U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

   [X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                For the quarterly period ended December 31, 1999

                                       or

  [ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934
                        For the transition period from to

                        Commission file number: 333-70437

                             Cardinal Airlines, Inc.
        (Exact Name of Small Business Issuer as Specified in Its Charter)

                    Delaware                 59-3492127
          (State of incorporation) (I.R.S. Employer Identification No.)

                            1380 Sarno Road, Suite B
                               Melbourne, FL 32935
                    (Address of principal executive offices)

                   Registrant's telephone number: 407-757-7388

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

The number of shares of the registrant's common stock, par value $0.01 per
share, outstanding as of December 31, 1999 was 2,033,900.



<PAGE>






                             Cardinal Airlines, Inc.
                               Index to Form 10QSB

Part I - Financial Information                                            Page

Item 1.  Financial Statements (unaudited)

   Condensed Balance Sheet - December 31, 1999...............................1

   Condensed Statements of Operations - Three Months
   and Six Months Ended December 31, 1999 and 1998
   and for the period February 10, 1997 (Date of
   Inception) through December 31, 1999......................................2

   Condensed Statements of Cash Flows - Six Months Ended
   December 31, 1999 and 1998 and for the period
   February 10, 1997 (Date of Inception) through December 31, 1999...........3

   Notes to Condensed Financial Statements...................................5

Item 2.  Management's Discussion and Analysis or Plan of Operations.........12

Part II - Other Information

Item 6.  Exhibits and Reports on Form 8-K...................................15

Signatures..................................................................16

Exhibit Index...............................................................17


<PAGE>






Part I   Financial Information
Item 1.  Financial Statements

                             CARDINAL AIRLINES, INC.
                          (A Development Stage Company)
                                 BALANCE SHEETS
<TABLE>
<CAPTION>


                                                                   For the three months ended
                                                                           December 31

                                                                   1999                  1998
                                                                ------------         ------------

 CURRENT ASSETS
<S>                                                        <C>                  <C>

 Cash                                                          $       1,933        $       30,351
 Interest Receivable                                                  11,427                 3,872
                                                               -------------        --------------
     TOTAL CURRENT ASSETS                                             13,360                34,223

 PROPERTY AND EQUIPMENT, net                                           6,566                 7,249

 DEPOSITS                                                              4,200                 3,830
                                                               -------------        --------------
     TOTAL ASSETS                                              $      24,126        $       45,302
                                                               =============        ==============

 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 CURRENT LIABILITIES
 Accounts payable                                              $      41,277        $            -
                                                                                                 -
                                                               -------------        --------------
     TOTAL LIABILITIES                                         $      41,277                     -

 COMMITMENTS                                                               0                     0

                                                               -------------        --------------
     TOTAL LIABILITIES AND COMMITMENTS                         $      41,277        $            -
                                                               =============        ==============

 TOTAL STOCKHOLDERS' EQUITY, (DEFICIT)
 including deficit accumulated during the
 development stage of $333,705                                       (17,151)               45,302
                                                               -------------        --------------

      TOTAL LIABILITIES AND STOCKHOLDERS'
      EQUITY (DEFICIT)                                         $      24,126        $       45,302
                                                               =============        ==============
</TABLE>







   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                      - 1 -
<PAGE>


                             CARDINAL AIRLINES, INC.
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>


                                         FEBRUARY 10, 1997           FOR THE THREE MONTHS ENDED
                                           (INCEPTION) TO                   DECEMBER 31
                                           DECEMBER 31, 1999        1999                   1998
<S>                                  <C>                   <C>                  <C>

                                          --------------       ----------------      ------------------
 REVENUES                                 $          -         $             -       $              -
                                          --------------       ----------------      ------------------
 EXPENSES

     Consulting Fees                           194,869                   4,600                 24,300
     Professional Fees                         172,638                  16,401                 10,314
     Rent                                       37,365                   4,770                  2,915
     Supplies                                   20,398                     300                    488
     Utilities                                  17,581                   3,750                  1,639
     Depreciation and amortization               5,090                     512                  1,197
     Miscellaneous                              10,938                     833                  2,808
     Taxes                                         366                     125                      -
                                          --------------       ----------------      -----------------
                                               459,245                  31,291                 43,660
 OTHER INCOME
     Interest Income                            11,427                   1,331                  1,936
                                          --------------       ----------------      -----------------
 NET (LOSS) before provision for
 income taxes                             $   (447,818)        $       (29,960)      $       (41,724)

 Provision for Income Taxes                          -                       -                     -
                                          --------------       ----------------      -----------------

 NET (LOSS)                               $   (447,818)        $       (29,960)      $       (41,724)
                                          ==============       ================      =================

  Net loss per share                      $      (0.22)        $         (0.01)      $         (0.02)
                                          ==============       ================      =================

 Shares used in computing net
 loss per share                              2,033,900               2,033,900             1,712,400
                                          ==============       ================      =================
</TABLE>


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

                                      - 2 -

<PAGE>



                             CARDINAL AIRLINES, INC.
                          (A Development Stage Company)
                             STATEMENT OF CASH FLOW
<TABLE>
<CAPTION>

                                        FEBRUARY 10, 1997     FOR THE THREE MONTHS ENDED
                                         (INCEPTION) TO               DECEMBER 31
                                        DECEMBER 31, 1999        1999               1998
                                     --------------------  -----------------   ----------------
<S>                                <C>                  <C>              <C>

CASH FLOWS FROM
OPERATING ACTIVITIES:

Cash paid for operating expenses       $     (447,818)      $     (29,960)     $      (42,464)
                                        ---------------     ---------------    ----------------

     NET CASH USED IN OPERATING
     ACTIVITIES:                             (447,818)            (29,960)           (42,464)
                                        ---------------     ---------------    ----------------

CASH FLOWS FROM INVESTING
ACTIVITIES:

Purchase of property and equipment            (11,664)                   0                 0
Increase in security deposits                  (4,200)                   0                 0
                                        ---------------     ---------------    ----------------
     NET CASH USED IN INVESTING
     ACTIVITIES                               (15,864)                   0                 0
                                        ---------------     ---------------    ----------------

CASH FLOWS FROM FINANCING
ACTIVITIES:

Issuance of common stock                      375,079                                 57,536
Increase in notes receivable -
     related parties                           37,077                                  1,000
Payments on notes receivable -
     related parties                           53,459              30,859                 -
                                        ---------------     ---------------    ----------------

     NET CASH PROVIDED BY FINANCING
     ACTIVITIES                               465,615              30,859             58,536
                                        ---------------     ---------------    ----------------

NET INCREASE (DECREASE) IN CASH                 1,933                 899             16,072
     CASH AT BEGINNING OF PERIOD                    -               1,034             14,279
                                        ---------------     ---------------    ----------------
CASH AT END OF PERIOD                   $       1,933       $       1,933      $      30,351
                                        ===============     ===============    ================
</TABLE>


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

                                      - 3 -

<PAGE>


                             CARDINAL AIRLINES, INC.
                          (A Development Stage Company)
                             STATEMENT OF CASH FLOW

<TABLE>
<CAPTION>

                                       FEBRUARY 10, 1997       FOR THE THREE MONTHS ENDED
                                        (INCEPTION) TO                DECEMBER 31
                                       DECEMBER 31, 1999          1999              1998
                                      --------------------  ----------------- -----------------


RECONCILIATION OF NET LOSS TO NET
CASH USED IN OPERATING ACTIVITIES:
<S>                                <C>                   <C>               <C>

Net loss                                $    (454,155)      $     (30,779)     $      (42,463)

Adjustments to reconcile net loss
to net cash used in operating
activities:

   Depreciation and amortization                5,090                 512                1,197
   Increase in receivables                    (11,427)             (1,331)              (1,936)

                                        ---------------     ---------------    ----------------


       NET CASH USED IN
       OPERATING ACTIVITIES             $    (447,818)      $      (29,960)    $      (41,724)
                                        ===============     ===============    ================
</TABLE>




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

                                      - 4 -


<PAGE>


                                CARDINAL AIRLINES
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          A)   NATURE OF OPERATIONS

                   The planned principal business activity of Cardinal Airlines,
                   Inc. ("Company") is to provide commercial airline service to
                   and from major airports throughout the eastern United States
                   with operations based in Melbourne, Florida.

          B)   CASH AND CASH EQUIVALENTS

                   For purposes of the statements of cash flows, the Company
                   considers all highly liquid debt instruments purchased with
                   an original maturity of three months or less to be cash
                   and/or cash equivalents.

          C)   PROPERTY AND EQUIPMENT

                   Property and equipment are stated at cost. Depreciation
                   computed using the straight-line method over the assets'
                   expected useful lives. Leasehold improvements are amortized
                   over the lessor of the term of the lease or the assets'
                   expected useful lives.

          D)   MANAGEMENT ESTIMATES

                   The preparation of financial statements in conformity with
                   generally accepted accounting principles requires management
                   to make estimates and assumptions that affect the reported
                   assets and liabilities. Actual results could differ from
                   these estimates.

          E)   INCOME TAXES

                   Deferred income taxes arise from the expected tax consequence
                   of temporary differences between the carrying amounts and the
                   tax basis of certain assets and liabilities. The differences
                   result primarily from different depreciation methods on
                   property and equipment.

          F)   ORGANIZATION COSTS

                   Organization costs consist of expenses related to the
                   start-up of the Company. These costs are expensed as incurred
                   in accordance with Statement of Position 98-5, "Reporting on
                   the Costs of Start-Up Activities" (SOP 98-5).

                                      - 5 -


<PAGE>


                                CARDINAL AIRLINES
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT.

          G)   EARNINGS PER SHARE

                   The Company adopted Statement of Financial Accounting
                   Standards (SFAS) No. 128, "Earnings Per Share" (SFAS 128)
                   effective February 10, 1997 (Inception). As such, net loss
                   per share is computed using the weighted average number of
                   common shares outstanding during the period. Pursuant to the
                   Securities and Exchange Commission Staff Accounting Bulletins
                   and Staff Policy, such computations include all common and
                   equivalent shares issued as if they were outstanding for all
                   periods presented. Common equivalent shares consist of the
                   incremental common shares issuable upon the conversion of the
                   convertible preferred stock (using the if converted method).

                   The Series A Preferred Stock issued has no preferences other
                   than voting rights over the common stock and no dividend
                   payment arrangements. The preferred stock has no effect in
                   arriving at income available to common shareholders in
                   computing earnings per share.

          H)   NEW ACCOUNTING STANDARDS

                   There have been no new significant accounting pronouncements
                   issued for the three month period ended Sept 30, 1999 that
                   would have a direct material effect on the financial
                   statements, except for Statement of Position 98-5, "Reporting
                   on the Costs of Start-Up Activities" (SOP 98-5) which is
                   addressed in NOTE 1F.

NOTE 2 - DEVELOPMENT STAGE OPERATIONS

                   The Company was formed February 10, 1997, and began
                   operations April 1, 1997. Through December 31, 1999,
                   operations have been devoted primarily to raising capital,
                   negotiating leasing of airplanes, related equipment, and
                   related facilities as well as the performance of general
                   administrative functions. As of December 31, 1999, the
                   Company has Sixty-Two Stockholders.

                                      - 6 -


<PAGE>

                                CARDINAL AIRLINES
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

NOTE 3 - PROPERTY AND EQUIPMENT

                                                              Feburary 10, 1997
                                                                (inception) to
<TABLE>
<CAPTION>

                                                    December 31, 1999   December 31,1998
                                                     ---------------      ---------------
<S>                                               <C>                <C>

          Computers and equipment                    $       9,955        $       9,955
          Furniture and fixtures                               159                  159
          Leasehold Improvements                             1,550                1,550
                                                     ---------------      ---------------
                                                            11,664               11,664
          Less accumulated depreciation

          and amortization                                  (5,098)              (4,415)
                                                     ---------------      ---------------
                                                     $       6,566        $       7,249
                                                     ===============      ===============
</TABLE>

                   Depreciation and amortization expense was $512 for the three
                   month period ended Dec 31, 1999; and $2,531 for the period
                   from February 10, 1997 (Inception) to December 31, 1998.

NOTE 4 - RELATED PARTIES

                   The Company has made loans to four of its stockholders in
                   exchange for issuance of shares of common stock and preferred
                   stock (NOTE 7). As of June 30, 1999, these four stockholders
                   own 56% of the outstanding common shares of stock.

                   The loans are unsecured, are due June 30, 2003 and bear
                   interest at 8% annually. Notes receivable due from related
                   parties were $109,321 as of June 30, 1999, and $96,671 as of
                   June 30, 1998. A summary of Notes receivable due from related
                   parties is as follows:
<TABLE>
<CAPTION>
<S>                                                                        <C>

                    Common stock issued during the year ended June 30, 1998     $      92,179
                    Common stock issued from March 1, 1997 to June 30, 1997             4,492
                    Preferred stock issued during the year ended June 30, 1999          1,000

                    Conversion of stock subscriptions to notes receivable
                    during the year ended  June 30, 1999 (NOTE 7)                      25,650

                    Repayment of notes receivable through Dec 31, 1999               (75,001)
                                                                                --------------

                                                                                $      48,320

                                                                                ==============
</TABLE>

                                      - 7 -

<PAGE>


                                CARDINAL AIRLINES
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

NOTE 4 - RELATED PARTIES CONT.

                   The Notes receivable due from related parties are reported as
                   a reduction in stockholders' equity (deficit).

NOTE 5 - COMMITMENTS AND CONTINGENCIES

                   The Company leases its facilities from an unrelated third
                   party under an operating lease expiring July, 2000. Rent
                   expense was $4,770 and $2,915 for the three month period
                   ended December 31, 1999 and 1998 respectively.

                   Future minimum lease payments are as follows:

                      Year ending June 30,

                              2000                         $ 19,080
                              2001                            1,590
                                                              -----

                                                           $ 20,670

                   During the period January through March, 1999, the Company
                   issued shares of stock to raise capital to fund its
                   operations. The sales may be in violation of Section 5 of the
                   Securities Act of 1933 and accordingly, those who purchased
                   may have the right to rescind their shares. The potential
                   liability to the company is $253,100 plus interst.

NOTE 6 - INCOME TAXES

                   The Company's effective tax rate differs from the expected
                   federal income tax rate as follows:

                                           Year Ended              Year Ended
                                          June 30, 1999          June 30, 1998
                                          -------------          -------------

 Income tax benefit at statutory Rate   $      (113,460)         $      (8,068)
 Increase in valuation Allowance                113,460                  8,068
                                                -------                  -----

  Actual income taxes                   $            -           $          -
                                        =            =           =          =



                                      - 8 -

<PAGE>


                                CARDINAL AIRLINES
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

NOTE 6 - INCOME TAXES CONT.

                   The components of the deferred tax assets and liabilities are
                   as follows:

                                           June 30, 1999          June 30, 1998
                                           -------------          -------------

   Deferred tax assets:

   Net operating loss carryforwards       $       113,460         $      8,068
                                                  -------                -----

   Total deferred tax assets                      113,460                8,068

   Less valuation allowance                      (113,460)              (8,068)

   Deferred tax assets, net of
   valuation allowance                                 -                    -

   Deferred tax liabilities                            -                    -
                                                       -                    -
   Net deferred tax asset (liability)     $            -          $         -
                                                       =                    =


       A summary of the net operating loss carryforwards is as follows:

          Generated June 30, 1997      $  3,168       Expires June 30, 2012
          Generated June 30, 1998        20,561       Expires June 30, 2013
          Generated June 30, 1999       309,976       Expires June 30, 2014
                                                ------------------------------


                                       $333,705

                  As of December 31, 1999, the Company is still in development
                  stage. As such, all income and deductions for tax purposes are
                  deferred until the Company's planned principal operations have
                  commenced.

NOTE 7 - STOCKHOLDERS' EQUITY

                   A summary of issuance of common stock involving non-cash
                   consideration is as follows:

                          On April 1, 1997, the Company issued 449,200 shares of
                          stock in consideration for notes receivable due from
                          related parties (NOTE 4) of $4,492. The shares were
                          sold at $.01 par value per share.

                                      - 9 -


<PAGE>

                                CARDINAL AIRLINES
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

NOTE 7 - STOCKHOLDERS' EQUITY CONT.

                           On July 1, 1997, the Company issued 184,358 shares of
                           stock in consideration for notes receivable due from
                           related parties (NOTE 4) of $92,179. The shares were
                           sold at $.01 par value per share, with $.50 per share
                           consideration. Through Dec 31, 1999, $75,001 was
                           received in payment of these notes (NOTE 4).

                           During the year ended June 30,1999, the Company
                           issued 83,300 shares of stock in consideration for
                           stock subscriptions of $41,650. The shares were sold
                           at $.01 par value per share, with $.50 per share
                           consideration. These subscriptions were converted to
                           a note receivable (NOTE 4).

                   As of June 30, 1997, the Company's common stock had a par
                   value $.01 per share with 50,000,000 shares authorized and
                   940,000 shares issued and outstanding.

                   As of Dec 31, 1998, the Company's common stock had a par
                   value $.01 per share with 50,000,000 shares authorized and
                   1,712,400 shares issued and outstanding.

                   As of Dec 31, 1999, the Company's common stock had a par
                   value $.01 per share with 50,000,000 shares authorized and
                   2,033,900 shares issued and outstanding.

                   A summary of issuance of preferred stock involving non-cash
                   consideration is as follows:

                           On October 16, 1998, the Company issued 100,000
                           shares of $.01 par value "Series A" preferred stock
                           in consideration for notes receivable due from
                           related parties (NOTE 4) of $1,000.

                   As of Dec 31, 1999, the Company's preferred stock had a par
                   value $.01 per share with 1,000,000 shares authorized. There
                   are 100,000 shares issued and outstanding as "Series A"
                   preferred stock. The 900,000 unissued shares have not been
                   designated.

                   The shares of "Series A" preferred stock have super voting
                   rights at the multiple of 100 votes per share. In the event
                   of liquidation, the preferred stock has preference over the
                   common stock. The shares are not convertible into common
                   stock and do not have any other rights or preferences.

                                     - 10 -


<PAGE>


                                CARDINAL AIRLINES
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

NOTE 8 - OFFERING

                   On July 21, 1999, the Company issued its initial S-1 filing
                   with the Securities and Exchanges Commission. This is an
                   initial public offering of 2,000,000 shares of common stock
                   for $10 per share.

                                     - 11 -


<PAGE>


Item 2.  Management's Discussion and Analysis or Plan of Operations.

                Results of Operations

                Cardinal is a development stage, airline company. Cardinal is
                considered to be in the development stage because we have
                devoted substantially all of our efforts to establishing the
                business plan, organization and raising capital.

                Since inception in February 1997 our efforts have principally
                been devoted to organization, development and raising capital.
                Cardinal has not received any revenues from flight services, and
                does not expect any of its flights to be commercially available
                until one month after 600,000 units are sold. From inception
                through December 31, 1999, we have sustained cumulative losses
                of $447,818 of which $194,869 was for consulting fees, $172,638
                was for professional fees, $37,365 for rent, $20,398 for
                supplies, $17,581 for utilities, $5,090 in depreciation, $10,938
                for miscellaneous expenses, and $366 in taxes. For the three
                months ended December 31, 1999, we sustained a cumulative loss
                of $29,960 of which $4,600 was for consulting fees, $16,401 was
                for professional fees, $4,770 for rent, $300 for supplies,
                $3,750 for utilities, $512 in depreciation, $833 for
                miscellaneous expenses, and $125 in taxes. These losses have
                resulted primarily from expenditures incurred in connection with
                general and administrative activities, organization and
                development, trademark registration and offering costs.

                Between June 10, 1998, and March 23, 1999, Cardinal sold 506,200
                common shares for $0.50 per share to 34 purchasers in a private
                placement. We received a total of $253,100 in the private
                placement.

                We expect to incur substantial costs in the future resulting
                from the acquisition of aircraft, equipment, agreements with
                airport service providers such as baggage handling, and fuel
                service. Additional expenses will include airport facilities,
                maintenance costs, and marketing. There can be no assurance that
                Cardinal will ever achieve profitable operations.

                To date, Cardinal has not marketed or generated revenues from
                the commercialization of any service. Our current planned
                flights will not begin until at least one month after 600,000
                units of this offering are sold. During this period following
                the sale of 600,000 units, we expect to hire additional
                personnel. Depending on how rapidly units are sold, we may also
                be finalizing arrangements for aircraft which could increase the
                time in which scheduled operations would begin.

                Our operating expenses will depend on several factors, including
                the level of aircraft maintenance and repair expenses.
                Development of Cardinal's planned flights will depend upon
                economic factors which we cannot predict. Management may, in
                some cases, be able to control the timing of developmental
                expenses, in part, by controlling growth. As a result of these
                factors, we believe that period-to-period comparisons are not
                necessarily meaningful and should not be relied upon as an
                indicator of future performance. Due to all of the foregoing
                factors, it is possible that our operating results will be below
                the expectations of market


                                       12

<PAGE>
                analysts, if any, and investors. In such event, the prevailing
                market price, if any, of the common stock would likely be
                materially adversely affected.

                Cardinal entered into negotiations with Capstone Partners, Inc.,
                for selling agent and investment banking services. Cardinal has
                signed an agreement with Capstone which will provide for the
                formation of a selling group and will solicit subscriptions on a
                best efforts bases. Under that Agreement, Capstone shall receive
                10% compensation equal to 10% commissions on sales.

                Liquidity and Capital Resources

                Until such time that Cardinal receives the proceeds of its
                public offering (File number 333-70437) or other financing, it
                will continue to operate on a limited basis. Our approximate
                monthly expenditures during this interim development period are
                approximately $17,000 per month. Without additional funding,
                Cardinal can maintain its present operating level through the
                end of April 1, 2000.

                Cardinal can delay the majority of the expenditures which are
                necessary to carry out its business plan until adequate funds
                are on hand or appear to be available. Put another way, Cardinal
                will delay incurring significantly greater costs than its
                present expenditures of $17,000 per month, such as additional
                personnel and the purchase or lease of aircraft, until funds
                are available from its public offering. The bulk of FAA
                certification expenses will be incurred when sufficient funds
                are available.

                Cardinal has incurred negative cash flows from operations since
                its inception. We have expended and expect to continue to expend
                in the future, substantial funds to complete our planned service
                development efforts. Our future capital requirements and the
                adequacy of available funds will depend on numerous factors
                including:

                o the successful commercialization of planned flights
                o obtaining sufficient funding to acquire aircraft and equipment
                o fuel price and availability
                o hiring qualified personnel
                o keeping pace with government regulation
                o obtaining adequate insurance
                o the development of contractual agreements with airports
                o the use of airport service providers

                Expenditures relating to aircraft and certification will be made
                prior to crew and maintenance salaries being incurred. If
                Cardinal determines that the offering is not likely to raise at
                least $5.35 million, it will defer flight-related and
                certification expenses to seek additional financing or revise
                its business plan to provide for the use of less expensive
                aircraft.

                At such time as Cardinal raises at least $6,000,000 in its
                public offering (600,000 Units), the proceeds of the offering
                would be used to commence operations by purchasing one MD-80
                Aircraft. $540,000 would be used for aircraft deposit.  Over a
                period of three to nine months from the date of commencement,
                $1,037,902 would be used to staff operations at both Melbourne
                International Airport and Baltimore Washington International
                Airport. Approximately $1,140,459 would be used to finance
                flight operations beginning in the fifth month of operations.
                Fuel and maintenance expense totaling approximately $846,204
                for the six month period would begin in the fifth month of
                operations. Beginning in the third month of operations, Cardinal
                would expend a total of $702,417 for advertising and initial
                promotions. During this period, Cardinal anticipates expending
                approximately $659,018 on general and administrative expenses,
                $50,000 for computer leases and software and $24,000 for key
                man insurance. FAA and DOT certification expenses are expected
                to be approximately $350,000 during the period of three to six
                months following commencement of operations.

                In the event our plans change or our assumptions change or prove
                to be inaccurate or the proceeds of our public offering prove to
                be insufficient to fund operations, we could be required to seek
                additional financing. The terms and prices of any additional
                financing may be significantly more favorable than those of the
                units sold in our public offering. Cardinal does not have any
                material committed sources of additional financing, and there
                can be no assurance that additional funding, if necessary, will
                be available on acceptable terms, if at all. If adequate funds
                are not available, we may be required to delay, scale back, or
                eliminate certain aspects of our operations. If adequate
                additional funds are not available, Cardinal's business,
                financial condition, and results of operations will be
                materially and adversely affected

                                       13
<PAGE>




                Cardinal may receive additional funding under the provisions
                pertaining to the exercise of the warrants which are part of the
                units offered in its public offering.

                Currently, we have no plans to sell or issue any additional
                preferred stock.

                The net proceeds from the sale of 600,000 units in our public
                offering is estimated to be the minimum amount necessary to
                begin operations. If fewer than 600,000 units are sold, then we
                would use the proceeds to pay the offering expenses and possibly
                commissions. Any remaining proceeds would be used to secure
                additional funding to implement Cardinal's business plan or to
                amend the plan and operate with less expensive aircraft or
                contract services.

                If less than 600,000 units are sold in our public offering, as
                an alternative until we are able to receive our own certificate,
                Cardinal could contract its flight services to another company
                which holds a FAA Operators Certificate. If this occurs,
                Cardinal may be required to make certain deposits and bonds and
                would contract actual flight operations. The usual cost per
                aircraft operating hour is $3,000 to $5,000. Assuming average
                operating hours of 240 per month, the estimated monthly cost of
                using contracted flight services would range from approximately
                $720,000 to $ 1,200,000 per month. Costs vary widely depending
                on operating requirements, including the time of day and time
                of year. Contract flight service fees typically include flight
                crew, fuel, insurance and maintenance. This option could be
                accomplished with substantially fewer capital resources than
                required to begin independent flight operations with our own
                operating certificate.




                                        14


<PAGE>




Part II - Other Information

Item 6.  Exhibits and Reports on Form 8-K

         (a)        Exhibits

Exhibit                    Description                                    Page

(2)     Plan of Acquisition, Reorganization, Arrangement,
          Liquidation or Succession                                        None

(3)     Articles and By-Laws                                               None

(4)     Instruments defining the Rights of Security Holders                None

(10)    Material Contracts                                                 None

(11)*   Statement re: Computation of Per Share Earnings               Note 1(G)
                                                                   to Financial
                                                                     Statements

(15)    Letter re: Unaudited Interim Financial Information                 None

(18)    Letter re: Change in Accounting Principles                         None

(19)    Report Furnished to Security Holders                               None

(22)    Published Report re: Matters Submitted to Vote of
          Security Holders                                                 None

(23)    Consents of Experts and Counsel                                    None

(24)    Power of Attorney                                                  None

(27)*   Financial Data Schedule

(99)    Additional Exhibits                                                None

   *Filed herewith

<PAGE>


                                   SIGNATURES


      In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.



CARDINAL AIRLINES, INC.



SIGNATURE                                 TITLE                     DATE

  /S/ Lawrence A. Watson
_________________________  President, Chairman of the Board   February 14, 2000
LAWRENCE A. WATSON         Chief Executive Officer



 /S/ H. Lawrence Mason
________________________   Secretary Treasurer,               February 14, 2000
H. LAWRENCE MASON          Chief Financial Officer


<PAGE>


                Exhibit Index

Exhibit           Description                                              Page

(2)    Plan of Acquisition, Reorganization, Arrangement,
        Liquidation or Succession                                          None

(3.5)  Articles and By-Laws

(4)    Instruments defining the Rights of Security Holders                 None

(10)   Material Contracts                                                  None

(11)*  Statement re: Computation of Per Share Earnings               Note 1(G)
                                                                   to Financial
                                                                    Statements

(15)   Letter re: Unaudited Interim Financial Information                  None

(18)   Letter re: Change in Accounting Principles                          None

(19)   Report Furnished to Security Holders                                None

(23)   Published Report re: Matters Submitted to Vote of

       Security Holders                                                    None

(23)   Consents of Experts and Counsel                                     None

(24)   Power of Attorney                                                   None

(27)*  Financial Data Schedule

(99)   Additional Exhibits                                                 None

   *Filed herewith