JETBORNE INTERNATIONAL, INC.


                           FINANCIAL STATEMENTS


                              APRIL 30, 1995








<PAGE>




                      JETBORNE INTERNATIONAL, INC.

                      INDEX TO FINANCIAL STATEMENTS




Item 8.  FINANCIAL STATEMENTS

INDEX TO FINANCIAL STATEMENTS
  Independent Auditors' Report

  Financial Statements:
    Balance Sheets
      April 30, 1995 and 1994

    Statements of Income (Loss)
      For the years ended April 30, 1995, 1994 and 1993

    Statements of Changes in Stockholders' Equity
      For the years ended April 30, 1995, 1994 and 1993

    Statements of Cash Flows
      For the years ended April 30, 1995, 1994 and 1993

    Notes to Financial Statements

  Financial Statement Schedules (included in Item 14.)
    Schedule II - Amounts Receivable From Related
                    Parties and Underwriters, Promoters and
                    Employees Other Than Related Parties

    Schedule VII - Guarantees of Securities of Other Issuers

    Schedule IX - Short-term Borrowings

    Exhibit II - Schedule of Computations of Earnings (Loss) per Share
























                                    F-1
<PAGE>

                          NORMAN A. ELIOT & CO.
                      CERTIFIED PUBLIC ACCOUNTANTS

Norman A. Eliot, C.P.A.                     9400 South Dadeland Boulevard
Florence L. Krantz, C.P.A.                         Miami, Florida 33156
John Blumenthal, C.P.A.                           Phone: (305) 670-4444
      ----                                          Fax: (305) 670-0105
Vivian R. Shariff, C.P.A.
Ramesh Singh, C.P.A.


                      INDEPENDENT AUDITORS' REPORT



The Board of Directors
Jetborne International, Inc.
Miami, FL 33142

We  have audited the balance sheets of Jetborne International, Inc. as of
April 30,  1995  and  1994,  and the related statements of income (loss),
changes in stockholders' equity, and cash flows for the years ended April
30, 1995, 1994 and 1993 and the schedules listed in the Index at Item 14.
These financial statements and  schedules  are  the responsibility of the
Company's  management.  Our responsibility is to express  an  opinion  on 
these financial statements and schedules based on our audits. 

We conducted  our  audits  in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about  whether  the  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 financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred  to  above   present
fairly,  in  all  material  respects,  the financial position of Jetborne
International,  Inc.  at April 30, 1995  and 1994, and the results of its
operations and its cash flows for the years  ended  April  30, 1995, 1994
and 1993 in conformity with generally accepted accounting principles, and
the schedules referred to above present fairly, in all material respects,
when  read  in  conjunction  with  the related financial statements,  the
information therein set forth.

The accompanying financial statements, presented  on pages F-4, F-5, F-6,
and F-7 have been prepared assuming that the Company will  continue  as a
going  concern. As described in Note 2 to the financial  statements,  the
Company  has  experienced   significant  net  cumulative  losses  and has 
incurred significant negative cash flows from operations resulting in the
Company  having  difficulty  meeting  its  obligations.    The  continued
existence  of the Company is dependent on the ability of the  Company  to
successfully  implement  management's  plans  which are also described in
Note  2.  The  foregoing  conditions raise substantial  doubt  about  the




                                    F-2


Members: American Institute of Certified Public Accountants
         Florida Institute of Certified Public Accountants

<PAGE>



                      INDEPENDENT AUDITORS' REPORT
                               (continued)


Company's   ability  to  continue  as  a  going  concern.  The  financial
statements  do not include any adjustments to reflect the possible future
effects on the recoverability and classification of assets or the amounts
and classification  of  liabilities  that  may  result  from the possible
inability of Jetborne International, Inc. to continue as a going concern.


Miami, Florida
  June 1, 1995, except
  February 29, 1996 as to
  certain matters referred to
  in  Notes 1, 2, 5, 9, and 15
  for  events  that took place
  on  August 2, 1995, January 9,
  1996, January 18, 1996, February               /s/Norman A. Eliot & Co.
  14, 1996 and  February  29, 1996               Norman A. Eliot & Co.






































                                    F-3
<PAGE>

                      JETBORNE INTERNATIONAL, INC.

                            BALANCE SHEETS

                         APRIL 30, 1995 AND 1994


                                A S S E T S
                                -----------

<TABLE>
<CAPTION>
                                                       1995        1994
                                                   ----------- -----------
<S>                                                <C>         <C>
CURRENT ASSETS:
  Cash                                             $    86,235 $   301,106
  Accounts receivable:
    Trade, net of allowance for doubtful
      accounts ($3,607 and $15,996 1995
      and 1994, respectively)(Notes 1 and 7)           133,567     131,779
    Other                                                3,535       8,036
  Stockholder loan receivable                            3,000           0
  Inventories (Notes 1, 5 and 7)                     3,248,136   3,656,051
  Prepaid expenses and
    other current assets                                23,970      19,029
                                                   ----------- -----------

  Total Current Assets                             $ 3,498,443 $ 4,116,001
                                                   ----------- -----------


PROPERTY AND EQUIPMENT (Notes 1 and 6)             $   633,816 $   625,247
  Less: Accumulated depreciation and amortization      389,148     375,523
                                                   ----------- -----------
  Net Book Value                                       244,668     249,724
                                                   ----------- -----------

OTHER ASSETS:
  Security deposits and other assets               $     6,231 $    42,591
                                                   ----------- -----------


    TOTAL ASSETS                                   $ 3,749,342 $ 4,408,316
                                                   =========== ===========

</TABLE>















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

                                    F-4A

<PAGE>

                      JETBORNE INTERNATIONAL, INC.


                             BALANCE SHEETS

                         APRIL 30, 1995 AND 1994

                  LIABILITIES AND STOCKHOLDERS' EQUITY
                  ------------------------------------

<TABLE>
<CAPTION>
                                                       1995        1994
                                                   ----------- -----------
<S>                                                <C>         <C>
CURRENT LIABILITIES:
  Notes payable (Note 7)                           $    15,828 $    22,619
  Current maturities of long-term debt (Note 8)         68,302      51,489
  Accounts payable                                     159,197      90,661
  Income taxes payable (Note 11)                             0      10,000
  Customers' deposits                                    1,552           0
  Accrued expenses                                      86,383      87,883
                                                   ----------- -----------

  Total Current Liabilities                        $   331,262 $   262,652
                                                   ----------- -----------

LONG-TERM DEBT, net of current maturities
  (Note 8)                                         $    70,317 $    96,867
                                                   ----------- -----------

COMMITMENTS, CONTINGENCIES AND SUBSEQUENT EVENTS
  (Notes 9, 12, 14, and 15)

STOCKHOLDERS' EQUITY (Notes 1, 9, 10, and 15):
  Common stock, $.01 par value (14,000,000
    shares authorized; 11,882,280 and 12,635,780
    shares issued at April 30, 1995 and 1994)      $   118,823 $   126,358
  Additional paid-in capital                         5,097,251   5,093,480
  Retained earnings (deficit)                       (1,868,311) (1,167,277)
  Treasury stock, 0 and 753,500
    shares at April 30, 1995 and 1994, at cost               0      (3,764)
                                                   ----------- -----------
    TOTAL STOCKHOLDERS' EQUITY                       3,347,763   4,048,797
                                                   ----------- -----------

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $ 3,749,342 $ 4,408,316
                                                   =========== ===========
</TABLE>












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

                                    F-4B

<PAGE>
                      JETBORNE INTERNATIONAL, INC.

                       STATEMENTS OF INCOME (LOSS)

            FOR THE YEARS ENDED APRIL 30, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
                                                                  1993
                                       1995           1994       (Note 1)
                                    -----------   -----------  -----------
<S>                                 <C>           <C>          <C>
NET SALES                           $ 1,125,279   $ 1,755,763  $   798,008


COST OF SALES                           906,840     1,118,396      430,595
                                    -----------   -----------  -----------


GROSS PROFIT                        $   218,439   $   637,367  $   367,413


SELLING, GENERAL
  AND ADMINISTRATIVE EXPENSES         1,031,091       830,070      950,963
                                    -----------   -----------  -----------


OPERATING LOSS                      $  (812,652)  $  (192,703) $  (583,550)
                                    ------------  ------------ ------------


OTHER INCOME (EXPENSES):
  Interest and other income         $    96,083   $   316,304  $   592,843
  Interest expense                       (5,166)       (6,943)     (77,215)
  Recovery of stockholders' notes
    and loans receivable (Note 4)        12,500             0            0
                                    -----------   -----------  -----------

  Net Other Income                      103,417       309,361      515,628
                                    -----------   -----------  -----------

INCOME (LOSS) FROM
  CONTINUING OPERATIONS
  BEFORE INCOME TAXES (CREDIT)      $  (709,235)  $   116,658  $   (67,922)


INCOME TAXES (CREDIT) (Note 11)          (8,201)            0            0
                                    -----------   -----------  -----------

INCOME (LOSS) FROM
  CONTINUING OPERATIONS  (FORWARD)  $  (701,034)  $   116,658  $   (67,922)
                                    ------------  -----------  ------------

</TABLE>





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

                                    F-5A
<PAGE>

                      JETBORNE INTERNATIONAL, INC.

                       STATEMENTS OF INCOME (LOSS)

            FOR THE YEARS ENDED APRIL 30, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
                                                                  1993
                                        1995          1994       (Note 1)
                                     -----------  -----------  -----------
<S>                                  <C>          <C>          <C>
INCOME (LOSS) FROM
  CONTINUING OPERATIONS (FORWARDED)  $  (701,034) $   116,658  $   (67,922)
                                     ------------ -----------  ------------
DISCONTINUED OPERATIONS (Note 3):
  Loss from discontinued
    operations, net of income taxes  $         0  $         0  $   (40,332)
                                     -----------  -----------  ------------
INCOME (LOSS)
  BEFORE EXTRAORDINARY
  ITEM AND MINORITY INTEREST         $  (701,034) $   116,658  $  (108,254)

EXTRAORDINARY ITEM:
  Gain recognition on discharge of
    debt net of $10,000 provision
    for income taxes (Note 1)                  0      414,033            0
                                     -----------  -----------  -----------
INCOME (LOSS) BEFORE MINORITY 
  INTEREST                           $  (701,034) $   530,691  $  (108,254)

MINORITY INTEREST (dividend
  requirement on preferred
  stock of a subsidiary)(Note 10)              0            0       55,900
                                     -----------  -----------  -----------


NET INCOME (LOSS)                    $  (701,034) $   530,691  $  (164,154)
                                     ===========  ===========  ===========

EARNINGS (LOSS) PER SHARE (NOTE 1)
  Continuing operations              $     (0.06) $      0.01  $     (0.02)
  Net income (loss)                        (0.06)        0.05        (0.03)

WEIGHTED AVERAGE COMMON
  SHARES AND COMMON SHARE
  EQUIVALENTS OUTSTANDING (Note 1)    11,882,280     9,730,636   6,232,280
                                      ==========    ==========  ==========

</TABLE>




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

                                    F-5B
<PAGE>

                      JETBORNE INTERNATIONAL, INC.

             STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

           FOR THE YEARS ENDED APRIL 30, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
                                             Number of shares
                                             of common stock      Amounts
                                           ---------------------  --------

                                                       Treasury    Common
                                            Issued       Stock      Stock
                                           ----------  ---------  --------
<S>                                        <C>         <C>        <C>
BALANCE, APRIL 30, 1992 (Note 1)            6,235,780      3,500  $ 62,358

  Net loss                                     -            -         -
                                           ----------   --------  --------
BALANCE, APRIL 30, 1993 (Note 1)            6,235,780      3,500  $ 62,358

  Net income                                   -            -         -

  Common stock issued (Notes 1, 9 and 10)   6,400,000       -       64,000

  Common stock acquired
    on confirmation of plan of
    reorganization (Notes 1, 9 and 10)         -         750,000      -
                                           ----------   --------  --------

BALANCE, APRIL 30, 1994 (Note 1)           12,635,780    753,500  $126,358

  Net loss

  Common stock retired                       (753,500)  (753,500)   (7,535)
                                           ----------   --------  --------

BALANCE, APRIL 30, 1995 (Note 1)           11,882,280          0  $118,823
                                           ==========   ========  ========
</TABLE>















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

                                    F-6A
<PAGE>

                      JETBORNE INTERNATIONAL, INC.

             STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

           FOR THE YEARS ENDED APRIL 30, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
                                                    Amounts
                                     -------------------------------------

                                                  Additional    Retained
                                      Treasury      Paid-in      Earnings
                                        Stock       Capital      (Deficit)
                                     ----------  ------------  -----------
<S>                                  <C>         <C>           <C>
BALANCE, APRIL 30, 1992 (Note 1)       $ (3,763)  $ 4,956,280  $(1,533,814)

  Net loss                                 -             -        (164,154)
                                       --------   -----------  -----------
BALANCE, APRIL 30, 1993 (Note 1)       $ (3,763)  $ 4,956,280  $(1,697,968)

  Net income                               -             -         530,691

  Common stock issued (Notes 1, 9 and 10)  -          137,200         -

  Common stock acquired
    on confirmation of plan of
    reorganization (Notes 1, 9 and 10)       (1)         -            -
                                       --------   -----------  -----------
BALANCE, APRIL 30, 1994 (Note 1)       $ (3,764)  $ 5,093,480  $(1,167,277)

  Net loss                                                        (701,034)

  Common stock retired                    3,764         3,771
                                       --------   -----------  -----------
BALANCE, APRIL 30, 1995 (Note 1)       $      0   $ 5,097,251  $(1,868,311)
                                      =========   ===========  ===========

</TABLE>














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

                                    F-6B
<PAGE>

                      JETBORNE INTERNATIONAL, INC.

             STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

           FOR THE YEARS ENDED APRIL 30, 1995, 1994 AND 1993




                                               Amounts
                                            -------------

                                              Total
                                            Stockholders'
                                               Equity
                                            -------------
                                         
BALANCE, APRIL 30, 1992 (Note 1)             $  3,481,061

  Net loss                                       (164,154)
                                             ------------

BALANCE, APRIL 30, 1993 (Note 1)             $  3,316,907

  Net income                                      530,691

  Common stock issued (Notes 1, 9 and 10)         201,200

  Common stock acquired
    on confirmation of plan of
    reorganization (Notes 1, 9 and 10)                 (1)
                                             ------------


BALANCE, APRIL 30, 1994 (Note 1)             $  4,048,797

  Net loss                                       (701,034)

  Common stock retired                                  0
                                             ------------


BALANCE, APRIL 30, 1995 (Note 1)             $  3,347,763
                                             ============
















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

                                    F-6C
<PAGE>

                      JETBORNE INTERNATIONAL, INC.

                        STATEMENTS OF CASH FLOWS

           FOR THE YEARS ENDED APRIL 30, 1995, 1994 AND 1993
                                            
<TABLE>
<CAPTION>
                                                                   1993
                                          1995         1994      (Note 1)
                                       ----------   ----------  ----------
<S>                                    <C>          <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                    $ (701,034)  $  530,691  $ (164,154)
  Adjustments to reconcile
    net income (loss) to net cash
    used in operating activities:
    Depreciation and amortization          29,958       33,774      45,269
    Provision for losses
      on trade accounts receivable          3,607            0       1,325
    Write-off of trade accounts
      receivable, net of recoveries        12,880        7,848       5,971
    Loss on discontinued operations             0            0      40,332
    Loss from sale of
      property and equipment                    0        1,671      18,535
    Recognition of deferred income              0     (193,518)   (316,667)
    Forgiveness of debt                    (9,300)           0           0
    Treasury stock received (nominal value)     0           (1)          0
    Changes in certain 
      assets and liabilities:
      (Increase) decrease in
        trade accounts receivable         (18,275)      (6,854)     28,666
      Decrease in other
        accounts receivable                 4,501        8,508      37,961
      Increase in
        stockholder loan receivable        (3,000)           0           0
      Decrease in inventories             407,915       11,413     135,076
      (Increase) decrease in prepaid
        expenses and other current assets  (4,941)     190,647    (186,327)
      Decrease in net
        assets of discontinued operations       0       88,294      17,560
      (Increase) decrease in
        security deposits and other
        assets                             36,360      (37,054)     30,384
      Increase (decrease)
        in accounts payable                68,536      (94,454)     24,430
      Increase (decrease) in
        indebtedness to stockholder             0       (3,600)      3,600
      Increase (decrease)
        in income taxes payable           (10,000)       6,895       3,500
      Increase (decrease)
        in customers' deposits              1,552      (15,375)       (729)
      Decrease in accrued expenses         (1,500)    (160,912)    (71,604)
      Decrease in net liabilities
        discharged in bankruptcy                0     (414,033)          0
                                       ----------   ----------  ----------
        Net cash used in 
          operating activities         $ (182,741)  $  (46,060) $ (346,872)
                                       ----------   ----------  ----------

</TABLE>


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

                                    F-7A

<PAGE>
                      JETBORNE INTERNATIONAL, INC.

                        STATEMENTS OF CASH FLOWS

           FOR THE YEARS ENDED APRIL 30, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
                                                                   1993
                                          1995          1994      (Note 1)
                                      ----------    ----------   ---------
<S>                                   <C>           <C>          <C>

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment  $  (24,902)   $   (2,831)  $ (34,595)
  Proceeds from sale
    of property and equipment                  0             0       5,161
                                      ----------    ----------   ---------
    Net cash used
      in investing activities            (24,902)       (2,831)    (29,434)
                                      ----------    ----------   ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments received
    from notes receivable             $        0    $        0   $ 650,000
  Proceeds from issuance of notes         26,070        20,859           0
  Principal
    repayments on notes payable          (23,561)      (25,540)    (11,522)
  Principal repayments
    on long-term debt                     (9,737)     (101,465)    (65,499)
  Proceeds from private
    placement sale of common stock             0       201,200           0
                                      ----------    ----------   ---------
    Net cash provided by
      (used in) financing activities      (7,228)   $   95,054     572,979
                                      ----------    ----------   ---------

NET INCREASE (DECREASE) IN CASH       $ (214,871)   $   46,163   $ 196,673

CASH, BEGINNING                          301,106       254,943      58,270
                                      ----------    ----------   ---------
CASH, END                             $   86,235    $  301,106   $ 254,943
                                      ==========    ==========   =========

Supplemental disclosures of cash flow information:
  Cash paid during the year for:

    Interest                         $     5,136    $    6,078   $   1,990
                                     ===========    ==========   =========
    Income taxes                     $     1,799    $   41,142   $       0
                                     ===========    ==========   =========

</TABLE>



   The accompanying notes to financial statements describe certain non-cash
   investing and financing activities (some of which  affect the changes in
   certain assets and liabilities) and  are taken into consideration in the
   consolidated statements of cash flows.


                                    F-7B
<PAGE>

                      JETBORNE INTERNATIONAL, INC.

                      NOTES TO FINANCIAL STATEMENTS


Note 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business
-------------------------

Jetborne International, Inc. (the "Company") was incorporated January 30,
1987  (under  the  laws of the State of Delaware) as a holding company in
anticipation of a public offering. On February  2, 1987, the stockholders
of Jetborne, Inc.  (incorporated  April  24,  1980  under the laws of the
State of Florida) contributed all of the outstanding  shares of Jetborne,
Inc.  common stock to Jetborne International, Inc. (the  Company owned no
other  assets  at that date) in exchange for 3,123,000 shares  of  common
stock of the Company  and  Jetborne,  Inc. transferred to the Company its
stock in each of its subsidiary companies.  On  May 20, 1987, the Company
sold 1,150,000 shares of its common stock to the public, resulting in net
proceeds  to the Company of approximately $3,328,000.  On  September  17,
1993, an order   of the United States Bankruptcy Court, Southern District
of Florida was entered  confirming  the  Company's  third amended plan of
reorganization.  Prior  thereto, $201,200 was deposited  to  the  Company
attorneys' trust account  as  payment  for  6,400,000  shares  of Company
common stock to be issued in accordance with terms of the plan (see below
and Note 10).

The  September 17, 1993 order of the United States Bankruptcy  Court  was
entered conditioned upon the ability of the Company to maintain the level
of allowed  unsecured  claims  against  the  Jetborne International, Inc.
estate at a maximum of $2,300,000; accomplished  on  September  27,  1994
when the Company objection to the claim of a former principal stockholder
of the Company was sustained by the United States Bankruptcy Court. Prior
thereto,  on  December  10, 1991, creditors of the Company filed with the
United States Bankruptcy  Court,  placing  the  Company in an involuntary
Chapter  11  bankruptcy  proceeding  (converted  by  the   Company  to  a
voluntary  proceeding   on December 26, 1991); Jetborne, Inc.,  the  only
then significant operating subsidiary  of the Company,  filed a voluntary
petition on December 16, 1991; subsequently,  the  two  proceedings  were
consolidated.  The  Company  filed, with the Bankruptcy Court, an Amended
Disclosure Statement and Plan  dated  May  14, 1993 whereby a program was
established  for  the  probable payment to all  creditors,  over  various
periods not to exceed nine  years,  of all approved sums due to them (the
allowed unsecured claims against the  Jetborne,  Inc.  [see below] estate
are to be paid after the payment of allowed unsecured claims  against the
Jetborne   International,   Inc. estate);   payments   to   the  Jetborne
International,  Inc.  unsecured  creditors commenced during January  1995
(thirty days after  the  December 14, 1994 United States Bankruptcy Court
appointment of the designee  for  the Unsecured Creditors Committee). The
principal source of the funds to pay  the  indebtedness is the January 1,
1993  balance  on  the note received from the  sale  of  Aircraft Modular
Products, Inc. ("AMP")(see  Notes  3  and  4).   In  addition,  there are
provisions for:

    Merging Jetborne, Inc. into  the  Company  and the cancellation of
    the Jetborne, Inc. preferred stock (see Note 10). The Company has,
    however,   registered the name Jetborne, Inc. under the Fictitious
    Name Act of the State of Florida.



                                    F-8

<PAGE>
                      JETBORNE INTERNATIONAL, INC.

                      NOTES TO FINANCIAL STATEMENTS

Note 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Organization and Business (continued)
-------------------------------------

    The    present    stockholders    of    Jetborne    International,
    Inc. maintaining  their   shares   of  common stock of the Company
    (the Company will still be publicly owned).

    The sale of 6,400,000 shares of  the Company's common stock to two
    new principal stockholders of the Company (see Notes 9 and 10) for
    $201,200.

The sum of  the  excess  of  liabilities  transferred  to  the  Unsecured
Creditors' Committee of Jetborne International, Inc., the cancellation of
the preferred stock (and the related assets and liabilities) of Jetborne,
Inc. and  the  Federal  "alternative minimum tax" (see Note 11) (based on
the excess of alternative minimum tax income over the alternative minimum
tax net operating loss carryforward)  over  the carrying value of the AMP
note ($414,033) is reflected on the statement  of  income  (loss) for the
year ended April 30, 1994 in the category "gain recognition  on discharge
of debt, net of $10,000 provision for income taxes (Note 1)".

The Company is primarily engaged in the sale of  aircraft  parts and also
coordinates  maintenance  support  and  management  for aircraft, manages
aircraft conversion projects and sells and leases aircraft primarily as a
broker.

General/Pledged Assets/Reclassifications
----------------------------------------

The stockholders' equity section  of the balance sheets at April 30, 1995
and April 30, 1994 reflect   the 6,400,000 shares of Company common stock
as if issued at those dates (in accordance  with  the  confirmed  plan of
reorganization;  see  above)(not  issued  at February 29, 1996)  and  the
750,000 shares of Company common stock as if received  in the Treasury at
April   30,  1994  (also  in  accordance  with  the  confirmed  plan   of
reorganization; see Notes 10 and 15)(the 750,000 shares, and 3,500 shares
of previously  acquired  stock, were cancelled on August 10, 1994 thereby
reducing the number of shares  issued at April 30, 1995).  The prior year
financial statements are presented,  for  comparative purposes, as if the
Company  was  not,  until September 17, 1993,  in  re-organization  under
Chapter 11 of the United  States  Bankruptcy  Code.   The  statements  of
income  (loss),  changes  in  stockholders' equity and cash flows for the
period May 1, 1993 through September  16,  1993  and the year ended April
30, 1993 reflect  results of operations and cash flows of the Company and
its then wholly owned subsidiaries while it was Debtor-in-Possession. All
material inter-company balances and transactions (through  September  16,
1993) have been eliminated.

Prior to its emergence from the bankruptcy proceedings, substantially all
of the Company's assets  were pledged as collateral for notes payable and
other debt. Effective September  17,  1993,  the  Company transferred the
note  receivable  (from  the  purchaser of 100% of the  common  stock  of
Aircraft Modular Products, Inc.;  see  Notes  3  and  4) to the Unsecured


                                    F-9
<PAGE>

                      JETBORNE INTERNATIONAL, INC.

                      NOTES TO FINANCIAL STATEMENTS

Note 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Creditors' Committee of Jetborne International, Inc. (in  accordance with
the  terms  of  the  Company's third amended plan of reorganization  [see
above]).

Certain  amounts in the April 30,  1994  and  April  30,  1993  financial
statements have  been  reclassified  to  conform  with the April 30, 1995
presentation  and  the  April  30, 1993 financial  statements  have  been
restated to take into consideration  the sale/liquidation of subsidiaries
(see Note 3).

New (Recent) Accounting Standards
---------------------------------

The   Company   has   adopted   all   recent   accounting  standards  and
pronouncements issued by the Financial Accounting Standards  Board (FASB)
that are applicable (including  FASB  109 Accounting for Income Taxes and
FASB  121  Accounting  for  the  Impairment  of  Long  Lived Assets). The
adoption  did  not  cause  a  material  effect on the Company's financial
statements.

Accounts and Notes Receivable, Trade/Allowance for Doubtful Accounts
--------------------------------------------------------------------

The Company's policy is to establish an allowance  for  doubtful accounts
when  the collectability of the accounts is doubtful  and to charge  that
account,  or income, when the accounts are determined to be uncollectable
($16,487, $4,200 and $2,067 [net of recoveries] for the years ended April
30, 1995, 1994 and 1993, respectively)(see Note 4 regarding the write-off
of certain non-trade notes and loans receivable).

Inventories
-----------

Inventories  are  stated  at  the  lower  of  cost  or  market with  cost
determined using the average cost method (see Note 5).

Property and Equipment
----------------------

Property  and  equipment  are  stated  at  cost.  Expenditures  for major
betterments  and  additions  are  charged  to  the property and equipment
accounts  while  replacements,  maintenance  and repairs,  which  do  not
improve  or  extend  the  life of the respective asset,  are  charged  to
expense currently. The cost  of  assets  retired or otherwise disposed of
and the accumulated depreciation are relieved  from the accounts, and the
resulting  gain  or  loss  is included in the statement  of  income.  The
Company's policy is to capitalize,  and record as property and equipment,
assets acquired under terms of capital leases.

Depreciation is calculated using the straight line and declining  balance
methods  over  the  estimated  useful lives of the assets. For income tax
purposes, depreciation is calculated  using the accelerated cost recovery
system (MACRS) for certain qualifying assets and the straight-line method
for other assets (see below).

                                    F-10

<PAGE>

                      JETBORNE INTERNATIONAL, INC.

                      NOTES TO FINANCIAL STATEMENTS

Note 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes
------------

The Company filed consolidated income tax returns through the year  ended
April  30, 1994 which included the results  of  its  operations  and  the
operations of  its  wholly  owned U.S. subsidiaries through September 16,
1993. Income tax  expense was allocated to the subsidiaries  that had net
income, computed as if each subsidiary were filing a separate return. The
subsidiaries' liability, along with other inter-company indebtedness, was
eliminated in consolidation.  The  income  tax returns of the Company for
the period September 17, 1993 through April 30, 1994 and  the  year ended
April 30, 1995 reflect the results of operations of the Company.

Deferred income taxes  (none  at April 30, 1995 and 1994) are provided in
amounts  sufficient to give effect to  the  use  of  net  operating  loss
carryforwards  and  timing  differences  between financial and income tax
reporting (see Note 11). Investment tax  and research and development tax
credits are treated as a reduction of income tax  expense  in the year in
which the related assets are placed in service and when the  research and
development expense is incurred.

Earnings (Loss) Per Share
-------------------------

Earnings (loss) per share  have  been  computed  based  on  the  weighted
average   number   of   common   shares  and  common  share   equivalents
outstanding.

Cash and Cash Equivalents
-------------------------

The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.

Note 2.  LIQUIDITY (see Note 1)

The  Company   has  sustained  net  cumulative  losses  of  approximately
$3,700,000  since  April 30, 1988 (the net income for the two years  that
did not reflect losses were generated from either discontinued operations
or  extraordinary  items)  and  retained  earnings  have  decreased  from
$1,837,681  to  retained  earnings (deficit) of $(1,868,311) at April 30,
1995. As referred to in Note  1,  the  Company  emerged from a Chapter 11
bankruptcy proceeding (which commenced December 10,  1991)  on  September
17,  1993  and,  as  part  of  the confirmed plan of reorganization,  the
Company received $201,200 for the issuance of 6,400,000 shares of Company
common stock.

Since  the  end  of  the  last  fiscal  year, the Company's liquidity has
continued  to  deteriorate,  with increasing rapidity, primarily due to a
continuing diminishing stock sales trend caused by a lack  of  current or
"fresh"  inventory,  declining  consignment  inventory, limited brokerage
sales opportunities and excessive professional  fees  due to previous and
on-going litigation.


                                    F-11
<PAGE>

                      JETBORNE INTERNATIONAL, INC.

                      NOTES TO FINANCIAL STATEMENTS

Note 2.  LIQUIDITY (see Note 1)(continued)

The  Company borrowed $30,000 from its Chief Executive Officer on January
18, 1996 (not  repaid  at February 29, 1996) for the purpose of paying an
obligation due that day  (see  Note  15)  and,  at  February 29, 1996, is
indebted  to  the  Chairman  of  its Board of Directors for  five  months
compensation (see Note 14).

Credit  financing  is  being  sought to purchase "fresh"  inventory  lots
where the purchased inventory will comprise the collateral for the credit
extended. The Company also continues to pursue aircraft parts consignment
agreements  and  other business opportunities within the expertise of its
executives. Consignments,  in effect, provide the Company with additional
inventory  without the prior need for purchases which  adversely  affects
liquidity.

Management  of  the Company believes that the referred  to  programs,  if
accomplished,  will  provide  sufficient  working  capital  to  meet  the
Company's obligations as they become due.  There  can  be  no  assurance,
however, that the Company will be successful in  its  efforts nor that it
will be able to maintain its operations on a profitable basis even though
substantially  all  claims  and  lawsuits have been resolved or  adequate
provision has been made for the ultimate liability (see Note 15).

As indicated in Note  3,  all  operating subsidiaries of the Company were
sold, or operations were terminated,  during  the  past five years except
Jetborne, Inc. which was effectively merged into the Company.

Note 3.  SALE/LIQUIDATION OF SUBSIDIARIES

As  referred  to  in Note 1, the Company sold 100% of the common stock of
Aircraft Modular Products, Inc. during the year-end April  30, 1991   and
during  the  same  year   sold  the  operating  assets  of  Alblam  Sound
Productions, Inc. In addition,  a receiver was appointed, during the year
ended  April  30,  1992,  for  the  Company's  principal  United  Kingdom
subsidiary  and  operations  of  Advanced   Aero   Hydraulics,  Inc. were
terminated during the year ended April 30, 1993. The  then only remaining
subsidiary  of the Company (Jetborne, Inc.) was effectively  merged  into
the Company when  the United States Bankruptcy Court entered an order, on
September 17, 1993,  confirming the Company's third amended joint plan of
reorganization (see Note 1).

Operations of Advanced  Aero  Hydraulics, Inc. ("AAH") were terminated on
July 31, 1992 and the Company entered  into  a  contract  for the sale of
AAH's equipment for $60,000. The sale was concluded on March 26, 1993 and
the  Company  received $15,000 with the balance of the contracted  amount
payable in $15,000 installments (paid in full by July 23, 1993).

The results of operations of AAH are included in the statements of income
(loss) in the category "loss from discontinued operations, net of  income







                                    F-12
<PAGE>

                      JETBORNE INTERNATIONAL, INC.

                      NOTES TO FINANCIAL STATEMENTS

Note 3.  SALE/LIQUIDATION OF SUBSIDIARIES (continued)

taxes". The following is a summary of AAH's results of operations for the
year ended April 30, 1993:

  Net sales                                          $137,191
  (Loss) before income taxes                          (40,332)
  Income taxes                                              0
  Net income (loss)                                   (40,332)

Note 4.  NOTES RECEIVABLE (Non-trade)

The Company had, prior  to September 17, 1993, ownership of the remaining
balance on the note receivable  from  the purchaser of 100% of the common
stock of Aircraft Modular Products, Inc.  This  note  (with the remaining
balance  at  January 1, 1993 of $2,078,350) has been transferred  to  the
Unsecured Creditors' Committee of Jetborne International, Inc. (see Notes
1 and 3).

At April 30,  1995  and  1994,  the  former  principal stockholder of the
Company  and  two  terminated  officers  (see  Notes  9,  10 and 15) were
indebted to the Company as follows:

  Former principal stockholder                       $3,310,321  (1)
  Former Vice President                                 572,658  (2)
  Former President                                       43,738  (3)
                                                     ----------
  Total                                              $3,926,717
                                                     ==========

These amounts had  been written off as uncollectible, or an allowance had
been established, based on the then possible offsets and on  the probable
uncollectability (see below and Notes 9, 10 and 15).
______

(1)  On  June  10,  1994  a  final  default  judgement for $4,512,600 was
     entered, by  the United States Bankruptcy Court, against the  former
     principal stockholder.

(2)  On  November  10, 1994  the  former  Vice President,  based  on  his
     petition, obtained an order from the United States  Bankruptcy Court
     discharging  his  debts;  however, on  May  29, 1995, the same Court
     determined  that  $514,212  of   his  debt  to  the  Company was not
     dischargeable  and, accordingly,entered  a final  summary  judgement
     against him.

(3)  The indebtedness of the former President was  satisfied on September
     8, 1994; the Company received $12,500, the former President withdrew
     his claims against the Company, and mutual  releases were exchanged.

Note 5. INVENTORIES (see Notes 1 and 7)

Inventories of aircraft  parts and supplies total $3,248,136 at April 30,
1995 and $3,656,051 at April  30, 1994, net of a reserve for obsolescence
of  $365,000  and  $500,000 respectively. These amounts  do  not  include
inventories received on  a consignment basis with the Company agreeing to
assume  all  risks  and insure  at  no  charge  to  the  consignors.  The
consignment agreements are summarized as follows:


                                    F-13

<PAGE>

                      JETBORNE INTERNATIONAL, INC.

                      NOTES TO FINANCIAL STATEMENTS

Note 5. INVENTORIES (see Notes 1 and 7)(continued)

   Consignment agreement dated January 26, 1990 with a major airline with
   the Company agreeing to use its best efforts to sell  the inventory at
   market  value  for  which it was to receive 35% of the selling  price.
   From  inception through April  30,  1992,  the  Company  had  received
   approximately  $2,150,000  (valued  at  estimated  selling  prices) of
   parts.  As  of  April  30, 1995 all unsold parts were in the Company's
   warehouse, however, based on negotiations with, and instructions from,
   the consignor, all parts were returned to the consignor by November 2,
   1995. The various remaining unresolved matters between the Company and
   the consignor were in progress until January 9, 1996 when a settlement
   agreement  was  entered  into  cancelling and terminating the original
   consignment agreement and the modifications (see Note 15).

   Consignment  agreement  dated   December  9, 1992,  with a non-related
   entity, which  required  the  Company  to  initially  place a $125,000
   deposit with the consignor (to be reviewed semi-annually as it relates
   to the value of the consigned parts; reduced to  $36,629  at April 30,
   1994, and $ 0 at April 30,  1995  based  on  the reduced amount of the
   consigned  inventory  on  hand).  The Company agreed to use  its  best
   efforts to sell the parts for which  it  receives  40%  of the selling
   price. Either party may cancel the agreement with thirty  days written
   notice. An affiliate of the consignor had guaranteed the deposit.

   Consignment  agreement  dated   December  1, 1994,  with a non-related
   entity. The Company  agreed  to use its best efforts to sell the parts
   for  which  it receives 40% of the selling price (just prior  to  each
   sale title to the inventory  items  are transferred from the consignor
   to the Company and the Company sells  the  parts  in its own name). In
   addition,  the  Company  is  to  pay  a  handling  fee of 10%  of  the
   consignor's  acquisition costs for any consignment parts  returned  to
   the consignor during the period of the agreement; the 10% handling fee
   for items returned to the consignor, based on the consignor's request,
   is to be charged  to  the  consignor.  The  agreement  was  to  expire
   November 30, 1995, however, it was cancelled by the Company August  2,
   1995.

Note 6.  PROPERTY AND EQUIPMENT (see Note 1)

At April 30, property and equipment consists of:

<TABLE>
<CAPTION>
                                                Estimated useful lives/
                             1995      1994      depreciation methods
                           --------  --------  -------------------------
<S>                        <C>       <C>       <C>
  Machinery                                    5-10 years/straight-line
    and equipment          $142,718  $129,196    and declining balance
  Leasehold improvements    361,681   361,681  10-25 years/straight-line
  Office furniture
    and equipment           110,992   115,945  5-8 years/straight-line
  Transportation equipment   18,425    18,425  5 year straight-line
                           --------  --------

  Total                    $633,816  $625,247
                           ========  ========
</TABLE>

                                    F-14

<PAGE>

                      JETBORNE INTERNATIONAL, INC.

                      NOTES TO FINANCIAL STATEMENTS

Note 6.  PROPERTY AND EQUIPMENT (see Note 1)(continued)

Depreciation and amortization  charged  to  income  was $29,958,  $33,774
and  $45,269  for  the  years  ended  April  30,  1995,  1994  and  1993,
respectively.

Note 7.  NOTES PAYABLE (see Notes  1, 4 and 5)



At April 30, notes payable consist of:

<TABLE>
<CAPTION>
                                                      1995       1994
                                                    --------  ---------
<S>                                                 <C>       <C>
  Remaining  balance  on a $25,000 note, originally
  payable on demand, with interest   at  prime plus
  2 points; issued December 11, 1991 with a chattel
  mortgage encumbering all inventory,  all accounts
  receivable and the AMP note (see Note 3)          $      0  $   9,300

  Installment notes payable monthly ($362 to $1,671
  including  interest  at  various  rates)  through
  December 15, 1995                                   15,828     13,319
                                                    --------  ---------
  Total                                             $ 15,828  $  22,619
                                                    ========  =========

Note 8.  LONG-TERM DEBT (see Notes 1, 5 and 15)

At April 30, long-term debt consist of:
                                                     1995        1994
                                                   ---------  ---------
  Various unsecured tax obligations payable monthly
  ($1  to  $371 plus interest)  from  October  1993
  through February  1996                            $ 27,331   $ 27,331

  Agreement to pay a creditor  in  twenty remaining
  quarterly  installments  commencing November  23,
  1993  (the  first  four  installments  of  $5,000
  through August 23, 1994 and the remaining sixteen
  installments of $2,500 through  August 25, 1998),
  without  interest  (see  Note  15  regarding  the
  modification  of  the amount of the  indebtedness
  and the payment terms)                              60,000     60,000

  Income tax obligation to Internal Revenue Service
  payable in monthly installments ($1,151 including
  interest at 7% per annum) through August 17, 1999   51,288     61,025
                                                    --------   --------

  Total                                             $138,619   $148,356

  Less: Current maturities                            68,302     51,489
                                                    --------   --------
  Long-term debt, net of current maturities         $ 70,317   $ 96,867
                                                    ========   ========

</TABLE>


                                    F-15

<PAGE>

                      JETBORNE INTERNATIONAL, INC.

                      NOTES TO FINANCIAL STATEMENTS

Note 8.  LONG-TERM DEBT (see Notes 1, 5 and 15)(continued)

Maturities of long-term debt in each of the next years are as follows:

               Year ending April 30,             Amount
               --------------------           ------------
                       1996                   $     68,302
                       1997                         24,012
                       1998                         23,359
                       1999                         18,410
                       2000 and thereafter           4,536
                                              ------------

                       Total                  $    138,619
                                              ============

Note 9. RELATED PARTY TRANSACTIONS (see Notes 1, 4, 10, 14 and 15)

Prior to March 9, 1991, when a non-related U.K. Limited Liability Company
("U.K. Company") acquired, from the then  principal  stockholder  of  the
Company, the rights to 3,130,000 shares of  the  Company's  common  stock
(including  options to purchase 430,000 shares; the options expired prior
to April 30,  1995), a former employee, officer and chairman of the Board
of Directors was  the  principal  stockholder of the Company. On December
30,  1990,  the  then  principal stockholder  of  the  Company  signed  a
$1,960,492 note to the Company  which  note was not paid and, on June 10,
1994, the Company obtained a default  final  judgement,  in the amount of
$4,512,600, against him in connection with the note and related matters.

Reference is made to Note 1 which describes a provision in the bankruptcy
confirmation  order  for the receipt by the Company of $201,200  for  the
issuance of 6,400,000 shares of Company common stock (50% to the Chairman
of  the  Board  of  Directors  of  the  Company,  as  trustee  [also  the
representative of U.K.  Company;   see  above and Note 10] and 50% to the
Chief Executive Officer of the Company).  In connection therewith, and as
subsequently confirmed by the United States  Bankruptcy  Court,  the  two  
stockholders  entered into a shareholder agreement which contains various
provisions including:  voting  for  members of the Board of Directors (as
directed by the United States Bankruptcy  Court,  the  current  Board  of
Directors  consists  of  the  Chairman  of the Board, the Chief Executive
Officer and a non-employee who was previously  appointed  a  director  by
U.K.  Company),  disposition  of  shares  (including  the  first right of
refusal  on possible sale and/or transfer), an employment  agreement  for
the Chief Executive  Officer  (see  Note  14)  and  compensation for  the
Chairman of the Board of Directors of the Company (see Note 14).

On January  18,  1996,  the  Company  borrowed  $30,000  from  its  Chief
Executive  Officer  (see Note 15)(not repaid at February 29, 1996) and is
indebted  to  the Chairman of its Board of Directors at February 29, 1996
for five months compensation (totalling $20,000; see Note 14).







                                    F-16

<PAGE>

                      JETBORNE INTERNATIONAL, INC.

                      NOTES TO FINANCIAL STATEMENTS

Note 10.  STOCKHOLDERS' EQUITY (see Notes 1, 9 and 15)

On October 4, 1991, the Company's stock was delisted from NASDAQ.

Effective  September  17,  1993,  the  5,590  shares  of  10%  cumulative
redeemable preferred  stock  of Jetborne, Inc. was cancelled based on the
September 17, 1993 order of the  United States Bankruptcy Court, Southern
District  of Florida, confirming the  Company's  third  amended  plan  of
reorganization (see Notes 1 and 3).

In connection  with  various  contractual  arrangements,  the Company had
committed   to   register  946,850  shares  of  its  common  stock  in  a
registration statement  to  be  filed  with  the  Securities and Exchange
Commission.  Since  the  commitments were made, significant  events  have
taken  place  and,  presently,   it  is  uncertain  whether  any  of  the
commitments can be, or will have to be, fulfilled.

Stock Option Plans
------------------
Since inception,  the  Company adopted several stock option plans for the
benefit of employees and directors of  the Company. The Company  believes
that all of the options, as of February 29, 1996,  were cancelled or have
expired.

Common Stock Issued
-------------------
Through  May  1,  1991, the Company had issued 6,235,780  shares  of  its
common  stock. The status  remained  the  same,  subject  to  outstanding
options (see above) until September 17, 1993 when 6,400,000 shares of the
Company's common stock were sold to two new principal stockholders of the
Company based on an order of the United States Bankruptcy Court, Southern
District  of  Florida, confirming the Company's  third  amended  plan  of
reorganization (see above and Note 1).

On November 10, 1994  the Company was notified that the 221,850 shares of
Company  common  stock  purchased  by  U.K. Company  (see  Note  9)  were
transferred to the Chairman  of the Board of Directors of the Company, as
Trustee (U.K. Company also confirmed  that  they conveyed to that person,
as  trustee, all of its ownership interest in  the  3,200,000  shares  of
Company's common  stock  to  be  acquired  by that person as trustee [see
above and Note 1]). Accordingly, U.K. Company only owns the shares of the
Company's common  stock  acquired,  on  March  9,  1991,  from  the  then
principal stockholder of the Company (see Note 9).

Common Stock in Treasury
------------------------
Prior  to  May  1,  1991,  the  Company had purchased,  from  non-related
persons,  3,500  shares  of  its  common  stock  for $3,763.  The Company
received 750,000  shares  of  its  common  stock  from  the bank that was
holding the shares as collateral for an obligation of the then  principal
stockholder  of  the  Company (see Note 9). The return was negotiated  as
part of the settlement with that bank (see Note 15) and accordingly it is
included in the statement of changes in stockholders' equity for the year
ended April 30, 1994 at a nominal value of $1.

On August 10, 1994 the 753,500 shares were cancelled (see Note 1).


                                    F-17

<PAGE>

                      JETBORNE INTERNATIONAL, INC.

                      NOTES TO FINANCIAL STATEMENTS

Note 11.  INCOME TAXES

At May 1, 1992, the Company had, for Federal Income Tax purposes,  a  net
operating  loss carryforward of $2,741,731. The following is a summary of
the components  of the net operating loss carryforward to the fiscal year
ending April 30, 1995:

  Balance at May 1, 1992                                $2,741,731
  Loss applied to taxable income
    of fiscal year ended April 30, 1993                   (125,272)
  Loss applied to taxable income
    of fiscal year ended April 30, 1994                 (2,041,621)
  Increase due to reduction in
    charitable contributions carryforward                   11,698
  Loss arising in fiscal year ended April 30, 1995         944,142
                                                        ----------
  Net operating loss carryforward to fiscal years
    ending  April 30, 1996 through  April 30, 2010      $1,530,678
                                                        ==========

Even though the Company was not required to pay Federal  income tax based
on  taxable  income  for  the  year  ended April 30, 1994 (as the taxable
income was offset by the net operating loss carryforward), Federal income
tax  of  $1,799   was  computed based on the  "alternative  minimum  tax"
computation. In the event Federal income tax returns for subsequent years
reflect Federal income taxes  due  in  excess  of the alternative minimum
tax,  the  alternative  minimum  taxes paid for years  ended  April  1991
($59,763) and 1994 ($1,799) can be  applied  against the computed Federal
income tax.

No provision has been made for the difference between financial statement
and income tax reporting of certain items of revenue and expenses, as the
net operating loss carryforward at  April  30, 1995 substantially exceeds
the  difference; nor has a provision been made for  deferred  income  tax
credits,  based  on  the  possible use of  the net operating losses being
applied against taxable income  in  future  years  (and  the  use  of the  
"alternative  minimum  tax"  paid)  as  there  is  no  assurance that the
Company's future profitability will exceed the difference.

Note 12.  LEASES

The Company  leases  warehouse  facilities  and  office  space   under  a
long-term agreement. On June 30, 1992, the Company concluded a settlement
with  Aircraft  Modular  Products,  Inc.  ("AMP")  which  included  AMP's
purchasing the building occupied by the Company  and  entering into a new
lease with the Company (not including the space then occupied by a former
subsidiary  [Advanced  Aero  Hydraulics, Inc.; see Note  3])  covering  a
period of five years commencing  October  1,  1992  (initially  for a six
month  period  with  options  for  six  months  and four years [exercised
covering  the  four  years  ending  September   30,  1997])(with  a  rent
reduction) and  relieving the Company of its $85,387 obligation for prior
unpaid rent.




                                    F-18

<PAGE>

                      JETBORNE INTERNATIONAL, INC.

                      NOTES TO FINANCIAL STATEMENTS

Note 12.  LEASES (continued)

The  following is a schedule of future minimum  lease  payments  for  the
above described lease:

                   Year ending April 30
                   -------------------
                            1996          $   85,679
                            1997              85,679
                            1998              35,700
                            Thereafter             0
                                          ----------

                            Total         $  207,058
                                          ==========

For the years ended April 30, 1995, 1994 and 1993, rental expense for all
operating  leases  was approximately $111,496, $104,000 and $101,000 (net
of rent waivers, see above), respectively.

Note 13.  MAJOR CUSTOMER

The Company made sales to major unaffiliated customers  of  approximately
$486,000,  $986,000  and  $92,000  during the years ended April 30, 1995,
1994 and 1993, respectively.

NOTE 14.  EMPLOYMENT AGREEMENTS (see Note 9)

During  April  1992,  the  then  financial  controller of the Company was
appointed  Chief  Financial  Officer  at a salary of  $65,000  per  annum
(increased to $70,000 when an employment  agreement  was  entered into on
May  1, 1994). The employee resigned on May 31, 1995 effective  June  30,
1995. Another employee was appointed financial controller.

On June 15, 1994, modifications to Executive  Employment  Agreements were
approved  by  the  United  States Bankruptcy Court and are summarized  as
follows:

  A five year employment agreement, effective  May  1,  1994,  with the
  Chief  Executive  Officer  at  a  salary  of $120,000 per annum, plus
  fringe   benefits  (the agreement contains provisions for termination
  by the Company and/or the  employee  and  a  non-compete clause), and
  establishment of $48,000 per year compensation to the Chairman of the
  Board of Directors (effective June 15, 1994).

Note 15.  LITIGATION (see Notes 4, 9, and 10)

At April 30, 1995 and 1994, the Company was a party to several claims and
lawsuits arising out of the conduct of its business. Substantially all of
the litigation that was unresolved at April 30, 1993 has been resolved by
the  United States Bankruptcy Court prior to, or on, September  17,  1993
(when  the  Company's third amended plan of reorganization was confirmed)
or subsequently by a separate Bankruptcy Court order.




                                    F-19

<PAGE>

                      JETBORNE INTERNATIONAL, INC.
 
                      NOTES TO FINANCIAL STATEMENTS

Note 15.  LITIGATION (see Notes 4, 9, and 10)(continued)

The  following  is  a  summary of the claims and lawsuits that have  been
resolved as of February 29, 1996:

   On  June  10, 1994, a Default Final Judgement was entered against the
   former  principal  stockholder, in  the  amount  of  $4,512,600  plus
   interest,  based  on  the lawsuit re-filed in the  Bankruptcy  Court.
   Included in the lawsuit were claims against two suspended officers of
   the Company  (see below) and claims against a third suspended officer
   (see below) and a former sales  consultant;  these  claims  have been
   settled without payment of substantial  funds  by, or to, the Company
   (see Note 4). The former sales consultant had filed a $474,000  claim
   (against Jetborne, Inc.) in the Bankruptcy Court and the Company  had
   disputed  it.  On  September 8, 1994 the Company and the former sales
   consultant  resolved   their  disputes  and  both  parties  signed  a
   stipulation of dismissal (however, the sales consultant still had the
   right to file a claim in the Bankruptcy Court).

   An action to recover  damages  from  the Company, as guarantor, on an
   outstanding $750,000 obligation (plus interest  and costs) payable to
   a  bank  by  the  then  principal  stockholder of the    Company.  On
   September 12, 1991 a judgement was awarded  to  the bank (against the
   stockholder and the  Company,  as guarantor).  The litigation against
   the  Company was settled on September 17,  1993  when  an  order  was
   entered    confirming   the   Company's   third   amended   plan   of
   reorganization.  The  settlement  includes the payment to the bank of
   $100,000 (by the  Company),  payment  to  the  bank  of approximately
   $1,078,000 (from the proceeds of collection of the note received from
   the purchaser of Aircraft Modular Products, Inc. [see Notes 1  and 3]
   and  transferred  to the Unsecured Creditors' Committee  of  Jetborne
   International, Inc.) and the  bank's return to the Company of 750,000
   shares of the Company's common  stock (previously held by the bank as
   partial collateral and subsequently  purchased  by  the bank for $.05
   per share)(see Note 10).

   A shareholders' derivative suit,  on behalf of the Company, commenced 
   during May 1991, which named the former President of the Company, the
   President   (effective February 1991), the  Vice  President  and  the
   Chief  Operating  Officer  as  defendants  (see above). The complaint
   purported to set forth claims for conversion, civil  theft, breach of
   fiduciary  duty,  instructive  trust  and breach of promise  to  pay.
   Injunctive  relief  was  sought,  as well as  an  accounting  by  the
   defendants, for the appointment of a receiver for the Company and the
   involuntary dissolution of the Company.  At  a  meeting  held May 10,
   1991,  the  newly  elected  Board of Directors passed a resolution to
   investigate the claims and, at the same  time, suspended, as officers
   and  employees, the three officers of the Company.  Salaries  to  the
   three  former officers were stopped effective May 10, 1991. There has
   not been  any  recent  activity  and the Company considers the matter
   closed. In the opinion of management  of  the  Company,  any  adverse
   decision  in connection with this litigation will not have a material
   adverse impact  on the financial condition of the Company and, if the




                                    F-20
<PAGE>

                      JETBORNE INTERNATIONAL, INC.

                      NOTES TO FINANCIAL STATEMENTS

Note 15.  LITIGATION (see Notes 4, 9, and 10)(continued)

   Company is awarded  damages, the collectability is doubtful (see Note
   4).

   During June 1991, the three suspended officers of the Company brought
   actions against  the  Company (and the Company filed a lawsuit in the
   United States Bankruptcy Court  against  the  suspended officers) for
   breach of employment and indemnity contracts (see  above) and alleged
   damages  as a result of the breaches as well as for reimbursement  of
   costs incurred.  The  Board  of Directors completed its investigation
   in connection with the shareholders'  derivative suit (see above) and
   terminated the employment  of the officers.  The  actions  have  been
   resolved (see above and Note 4).

   During March 1991, the Company  was informed that an investigation by
   the United States Customs Service (which  commenced on March 7, 1990,
   when the United States Customs Service visited  the  offices  of  the
   Company  [in  the  United States and the United Kingdom] and searched
   the premises and Company  files  pursuant  to  a  warrant signed by a
   United  States  Magistrate  to  determine  if  there was  a  possible
   violation  of  the  Export  Administration  Act and the  Arms  Export
   Control Act) had been expanded and the Company, and one of its former
   Vice Presidents, were the targets of an investigation  by  a  Federal
   Grand  Jury  for  possible  criminal violations. The Company had been
   informed that charges against the former Vice President were dropped,
   the Company was indicted and  the  trial scheduled for November 1991.
   On  October  23,  1992,  the  Company  entered  into  a  plea-bargain
   agreement, and on December 15, 1992 the Company pleaded guilty to two
   counts and paid $25,260 in fines,  to  settle  all pending litigation
   and  matters  in connection with the investigation.  During  December
   1993, the Company was informed that it had been debarred for a period
   of three years  from  December 3, 1992 from participating directly or
   indirectly in the export  of defense articles or technical data or in
   furnishing of defense services  for which a license or other approval
   is required. 

   As  referred  to  in  Note  5,  there were various unresolved matters
   between  the  Company  and  a  major airline  in  connection  with  a
   consignment agreement dated January  26,  1990. On January 9, 1996, a
   settlement agreement was entered into between  the  Company  and  the
   major  airline.  The  agreement cancelled and terminated the original
   consignment agreement, and the modifications thereto, and the Company
   agreed to wire transfer to the major airline $30,000  by  January 18,   
   1996  (timely  paid)  and  an  additional $7,500 per month commencing
   February 20, 1996 (the first  payment was paid February 9, 1996) with
   a  final payment on January 20, 1997.  The  agreement  also  provides
   that, when  the  major airline receives the $120,000 they will assign
   to the Company their  claim  filed  in  the  United States Bankruptcy
   Court against Jetborne, Inc. ($80,180)(see Note 1).

   On February 14, 1996, a lawsuit filed against  the  Company by one of
   its former attorneys was dismissed based on a settlement compromising
   the fees sought by the attorney.



                                    F-21

<PAGE>

                      JETBORNE INTERNATIONAL, INC.

                      NOTES TO FINANCIAL STATEMENTS

Note 15.  LITIGATION (see Notes 4, 9, and 10)(continued)

The following is a summary of the claims and lawsuits  that have not been
resolved as of February 29, 1996:

   A   former  attorney  for  the  Company  (the  escrow  agent  holding
   promissory  notes,  and  collateral therefore [and collateral for the
   payment of Federal income  taxes  that  might have been required with
   respect to a proposed bonus payable to one former employee], that the
   Company received from  former executives  of  the  Company [see above
   and Notes 4 and 9]) had deposited with the Court the promissory notes
   and collateral and had brought an interpleader action requesting that
   the  Court  accept  the promissory notes and collateral  pending  the
   outcome of the matters  involved.  The  Company  filed  an answer and
   cross-claim  against  the issuers of the promissory notes seeking  to
   claim the escrowed promissory  notes  and collateral. Counsel for the
   Company is presently evaluating the possibility of having the default
   final judgement against the former principal stockholder entered into
   the litigation in the Circuit Court in  order  to obtain the release,
   and  subsequent return to the Company, of 1,000,000   shares  of  the
   Company  common  stock  which were interplead and which were owned by
   the former principal stockholder of the Company.

   A possible substantial liability  of  Advanced  Aero Hydraulics, Inc.
   (see Note 3) as a result of pollution of its business premises. Based
   on  recent  studies  made  on  behalf of the Company, a provision  of
   $49,500 had been made in a prior year (approximately  $10,000 of  the
   provision  was  paid  by April 30, 1995 and 1994)(included in accrued
   expenses in the balance sheets).




























                                    F-22

<PAGE>
                                                             Schedule II
                      JETBORNE INTERNATIONAL, INC.
<TABLE>
<CAPTION>
               AMOUNTS RECEIVABLE FROM RELATED PARTIES AND
                  UNDERWRITERS, PROMOTERS AND EMPLOYEES
                       OTHER THAN RELATED PARTIES

            FOR THE YEARS ENDED APRIL 30, 1995, 1994 AND 1993



                                                Deductions
                      Balances,   Additions      (Amounts
                      Beginning  (Including     Collected
Name of Debtor         of Year    Interest)    or Credited)       Total
----------------     ----------   ----------   -------------    --------
<S>                  <C>          <C>          <C>              <C>
1995:
  A. Blattner(1)     $       0    $        0      $        0    $     0
  M. Levkovitz(2)            0             0               0          0
  D. Blattner (3)            0             0               0          0
  A. Alouf                   0         3,000               0      3,000


1994:
  A. Blattner(1)     $       0    $        0      $        0    $     0
  M. Levkovitz(2)            0             0               0          0
  D. Blattner (3)            0             0               0          0


1993:
  A. Blattner(1)     $       0    $        0      $        0    $     0
  M. Levkovitz(2)            0             0               0          0
  D. Blattner (3)            0             0               0          0


</TABLE>

   (1) Balance at beginning and  end of year ($0) represents a receivable
       of $3,310,321 less amounts written-off or for which  an  allowance
       has been established of $3,310,321 (see Note 4  to  the  Financial
       Statements).

   (2) Balance at beginning and  end of year ($0) represents a receivable
       of $572,658 less amounts written-off or for which an allowance has
       been  established  of  $572,658  (see  Note  4  to  the  Financial
       Statements).

   (3) Balance  at beginning and end of year ($0) represents a receivable
       of $43,738 less amounts written-off  or  for  which  an  allowance
       has  been  established  of  $43,738  (see  Note 4 to the Financial
       Statements).









                                    F-23A

<PAGE>

                                                             Schedule II
                      JETBORNE INTERNATIONAL, INC.
<TABLE>
<CAPTION>
               AMOUNTS RECEIVABLE FROM RELATED PARTIES AND
                  UNDERWRITERS, PROMOTERS AND EMPLOYEES
                       OTHER THAN RELATED PARTIES

            FOR THE YEARS ENDED APRIL 30, 1995, 1994 AND 1993

                               Amounts
                             Written-off
                             or for Which     Balances, End Of Year,
                             an Allowance        Net of Allowances
                               Has Been      ------------------------
Name of Debtor               Established      Current     Non-current
-----------------            ------------    --------    ------------
<S>                          <C>             <C>         <C>
1995:
  A. Blattner(1)              $        0     $      0        $      0
  M. Levkovitz(2)                      0            0               0
  D. Blattner (3)                      0            0               0
  A. Alouf                             0        3,000               0


1994:
  A. Blattner(1)              $        0     $      0        $      0
  M. Levkovitz(2)                      0            0               0
  D. Blattner                          0            0               0


1993:
  A. Blattner                 $        0     $      0        $      0
  M. Levkovitz                         0            0               0
  D. Blattner                          0            0               0


</TABLE>

   (1) Balance at beginning and  end of year ($0) represents a receivable
       of $3,310,321 less amounts written-off or for which  an  allowance
       has been established of $3,310,321 (see Note 4  to  the  Financial
       Statements).

   (2) Balance at beginning and  end of year ($0) represents a receivable
       of $572,658 less amounts written-off or for which an allowance has
       been  established  of  $572,658  (see  Note  4  to  the  Financial
       Statements).

   (3) Balance  at beginning and end of year ($0) represents a receivable
       of $43,738 less amounts written-off  or  for  which  an  allowance
       has  been  established  of $43,738   (see  Note 4 to the Financial
       Statements).









                                    F-23B

<PAGE>
                                                             Schedule VII
                      JETBORNE INTERNATIONAL, INC.

<TABLE>
<CAPTION>
                GUARANTEES OF SECURITIES OF OTHER ISSUERS

                             APRIL 30, 1995



  Name of Issuer of     Title of Issue of     Total Amount
Securities Guaranteed     Each Class of      Guaranteed and  Amount Owed by
    by the Company     Securities Guaranteed   Outstanding     the Company
---------------------  --------------------- --------------  --------------
<S>                    <C>                   <C>             <C>

                                           NONE

</TABLE>









































                                    F-24A

<PAGE>

                                                             Schedule VII
                      JETBORNE INTERNATIONAL, INC.

<TABLE>
<CAPTION>
                GUARANTEES OF SECURITIES OF OTHER ISSUERS

                             APRIL 30, 1995

 
                                  Nature of Default by
   Amount in                      Issuer of Securities
   Treasury                      Guaranteed in Principal,
  of Issuer of                   Interest, Sinking Fund,
   Securities       Nature       or Redemption Provisions
   Guaranteed    of Guarantee    or Payment of Dividends
---------------  ------------    ------------------------
<S>              <C>             <C>



                            NONE


</TABLE>






































                                    F-24B
<PAGE>

                                                             Schedule IX
                      JETBORNE INTERNATIONAL, INC.

<TABLE>
<CAPTION>
                          SHORT-TERM BORROWINGS

                    FOR THE YEAR ENDED APRIL 30, 1995

                                        Maximum Amounts   Average Amount
Categories of Aggregate   Balances at     Outstanding       Outstanding
 Short-term Borrowings    End of Year   During the Year   During the Year
-----------------------   -----------   ---------------   ---------------
<S>                       <C>           <C>               <C>

Notes payable to:
  Banks and other
    financial institutions   $15,828      $   26,783        $   14,574

</TABLE>


The average amount outstanding during the year represents the average
  principal balances outstanding during the year.

The weighted average interest rates during the year were computed by
  dividing the actual interest  incurred  on  short-term borrowings by 
  the average  amount outstanding during  the year.




































                                    F-25A
<PAGE>

                                                             Schedule IX
                      JETBORNE INTERNATIONAL, INC.
 
                          SHORT-TERM BORROWINGS

                    FOR THE YEAR ENDED APRIL 30, 1995

                                       Weighted Average
Categories of Aggregate                 Interest Rate
 Short-term Borrowings                 During the Year
-----------------------                ----------------

Notes payable to:
  Banks and other
    financial institutions                   6.92%




The average amount outstanding during the year represents the average
  principal balances outstanding during the year.

The weighted average interest rates during the year were computed by
  dividing the actual interest  incurred  on  short-term borrowings by 
  the average  amount outstanding during  the year.




































                                    F-25B

<PAGE> 
                      JETBORNE INTERNATIONAL, INC.

<TABLE>
<CAPTION>
                                Exhibit II

         SCHEDULE OF COMPUTATIONS OF  EARNINGS  (LOSS) PER SHARE

            FOR THE YEARS ENDED APRIL 30, 1995, 1994 AND 1993


                                         1995         1994        1993
                                     -----------  -----------  ----------
<S>                                  <C>          <C>          <C>
CONTINUING OPERATIONS:
  Income (loss)
    from continuing operations       $  (701,034) $   116,658  $  (123,822)
                                     ===========  ===========  ===========

Weighted average number of common
  shares outstanding during the year  11,882,280    9,730,636    6,232,280
                                      ==========    =========    =========

INCOME (LOSS) PER SHARE -
  CONTINUING OPERATIONS              $     (0.06) $      0.01  $     (0.02)
                                     ===========  ===========  ===========




NET INCOME:
  Net income (loss)                  $  (701,034) $   530,691  $  (164,154)
                                     ===========  ===========  ===========

Weighted average number of common
  shares outstanding during the year  11,882,280    9,730,636    6,232,280
                                      ==========    =========    =========

EARNINGS (LOSS)
  PER SHARE - NET INCOME (LOSS)       $    (0.06)  $     0.05   $    (0.03)
                                      ==========   ==========   ==========

</TABLE>




















                                    F-26