PROFLIGHT MEDICAL RESPONSE INC, SB-2/A, 1998-01-22

PROFLIGHT MEDICAL RESPONSE INC
SB-2/A, 1998-01-22
AIR TRANSPORTATION, NONSCHEDULED

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 22, 1998

REGISTRATION NO. 333-27197
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------

AMENDMENT NO. 2
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
PROFLIGHT MEDICAL RESPONSE, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
------------------------
<TABLE>
<S> <C> <C>
COLORADO 4522 84-1200480
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>

7211 S. PEORIA STREET,
ENGLEWOOD, COLORADO 80112
(800) 949-5387
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
7211 S. PEORIA STREET,
ENGLEWOOD, COLORADO 80112
(ADDRESS OF PRINCIPAL PLACE OF BUSINESS OR INTENDED PRINCIPAL PLACE OF BUSINESS)
------------------------
KEVIN L. BURKHARDT
7211 S. PEORIA STREET, ENGLEWOOD, COLORADO 80112
(800) 949-5387
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)

------------------------
COPY OF ALL COMMUNICATIONS TO:

<TABLE>
<S> <C>
GERALD A. ADLER, ESQ. LAWRENCE G. NUSBAUM, ESQ.
MARY P. O'HARA, ESQ. GUSRAE, KAPLAN & BRUNO
BONDY & SCHLOSS LLP 120 WALL STREET
6 EAST 43RD ST., 25TH FLOOR NEW YORK, NY 10005
NEW YORK, NY 10017 PH: (212) 269-1400
PH: (212) 661-3535 FAX: (212) 809-5449
FAX: (212) 972-1677
</TABLE>

------------------------
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after this Registration Statement becomes effective.
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE

PROPOSED PROPOSED
MAXIMUM MAXIMUM
OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE(2) PRICE(2) FEE(3)
<S> <C> <C> <C> <C>
Common Stock............................ 1,782,500 Shares(1) $ 4.00 $ 7,130,000 $ 474.95
Redeemable Common Stock Purchase
Warrants.............................. 1,782,500 Warrants(1) $ .10 $ 178,250 $ 11.87
Common Stock(4)......................... 1,782,500 Shares $ 6.00 $10,695,000 $ 712.43
Underwriter's Option(5)................. 310,000 Shares -- $ 10 --
Common Stock(6)......................... 155,000 Shares $ 4.80 $ 744,000 $ 49.56
Underwriter's Common Stock Purchase
Warrants(7)........................... 155,000 Warrants $ .12 $ 18,600 $ 1.24
Common Stock(8)......................... 155,000 Shares $ 6.00 $ 930,000 $ 61.95
Total.............................................................................................. $ 1,312.00
</TABLE>

(footnotes on next page)
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------

(footnotes from previous page)

(1) Includes 232,500 shares of Common Stock and Common Stock Purchase Warrants
that the Underwriter has the option to purchase from the Company to cover
over-allotments, if any. See 'Underwriting.'

(2) Estimated solely for the purpose of calculating the registration fee.

(3) Calculated pursuant to Rule 457(a) based on a bona fide estimate of the
maximum offering price. The amount of the fee for each item listed in the
table has been adjusted to reflect the prior payment of a portion of the fee
upon filing of Amendment No. 1 to the Company's Registration Statement. Fees
paid with this Amendment No. 2 are based solely on the additional 402,500
Shares and 402,500 Common Stock Purchase Warrants being offered hereby.

(4) Represents Common Stock reserved for issuance upon exercise of the
Redeemable Common Stock Purchase Warrants.

(5) Represents Underwriter's Option to purchase 155,000 shares of Common Stock
and 155,000 Common Stock Purchase Warrants.

(6) Represents Common Stock underlying Underwriter's Option.

(7) Represents Common Stock Purchase Warrants underlying Underwriter's Option.

(8) Represents Common Stock underlying Common Stock Purchase Warrants underlying
Underwriter's Option.

SUBJECT TO COMPLETION, DATED JANUARY 22, 1998

PROSPECTUS
PROFLIGHT MEDICAL RESPONSE, INC.

1,550,000 SHARES OF COMMON STOCK AND
1,550,000 REDEEMABLE COMMON STOCK PURCHASE WARRANTS

Proflight Medical Response, Inc., a Colorado corporation (the 'Company')
hereby offers (the 'Offering') 1,550,000 shares of common stock, $.001 par value
(the 'Common Stock') of the Company and 1,550,000 Redeemable Common Stock
Purchase Warrants (the 'Warrants'). The initial public offering prices of the
Common Stock and Warrants are $4.00 and $.10, respectively. The Offering is
being offered through First Liberty Investment Group, Inc. (the 'Underwriter').
See 'Underwriting.' The Common Stock and the Warrants offered hereby (sometimes
hereinafter collectively referred to as the 'Securities') will be separately
tradeable immediately upon issuance and may be purchased separately. Investors
will not be required to purchase shares of Common Stock and Warrants together or
in any particular ratio. Each Warrant entitles the holder to purchase one share
of Common Stock at an exercise price of $6.00 (the 'Exercise Price'), subject to
adjustment, for three years commencing the date of this Prospectus (the 'Closing
Date').

The Warrants are redeemable, in whole or in part, by the Company at a price
of $.10 per Warrant, commencing twenty-four (24) months after the Closing Date
(provided that with the prior written consent of the Underwriter the Warrants
may be redeemed commencing twelve (12) months from the Closing Date) and prior
to the expiration, provided that (i) prior written notice of not less than
thirty (30) days is given to the Warrantholders, and (ii) the closing bid price
(as defined) of the Company's Common Stock for the twenty (20) consecutive
trading days immediately prior to the date on which the notice of redemption is
given, shall have exceeded $8.50 per share. Notwithstanding the foregoing,
Warrantholders shall have exercise rights until the close of business the day
preceding the date fixed for redemption.

Prior to this Offering, there has been no public market for the Common
Stock or the Warrants. There can be no assurance that a public market will
develop or be sustained for the Common Stock or the Warrants after the
completion of the Offering. The Offering prices of the Common Stock and the
Warrants, exercise price and other terms of the Warrants were established by
negotiations between the Company and the Underwriter and do not necessarily bear
any direct relationship to the Company's assets, earnings, book value, results
of operations or any other generally accepted criteria of value. The Company has
applied for listing of the Common Stock and the Warrants on the Nasdaq SmallCap
Market'sm' under the trading symbols 'PFLT' and 'PFLTW.' See 'Risk Factors' and
'Underwriting.'
------------------------

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND IMMEDIATE AND
SUBSTANTIAL DILUTION AND SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD THE
LOSS OF HIS OR HER ENTIRE INVESTMENT. SEE 'RISK FACTORS' BEGINNING ON PAGE 9 OF
THIS PROSPECTUS FOR CERTAIN INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE
INVESTORS.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(1) COMPANY(2)(3)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share...................................................................... $4.00 $0.40 $3.60
Per Warrant.................................................................... $.10 $.01 $.09
Total(3)....................................................................... $6,355,000 $635,500 $5,719,500
</TABLE>

(1) Does not include (i) an option issued to the Underwriter (the 'Underwriter's
Option') to purchase 155,000 shares of Common Stock at $4.80 per share and
155,000 Warrants at a price of $.12 per warrant, (ii) a non-accountable
expense allowance payable to the Underwriter equal to 3% of the gross
proceeds of the Offering, (iii) a consulting agreement providing for fees
totalling $120,000 payable in full to the Underwriter on the Closing Date
and (iv) a 5% sales commission on Warrants exercised through the
Underwriter. The Underwriter's Option is exercisable for a period of four
years commencing one year after the date of this Prospectus. The Company has
agreed to indemnify the Underwriter against, or contribute to losses arising
out of, certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See 'Underwriting.'

(footnotes continued on following page)

FIRST LIBERTY INVESTMENT GROUP, INC.
------------------------

, 1998

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION, OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

(footnotes continued from previous page)

(2) After deducting underwriting discounts and commissions, but before deducting
estimated Offering expenses of $465,650 in the aggregate, which includes the
Underwriter's non-accountable expense allowance all of which are payable by
the Company. See 'Underwriting.'

(3) The Securities are being sold on a 'firm commitment' basis. The Company has
granted the Underwriter an option, exercisable during the 45-calendar-day
period after the Closing Date, to purchase, at the initial public offering
price less underwriting discounts, up to an additional 232,500 shares of
Common Stock and 232,500 Common Stock Purchase Warrants, on the same terms
as the Securities offered hereby, solely to cover over-allotments, if any
(the 'Over-Allotment Option'). If the Over-Allotment Option is exercised in
full, the total price to the public will be $7,308,250, the total
Underwriting Discount and Commissions will be $826,150, and the total
Proceeds to the Company will be $6,482,100, before deducting estimated
offering expenses payable by the Company. See Note (2) above and
'Underwriting.'

------------------------
The Securities are being offered by the Underwriter named herein, as agent
for the Company, subject to prior sale, when, as and if accepted by them and
subject to certain legal matters to be approved by counsel and to certain other
conditions. The Company and the Underwriter reserve the right to withdraw,
cancel or modify the Offering and to reject any order in whole or in part.

The Company intends to furnish its stockholders with annual reports
containing audited financial statements of the Company, after the end of each
fiscal year, and make available such other periodic reports as the Company may
deem appropriate or as may be required by law.

A SIGNIFICANT NUMBER OF SECURITIES MAY BE SOLD TO CUSTOMERS OF THE
UNDERWRITER. SUCH CUSTOMERS MAY SUBSEQUENTLY ENGAGE IN THE SALE OR PURCHASE OF
THE SECURITIES THROUGH OR WITH THE UNDERWRITER. ALTHOUGH IT HAS NO OBLIGATION TO
DO SO, THE UNDERWRITER MAY BECOME A MARKET MAKER AND OTHERWISE EFFECT
TRANSACTIONS IN SECURITIES OF THE COMPANY, AND, IF IT PARTICIPATES IN SUCH
MARKET ACTIVITIES, MAY BE A DOMINATING INFLUENCE IN THE TRADING OF THE
SECURITIES. THE PRICES AND THE LIQUIDITY OF THE SECURITIES MAY BE SIGNIFICANTLY
AFFECTED BY THE DEGREE, IF ANY, OF THE PARTICIPATION OF THE UNDERWRITER IN SUCH
MARKET, SHOULD A MARKET ARISE.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET.

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information, including the financial
statements and notes thereto, appearing elsewhere in this Prospectus. All share
and per share amounts reflect a fifty-for-one and a 3.85356-for-one stock split
of the Company's issued and outstanding Common Stock effective July 1996 and
January 1996, respectively. In December 1996, the Company contracted to acquire
all of the outstanding shares of capital stock of (i) Air Response, Inc., a New
York corporation ('Air Response') in a stock-for-stock exchange and (ii) Air
Response South, Inc., a Florida corporation ('Air Response South'), for cash.
Each of these corporations provide fixed wing air ambulance services. These
agreements were amended in April and May 1997. Pursuant to the terms of these
agreements, the acquisitions will close simultaneously with the closing of this
initial public offering. Unless the context otherwise requires, the term 'the
Company' includes Air Response and Air Response South. Except where otherwise
indicated, all information in this Prospectus assumes no exercise of the
Underwriter's Over-Allotment Option or Underwriter's Option. Each prospective
investor is urged to read this Prospectus in its entirety.

THE COMPANY

The Company is a national and international provider of fixed wing air
ambulance transport services for persons who are ill, injured or otherwise
incapacitated who need to be relocated and who may require emergency medical
care during flight. The Company currently operates from its main facility
located in Colorado, and has bases in New York and Tennessee. The Company
provides its services throughout the United States, Canada, Europe, Mexico,
Central America, South America, Bermuda and the Mediterranean. In addition, the
Company, when operating at full capacity, has subcontracted its services by
brokering its air ambulance trips to other air transport providers. For the year
ended December 31, 1996, the Company, including Air Response and Air Response
South, had pro forma net sales of approximately $11.3 million.

As of the date hereof, the Company has an air ambulance fleet of 9 fixed
winged aircraft. The Company provides transport services in connection with the
relocation of patients requiring specialized medical procedures such as organ
transplants, cancer treatment, specialized cardiac surgery, burn care, stroke
care and advanced head and spinal cord surgery and rehabilitation to hospitals
recognized as national centers of excellence in these fields, for the
repatriation of patients who are injured or become ill away from home and in
connection with the transportation of non-ambulatory long-term care patients who
need to be relocated. The flights operated are on a non-emergency basis and are
generally long distance in nature. Emergency flights are usually contracted to
helicopters and such flights are generally short distances. The Company's
customers include individual patients, managed care companies, hospitals,
government agencies, national health insurance companies, health maintenance
organizations ('HMOs') and air ambulance brokers.

The Company believes that the need for non-emergency ambulance transport
services will increase as pressure on the health insurance industry to reduce
costs increases. The Company believes that it can capitalize on this market. The
Company believes that the fixed wing segment of the medical air transport
industry will grow as hospital consolidation produces regional health networks
responsible for patients spread over a greater geographic area. The Company also
believes, although no assurance can be given, that relocating patients with
specialized needs to hospitals recognized as national centers of excellence and
which have pricing agreements with insurers and HMOs will increase as a way to
provide high quality, cost effective health care. The fixed wing air ambulance
market is currently served by a number of small, regional companies lacking a
national presence and the ability to serve an insurance company or HMO on a
national basis. The Company believes that through the acquisitions of Air
Response and Air Response South (the 'Acquisitions') and by implementing its
business strategy, it will begin to establish a national presence while
continuing to ensure that patients receive the highest quality care. The
Company's beliefs in this paragraph are based upon management's experience and
an independent research report by Wintergreen Research, Inc., copyright 1995,
entitled 'Fixed Wing Air Medical Transport Market, 1991 - 2000.' No assurance
can be given that such beliefs will be realized or are predictive of future
developments. No assurance can be given that the facts, predictions or the
independent research report upon which such beliefs are premised are accurate.

The Company's business strategy over the next 24 months is to attempt to
become a leading national provider of fixed wing air ambulance services by:

Improving the efficiency of its existing operations by integrating the
operations of Air Response and Air Response South into the Company and by
providing additional management expertise, recognizing economies of scale,
introducing sophisticated operating systems and controls, instituting a
centralized dispatching function and providing a stronger, more stable
capital base.

Implementing strategic acquisitions of other air ambulance service
providers. The Company believes that opportunities exist to acquire
additional air ambulance service providers in the future that would
benefit from the efficiency, as well as the capital and management
resources of the Company. The Company regularly evaluates acquisition
possibilities and considers a number of factors in evaluating such
acquisition candidates, including the quality of management and medical
personnel, historical operating results, the demographic characteristics
of service areas, the regulatory environment in which such company
operates and the fee structure and reimbursement levels. In addition, by
combining existing companies, the Company hopes it will be able to deliver
fixed wing air ambulance services to insurance companies and other health
care providers at cost effective rates. Except as otherwise described in
this Prospectus, there are no present negotiations, arrangements or
understandings with respect to any potential material acquisitions.

Increasing its market share and expanding its operations by contracting
with insurers and HMOs seeking an air ambulance provider with national and
international capabilities and by appealing to individual consumers
through a prepaid service package. No assurances can be given that the
Company will be able to successfully negotiate additional contracts with
such parties on favorable terms, if at all, or otherwise expand its
operations.

The Company's senior management has extensive experience in the air
ambulance transport services business. Kevin L. Burkhardt, the Company's Chief
Executive Officer and President, has over 10 years experience in the air
ambulance industry and over 20 years experience in the aviation industry,
including experience as captain, flight instructor and corporate pilot. Jane S.
Burkhardt, the Company's Secretary and medical and legal coordinator, received
her B.S. degree in nursing in 1981 from the University of Wisconsin and her JD
degree in 1990 from St. Louis University Law School. Mrs. Burkhardt has over 14
years experience in the nursing industry and was a registered nurse and risk
manager for Presbyterian/St. Lukes Medical Center. Donald Jones will, upon
closing of the Offering, serve as the Company's Vice President of Sales and a
Director of the Company. Mr. Jones has over 13 years experience in the air
ambulance industry, including experience as flight coordinator, and director of
marketing and sales. David Cohen, the Company's Chief Financial Officer and
Treasurer, has over 30 years of management and financial experience. Mr. Cohen
was the chief financial officer of Air Resources Corp., a public company which
manufactures adhesives and held various senior management positions for two
aircraft sales corporations.

In April 1997, the Company entered into an Amended Agreement and Plan of
Reorganization with Air Response and Louis R. Capece, Jr., which agreement was
further amended in May 1997 and January 1998, pursuant to which the Company
agreed to acquire at the closing of the Offering, subject to the terms and
conditions contained therein, all of the outstanding capital stock of Air
Response in exchange for 806,250 shares of Common Stock of the Company to be
issued two years from the closing of the Offering. If the Company completes a
second public offering, Mr. Capece has a put option to sell to the Company such
number of shares of Common Stock at the then current market value, equal to 20%
of the net proceeds of such offering not to exceed $1,000,000. Under the terms
of the put option, the Company is obligated to purchase such shares once the put
option is exercised. The Company simultaneously entered into an Amended Stock
Purchase and Sale Agreement with Air Response South and Louis R. Capece, Jr.,
which was further amended January 1998, pursuant to which the Company agreed to
acquire at the closing of the Offering, subject to the terms and conditions
contained therein, all of the outstanding capital stock of Air Response South
for $800,000 which is payable upon closing of the Offering.

The Company was incorporated in May 1992. The Company's executive offices
are located at 7211 S. Peoria St., Englewood, CO 80112 and its telephone number
is (800) 949-5387.

THE OFFERING

<TABLE>

<S> <C>
Common Stock Offered......................... 1,550,000 shares(1)
Redeemable Common Stock Purchase Warrants
Offered.................................... 1,550,000 Warrants(1)
Common Stock Outstanding Before the
Offering................................... 2,665,607 shares(1)(2)
Common Stock Outstanding After the
Offering................................... 4,215,607 shares(1)(2)
Warrants Outstanding Before Offering......... -0-
Warrants Outstanding After Offering.......... 1,550,000 Warrants(1)(3)
Exercise Terms.......................... Each Warrant entitles the holder to purchase one share of Common
Stock for $6.00, during the three (3) year period commencing on
the date hereof, subject to adjustment in certain circumstances.
See 'Description of Securities -- Warrants.'
Expiration Date......................... , 2001 (three years after the date hereof).
Redemption.............................. Redeemable by the Company, in whole or in part, at a price of $.10
per Warrant, commencing twenty four (24) months after the date
hereof (provided that with the prior written consent of the
Underwriter, the Warrants may be redeemed commencing twelve (12)
months from the date hereof) upon not less than thirty (30) days
prior written notice to the holders of such Warrants, provided
that the closing bid price (as defined in the Warrant Agreement)
of the Company's Common Stock for the twenty (20) consecutive
trading days immediately prior to the date on which the notice of
redemption is given, shall have exceeded $8.50 per share.
Use of Proceeds.............................. The net proceeds from the Offering will be used to pay the first
payment in connection with the acquisition of Air Response South,
to repay indebtedness incurred in connection with its bridge
financing and certain short term notes, to fund costs relating to
its expansion strategy and for general corporate purposes,
including working capital. See 'Use of Proceeds.'
Risk Factors................................. An investment in the Securities offered hereby involves a high
degree of risk and immediate substantial dilution to the public
investors. See 'Risk Factors' and 'Dilution.'
Proposed Trading Symbols(4):
Nasdaq SmallCap Market'sm'
Common Stock............................ PFLT
Warrants................................ PFLTW
</TABLE>

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

(1) Does not include 232,500 shares of Common Stock or 232,500 Common Stock
Purchase Warrants that may be sold by the Company pursuant to the
Underwriter's Over-Allotment Option.

(2) Does not include: (i) 350,000 shares of Common Stock reserved for issuance
under the Company's stock option plan; (ii) 806,250 shares of Common Stock
which will be issued to Louis R. Capece, Jr.,

(footnotes continued on next page)

(footnotes continued from previous page)

in connection with the acquisition of Air Response, two years from the
closing of the Offering, (iii) 1,550,000 shares reserved for issuance upon
exercise of the Warrants offered hereby; (iv) 1,025,000 shares reserved for
issuance upon exercise of other outstanding options; and (v) 155,000 shares
of Common Stock and 155,000 Common Stock Purchase Warrants issuable upon
exercise of the Underwriter's Option, including 155,000 shares of Common
Stock issuable upon exercise of the Common Stock Purchase Warrants which are
included in and issuable upon exercise of the Underwriter's Option; (vi)
232,500 shares of Common Stock and 232,500 Common Stock Purchase Warrants
issuable upon exercise of the Underwriter's Over-Allotment Option; (vii) up
to 1,018,786 shares of Common Stock issuable to certain employees of the
Company if the Company achieves a minimum of $1,000,000 in pretax profits
before depreciation and amortization, in either of the first two years from
the date of this Prospectus; and (viii) 10,000 shares of Common Stock to be
issued to an Officer at the closing of the Offering. See
'Management -- Stock Option Plan,' 'Certain Transactions,' 'Description of
Securities' and 'Underwriting.'

(3) Does not include Underwriter's Options or the 155,000 Warrants issuable upon
exercise thereof.

(4) The Company has applied to have the Common Stock and Warrants approved for
quotation on the Nasdaq SmallCap Market'sm' and believes it will meet the
initial listing requirements upon consummation of the Offering. However, no
assurance can be given that the Company will be approved for listing. There
is also no assurance that, if listed, it will be able to satisfy the
criteria for continued quotation on the Nasdaq SmallCap Market'sm' following
the Offering. See 'Risk Factors -- Listing and Continued Quotation on the
Nasdaq SmallCap Market.'sm''

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA

The following table sets forth summary historical financial data of (i)
Proflight for the years ended December 31, 1996 and 1995 and for nine months
ended September 30, 1997 and 1996 and (ii) Air Response and Air Response South
for the years ended December 31, 1996 and 1995 and for the nine months ended
September 30, 1997 and 1996. The historical financial data for the years ended
December 31, 1996 and 1995 are derived from the audited financial statements of
Proflight, Air Response and Air Response South. The financial statements of
Proflight have been audited by Grant Thornton LLP, independent certified public
accountants, whose report thereon has been modified to include an explanatory
paragraph which refers to various matters which raise substantial doubt about
Proflight's ability to continue as a going concern and are included elsewhere in
this Prospectus. The combined financial statements of Air Response and Air
Response South for the years ended December 31, 1996 and 1995 have been audited
by Staff Maikels & Ciampino, P.C., independent certified public accountants,
which statements are included elsewhere in this Prospectus. The summary
historical financial data should be read in conjunction with the financial
statements and notes thereto of Proflight, Air Response and Air Response South
and 'Management's Discussion and Analysis of Financial Condition and Results of
Operations' included elsewhere in this Prospectus. The financial data for
Proflight, Air Response and Air Response South for the nine months ended
September 30, 1997 and 1996 are unaudited, but, in the opinion of management of
the respective companies, reflect all adjustments (consisting only of normal
recurring adjustments) necessary for a fair representation of results for all
interim periods. The operating results for interim periods are not necessarily
indicative of results for the full fiscal year. The following table also sets
forth pro forma financial data of the Company as if the Acquisitions (which will
close simultaneously with the closing of this Offering) had occurred as of
September 30, 1997 for balance sheet results and as of January 1, 1996 for
operating data. The pro forma financial data was derived from the unaudited pro
forma financial statements appearing elsewhere in this Prospectus. The summary
pro forma financial data should be read in conjunction with the Company's pro
forma financial statements and the notes thereto. The pro forma balance sheet
data as of September 30, 1997 and the pro forma statement of operations for the
year ended December 31, 1996 and nine months ended September 30, 1997 are
unaudited, but, in the opinion of management, reflect all adjustments necessary
for a fair presentation of pro forma results of operations. The pro forma
operating results are not necessarily indicative of the Company's future results
of operations.

SUMMARY HISTORICAL FINANCIAL DATA

THE COMPANY AIR RESPONSE AND AIR RESPONSE SOUTH
------------------------------------------------- -------------------------------------------------
NINE MONTHS ENDED TWELVE MONTHS ENDED NINE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, DECEMBER 31,
----------------------- ----------------------- ----------------------- -----------------------
1997 1996 1996 1995 1997 1996 1996 1995
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA
Historical:
Net sales............. $4,285,832 $2,942,888 $3,906,211 $2,885,535 $6,537,380 $5,908,145 $7,658,243 $5,875,929
Flying operations and
maintenance......... 2,948,083 2,097,970 3,001,507 1,960,671 4,331,274 3,844,043 4,875,505 3,850,363
Promotion and sales... 85,305 96,838 255,616 31,909 372,560 435,207 447,061 663,686
General,
administrative
expense............. 946,683 478,901 650,036 353,969 1,491,410 1,043,196 1,538,761 1,099,404
Depreciation and
amortization........ 222,748 329,720 377,930 276,538 297,650 277,339 396,139 339,230
Profit (loss) from
operation........... 83,013 (60,541) (378,878) 262,448 44,486 308,360 400,777 (76,754)
Interest expense...... 227,126 180,812 287,188 150,254 108,197 69,355 136,148 117,719
Other income
(expense)........... -- -- 34 4,915 (8,704) (240,302) (349,590) (215,510)
Income tax
(benefit)........... -- -- -- -- 5,874 (49,309) (38,747) (98,065)
Net profit (loss)..... (144,113) (241,353) (666,032) 117,109 (78,289) 48,012 (46,214) (311,918)
</TABLE>

SUMMARY UNAUDITED PRO FORMA FINANCIAL DATA

NINE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER 30, 1997 DECEMBER 31, 1996
------------------- -------------------
<S> <C> <C>
Pro Forma Operating Data:
Net sales...................................................... $ 9,965,402 $11,314,454
Flying operations and maintenance.............................. 6,421,547 7,627,012
Promotion and sales............................................ 457,865 702,677
General and administrative expense............................. 2,438,093 2,188,797
Depreciation and amortization.................................. 716,148 1,035,069
Total operating expense........................................ 10,033,653 11,553,555
Operating loss................................................. 127,499 (239,101)
Other income (expense)......................................... (344,027) (844,223)
Income tax expense (benefit)................................... 5,874 (38,747)
Net loss....................................................... (418,152) (1,044,577)

Per share data:
Net loss....................................................... $ (0.12)(4) $ (0.33)(4)
</TABLE>

<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
---------------------------------------------
ACTUAL(1) PRO FORMA(2) ADJUSTED(3)
----------- ------------ --------------
<S> <C> <C> <C>
Balance Sheet Data:
Working capital (deficit).................................. $ (954,133) $(2,872,943) $ 2,380,907
Total assets............................................... 3,715,316 9,912,027 14,562,877
Long term obligations...................................... 2,385,080 3,619,533 3,619,533
Retained earnings (deficit)................................ (255,118) (255,118) (295,118)
Stockholders' equity (deficit)............................. (221,741) 3,003,259 8,257,109
</TABLE>

- ------------
(1) Represents Proflight Medical Response.

(2) Includes Air Response and Air Response South.

(3) The adjusted pro forma data includes adjustments that reflect the effects of
the Acquisitions, including the sale of 1,550,000 shares of Common Stock and
1,550,000 Warrants offered hereby and the application of the net proceeds.

(4) Based on 3,471,957 shares which do not include (i) 1,550,000 shares of
Common Stock offered hereby, or (ii) 10,000 shares of Common Stock being
offered to an officer as a bonus at the closing of the Offering.

RISK FACTORS

An investment in the Securities offered hereby involves a high degree of
risk. Prior to making any investment decision, prospective investors should
carefully consider the following risk factors together with the other
information presented in this Prospectus including the financial statements (and
notes thereto).

HISTORY OF LOSSES; ACCUMULATED DEFICIT; NO HISTORY OF COMBINED OPERATIONS.
Proflight reported a net loss for the year ended December 31, 1996 of $666,032
and net income for the year ended December 31, 1995 of $117,109. Air Response
and Air Response South, on a combined basis, reported a net loss of $46,214 and
$311,918 for the years ended December 31, 1996 and 1995, respectively. On a pro
forma basis, after giving effect to the Acquisitions, the Company would have had
a net loss for the year ended December 31, 1996 of $1,044,577. As of December
31, 1996, Proflight had an accumulated deficit in stockholders' equity of
$543,878. Proflight reported a net loss for the period ended September 30, 1997
of $144,113. Air Response and Air Response South reported a net loss, on a
combined basis, of $78,289. On a pro forma basis, after giving effect to the
Acquisition, the Company would have had a net loss for the period ended
September 30, 1997 of $471,651. As of September 30, 1997, Proflight has
accumulated deficit in stockholders' equity of $221,741. For the remaining
current fiscal year, the Company may incur additional losses which may be
substantial as a result of, among other things, its expansion strategy. There
can be no assurance that the Company's operations will be profitable in the
future or if achieved, that such profitability will be sustained. The Company
will consummate the Acquisitions on closing of the Offering, and to date, each
of the companies has been operating as a separate, independent entity. The
Company's profitability will depend upon, among other factors, the ability of
its management to integrate these entities into a single cohesive business
entity with a single business philosophy. There can be no assurance that the
Company's management will be successful in managing the combined operations or
in implementing the Company's business strategy. See 'Management's Discussion
and Analysis of Financial Condition and Results of Operations.'

MODIFICATION OF AUDITOR'S OPINION; GOING CONCERN. Proflight's independent
accountants have included an explanatory paragraph in their report on
Proflight's financial statements at December 31, 1996 and 1995, which states
that Proflight has accumulated a deficit in stockholders' equity of $543,878
through December 31, 1996 and total current liabilities exceed total current
assets by approximately $1,080,311 as of December 31, 1996, all of which raise
substantial doubt about Proflight's ability to continue as a going concern. See
'Financial Statements and Report of Independent Certified Public Accountants'
included elsewhere in this Prospectus.

EXPANSION STRATEGY. The Company's success will depend, in large measure,
upon management's ability to successfully implement its business strategy to
expand the Company's operations and enhance its national and international
presence by improving the efficiency of its existing operations including
integrating the operations of Air Response and Air Response South, implementing
strategic acquisitions of other air ambulance service providers and increasing
its market share by contracting with insurers and HMOs. The Company currently
has no agreements or understandings, nor is it engaged in any negotiations with
respect to any acquisitions other than those contemplated herein with Air
Response and Air Response South. The Company has a contract with Aetna Health
Management, Inc. ('Aetna') to provide air transport services. The Company's
contract with Aetna does not guarantee any specific amount of revenues. For the
year ended December 31, 1996, Aetna represented 5.57% of the Company's revenues.
However, the Company does not have any other agreements with insurers or HMOs.
There can be no assurance that suitable growth opportunities or acquisitions or
strategic alliances can be identified, consummated or successfully implemented
or that the Company's expansion strategy will result in profitability.

RISKS ASSOCIATED WITH ACQUISITIONS. The Company is not currently
considering, nor are there any agreements, negotiations or understandings
involving the Company with respect to, the acquisition of any business, other
than those of Air Response, Inc. and Air Response South, Inc. discussed
elsewhere in this Prospectus, or entering into a joint venture with any other
business, individual or other entity. From time to time in the future, the
Company may enter into negotiations with respect to potential acquisitions or
joint ventures, some of which may result in preliminary agreements. In the
course of such negotiations and/or due diligence, these negotiations and/or
preliminary agreements may be

abandoned or terminated, and the Company may incur significant transaction
expenses (such as legal and accounting fees) despite the abandonment or
termination of such negotiation or agreement.

NEED FOR ADDITIONAL FINANCING. The Company anticipates that the proceeds
from the Offering, together with projected cash flow from operations, will be
sufficient to fund its operations, including its proposed expansion, for at
least the next 12 months. However, there can be no assurance that events
affecting the Company's operations will not result in the Company depleting its
funds before that time. The Company may need to raise additional funds to
continue to implement its expansion strategy. There can be no assurance that
additional financing will be available, or, if available, that such financing
will be on terms favorable to the Company. Failure to obtain such additional
financing could have a material adverse effect on the Company. The Company
anticipates issuing additional securities to fund its expansion, either to raise
capital to fund internal growth or as principal consideration for acquisitions.
There can be no assurance that the Company will be able to successfully finance
its expansion or that the Company's securities will be acceptable consideration
to acquisition candidates. The failure of the Company to successfully implement
its expansion strategy may negatively impact the Company's competitive position
and its future results of operations. See 'Use of Proceeds,' 'Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources' and the Company's financial
statements and notes thereto.

PROCEEDS FOR ACQUISITION PAYMENT AND DEBT REPAYMENT; BROAD DISCRETION IN
APPLICATION OF PROCEEDS. Approximately 25% of the net proceeds of this Offering
will be used to pay the first payment in connection with the acquisition of Air
Response South and to repay certain short term notes and to repay the bridge
lenders. In addition, approximately $1,150,850 (21%) of the net proceeds of this
Offering will be used for general corporate purposes, including working capital.
Accordingly, management will have broad discretion over the use of proceeds. See
'Use of Proceeds.'

GOVERNMENTAL REGULATION. The Company is subject to governmental regulation
at the federal and state levels. At the federal level, the Company is subject to
regulation by the Federal Aviation Administration ('FAA') and the Occupational
Safety and Health Administration ('OSHA'). The FAA regulations are primarily
related to flight safety issues, and to govern flight operating procedures,
aircraft and equipment standards, maintenance and inspections, flight crew
standards, training and limitations, weather requirements and record keeping
requirements. The OSHA regulations are primarily designed to protect the
employees of the Company. Certain of the states in which the Company operates
regulate various aspects of its business. The Company's business is subject to
state requirements including, business licenses, training and certification of
medical personnel, the scope of services that may be provided by medical
personnel, staffing requirements, medical control and procedures. Applicable
federal and state laws and regulations are subject to change. Any changes could
adversely affect the Company's operations as well as the air ambulance business
in general. The Company believes, based upon management's experience, that it is
in substantial compliance with all regulatory requirements applicable to its
business. The failure to be in compliance with any applicable governmental
regulations could adversely affect the business, financial condition or results
of operations of the Company. See 'Business -- Governmental Regulation.'

POSSIBLE ADVERSE CHANGES IN REIMBURSEMENT RATES OR COVERAGE; MEDICARE,
MEDICAID AND HEALTH CARE REFORM. A substantial portion (18% for the year ended
December 31, 1996) of the Company's revenue is attributable to payments received
from third-party payors, including Medicare, Medicaid, HMOs, state-run insurance
pools and private insurers. The revenue, cash flow and profitability of the
Company, like those of other companies in the health care industry, will be
affected by the continuing efforts of third-party payors to control expenditures
for health care. In addition, reimbursement can be influenced by the financial
instability of private third-party payors and by budget pressures and cost
shifting by governmental payors. With regard to Medicare and Medicaid
reimbursement, Congress has consistently attempted to curb federal spending on
these programs. The Company cannot predict whether any health care or Medicare
or Medicaid reform measures will be enacted, and if they are enacted, what
effect they may have on the Company's business. No assurances can be given that
future funding and reimbursement levels will be favorable to the Company. A
reduction in coverage or reimbursement rates by third-party payors, whether in
the private or government sector, could have a material adverse effect on the
Company's business, financial condition or results of operations.

LIABILITY INSURANCE. The Company's air ambulance operations involve the
risks of potential liability incurred by the Company in the event of, among
other things, accidents involving the Company's airplanes and medical
malpractice. The Company maintains aircraft insurance with a maximum liability
per occurrence of up to $20,000,000 along with hull coverage (similar to auto
collision insurance) for the value of the aircraft. The annual premiums cost
approximately $15,000 per aircraft and $7,000 per piston aircraft. In addition,
the Company carries medical liability insurance in the amount of $1,000,000 per
claim and $3,000,000 in the aggregate per incident with an annual premium of
approximately $19,000. Although the Company currently maintains insurance
coverage which it believes is adequate to cover the risks of potential liability
against the Company, there can be no assurance that the coverage limits of its
insurance are adequate or that the Company will be able to continue to obtain
such insurance policies in the future or that the Company will be able to
continue to obtain insurance rates which will not negatively impact the
Company's earnings. The inability of the Company to maintain adequate liability
insurance could have a material adverse effect on its business, financial
condition or results of operations.

COMPETITION. The air ambulance service industry is a highly competitive and
highly fragmented industry. The Company competes with other fixed wing air
ambulance companies which operate their own fleets of airplanes. The Company
believes, based upon management's experience and the Wintergreen Research
Report, that each of these companies are small with a market share of less than
5%. The Company also competes with brokers who do not own their own fleets but
act as middlemen who market air ambulance services by generally auctioning such
services to the lowest bidder. The Company believes that brokers control a large
percentage of the air medical transport business and keep prices in the industry
very low. The Company's major competitors include Global Air Ambulance,
(Clearwater, Florida), Advanced Air Ambulance, (Miami, Florida), Critical Air
Care, (Atlanta, Georgia) and Aeronational Air Ambulance, (Pittsburgh,
Pennsylvania). The Company believes, based upon management's experience, that
air ambulance service providers compete primarily on the basis of quality of
service, performance and prices. The Company anticipates that its one-way
pricing structure will allow the Company to be competitive in the industry. In
addition to present competition, other companies with significantly greater
economic resources than the Company including potential customers of the Company
such as insurance companies, HMOs and health care facilities that do not
currently provide air ambulance services may enter the air ambulance service
business. Entry into such business by such entities could adversely affect the
business, financial condition or results of operations of the Company. See
'Business -- Competition.'

BENEFITS TO PRINCIPAL SHAREHOLDERS: POTENTIAL CONFLICT OF INTEREST. The
Company has entered into employment contracts with certain employees, pursuant
to which four of such contracts obligate the Company to issue in the aggregate
1,015,000 shares of Common Stock to four individuals if the Company achieves
pre-tax profits, before depreciation and amortization, of at least $1 million in
either of the first two years from the date of this Prospectus. If the Company
achieves, based upon the year-end audited financial statements of the Company,
this earnings benchmark, the Company would be obligated to issue such shares and
as a consequence, would be required to recognize a charge against its earnings
at the fair market value on the date such shares are earned of the Company's
common stock. Based on the offering price the charge would be approximately
$4,060,000. A charge against earnings in such amount could materially and
adversely affect the Company's ability to continue the maintenance criteria for
eligibility for quotation on the NASDAQ SmallCap Market. See 'Management --
Employment Agreements.' Each of the four individuals is a director of the
Company, and such four constitute a majority of the Company's Board of Directors
as presently constituted. Three of the four individuals are existing
shareholders of the Company. Finally, all existing shareholders of the Company
will benefit from the increase in tangible book value per share of Common Stock
resulting from this Offering. See 'Dilution.'

DEPENDENCE ON KEY PERSONNEL. The Company is dependent on the experience,
abilities and continued service of Kevin L. Burkhardt, the Company's Chief
Executive Officer and President. The Company has entered into an employment
agreement with Mr. Burkhardt and the loss of his services or any other key
personnel could have a material adverse effect on the Company's business,
financial condition and results of operations. The Company intends to obtain
$1,000,000 of key man life

insurance on the life of Kevin L. Burkhardt. In addition, the Company's future
success depends in large part upon its ability to attract and retain highly
qualified personnel. The Company faces competition for such personnel from other
companies and organizations, many of which have significantly greater resources
than the Company. There can be no assurance that the Company will be able to
attract and retain the necessary personnel on acceptable terms or at all. See
'Management.'

ABSENCE OF PUBLIC MARKET; DETERMINATION OF OFFERING PRICE; VOLATILITY.
Prior to the Offering, there has been no public trading market for the Company's
Common Stock or Warrants (collectively, the 'Securities') and there can be no
assurance that an active trading market for either the Common Stock or the
Warrants will develop following the Offering or, if developed, will be
sustained. The initial public offering prices of the Common Stock and Warrants
were determined by negotiations between the Company and the Underwriter and may
not necessarily bear any relationship to the Company's assets, earnings, book
value, results of operations or any other generally accepted criteria of value.
There can be no assurance that the Common Stock and Warrants will trade in the
public market at or above the initial public offering price following the
closing of the Offering. The trading price of the Common Stock and Warrants
could be subject to significant fluctuations in response to variations in
quarterly operating results and other factors and such fluctuations could cause
the market price of the Common Stock and Warrants to fluctuate substantially. In
addition, the stock markets of the United States have from time to time,
experienced significant price and volume fluctuations that are unrelated or
disproportionate to the operating performance of individual companies. Such
fluctuations may adversely affect the price of the Common Stock and Warrants.
See 'Underwriting.'

LACK OF UNDERWRITING HISTORY. The Underwriter was incorporated on August
11, 1958 and first registered as a broker-dealer on October 3, 1958. Prior to
this Offering, although the Underwriter has participated as a selling group
member in two underwritings, it has not participated as a sole or co-manager in
any public offerings. Prospective purchasers of the Common Stock and Warrants
offered hereby should consider the Underwriter's lack of experience in being a
manager of an underwritten public offering. There can be no assurance that such
lack of experience will not have a material adverse effect upon the Offering.
See 'Underwriting.'

LISTING AND CONTINUED QUOTATION ON THE NASDAQ SMALLCAP MARKET'sm'. The
Company has applied to have the Common Stock and Warrants approved for quotation
on the Nasdaq SmallCap Market'sm' and believes it will meet the initial listing
requirements upon consummation of the Offering, although no assurance can be
given that the Company will be approved for listing. There also can be no
assurance that, if listed, it will be able to satisfy the criteria for continued
quotation on the Nasdaq SmallCap Market'sm' following the Offering. Failure to
meet the maintenance criteria in the future may result in the Common Stock and
Warrants not being eligible for quotation on the Nasdaq SmallCap Market'sm' or
otherwise. In such event, an investor may find it more difficult to dispose of,
or to obtain accurate quotations as to the market value of the Common Stock or
Warrants. See 'Description of Securities.'

NASDAQ SMALLCAP MAINTENANCE REQUIREMENTS; PENNY STOCK REGULATION. The
trading of the Company's Securities on the NASDAQ SmallCap Market'sm' is
conditioned upon the Company meeting certain asset, capital surplus and stock
price tests. To maintain eligibility on the NASDAQ SmallCap Market, the Company
is required to maintain total net tangible assets in excess of $2,000,000,
capital and surplus in excess of $1,000,000 and a bid price of $1.00 per share.
If the Company fails any of these tests, the Securities may be delisted from
trading on the NASDAQ SmallCap Market. In the absence of the Common Stock being
quoted on the NASDAQ SmallCap Market, or the Company's having $2,000,000 in
stockholders' equity, trading in the Common Stock would be covered by Rule 15g-9
promulgated under the Securities Exchange Act of 1934 (the 'Exchange Act'), for
non-NASDAQ and non-exchange listed securities. Under such rule, broker-dealers
who recommend such securities to persons other than established customers and
accredited investors must make a special written suitability determination for
the purchaser and receive the purchaser's written agreement to a transaction
prior to sale. Securities are exempt from this rule if the market price is at
least $5.00 per share.

The Commission has adopted regulations that generally define a 'penny
stock' to be any equity security that has a market price of less than $5.00 per
share or an exercise price of less than $5.00 per

share, subject to certain exceptions. Such exceptions include an equity security
listed on NASDAQ, and an equity security issued by an issuer that has (i) net
tangible assets of at least $4,000,000, if such issuer has been in continuous
operation for three years, (ii) net tangible assets of at least $5,000,000, if
such issuer has been in continuous operation for less than three years, or (iii)
average revenue of at least $6,000,000 for the preceding three years. Unless an
exception is available, the regulations require the delivery, prior to any
transaction involving a penny stock, of a risk disclosure schedule explaining
the penny stock market and the risks associated therewith.

If the Company's securities were to become subject to the regulations
applicable to penny stocks, the market liquidity for the securities would be
severely affected, limiting the ability of broker-dealers to sell the securities
and the ability of purchasers in this Offering to sell their securities in the
secondary market. There is no assurance that trading in the Company's securities
will not be subject to these or other regulations that would adversely affect
the market for such securities.

POTENTIAL SIGNIFICANT FUTURE CHARGE AGAINST EARNINGS. The Company has
entered into employment contracts with three of its employees and an arrangement
with one of its directors, whereby such persons will receive in the aggregate
1,018,786 shares of Common Stock if the Company achieves net earnings, before
depreciation, amortization and income taxes, of at least $1 million in either of
the first two years after the date of this Prospectus. See
'Management -- Employment Agreements.' If the Company achieves, based upon the
year-end audited financial statements of the Company, this earnings benchmark,
the Company would be obligated to issue such shares and as a consequence, would
be required to recognize a charge against its earnings at the fair market value,
on the date such shares are earned, of the Company's common stock. Based on the
offering price the charge would be approximately $4,060,000. A charge against
earnings in such amount could materially and adversely affect the Company's
ability to continue satisfying the maintenance criteria for eligibility for
quotation on the NASDAQ SmallCap MarketSM. In addition, this transaction also
could adversely affect the price of the stock.

POTENTIAL SIGNIFICANT FUTURE DILUTION. The Company has entered into
employment contracts with three employees and an arrangement with one of its
directors, whereby such persons will receive in the aggregate 1,018,786 shares
of Common Stock if the Company achieves net income, before depreciation and
amortization, of at least $1 million in either of the first two years after the
date of this Prospectus. See 'Management -- Employment Agreements.' If the
Company achieves this income benchmark, the Company would be obligated to issue
such shares and as a consequence, investors in the Offering would experience
immediate and substantial dilution. At September 30, 1997, the net tangible book
value of the Company was approximately $(473,006) or $(0.18) per share. Giving
effect to the issuance of an additional 1,018,786 shares at that date, the net
tangible book value would have been $(0.09) per share. The adjusted pro forma
net tangible book value at September 30, 1997 was $4,780,844 or $0.95 per share.
Giving effect to the issuance of an additional 1,018,786 shares at that date,
the adjusted pro forma net tangible book value would have been $0.79 per share.
Thus giving effect to the issuance of 1,018,786 shares increases dilution to new
investors from $3.05 to $3.21. See 'Dilution'.

POSSIBLE ADVERSE EFFECTS OF ISSUANCE OF PREFERRED STOCK. The Company's
Amended and Restated Articles of Incorporation, as of March 28, 1997, authorizes
the issuance of 500,000 shares of Preferred Stock, par value $1.00, with
designations, rights and preferences as determined from time to time by the
Board of Directors ('Preferred Stock'). As a result of the foregoing, the Board
of Directors can issue, without further stockholder approval, Preferred Stock
with dividend, liquidation, conversion, voting or other rights that could
adversely affect the voting power or other rights of the holders of the Common
Stock. The issuance of Preferred Stock could, under certain circumstances,
discourage, delay or prevent a change in control of the Company. In addition,
the issuance of Preferred Stock could dilute the rights of holders of the Common
Stock and the market price of the Common Stock. Although the Company has no
plans to issue any shares of Preferred Stock, there can be no assurance that it
will not issue Preferred Stock at some future date.

IMMEDIATE AND SUBSTANTIAL DILUTION; NO DIVIDENDS ANTICIPATED. Purchasers of
the shares of Common Stock offered hereby will incur immediate and substantial
dilution of the net tangible book value of the Common Stock of $3.05 per share
(76%) from the initial public offering price of $4.00 per share. In addition, an
immediate increase in the Company's net tangible book value of $1.13 per share

to the existing shareholders will result upon the consummation of the Offering.
Thus, the net tangible book value per share will be significantly lower than the
price per share paid by the public investors. The public investors, therefore,
will bear most of the risk of loss, while effective control of the Company will
remain in the hands of the present shareholders. The Company has never paid any
dividends on its Common Stock and does not anticipate the payment of dividends
in the foreseeable future. See 'Dividend Policy' and 'Dilution.'

SHARES ELIGIBLE FOR FUTURE SALE; EXERCISE OF REGISTRATION RIGHTS. Upon the
consummation of the Offering and giving effect to 806,250 shares of Common Stock
to be issued to Louis R. Capece two years from the closing of the Offering,
there will be 5,031,857 shares of Common Stock outstanding, of which 3,481,857
shares of Common Stock are 'restricted securities' under Rule 144 under the
Securities Act of 1933, as amended (the 'Securities Act'). In the future, these
restricted shares may be sold only pursuant to a registration statement under
the Securities Act or an applicable exemption, including pursuant to Rule 144.
The Securities and Exchange Commission ('Commission') has amended Rule 144,
effective April 29, 1997, reducing the holding period before shares subject to
Rule 144 become eligible for sale in the public market. Under the revised Rule
144, a person who has owned Common Stock for one year may, under certain
circumstances, sell within any three-month period, a number of shares of Common
Stock that does not exceed the greater of 1% of the then outstanding shares of
Common Stock or the average weekly trading volume during the four calendar weeks
prior to such sale. In addition, a person who is not deemed to have been an
affiliate of the Company at any time during the three months preceding a sale,
and who has beneficially owned the restricted securities for the last two years
is entitled to sell all such shares without regard to the volume limitations,
current public information requirements, manner of sale provisions and notice
requirements. Sales or the expectation of sales of a substantial number of
shares of Common Stock in the public market following this Offering could
adversely affect the prevailing market price of the Common Stock. Except as
otherwise described herein, the Company, its officers and directors and
shareholders have agreed with the Underwriter not to directly or indirectly
register, issue, offer, sell, offer to sell, contract to sell, hypothecate,
pledge or otherwise dispose of any shares of Common Stock (or any securities
convertible into or exercisable or exchangeable for shares of Common Stock) for
a period of two years from the date of this Prospectus, except that shares held
by Srotnac Group LLC are subject to a one-year lock up period, after which they
may be sold with the prior written consent of the Underwriter, which consent
shall not be unreasonably withheld. In addition, the 806,250 shares of Common
Stock to be issued to Mr. Capece will not be issued until two years from the
closing of the Offering and the Rule 144 holding period will not commence until
such shares have been issued. See 'Shares Eligible for Future Sale.'

The holders of the Underwriter's Option have been granted registration
rights with respect to the 155,000 shares and 155,000 Warrants issuable upon
exercise of the Underwriter's Option. The sale, or availability for sale, of the
outstanding Common Stock underlying the Underwriter's Warrants and the shares
issued to Steve Cantor or his companies, in the public market subsequent to the
Offering could adversely affect the prevailing market price of the Common Stock
and could impair the Company's ability to raise additional capital. See
'Description of Capital Stock -- Registration Rights' and 'Shares Eligible for
Future Sale.'

POTENTIAL ADVERSE EFFECT OF REDEMPTION OF WARRANTS. The Warrants offered
hereby are redeemable, in whole or in part, at a price of $.10 per Warrant,
commencing twenty-four (24) months after the Closing Date (except with the prior
written consent of the Underwriter permitting redemption commencing twelve (12)
months from the Closing Date), and prior to their expiration; provided that (i)
prior notice of not less than 30 days is given to the Warrantholders; and (ii)
the closing bid price of the Company's Common Stock for the twenty (20)
consecutive trading days immediately prior to the date on which the notice of
redemption is given, shall have exceeded $8.50 per share. Warrantholders shall
have exercise rights until the close of the business day preceding the date
fixed for redemption. Notice of redemption of the Warrants could force the
holders to exercise the Warrants and pay the Exercise Price at a time when it
may be disadvantageous for them to do so, or to sell the Warrants at the current
market price when they might otherwise wish to hold them, or to accept the
redemption price, which may be substantially less than the market value of the
Warrants at the time of redemption. The Company has agreed to use its best
efforts to keep the registration statement current in connection with any
proposed exercise of the Warrants. Further, the Warrants may not be exercised
unless the

registration statement pursuant to the Securities Act covering the underlying
shares of Common Stock is current and such shares have been qualified for sale,
or there is an exemption from applicable qualification requirements, under the
securities laws of the state of residence of the holder of the Warrants.
Although the Company does not presently intend to do so, the Company reserves
the right to call the Warrants for redemption whether or not such underlying
shares are not, or cannot be, registered in the applicable states. Such
restrictions could have the effect of preventing certain Warrantholders from
liquidating their Warrants. Further, in the event the Company does not have a
current registration statement in effect, the Company would be unable to call
the Warrants for redemption. See 'Description of Securities -- Warrants.'

CURRENT PROSPECTUS AND STATE BLUE SKY REGISTRATION REQUIRED TO EXERCISE
WARRANTS. Holders of the Warrants will have the right to exercise the Warrants
for the purchase of shares of Common Stock only if a current prospectus relating
to such shares is then in effect and only if the shares are qualified for sale
under the securities laws of the applicable state or states or exempt therefrom.
The Company has undertaken and intends to file and keep current a prospectus
which will permit the purchase and sale of the Common Stock underlying the
Warrants, but there can be no assurance that the Company will be able to do so.
Although the Company intends to seek to qualify for sale the shares of Common
Stock underlying the Warrants in those states in which the securities are to be
offered, no assurance can be given that such qualification will occur. In
addition, purchasers may buy Warrants in the aftermarket or may move to
jurisdictions in which the shares of Common Stock issuable upon exercise of the
Warrants are registered or qualified during the period that the Warrants are
exercisable. In such event, the Company would be unable to issue shares to those
persons desiring to exercise their Warrants unless and until the shares could be
registered or qualified for sale in the jurisdiction in which such purchasers
reside, or an exemption to such qualification exists or is granted in such
jurisdiction. The Warrants may lose or be of no value if a prospectus covering
the shares issuable upon the exercise thereof is not kept current or if such
underlying shares are not, or cannot be, registered in the applicable states.
See 'Description of Securities -- Warrants.'

RELATIONSHIP OF UNDERWRITERS TO TRADING. The Underwriter may act as a
broker and/or dealer with respect to the purchase or sale of the Securities in
the Nasdaq SmallCap Market where each is expected to trade. The Underwriter also
may act as the Company's agent in connection with any future solicitation of
warrantholders to exercise their Warrants. Unless granted an exemption by the
Commission from Regulation M under the Exchange Act, the Underwriter will be
prohibited from engaging in any market-making activities or solicited brokerage
activities with regard to the Company's securities during a period beginning
nine business days prior to the commencement of any such solicitation and ending
on the later of the termination of such solicitation activity or the termination
(by waiver or otherwise) of any right the Underwriter may have to receive a fee
for the exercise of the Warrants following such solicitation. As a result, the
Underwriter and soliciting broker/dealers may be unable to continue to make a
market in the Company's securities during certain periods while the exercise of
Warrants is being solicited. Such a limitation, while in effect, could impair
the liquidity and market price of the Securities.

UNDERWRITER'S OPTION AND REGISTRATION RIGHTS. In connection with this
Offering, the Company has agreed to sell to the Underwriter, for $10, the
Underwriter's Option which entitles the Underwriter to purchase up to 155,000
shares of Common Stock and 155,000 Warrants, as well as 155,000 shares of Common
Stock issuable on exercise of such Warrants. The securities issuable upon
exercise of the Underwriter's Option are identical to those offered pursuant to
this prospectus. The Underwriter's Option is exercisable for a period of four
years commencing one year from the Effective Date. The exercise of the
Underwriter's Option may dilute the value of the shares of Common Stock to be
acquired by holders of the Option, may adversely affect the Company's ability to
obtain equity capital, and, if the Common Stock issuable upon the exercise of
the Underwriters' Warrants are sold in the public market, may adversely affect
the market price of the Common Stock. The Underwriter has been granted certain
'piggyback' and demand registration rights for a period of five years from the
Effective Date with respect to the registration under the Securities Act of the
securities directly or indirectly issuable upon exercise of the Underwriter's
Option. The exercise of such rights could result in substantial expense to the
Company. See 'Underwriting.'

USE OF PROCEEDS

The net proceeds to the Company from the sale of the Common Stock offered
hereby at an initial public offering price of $4.00 per share, after deduction
of underwriting discounts and commissions, and other Offering expenses including
the Underwriter's non-accountable expense allowance, will be approximately
$5,253,850 (and $6,083,177 if the Underwriter's over-allotment option is fully
exercised). The Company intends to use the net proceeds as follows: (i) payment
of approximately $800,000 to Louis R. Capece, Jr. pursuant to the amended stock
purchase and sale agreement for Air Response South; (ii) approximately $125,000
to repay bridge lenders pursuant to 10% promissory notes issued in March 1997,
in a bridge financing, due upon closing of an initial public offering, which
funds were used for legal, accounting and, printing expenses in connection with
this Offering and an earlier aborted offering and expenses in connection with
moving to new facilities; (iii) approximately $478,000 to repay short term
notes, including approximately $375,000 to pay off a line of credit of Air
Response, secured by accounts receivable with Central National Bank,
Canajoharie, New York, approximately $33,000 to pay Andrew Hiestand for the
balance owed for the purchase of his stock in January 1996, approximately
$20,000 to pay Charles W. Bartholomew, a director of the Company, on a loan made
to the Company in November, 1993 with an original balance of $75,000, and
$50,000 to pay off a short-term note to Steven Cantor that was used as operating
capital; (iv) $2,700,000 to fund costs related to the Company's expansion
strategy, including approximately $500,000 for down payment on a maintenance
facility, approximately $500,000 for the purchase of additional aircraft parts
inventory, approximately $200,000 for expenses associated with the Company's new
facilities, the upgrade of the Company's computer network and the purchase of
new dispatch software, approximately $500,000 for marketing, and approximately
$1,000,000 for leasing and equipping an aircraft; and (v) approximately
$1,150,850 for general corporate purposes, including working capital.

The foregoing uses of proceeds are estimates only and there may be
significant variations in the uses of proceeds due to, among other things,
changes in the Company's business or financial condition or economic
circumstances. Accordingly, the Company reserves the right to reallocate among
the foregoing uses upon any such change.

The Company anticipates that the proceeds from the Offering, together with
projected cash flow from operations, will be sufficient to fund its operations,
including its proposed expansion, for approximately 12 months. If the
Underwriters exercises the over-allotment option, the Company intends to add the
net proceeds of such exercise to working capital. However, there can be no
assurance that events affecting the Company's operations will not result in the
Company depleting its funds before that time. The Company may need to raise
substantial additional funding through public or private financings, corporate
collaborations or other sources. However, there can be no assurance that
additional financings will be available through any of these sources or, if
available, that such financing will be on acceptable terms. See 'Risk
Factors -- Need for Additional Financing' and 'Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources.'

Pending application of the net proceeds of the Offering, the Company will
make temporary investments in certificates of deposit, money market accounts
established by major commercial banks or financial institutions, United States
government obligations or high-grade commercial paper.

DIVIDEND POLICY

The Company has never paid cash dividends on its Common Stock and does not
anticipate paying dividends in the foreseeable future. The Company currently
intends to retain future earnings, if any, to finance its expansion strategy.
The payment of future cash dividends by the Company on its Common Stock will be
at the discretion of the Board of Directors and will depend on the Company's
earnings (if any), financial condition, cash flows, capital requirements, and
contractual prohibitions with respect to the payment of dividends and other
considerations as the Board of Directors may consider relevant.

CAPITALIZATION

The following table sets forth as of September 30, 1997 (i) the 'actual'
capitalization of Proflight; (ii) the 'pro forma' capitalization of the Company
giving effect to (a) its historical capitalization and (b) the Acquisitions, and
(iii) the 'pro forma as adjusted' capitalization of the Company giving effect to
the 'pro forma' capitalization and the issuance of the Securities offered hereby
(at an initial public offering price of $4.00 per share and $.10 per Warrant),
after deduction of underwriting discounts and commissions and estimated Offering
expenses payable by the Company and the application of a portion of the net
proceeds therefrom to repay indebtedness.

SEPTEMBER 30, 1997
----------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
---------- ----------- -----------
<S> <C> <C> <C>
Total current liabilities................................... $1,551,977 $ 3,289,235 $ 2,686,235
Long-term debt.............................................. 2,385,080 3,619,533 3,619,533
Stockholders' equity
Common Stock -- $.001 par value
Authorized -- 20,000,000 shares, 2,665,607 shares
issued and outstanding
Pro forma -- 3,471,857 shares
As adjusted -- 5,031,857 shares............................. 2,666 3,472 5,032(1)(2)
Additional paid-in capital (deficit)........................ 30,711 3,255,175 8,547,195(1)(2)
Retained earnings (deficit)................................. (255,118) (255,118) (295,118)
---------- ----------- -----------
Total Stockholders' equity (deficit)........................ (221,741) 3,003,259 8,257,109
---------- ----------- -----------
Total capitalization................................... $3,715,316 $ 9,912,027 $14,562,877
---------- ----------- -----------
---------- ----------- -----------
</TABLE>

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

(1) Reflects the issuance of 1,550,000 shares of Common Stock and 1,550,000
Warrants offered hereby; 806,250 shares to be issued for the purchase of Air
Response, 10,000 shares of Common Stock to be issued as a bonus to an
officer of the Company at the closing of the Offering.

(2) Reflects the receipt of $5,253,850 in net proceeds from the issuance of
1,550,000 shares of Common Stock at $4.00 per share of 1,550,000 Warrants at
$.10 per Warrant, after deduction of underwriting discounts and commissions
and Offering expenses estimated at $1,100,650.

DILUTION

At September 30, 1997, the pro forma net tangible book value of the Company
was a deficit of approximately $(473,006), or $(0.18) per share of Common Stock
after giving effect to the Acquisitions as if they occurred on such date. Net
tangible book value (deficit) per share is determined by dividing tangible book
value (total tangible assets less total liabilities) by the number of shares of
Common Stock issued and outstanding at that date. After giving effect to (i) the
sale of the 1,550,000 shares of Common Stock offered hereby (at an initial
public offering price of $4.00 per share) and the application of the net
proceeds therefrom, after deducting underwriting discounts and commissions and
Offering expenses; (ii) the issuance of 806,250 shares of Common Stock to Louis
R. Capece, Jr. in connection with the acquisition of Air Response two years from
the closing of the Offering; (iii) 10,000 shares of Common Stock to be issued as
a bonus to an officer of the Company at the closing of the Offering, the
adjusted pro forma net tangible book value of the Company at September 30, 1997
after giving effect to the Acquisitions as if they occurred on such date would
have been $4,780,844 or $0.95 per share. This represents an immediate increase
in net tangible book value of $1.13 per share to existing shareholders and an
immediate dilution of $3.05 per share to investors purchasing shares of Common
Stock in the Offering. The following table illustrates this per share dilution:

<TABLE>

<S> <C> <C>
Assumed initial public offering price......................................................... $4.00
Net tangible book value (deficit) per share at September 30, 1997............... $(0.18)
Increase in net tangible book value per share attributable to new investors..... $ 1.13
Pro forma net tangible book value per share after the Offering....................... $0.95
Dilution per share to new investors.................................................. $3.05
</TABLE>

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

If the underwriter exercises the over-allotment option in full, the pro
forma net tangible book value will be $5,788,521 or $1.09 per share, resulting
in an immediate dilution of $2.91 per share or 73% to New Investors.

The following table summarizes, on a pro forma basis, as of September 30,
1997 the difference between existing shareholders and new investors with respect
to the number and percentage of shares of Common Stock purchased from the
Company, and the total consideration per share paid (at the assumed initial
public offering price of $4.00 per share):

SHARES
PURCHASED(1)(2) TOTAL CONSIDERATION AVERAGE
-------------------- ----------------------- PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
--------- ------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing shareholders................. 3,481,857 70% $3,254,905 34% $0.94
New investors......................... 1,550,000 30 6,355,000 66 4.00
------- -------
100.0% 100.0%
------- -------
------- -------
</TABLE>

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

(1) Does not include: (i) 350,000 shares of Common Stock reserved for issuance
under the Option Plan; (ii) 1,550,000 shares reserved for issuance upon
exercise of the Warrants offered hereby; (iii) 1,025,000 shares reserved for
issuance upon exercise of other outstanding options and warrants; and (iv)
132,500 shares of Common Stock and 132,500 Warrants issuable upon exercise
of the Underwriter's Option. See 'Management -- Stock Option Plan.'
'Description of Capital Stock' and 'Underwriting.'

(2) Includes (i) the issuance of 806,250 shares of Common Stock to Louis R.
Capece, Jr. in connection with the acquisition of Air Response two years
from the closing of the Offering; (ii) 300,000 shares of Common Stock issued
in January 1997 to certain bridge lenders and (iii) 25,000 shares of Common
Stock issued in March 1997 to certain bridge lenders; (iv) 10,000 shares of
Common Stock to be issued to an Officer, (v) and the retirement of 884,393
shares of Common Stock to treasury. See 'Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources' and 'Certain Transactions.'

SELECTED FINANCIAL DATA

The following table sets forth summary historical financial data of (i)
Proflight for the years ended December 31, 1996 and 1995 and for nine months
ended September 30, 1997 and 1996 and (ii) Air Response and Air Response South
for the years ended December 31, 1996 and 1995 and for the nine months ended
September 30, 1997 and 1996. The historical financial data for the years ended
December 31, 1996 and 1995 are derived from the audited financial statements of
Proflight, Air Response and Air Response South. The financial statements of
Proflight have been audited by Grant Thornton LLP, independent certified public
accountants, whose report thereon has been modified to include an explanatory
paragraph which refers to various matters which raise substantial doubt about
Proflight's ability to continue as a going concern and are included elsewhere in
this Prospectus. The combined financial statements of Air Response and Air
Response South for the years ended December 31, 1996 and 1995 have been audited
by Staff Maikels & Ciampino, P.C. independent certified public accountants,
which statements are included elsewhere in this Prospectus. The summary
historical financial data should be read in conjunction with the financial
statements and notes thereto of Proflight, Air Response and Air Response South
and 'Management's Discussion and Analysis of Financial Condition and Results of
Operations' included elsewhere in this Prospectus. The financial data for
Proflight, Air Response and Air Response South for the nine months ended
September 30, 1997 and 1996 are unaudited, but, in the opinion of management, of
the respective companies, reflect all adjustments (consisting only of normal
recurring adjustments) necessary for a fair representation of results for all
interim periods. The operating results for interim periods are not necessarily
indicative of results for the full fiscal year. The following table also sets
forth pro forma financial data of the Company as if the Acquisitions (which will
close simultaneously with the closing of this Offering) had occurred as of
September 30, 1997 for balance sheet results and as of January 1, 1996 for
operating data. The pro forma financial data was derived from the unaudited pro
forma financial statements appearing elsewhere in this Prospectus. The summary
pro forma financial data should be read in conjunction with the Company's pro
forma financial statements and the notes thereto. The pro forma balance sheet
data as of September 30, 1997 and the pro forma statement of operations for the
year ended December 31, 1996 and nine months ended September 30, 1997 are
unaudited, but, in the opinion of management, reflect all adjustments necessary
for a fair presentation of pro forma results of operations. The pro forma
operating results are not necessarily indicative of the Company's future results
of operations.

SUMMARY HISTORICAL FINANCIAL DATA

</TABLE>

SUMMARY UNAUDITED PRO FORMA FINANCIAL DATA

NINE MONTHS ENDED
SEPTEMBER 30, TWELVE MONTHS ENDED
1997 DECEMBER 31, 1996
----------------- -------------------

<S> <C> <C>
Pro Forma Operating Data:
Net sales........................................................ $ 9,965,402 $11,314,454
Flying operations and maintenance................................ 6,421,547 7,627,012
Promotion and sales.............................................. 457,865 702,677
General and administrative expense............................... 2,438,093 2,188,797
Depreciation and amortization.................................... 716,148 1,035,069
Total operating expense.......................................... 10,033,653 11,553,555
Operating loss................................................... 127,499 (239,101)
Other income (expense)........................................... (344,027) (844,223)
Income tax expense (benefit)..................................... 5,874 (38,747)
Net loss......................................................... (418,152) (1,044,577)

Per share data:
Net (loss)....................................................... $ (0.12)(4) $ (0.33)(4)
</TABLE>

<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
---------------------------------------------
ACTUAL PRO FORMA ADJUSTED
----------- ------------ --------------
<S> <C> <C> <C>
Balance Sheet Data:
Working capital (deficit).................................. $ (954,133) $(2,872,943) $ 2,380,907
Total assets............................................... 3,715,316 9,912,027 14,562,877
Long term obligations...................................... 2,385,080 3,619,533 3,619,533
Retained earnings (deficit)................................ (255,118) (255,118) (295,118)
Stockholders' equity (deficit)............................. (221,741) 3,003,259 8,257,109
</TABLE>

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

(1) Represents Proflight.

(2) Includes Proflight, Air Response and Air Response South.

(3) The adjusted pro forma data includes adjustments that reflect the effects of
the Acquisitions including the sale of 1,550,000 shares of Common Stock and
1,550,000 Warrants offered hereby and the application of the net proceeds.

(4) Based on 3,471,857 shares which do not include (i) 1,550,000 shares of
Common Stock offered hereby or (ii) 10,000 shares of Common Stock being
offered to an officer as a bonus at the Closing of the Offering.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with
the financial statements and notes thereto appearing elsewhere in this
Prospectus.

OVERVIEW AND PLAN OF OPERATION

The Company was formed in May 1992 under the name Proflight, Inc. and is a
national and international provider of fixed wing air ambulance transport
services for persons who are ill, injured or otherwise incapacitated who need to
be relocated and who may require emergency medical care during flight. In March
of 1997 the Company changed its name to Proflight Medical Response, Inc.
('Proflight'). The Company has contracted to acquire Air Response, Inc., a New
York corporation ('Air Response') and Air Response South, Inc., a Florida
corporation ('Air Response South') which acquisitions (the 'Acquisitions') will
close simultaneously with the closing of the Offering. See 'Certain
Transactions -- Acquisition of Air Response and Air Response South.'

The revenues of the Company are primarily derived from service fees for air
medical transport services. The number of transports and rates as well as the
source affect revenues in different ways. Greater revenues are derived from
third party and direct patient paid trips as compared to transports arranged by
brokers.

The Company's business strategy over the next 24 months is to become a
leading national provider of fixed wing air ambulance services by:

Improving the efficiency of its existing operations by integrating the
operations of Air Response and Air Response South and by providing
additional management expertise, recognizing economies of scale,
introducing sophisticated operating systems and controls, instituting a
centralized dispatching function and providing a stronger, more stable
capital base.

The Company is continuing to expand services through the purchase of
additional aircraft resulting in increased revenues, more efficient use of
current aircraft, proportionately lower operating costs and the acquisition of
Air Response and Air Response South. Overall, the Company believes, based upon
management's experience, this should provide higher gross margins. It is hoped
that this combination will allow all three companies to operate more efficiently
through elimination of certain duplicative general and administrative costs,
purchasing discounts on fuel, and more efficient use of each aircraft. The
Company believes, based upon management's experience, that these actions will
provide growth and improve the Company's operating and financial condition,
providing the opportunity to continue as a going concern. See ' -- Effects of
Combination.'

RESULTS OF OPERATIONS

PROFLIGHT MEDICAL RESPONSE, INC.

The following sets forth, in tabular form, a comparison of the results of
operations for Proflight for the years ended December 31, 1996 and 1995, and
nine months ended September 30, 1997 and 1996.

NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
---------------- ----------------
1997 1996 1996 1995
----- ----- ----- -----
<S> <C> <C> <C> <C>
Net sales................................................. 100.0% 100.0% 100.0% 100.0%
Flying operations and maintenance......................... 68.7% 71.29% 76.8% 67.9%
Promotion and sales....................................... 2.0% 3.3% 6.5% 1.1%
General and administrative expenses....................... 22.1% 16.3% 16.6% 12.2%
Depreciation and amortization............................. 5.2% 11.2% 9.7% 9.5%
Interest expense.......................................... 5.1% 6.1% 7.4% 5.2%
Net income (loss)......................................... (3.4%) (8.2%) (17.0%) 4.1%
</TABLE>

NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

Net Sales. Net Sales increased by $1,342,944 to $4,285,832 as compared to
$2,942,888 for the same period in 1996. This increase was attributed to more
sales generated through advertising and the sale of an aircraft which generated
income of $536,642.

Flying Operations and Maintenance. Flying operations and maintenance
increased by $850,113 to $2,948,083 as compared to $2,097,970 in 1996. This
increase was mostly due to increased fuel costs, and the need to use other
operator's aircraft when company owned planes were flying. These higher direct
expenses are expected to decrease proportionally because of volume fuel
discounts in addition to owning a larger fleet of aircraft as a result of the
acquisition.

Promotion and Sales Expense. Promotion and sales expense decreased $11,533
to $85,305 as compared to $96,838 for the same period in 1996. This decrease was
due mostly to better directing funds to advertising and promotion activities.
More direct calls were made in lieu of personal visits. Direct mailing replaced
some convention participation which resulted in increased sales and reduced
advertising costs.

General and Administrative Expense. General and administrative expenses
increased $467,782 to $946,683 as compared to $478,901 for the same period in
1996. This increase was mostly due to $227,986 of expenses associated with IPO
costs that were written off when the previous offering was aborted, higher
salaries of some current employees and costs associated with moving to a larger
facility. Also effecting the increase was greater costs associated with higher
sales.

Depreciation and Amortization. Depreciation and amortization decreased
$106,972 to $222,748 as compared with $329,720 for the same period in 1996. This
was mostly due to the sale of two aircraft in October of 1996 and one in
February of 1997.

Interest Expense. Interest expense increased $46,314 to $227,126 as
compared to $180,812 for the same period in 1996. This increase was due mostly
to interest paid on more expensive aircraft and the cost for factoring accounts
receivable, which was implemented in February of 1997.

Net Loss. Net loss was $144,113 as compared to $241,353 for the same period
in 1996. This increase was due to the factors discussed above.

THE YEARS ENDED DECEMBER 31, 1996 AND 1995

Net Sales. Net sales increased by $1,020,676 to $3,906,211 for the year
ended December 31, 1996 as compared to $2,885,535 for the year ended December
31, 1995. This increase was attributable to the addition of an aircraft which
allowed the Company to provide transport services to customers previously turned
down. The Company also provided more non-medical charter flights than in the
previous year. In addition, the Company increased its marketing efforts in 1996.
The addition of an aircraft does not necessarily mean that the Company's other
planes are flying at 100% capacity. An additional aircraft gives the Company, at
any given time, a greater opportunity of getting a trip. The determination of
whether or not the Company is awarded a particular trip is based upon
availability, location and maintenance status.

Flying Operations and Maintenance: Flying operations and maintenance
increased $1,040,836 to $3,001,507 for the year ended December 31, 1996 as
compared to $1,960,671 for the year ended December 31, 1995. This increase was
primarily due to increased fuel, parts and other expenses related to higher
sales. This increase was also due to costs relating to expansion, such as
training personnel, training flights, and the leasing of an aircraft, which have
increased these expenses disproportionately to income but are expected to help
yield greater revenues in the future.

Promotion and Sales: Promotion and sales increased $223,707 to $255,616 for
the year ended December 31, 1996 as compared to $31,909 for the year ended
December 31, 1995. This increase was due to increased marketing expenditures
including direct mailings, attending medical conventions, and travel to
potential customers. The Company expects these large increases to show results
by the end of the current fiscal year.

General and Administrative Expenses: General and administrative expenses
increased by $296,067 to $650,036 for the year ended December 31, 1996 as
compared to $353,969 for the year ended December 31, 1995. The increase was
primarily due to hiring additional employees and training them. In addition, the
Company had one time expenses consisting of employee severance pay and increased
costs in connection with the acquisition of Air Response. These one time
expenses removed bring the percentage of these expenses in proportion with
increased income.

Depreciation and Amortization. Depreciation and amortization increased by
$101,392 to $377,930 for the year ended December 31, 1996 as compared to
$276,538 for the year ended December 31, 1995. This increase was primarily due
to the purchase of a more expensive aircraft and an increase in the number of
hours flown.

Interest Expense. Interest expense was $287,188 for the year ended December
31, 1996 as compared to $150,254 for the year ended December 31, 1995. This
increase in interest expense was primarily due to the purchase of a more
expensive aircraft and bridge financing.

Net Income (Loss). Net income (loss) for the year ended December 31, 1996
was $(666,032) as compared to $117,109 for the year ended December 31, 1995. The
loss was due to the increase in costs and expenses described above.

AIR RESPONSE AND AIR RESPONSE SOUTH

RESULTS OF OPERATIONS

The following sets forth, in tabular form, a comparison of the results of
operations for Air Response and Air Response South for the nine months ended
September 30, 1996 and 1995 and the years ended December 31, 1996 and 1995.

<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER YEAR ENDED
30, DECEMBER 31,
---------------- ----------------
1997 1996 1996 1995
----- ----- ----- -----
<S> <C> <C> <C> <C>
Net sales................................................. 100.0% 100.0% 100.0% 100.0%
Flying operations and maintenance......................... 66.3% 65.1% 63.7% 65.5%
Promotion and sales....................................... 5.7% 7.4% 5.8% 11.2%
General and administrative expenses....................... 22.8% 17.7% 20.1% 18.7%
Depreciation and amortization............................. 4.6% 4.7% 5.2% 5.8%
Interest expense.......................................... 1.7% 1.2% 1.8% 2.0%
Other income (expense).................................... 0.1% 4.1% (4.6%) (3.7%)
Net income (loss)......................................... (1.2%) 0.8% (0.6%) (5.3%)
</TABLE>

NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

Net Sales. Net sales increased by $629,235 to $6,537,380 as compared to
$5,908,145 for the same period in 1996. This increase was attributed to more
sales generated through an increase in sales activities and having access to
more aircraft. The latter was a result of the Company working less competitively
with Proflight Medical Response in anticipation of the upcoming acquisition.

Flying Operations and Maintenance. Flying operations and maintenance
increased by $487,231 to $4,331,274 as compared to $3,844,043 in 1996. This
increase was mostly due to increased fuel costs and higher sales.

Promotion and Sales Expense. Promotion and sales expense decreased $62,647
to $372,560 as compared to $435,207 for the same period in 1996. This decrease
was due to eliminating or reducing the

size of some yellow page advertising and negotiating better prices in some
directory advertising markets.

General and Administrative Expense. General and administrative expenses
increased $448,214 to $1,491,410 as compared to $1,043,196 for the same period
in 1996. This increase was mostly due to higher salaries of some current
employees. In addition, in August the Company moved its Florida and New York
operations to Colorado in anticipation of the acquisition which resulted in
substantial one time moving costs. Also affecting the increase were greater
costs associated with higher sales.

Depreciation and Amortization. Depreciation and amortization increased
$20,311 to $297,650 as compared to $277,339 for the same period in 1996. This
was due to the cost of some engine overhaul work that was capitalized.

Interest Expense. Interest expense increased $38,842 to $108,197 as
compared to $69,355 for the same period in 1996. This increase was due mostly to
the refinancing of several of the Company's aircraft to help pay engine overhaul
costs.

Other Expense. Other expense decreased $231,598 to $8,704 as compared to
$240,302 for the same period in 1996. This decrease was due to capitalized
engine work that was expensed in 1996 when the engines were replaced.

Net Earnings. Net earnings decreased to $(78,289) as compared to $48,012
for the same period in 1996. This increase was due to the factors discussed
above.

THE YEARS ENDED DECEMBER 31, 1996 AND 1995

Net Sales. Net Sales increased by $1,782,314 to $7,658,243 for the twelve
months ended December 31, 1996 as compared to $5,875,929 for the twelve months
ended December 31, 1995. This increase was attributed to increased marketing
efforts and an increase in demand for air ambulance service. The latter was
caused by health insurance companies finding it less expensive to move patients
to their own provider network where they get preferred rates.

Flying Operations and Maintenance. Flying operations and maintenance
increased by $1,025,142 to $4,875,505 for the twelve months ended December 31,
1996 as compared to $3,850,363 for the twelve months ended December 31, 1995.
This increase was primarily due to increased sales. In addition, fuel costs and
pilot and nurses salaries increased (because of strong employment opportunities
for these professionals), along with increased expenses due to engine overhauls
and the lease of a new aircraft.

Promotion and Sales Expense. Promotion and sales expense decreased $216,625
to $447,061 for the twelve months ended December 31, 1996 as compared to
$663,686 for the twelve months ended December 31, 1995. This decrease was due to
consolidation of yellow page advertising contracts.

General and Administrative Expense. General and administrative expense
increased $439,357 to $1,538,761 for the twelve months ended December 31, 1996
as compared to $1,099,404 for the twelve months ended December 31, 1995. This
increase was due mostly to higher expenses associated with higher sales. These
expenses include greater salaries and benefits due to the hiring of additional
employees and increasing compensation and commissions to sales personnel
relating to increased sales.

Depreciation and Amortization. Depreciation and amortization increased
$56,909 to $396,139 for the twelve months ended December 31, 1996 as compared
with $339,230 for the twelve months ended December 31, 1995. This increase was
mostly due to additional equipment asset base.

Interest Expense. Interest expense increased $18,429 to $136,148 for the
twelve months ended December 31, 1996 from $117,719 for the twelve months ended
December 31, 1995. This increase was due to refinancing of aircraft.

Other Expense. Other expense was $349,590 for the twelve months ended
December 31, 1996 as compared to $215,510 for the twelve months ended December
31, 1995. This increase was due mainly to a charge for asset abandonment offset
by a decrease in bad debt write offs from an affiliate.

Net Loss. Net loss was $46,214 for the twelve months ended December 31,
1996 as compared to $311,918 for the twelve months ended December 31, 1995. This
decrease was due to the factors discussed above.

LIQUIDITY AND CAPITAL RESOURCES

During the nine months ended September 30, 1997, Proflight had a net
increase in cash of $59,370 resulting in an ending cash balance of $59,370.
During this period net cash used in operating activities

was $344,075. Cash provided from investing activities was $1,666,040 primarily
due to the sale of an aircraft. Net cash used in financing activities was
$1,262,595 due to the repayment of notes payable.

As of September 30, 1997, ProFlight had a working capital deficiency of
$954,133. This deficiency decreased from December 31, 1996 by $126,178 as a
result of an increase in cash and accounts receivable balances.

Air Response and Air Response South had a decrease in cash of $53,330 for
the nine months ended September 30, 1997. During this period net cash of
$283,945 was provided by operating activities, $219,054 in cash was used in
investing activities to purchase property and equipment. A total of $118,221 in
cash was used in financing activities primarily for officers receivables. Cash
and cash equivalents had a balance of $238,967 at September 30, 1997.

At September 30, 1997, Air Response and Air Response South had a working
capital deficiency of $843,810. This deficiency increased by $465,607 from the
December 31, 1996 deficiency of $378,203 due to increases in accounts payable
and current portion of notes payable.

Proflight had a net decrease in cash of approximately $21,600 for the year
ended December 31, 1996 resulting in an overdraft of $19,910 at December 31,
1996. Cash used in operating activities during 1996 was approximately $199,000.
Cash used in investing activities was approximately $4,059,000, primarily due to
the acquisition of additional aircraft. Cash provided by financing activities
was approximately $4,256,000 consisting primarily of net borrowings from the
Company's bank and other lenders of approximately $4,184,000, and by net
proceeds from the sale of stock of $100,000.

As of December 31, 1996, Proflight had a working capital deficiency of
$1,080,311 compared to a deficiency of $157,341 as of December 31, 1995. This
deficiency increased by approximately $742,000 due to additional current
maturities of long-term obligations and an increase in accounts payable and
accrued liabilities of approximately $293,000.

Air Response and Air Response South had an increase in cash and cash
equivalents of approximately $217,000 for the twelve-month period ended December
31, 1996.

Approximately $618,000 in cash was provided from operating activities. Net
cash used in investing activities was approximately $981,000, due to
approximately $596,000 in purchases of equipment and approximately $385,000 in
advances to an officer and affiliate. Net proceeds from additional debt with the
Company's bank and other lenders provided cash from financing activities of
approximately $580,000.

During fiscal 1995, Proflight had four customers whose sales each accounted
for 10% or more of net sales. During fiscal 1996, Proflight had two such major
customers. In addition, the Company is due approximately $132,000 in accounts
receivable and $200,000 in a note receivable from Air Response whose sales
accounted for 10% and 8% of net sales during 1995 and 1996, respectively.

Air Response and Air Response South had a working capital deficiency of
approximately $378,000 as of December 31, 1996, compared to a deficiency in
working capital of approximately $774,000 as of December 31, 1995.

Historically, Proflight has financed its working capital requirements to
date from private bridge financings, borrowings, issuance of its Common Stock
and internally generated cash flow. For the year ended December 31, 1996, the
Company financed its working capital requirements as follows: approximately 50%
was financed through private bridge financings, approximately 20% from
borrowings, approximately 10% from the sale of common stock and approximately
20% from internally generated cash flow. Air Response and Air Response South
have financed its working capital requirements by internally generated cash flow
and factoring accounts receivable.

As of December 31, 1996, the Company had total current liabilities of
$1,555,109 of which $1,176,000 will be paid out of the proceeds. The balance of
$379,109 will be paid out of operations. The Company defaulted on a note, during
fiscal 1996, the balance of which was $85,009 at December 31, 1996. The holder
of the note has agreed to renew the note, and the Company plans to pay the
balance out of the proceeds of the offering. As of September 30, 1997, the
remaining balance owed was approximately $33,000.

In order for the Company to obtain sufficient financing to purchase a 1973
Learjet 25B-XR in March, 1995, it was necessary for the Company to have an
accomodator guarantee repayment of a loan. In exchange, the accomodator is paid
a fee of $100 per month for each month that the loan is outstanding.

In October 1996, the Company loaned $200,000 to Air Response. The note
bears interest at the rate of 10% per annum and is payable in two installments
of $100,000 plus accrued interest on May 14, 1998 and May 14, 2000. See 'Certain
Transactions -- Loan to Air Response.'

In October 1996, Proflight, in a private placement, sold to subscribers an
aggregate of $350,000 principal amount notes bearing interest at the rate of 10%
per annum and issued 700,000 shares of Common Stock. In May 1997, the
subscribers in the private placement released and discharged the Company from
any and all obligations arising out of the promissory notes and agreed to cancel
such notes.

In January 1997, Proflight, in a private placement, sold to subscribers an
aggregate of $150,000 principal amount notes bearing interest at the rate of 10%
per annum and issued 300,000 shares of Common Stock. In May 1997, the
subscribers in the private placement released and discharged the Company from
any and all obligations arising out of the promissory notes and agreed to cancel
such notes.

In March 1997, Proflight, in a private placement, sold to subscribers an
aggregate of $125,000 principal amount notes bearing interest at the rate of 10%
per annum and issued 25,000 shares of Common Stock.

Presently, the Company does approximately 50% of its billing through
insurance companies. In some cases this billing is indirect through brokers
which are customers of the Company. Generally, payment is received within 60-90
days. This delay in collection weakens the Company's cash flow. The Company
finances its receivables to help alleviate this cash flow problem. The Company
plans to initiate electronic billing to help speed up the collection process and
hopes to eliminate the need for factoring in the future.

The Company anticipates that the net proceeds from the Offering, together
with cash flow from operations should be sufficient to fund the Company's
operations, including its proposed expansion, for approximately 12 months.
However, there can be no assurance that events affecting the Company's
operations will not result in the Company depleting its funds before that time.
The Company may be required to raise substantial additional funds to continue to
fund operating expenses or its expansion strategy. There can be no assurance
that the Company will be able to obtain such additional financing or that such
financing, if available, will be on acceptable terms. See 'Risk Factors -- Need
for Additional Financing' and 'Use of Proceeds.'

EFFECTS OF COMBINATION

The Company believes that operating efficiencies will be achieved through
integration of the operations. The Company anticipates cost savings after the
combination in the areas of fuel, parts, marketing and advertising and
personnel. The Company has obtained preliminary quotes from aviation fuel and
part suppliers which will provide the Company with fuel and part cost
reductions. Fuel reductions are available because of the anticipated increase in
the volume of aviation fuel to be purchased as well as an increase in the number
of fueling sites needed and part reductions are available because the Company
plans to purchase larger quantities at one time. The Company believes that it
will realize cost savings in marketing and advertising expenses by eliminating
duplicated efforts. The Company also believes cost savings will also be realized
by the elimination of overstaffing and duplicative positions which will arise
through combination and the closing of the Company's facilities in New York and
Florida. For example, the Company believes cost savings will be realized in
areas such as accounts receivable and bookkeeping, which will be centralized.

The Company believes that effective aircraft and crew deployment will be a
significant factor in reducing operational costs. The Company intends to enhance
its computer system which will detail the ready status and location positions of
its aircraft and crews. The computer system will be able to analyze data on
demographics, usage frequency and similar factors to help determine optimal
fleet deployment.

The Company will begin to incur increased expenses not reflected in the
Company's historical financial statements, including increased salaries for
senior management and key employees as well as other costs related to the
establishment of its corporate and administrative infrastructure, such as lease
costs, accounting and legal costs.

BUSINESS

THE COMPANY

The Company is a national and international provider of fixed wing air
ambulance transport services for persons who are ill, injured or otherwise
incapacitated who need to be relocated and who may require emergency medical
care during flight. The Company currently operates from facilities located in
Colorado, New York and Florida and upon consummation of the Offering plans to
consolidate its operations into its Colorado facilities. The Company provides
its services throughout the United States, Canada, Europe, Mexico, Central
America, South America, Bermuda and the Mediterranean. In addition, the Company,
when operating at full capacity, has subcontracted its services by brokering its
air ambulance trips to other air transport providers. For the year ended
December 31, 1996, the Company, including Air Response and Air Response South,
had pro forma net sales of approximately $11.3 million.

As of the date hereof the Company has an air ambulance fleet of 9 fixed
winged aircraft. The Company provides transport services in connection with the
relocation of patients requiring specialized medical procedures such as organ
transplants, cancer treatment, specialized cardiac surgery, burn care, stroke
care and advanced head and spinal cord surgery and rehabilitation to hospitals
recognized as national centers of excellence in these fields, for the
repatriation of patients who are injured or become ill away from home and in
connection with the transportation of non-ambulatory long-term care patients who
need to be relocated. The flights operated are on a non-emergency basis and are
generally long distance in nature. Emergency flights are usually contracted to
helicopters and such flights are generally short distances. The Company's
customers include individual patients, managed care companies, hospitals,
government agencies, national health insurance companies, HMOs and air ambulance
brokers.

The Company believes that the need for non-emergency ambulance transport
services, will increase as pressure on the health insurance industry to reduce
costs increases. The Company believes that it can capitalize on this market. The
Company believes that the fixed wing segment of the medical air transport
industry will grow as hospital consolidation produces regional health networks
responsible for patients spread over a greater geographic area. The Company also
believes, although no assurance can be given, that relocating patients with
specialized needs to hospitals recognized as national centers of excellence and
which have pricing agreements with insurers and HMOs will increase as a way to
provide high quality, cost effective health care. The fixed wing air ambulance
market is currently served by a number of small, regional companies lacking a
national presence and the ability to serve an insurance company or HMO on a
national basis. The Company believes that through the acquisitions of Air
Response and Air Response South and by implementing its business strategy, it
will begin to establish a national presence while continuing to ensure that
patients receive the highest quality care. The Company's beliefs in this
paragraph are based upon management's experience and an independent research
report, presumed to be accurate and truthful as of its publication, by
Wintergreen Research, Inc. copyright 1995, entitled 'Fixed Wing Air Medical
Transport Market 1991 - 2000.' No assurance can be given that such beliefs will
be realized or are predictive of future developments. No assurance can be given
that the facts, predictions or the independent research report upon which such
beliefs are premised are accurate.

The Company's senior management has extensive experience in the air
ambulance transport services business. Kevin L. Burkhardt, the Company's Chief
Executive Officer and President, has over 10 years experience in the air
ambulance industry and over 20 years experience in the aviation industry,
including as captain, flight instructor and corporate pilot. Jane S. Burkhardt,
the Company's Secretary and medical and legal coordinator, received her B.S.
degree in nursing in 1981 from the University of Wisconsin and her JD degree in
1990 from St. Louis University Law School. Mrs. Burkhardt has over 14 years
experience in the nursing industry and was a registered nurse and risk manager
for Presbyterian/St. Lukes Medical Center. Donald Jones will, upon consummation
of the Offering, serve as the Company's Vice President of Sales and a Director
of the Company. Mr. Jones has over 13 years experience in the air ambulance
industry, including flight coordinator, and director of marketing and sales.
David Cohen, the Company's Chief Financial Officer and Treasurer, has over 30
years of management and financial experience. Mr. Cohen was the chief financial
officer of Air Resources Corp.,

a public company which manufacturers adhesives and held various senior
management positions for two aircraft sales corporations.

In April 1997, the Company entered into an Amended Agreement and Plan of
Reorganization with Air Response and Louis R. Capece, Jr., which agreement was
amended in May 1997, pursuant to which the Company agreed to acquire at the
closing of the Offering, subject to the terms and conditions contained therein,
all of the outstanding capital stock of Air Response in exchange for 806,250
shares of Common Stock of the Company to be issued two years from the closing of
the Offering. If the Company completes a second public offering, Mr. Capece has
the option to put such number of shares of Common Stock at the then current
market value, equal to 20% of the net proceeds of such offering to the Company,
not to exceed $1,000,000. The Company simultaneously entered into an Amended
Stock Purchase and Sale Agreement with Air Response South and Louis R. Capece,
Jr. pursuant to which the Company agreed to acquire at the closing of the
Offering, subject to the terms and conditions contained therein, all of the
outstanding capital stock of Air Response South for $800,000 which is payable
upon closing of the Offering.

BUSINESS STRATEGY

The Companies' business strategy over the next 24 months is to attempt to
become a leading national provider of fixed wing air ambulance services by:

MEDICAL TRANSPORT SERVICES

The Company provides fixed wing air ambulance transport services for
individual patients, HMOs, insurance companies and individual hospitals and
other providers of medical care. If necessary the Company provides 'bed to bed'
service, arranging for ground ambulance transportation, specialized medical care
during transport, overnight accommodations, and any other incidentals necessary
to a successful transport. The Company is able to provide air transport services
at any of the three recognized levels of medical care, Basic Life Support
(patients who may need CPR), Advanced Life Support (patients who need medication
and respiratory monitoring) and Critical Care (patients who are severely ill or
injured).

The level of treatment provided to a patient during transportation is
dependent upon the patient's condition. Basic Life Support is mostly
preventative in nature. It is appropriate for patients needing minimal external
life support, but in need of monitoring or potential care during flight.
Aircraft

involved in the transport of patients requiring Basic Life Support must have
both the equipment and personnel on board capable of handling and treating a
medical emergency.

The Company provides air transport for patients needing Advanced Life
Support services. Aircraft suited to transporting these patients must have all
personnel and equipment necessary to provide Basic Life Support functions as
well as the capability to perform cardiac defibrillation, control dysrhythmias,
administer drugs and establish and maintain respiratory airways. In addition,
medical personnel on board the aircraft must be capable of providing care for
the condition causing the need for the transport. Patients requiring Advanced
Life Support care may typically be suffering from trauma, burns, or cardiac
failure, as well as a variety of other conditions.

Finally, the Company provides air transport services to patients who are
severely ill or injured in need of Critical Care, the highest level of care. To
properly provide Critical Care services, highly and specifically trained
physicians and flight nurses must be part of the on board aircraft crew. It is
important that these medical personnel have specialized training to enable them
to perform services in an aeromedical environment. The Company has the required
personnel and equipment to provide these high level medical services.

The Company employs full-time registered nurses that accompany patients on
all medical flights. The nurses are given air ambulance training when they are
hired and on-going training every six months. In addition, the Company can
supply other medical professionals including medical doctors, respiratory
therapists and other medical personnel, if required by the patient.

The Company charges for its services on a retail and wholesale basis.
Flights are charged by the hour with additional costs for medical and
international fees. Cost per flight hour range from approximately $500 for
piston aircraft to $1500 for jet aircraft. Generally, high volume users like air
ambulance brokers and insurance companies receive up to a 20% discount.
Catering, ground medical, and other services are added to the basic charges.

MEDICAL PERSONNEL AND QUALITY ASSURANCE

The Company believes, based upon management's experience, that hiring and
maintaining highly qualified personnel, including physicians and nurses is
essential to its future success. Although the Company has not had a problem
attracting such persons to date, the loss of these persons or the inability to
attract and retain sufficient numbers of qualified personnel could have a
material adverse effect on the Company's business, financial condition and
results of operations.

The medical care provided during transports is provided pursuant to
established medical treatment protocols which were established based upon the
professional advice and direction of the Company's medical directors. Proflight,
Air Response and Air Response South each has its own medical director.
Initially, the Company will retain the medical directors of each Company.
However, these positions may be consolidated where legally and operationally
practical. Any medical treatment beyond that contained in the treatment
protocols requires an order from the patient's attending physician. Physician
orders are submitted to the Company with all case documentation, prior to
delivery of the patient to the Company for transport. Physician orders are then
reviewed by the Company's medical director to insure proper handling of the
patient. In some circumstances, the medical director may change the physician's
orders if 'in flight' conditions warrant alterations.

DISPATCHING

The Company intends to implement a centralized dispatching system for the
air ambulance operations. The Company plans to purchase a dispatch program
called 'Omnis 7' which is designed to schedule transports as well as keep track
of those in progress. The program features a visual mapped display of the
location of the aircraft which can help dispatchers select the aircraft in the
best proximity for a future flight. In addition, the program has an extensive
database with airport, hotel, and fueling information. An additional module can
be added that allows the aircraft's maintenance and pilot data to be stored and
analyzed. The cost of the entire Omnis 7 program is approximately $25,000.
Computer hardware for the dispatch system will cost about $15,000. When
implemented, this system will allow the Company to dispatch aircraft from the
most advantageous of its locations and enhance the Company's

ability to avoid one way trips with empty return flights. By ensuring that the
Company's aircraft are efficiently used, the dispatching system is expected to
reduce the Company's cost per transport.

The Company plans to have a dispatch center staffed at least six full-time
dispatch personnel that work in shifts to provide 24 hour a day coverage. They
will be supported by sales personnel that price the trips to the customers.

MARKETING

Presently, the Company relies on advertising in national telephone
directories and direct mail to attract customers. The Company has enhanced its
current marketing strategy through the hiring, under a six year employment
contract, of Donald Jones, an air ambulance marketing specialist. Mr. Jones has
an extensive customer list of hospitals, insurance companies, and other users of
air medical transport. Mr. Jones will implement a sales strategy using the
Company's existing sales and marketing staff.

The Company believes, based upon management's experience, that the air
ambulance transport market may be broken down into two distinct market segments,
the 'directed' market and the 'independent' market. The directed market segment
consists of accounts that send all or most of their ambulance service needs to a
single designated service provider, whether by contract or practice. These
accounts include insurance companies, HMOs, other managed care providers and
hospitals. The Company intends to market this segment both through the use of
personal contacts and media advertising, which will include direct mail,
advertising in national telephone directories, advertising in trade publication,
advertising on the internet and participation in trade shows.

The independent market consists of transport requests originating from
individual patients and referral sources such as individual physicians. The
Company's marketing campaign addresses this segment of the market by local
advertising in telephone directories, advertising on the internet, and direct
mail campaigns.

BILLING AND COLLECTION

Since the Company's air ambulance services are on a non-emergency basis,
the Company is not required to transport patients without regard to a patient's
insurance coverage or ability to pay. The Company ensures that a prospective
patient is able to pay the Company's fees, either through appropriate insurance
coverage or other resources and frequently is paid in advance for its services.
Consequently, the Company's provisions for uncompensated care is generally lower
than it would be if the Company provided emergency air ambulance transportation.

On a consolidated basis for the year ended December 31, 1996, the Company
derived approximately 9% of its net revenue directly from private insurers,
including prepaid health plans and other non-government sources, 3% from
governmental payors and 88% directly from patients and private sources.

INSURANCE

The Company's air ambulance operations involve the risks of potential
liability against the Company in the event of, among other things, accidents
involving the Company's airplanes and medical malpractice. The Company maintains
aircraft insurance with a maximum liability per occurrence of up to $20,000,000
along with hull coverage (similar to auto collision insurance) for the value of
the aircraft. The annual premiums cost approximately $15,000 per aircraft and
$7,000 per piston aircraft annually. In addition, the Company carries medical
liability insurance in the amount of $1,000,000 for each claim and $3,000,000 in
the aggregate for each incident with an annual premium of approximately $19,000.
Although the Company currently maintains insurance coverage which it believes is
adequate, there can be no assurance that the coverage limits of its insurance
are adequate or that the Company will be able to continue to obtain such
insurance in the future or that the Company will be able to continue to obtain
such insurance rates which will not negatively impact the Company's earnings.
The inability of the Company to maintain adequate liability insurance could have
a material adverse effect on its business, financial condition or results of
operations.

COMPETITION

The air ambulance service industry is a highly competitive and highly
fragmented industry. The Company competes with other fixed wing air ambulance
companies which operate their own fleets of airplanes. The Company believes,
based upon management's experience and the Wintergreen Research report, that
each of these companies are small with a market share of less than 5%. The
Company also competes with brokers who do not own their own fleets but act as
middlemen who market air ambulance services by generally auctioning the service
to the lowest bidder. The Company believes that brokers control a large
percentage of the air medical transport business and keep prices in the industry
very low. The Company's major competitors include Global Air Ambulance,
(Clearwater, Florida), Advanced Air Ambulance, (Miami, Florida), Critical Air
Care, (Atlanta, Georgia) and Aeronational Air Ambulance, (Pittsburgh,
Pennsylvania). The Company believes, based upon management's experience, that
air ambulance service providers compete primarily on the basis of quality of
service, performance and prices. The Company provides one way pricing on most of
its domestic flights. Patients are charged from point of pick up to final
destination, allowing the Company in most cases to charge less than other
operators that charge on a round trip basis. The Company's aircraft and crews
very rarely stay in one location more than one night due to the Company's high
volume of transport requests from all over the world. Having aircraft at several
locations at any given time, gives the Company a competitive bidding edge.

In addition to present competition, other companies with significantly
greater economic resources than the Company including potential customers of the
Company such as insurance companies, HMOs and health care facilities not
currently providing air ambulance services, may enter the air ambulance service
business. Entry into such business by such entities could adversely affect the
business, financial condition or results of operations of the Company.

GOVERNMENT REGULATION

The Company is subject to governmental regulation at the federal and state
levels. At the federal level, the Company is subject to regulation by the
Federal Aviation Administration ('FAA') and the Occupational Safety and Health
Administration ('OSHA'). The FAA regulations are primarily related to flight
safety issues, and govern flight operating procedures, aircraft and equipment
standards, maintenance and inspections, flight crew standards, training and
limitations, weather requirements and record keeping requirements. The OSHA
regulations are primarily designed to protect the employees of the Company.

Certain of the states in which the Company operates regulate various
aspects of its business. The Company's business is subject to state requirements
including, business licenses, training and certification of medical personnel,
the scope of services that may be provided by medical personnel, staffing
requirements, medical control and procedures.

Since the Company was established, it has met all FAA regulations necessary
to provide the services offered. The Company has also met all OSHA standards and
state and federal licensing requirements for the medical and business services
offered.

Applicable federal and state laws and regulations are subject to change.
Any changes could adversely affect the Company's operations as well as the air
ambulance business in general. The Company believes, based upon management's
experience, that it is in substantial compliance with all regulatory
requirements applicable to its business. The failure to be in compliance with
any applicable governmental regulations could adversely affect the business,
financial condition or results of operations of the Company.

EMPLOYEES

As of the date hereof, the Company employed 34 full-time employees and five
part-time employees, of whom fourteen are employed as flight crew, eight are
employed as medical personnel, six are employed as mechanics, three are employed
as dispatchers, three are employed in sales and five are employed in general or
administrative positions. The Company believes that the success of its business
will depend, in part, on its ability to attract and retain highly qualified
personnel. The Company's

employees are not a party to any collective bargaining agreements. The Company
believes that it has good relations with its employees.

LEGAL PROCEEDINGS

In September of 1997, Mr. James Fuller filed a complaint against the
Company claiming that he is entitled to an unspecified amount of compensation
for the value of shares of the Company's Common Stock which he alleges he owns.
No amount was stated in the suit. The Company maintains that Mr. Fuller never
paid the agreed upon price for the shares and therefore never owned them.
Moreover, Mr. Fuller signed the shares back to the Company in December 1994.

The Company, through its counsel, intends to vigorously defend against the
suit by Mr. Fuller. No assurance can be made that the Company will reach a
satisfactory resolution of the suit. Failure to reach such a resolution could
have a material adverse effect on the Company's financial condition or cash
reserves.

PROPERTIES

The Company's executive offices are located in approximately 9,364 square
feet of office space at Arapahoe County Airport at 7211 South Peoria Street,
Suite 200, Englewood, Colorado 80112. The lease is a seven year lease expiring
in June 2004. The lease is at a rental of approximately $11,700 per month.
Pursuant to an oral agreement the Company will continue to occupy a portion of
hanger space at 12420 East Control Tower Road, Englewood, CO 80112 for aircraft
maintenance at a monthly rental rate of approximately $2,000 per month.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information with respect to the
directors and executive officers of the Company:

NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Kevin L. Burkhardt...................................... 38 Chief Executive Officer, President,
Director
Jane S. Burkhardt....................................... 40 Secretary, Director
David H. Cohen.......................................... 55 Chief Financial Officer, Treasurer
Donald Jones............................................ 37 Vice President of Sales, Director
Charles W. Bartholomew.................................. 61 Director
Steven B. Myers......................................... 37 Director
Arthur G. Rosenberg..................................... 59 Director
Louis R. Capece, Jr..................................... 49 Director
Stanley Abrams.......................................... 59 Director
</TABLE>

The business experience of each of the directors and executive officers of
the Company for at least the last five years is as follows:

Kevin L. Burkhardt has served as Chief Executive Officer, President and a
Director of Proflight since its inception in May 1992. From April 1991 to March
1992, Mr. Burkhardt was a learjet captain for HPH Aviation, a learjet charter
corporation. From July 1990 to April 1991, Mr. Burkhardt was a learjet captain
and corporate pilot for Great Plains Resources, a company engaged in the oil
industry. From February 1989 to April 1990, Mr. Burkhardt was a learjet captain
for PC Air, a learjet charter corporation. From January 1987 to February 1989,
Mr. Burkhardt was a learjet captain for American Jet, an air ambulance
corporation. Kevin L. Burkhardt and Jane S. Burkhardt are husband and wife.

Jane S. Burkhardt has served as Secretary and a Director of Proflight since
its inception in May 1992 and is responsible for establishing all medical
policies and procedures, establishing required medical equipment, establishing
risk management of medical operations and liaison between medical director and
medical staff. From August 1991 to July 1994, Mrs. Burkhardt was a risk manager
for Presbyterian/St. Lukes Medical Center. From December 1989 to July 1991, Mrs.
Burkhardt was a part-time RN for Presbyterian/St. Luke's Medical Center. From
June 1989 to July 1991, Mrs. Burkhardt was an associate attorney at Wood, Ris &
Hames. Kevin L. Burkhardt and Jane S. Burkhardt are husband and wife.

David Cohen has served as Chief Financial Officer and Treasurer of
Proflight since August 1993. From January 1990 to June 1993, Mr. Cohen was the
chief financial officer of Air Resources Corp., a manufacturer of adhesives.
From January 1982 to January 1990, Mr. Cohen was the chief executive officer of
Aim Aircraft, Inc., an aircraft sales corporation and from 1979 to 1982, Mr.
Cohen was the sales manager for Aim Aircraft. From 1975 to 1978, Mr. Cohen was
the president of Basin Aviation, an aircraft sales, charter and flight training
corporation. Mr. Cohen is the author of a book entitled FBO (fixed based
operations) Management as well as the author of an aircraft brokering manual.

Donald Jones will, upon consummation of the Offering, serve as the
Company's Vice President of Sales and a Director. From August 1992 to the
present, Mr. Jones has been the director of sales and marketing and the flight
coordinator for Air Response and Air Response South. From August 1984 to August
1992, Mr. Jones held various positions at Air Ambulance Network, an air
ambulance brokerage company, including director of sales and flight coordination
and director of marketing.

Charles W. Bartholomew has served as a Director of Proflight since November
1993. From September 1988 to September 1994, Mr. Bartholomew was the program
manager for CTA Incorporated, a company which was an aerospace and information
systems contractor to the United States government. Mr. Bartholomew was
responsible for several information system engineering contracts with the United
States Air Force and directed approximately 30 engineering professionals in such
capacity.

Steven B. Myers has served as a Director of the Company since February
1996. Since 1993, Mr. Myers has been the Company's director of marketing and
contracting. From 1980 to 1993, Mr. Myers was engaged in real estate investing
and property management.

Arthur G. Rosenberg has served as a Director of Proflight since January
1997. Since 1986, Mr. Rosenberg has served as vice president of acquisitions for
The Associated Companies, a real estate development company. Mr. Rosenberg is a
practicing attorney admitted to the New York State Bar in 1962. For five years,
Mr. Rosenberg was general counsel to ITT Levitt & Sons, Inc., an international
home builder. Mr. Rosenberg is also a director of Mike's Original, Inc., EcoTyre
Technologies, Inc., Wall Street Records, Inc. and Phar-Mor, Inc. which are
publicly traded companies.

Louis R. Capece, Jr. will, upon consummation of the Offering, become a
Director of the Company and a consultant. Since 1986 and 1993, Mr. Capece has
served as president of Air Response and Air Response South, respectively. Since
1982 and 1993, Mr. Capece has served as president of Response Medical Transport
Service, Inc. and Response Aviation, Inc., respectively. Response Medical
Transport Service, Inc. provides ground ambulance transportation services.
Response Aviation, Inc. provides airport services.

Stanley Abrams has served as a Director of the Company since January 1998.
Since June 1987, Mr. Abrams has served as President and Director of Waste
Conversion Systems, Inc. Since November 1995, he has served as CEO, President
and Director and of Ripe Touch Greenhouses, Inc. Mr. Abrams is currently on the
board of directors of Waste Conversion Systems, Inc.

All directors hold office until the next annual meeting of shareholders or
until their successors are elected and qualified. Officers are appointed by the
Board of Directors and serve at the discretion of the Board. All of the
executive officers of the Company have employment agreements with the Company.
See ' -- Employment Agreements.'

EXECUTIVE COMPENSATION

The Company did not pay any compensation exceeding $100,000 to its
executive officers for the year ended December 31, 1996. Kevin L. Burkhardt, the
Company's President and Chief Executive Officer received approximately $71,000
during this period. See ' -- Employment Agreements.'

EMPLOYMENT AGREEMENTS

In March 1997, the Company entered into an amended employment agreement
with Donald Jones to serve as the Company's Vice President of Sales. The
employment agreement is for a six-year term commencing upon consummation of the
Offering and is subject to successive automatic renewal periods of one year
unless earlier terminated. Mr. Jones is to receive a 5% increase in his base
salary in years four, five and six. Pursuant to the terms of this employment
agreement, Mr. Jones is required to devote his full business time and attention
to fulfill his duties and responsibilities to the Company. Mr. Jones will
receive a base salary of $150,000 per annum. In addition, Mr. Jones will receive
a stock bonus in the total amount of 250,000 common shares if the Company
achieves a minimum of $1 million in pretax profits, before depreciation and
amortization, in either of the first two years from the date of this Prospectus.
Such bonus is subject to vesting at a rate of 50% upon realization by the
Company of the minimum $1 million in pretax profits and 25% on each of the next
two anniversaries thereof. The Company has agreed to pay Mr. Jones a relocation
bonus of $100,000 and reasonable relocation expenses. Mr. Jones will also have
the right to participate in all benefit plans afforded to other comparable
officers during the term of the agreement, including, executive incentive plan,
stock option plan, monetary bonus plan, participation or extra compensation
plan, pension plan, profit sharing plan, disability insurance, health and major
medical insurance. Mr. Jones's employment agreement contains certain
confidentiality and non-competition provisions. Either the Company or Mr. Jones
may cancel the agreement for any reason after six years upon 60 days prior
notice.

On March 31, 1997, the Company entered into an employment agreement with
Kevin L. Burkhardt, the Company's President and Chief Executive Officer for a
term of five years with successive automatic renewal periods of one year with a
base salary of $90,000 for the first year and 10% increases in each of the
following years. Mr. Burkhardt will receive a $25,000 one time bonus if he
consummates another acquisition. In addition, Mr. Burkhardt will receive a stock
bonus in the total amount of 336,658

shares of Common Stock if the Company achieves a minimum of $1 million in pretax
profits, before depreciation and amortization, in either of the first two years
from the date of this Prospectus. Such bonus is subject to vesting at a rate of
50% upon realization by the Company of the minimum profits and 25% on each of
the next two anniversaries thereof. Pursuant to the terms of this employment
agreement, Mr. Burkhardt is required to devote his full business time and
attention to fulfill his duties and responsibilities to the Company. Mr.
Burkhardt will also have the right to participate in all benefit plans afforded
to all executive officers during the term of the agreement, including, executive
incentive plan, stock option plan, monetary bonus plan, participation or extra
compensation plan, pension plan, profit sharing plan, disability insurance,
health and major medical insurance.

On October 31, 1997, the Company entered into an employment agreement with
Steven Myers to serve as Assistant Vice President of Marketing, for a term of
five years with successive automatic renewal periods of one year with a base
salary of $70,000. In addition, Mr. Myers will receive a stock bonus in the
total amount of 231,138 shares of Common Stock if the Company achieves a minimum
of $1 million in pretax profits, before depreciation and amortization, in either
of the first two years from the date of this Prospectus. Such bonus is subject
to vesting at a rate of 50% upon realization by the Company of the minimum
profits and 25% on each of the next two anniversaries thereof.

On March 31, 1997, the Company entered into an employment agreement with
David Cohen, the Company's Chief Financial Officer and Treasurer, for a term of
three years with successive automatic renewal periods of one year with a base
salary of $70,000. Pursuant to the terms of this employment agreement, Mr. Cohen
is required to devote his full business time and attention to fulfill his duties
and responsibilities to the Company. Mr. Cohen will also have the right to
participate in all benefit plans afforded to all executive officers during the
term of the agreement, including, executive incentive plan, stock option plan,
monetary bonus plan, participation or extra compensation plan, pension plan,
profit sharing plan, disability insurance, health and major medical insurance.

On March 31, 1997, the Company entered into an employment agreement with
Jane S. Burkhardt, the Company's Secretary, for a term of three years with
successive automatic renewal periods of one year with a base salary of $36,000.
Pursuant to the terms of this employment agreement, Mrs. Burkhardt is required
to devote 20 hours per week to fulfill her duties and responsibilities to the
Company. Mrs. Burkhardt will also have the right to participate in all benefit
plans afforded to all executive officers during the term of the agreement,
including, executive incentive plan, stock option plan, monetary bonus plan,
participation or extra compensation plan, pension plan, profit sharing plan,
disability insurance, health and major medical insurance.

The Company also intends to issue a stock bonus to Charles Bartholomew in
the amount of 200,990 common shares subject to the same requirements and vesting
as those for Messrs. Jones, Burkhardt, and Myers.

CONSULTING AGREEMENTS

In April, 1997, the Company entered into a three year consulting agreement
with Louis R. Capece, Jr. Under the terms of the agreement, Mr. Capece has
agreed to devote a minimum of 100 hours per month to the Company. Mr. Capece
will be paid an aggregate of $100,000 per year. The Company or Mr. Capece may
cancel the consulting agreement for any reason after one year upon 60 days prior
notice.

STOCK OPTION PLAN

The Board of Directors plans to submit to the shareholders a stock option
plan (the 'Option Plan'). The Option Plan provides for the grant of incentive
stock options ('ISOs'), intended to qualify for preferential tax treatment under
Section 422 of the Internal Revenue Code of 1986, as amended, and nonstatutory
stock options ('NSOs') that do not qualify for such treatment. Only employees
(including officers and directors who are also employees) of the Company or any
of its subsidiaries are eligible to receive grants of ISOs. Employees, officers,
directors, consultants, contractors and advisers of the Company or any
subsidiary are eligible to receive grants of NSOs. The purpose of the Option
Plan is to enable the Company to attract and retain exemplary directors,
employees, agents and consultants. No options can be granted under the Option
Plan at less than 100% of the fair market value of the Company's securities on
the date of grant.

The Option Plan provides that a maximum of 350,000 shares of Common Stock
may be issued upon the exercise of options granted under the Option Plan. If an
option granted under the Option Plan expires or terminates for any reason
without having been exercised in full, then the unpurchased shares subject to
that option will be available for additional option grants. No shares of Common
Stock underlying any stock options issued under the Plan may be registered on
Form S-8 or any successor form for two years after the date hereof.

The Option Plan will be administered by the Board of Directors of the
Company which will determine, in its discretion, among other things, the
recipients of grants, whether a grant will consist of ISOs or NSOs, or a
combination thereof, and the number of shares of Common Stock to be subject to
such options. The Board of Directors of the Company may, in its discretion,
delegate its powers, duties and responsibilities under the Option Plan to a
committee consisting of two or more directors who are 'disinterested persons'
within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act
of 1934, as amended.

LIMITATIONS ON PERSONAL LIABILITY OF DIRECTORS

The Colorado Corporation Code, as revised, in general, allows corporations
to indemnify their directors and officers against reasonable expenses incurred
in connection with a proceeding if the director and/or officer acted in good
faith and in a manner the person believed to be in or not opposed to the best
interests of the corporation. In the case of a criminal action, the director or
officer must have had no reasonable cause to believe that the person's conduct
was unlawful. Under current law, a corporation may not indemnify a director or
officer in connection with a proceeding by or in the right of the corporation in
which the director or officer was adjudged liable to the corporation or if the
director or officer derived an improper personal benefit.

The Company's Articles of Incorporation and Bylaws provide that the Company
shall indemnify its directors and officers to the fullest extent permitted by
the Colorado Law.

The Company will enter into an indemnification agreement ('Indemnification
Agreement') with each of its directors and officers. Each Indemnification
Agreement will provide that the Company will indemnify the indemnitee against
expenses, including reasonable attorneys' fees, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with any civil or criminal action or administrative proceeding
arising out of his or her performance of his or her duties as a director or
officer, other than an action instituted by the director or officer. Such
indemnification is available if the indemnitee acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action, had no
reasonable cause to believe his or her conduct was unlawful. Each
Indemnification Agreement also will require that the Company indemnify the
director or other party thereto in all cases to the fullest extent permitted by
applicable law. The term of the Indemnification Agreement will be the later of
(i) ten (10) years after the date that the indemnitee ceases to serve as a
director or officer of the Company, or (ii) the final termination of all
proceedings, as defined in the Indemnification Agreement, in which the
indemnitee is granted rights of indemnification.

Each Indemnification Agreement will permit the indemnitee to bring suit to
seek recovery of amounts due under such Indemnification Agreement and will
require that the Company indemnify the director or other party thereto in all
cases to the fullest extent permitted by applicable law. Although the Company
intends to seek to obtain directors' and officers' liability insurance, such
insurance is generally very expensive. If the Company is not able to obtain
directors' and officers' liability insurance to cover amounts, any payments made
by the Company under an Indemnification Agreement will have an adverse impact on
the Company.

It is the position of the Commission that insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, that such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.

PRINCIPAL SHAREHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of Common Stock, as of the date of this Prospectus, and as
adjusted to reflect the sale by the Company of the Securities offered hereby, by
(i) each person who is known by the Company to beneficially own more than five
percent of the outstanding Common Stock, (ii) each director of the Company,
(iii) each of the Company's named executive officers, and (iv) all directors and
executive officers of the Company as a group. The information presented assumes
no exercise of the Warrants offered hereby.

<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF CLASS (1)
BENEFICIALLY OWNED ---------------------------------
BENEFICIAL OWNER PRIOR TO OFFERING BEFORE OFFERING AFTER OFFERING
- ------------------------------------------------------------- ------------------ --------------- --------------
<S> <C> <C> <C>
Kevin L. Burkhardt and Jane S. Burkhardt(2).................. 437,908 14.1% 10.1%
David Cohen(3)............................................... -- -- *
Charles W. Bartholomew(4).................................... 261,438 9.0% 6.3%
Steven B. Myers(5)........................................... 300,664 10.1% 7.2%
Arthur G. Rosenberg(6)....................................... 25,000 * *
Louis R. Capece, Jr.(8)...................................... -- -- --
Donald Jones(9).............................................. -- -- --
Srotnac Group, LLC(7)........................................ 1,475,000 55.3% 38.0%
All executive officers and directors as a group (7
persons)................................................... 1,025,010 38.4 26.4%
</TABLE>

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

* Less than 1%.

(1) Unless otherwise indicated, each person has sole investment and voting
power with respect to the shares indicated, subject to community property
laws, where applicable. The number of shares of Common Stock outstanding
prior to the Offering is 2,665,607. For purposes of this table, a person or
group of persons is deemed to have 'beneficial ownership' of any shares
which such person has the right to acquire within 60 days. For purposes of
computing the percentage of outstanding shares held by each person or group
of persons named above, any security which such person or group of persons
has the right to acquire within 60 days after such date is deemed to be
outstanding for the purpose of computing the percentage ownership for such
person or persons, but is not deemed to be outstanding for the purpose of
computing the percentage of ownership of any other person.

(2) Includes options to purchase 437,908 shares of Common Stock at an exercise
price of $4.00 per share. Mr. and Mrs. Burkhardt's business address is 7211
S. Peoria St., Englewood, Colorado 80112. Mr. and Mrs. Burkhardt are
husband and wife and own their shares as joint tenants.

(3) Excludes 10,000 shares of Common Stock Mr. Cohen will be issued as a bonus
at the completion of the Offering. Mr. Cohen's business address is 7211 S.
Peoria St., Englewood, Colorado 80112.

(4) Includes options to purchase 261,438 shares of Common Stock at an exercise
price of $4.00 per share. Mr. Bartholomew's home address is 2150 Oak Hills
Drive, Colorado Springs, CO 80919.

(5) Includes options to purchase 300,654 shares of Common Stock at an exercise
price of $4.00 per share. Mr. Myers's home address is 5769 S. Andes Street,
Aurora, CO 80033.

(6) Includes options to purchase 25,000 shares of Common Stock exercisable at
$1.00 per share. Mr. Rosenberg's business address is 7979 Old Georgetown
Road, Suite 800, Bethesda, Maryland 20814.

(7) Srotnac Group, LLC's mailing address is P.O. Box 473, Babylon, NY 11702.

(8) Excludes 806,250 shares of Common Stock which will be issued to Mr. Capece
in connection with the acquisition of Air Response two years from the
closing of the Offering. Mr. Capece's address is 10845 Bayshore Drive,
Windermere, Florida 34786. See 'Certain Transactions -- Acquisition of Air
Response and Air Response South.'

(9) Mr. Jones's address is 5776 S. Fulton Way, Englewood, CO 80111.

CERTAIN TRANSACTIONS

ACQUISITION OF AIR RESPONSE AND AIR RESPONSE SOUTH

In April 1997, the Company entered into an Amended Agreement and Plan of
Reorganization with Air Response and Louis R. Capece, Jr., which agreement was
amended in May 1997 and in January 1998, pursuant to which the Company agreed to
acquire at the closing of the Offering, subject to the

terms and conditions contained therein, all of the outstanding capital stock of
Air Response in exchange for 806,250 shares of Common Stock of the Company,
valued at $4.00 per share, to be issued two years from the closing of the
Offering. If the Company completes a second public offering, Mr. Capece has a
put option to sell to the Company such number of shares of Common Stock at the
then current market value, equal to 20% of the net proceeds of such second
offering, not to exceed $1,000,000. Under the terms of such put option, the
Company is obligated to purchase the shares offered. Simultaneously, the Company
entered into an Amended Stock Purchase and Sale agreement with Air Response
South and Louis R. Capece, Jr. pursuant to which the Company agreed to acquire
at the closing of the Offering, subject to the terms and conditions contained
therein, all of the outstanding capital stock of Air Response South for $800,000
which is payable upon closing of the Offering.

The Acquisitions will close simultaneously with the closing of the
Offering. The Company entered into a consulting agreement with Louis R. Capece,
Jr. which agreement is effective as of the closing of the Offering. In
connection with the Acquisitions, Mr. Capece covenanted that he will not, for a
period of five years from closing, compete with the Company. Mr. Capece has the
right to nominate two members to the Company's Board of Directors. Mr. Capece
has nominated himself and Donald Jones as nominees to the Board of Directors.
See 'Management.'

LOAN TO AIR RESPONSE

TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS

In October 1993, Charles W. Bartholomew, a Director of the Company, entered
into a stock purchase agreement pursuant to which he purchased 18% of the then
outstanding shares of Common Stock of the Company for $75,000 and loaned an
additional $75,000 to the Company. Interest for the first 24 months of the loan
was in the form of an additional 2% ownership interest in the Company
(constituting a rate of approximately 8%). Thereafter, interest on the loan was
at the rate of 10% per annum due December 1997.

As of September 30, 1997, Air Response and Air Response South have a
receivable due from its sole shareholder, Louis R. Capece, Jr., in the amount of
approximately $475,000. This amount will be offset from the shares to be issued
to Mr. Capece. Mr. Capece, upon consummation of the Offering, will be a director
of the Company.

In January 1996, Steven B. Myers, a Director of the Company, purchased
231,214 shares of Common Stock from the Company for $100,000 or $.43 per share.

In February 1997, Donald Jones entered into a six year employment agreement
with the Company to serve as the Company's Vice President of Sales upon
consummation of the Offering. In April of 1997, Mr. Jones's employment agreement
was amended to provide for a stock bonus, receivable by Mr. Jones over a period
of 3-4 years, provided the Company achieves minimum pre-tax profits of $1
million, before depreciation and amortization, in either of the first two years
from the date of this Prospectus. See 'Management -- Employment Agreement.'

In April 1997, Kevin L. Burkhardt, the Company's Chief Executive Officer,
President and a Director entered into a five-year employment agreement with the
Company. See 'Management -- Employment Agreement.'

In April 1997, Jane S. Burkhardt, the Company's Secretary, entered into a
three-year employment agreement with the Company. See 'Management -- Employment
Agreement.'

In April 1997, David Cohen, the Company's Chief Financial Officer and
Treasurer, entered into a three-year employment agreement with the Company. See
'Management -- Employment Agreement.'

In May 1997, Kevin L. Burkhardt and Jane S. Burkhardt agreed to return
218,954 shares of Common Stock to the Company solely in exchange for options to
purchase 437,908 shares of Common Stock at an exercise price of $4.00 per share.
The options are five-year options exercisable upon closing

of the Offering. The Underwriter believed there were too many shares outstanding
and as a condition of underwriting this Offering and required these shares to be
returned to treasury and the Company in consideration for returning these shares
issued the individuals options.

In May 1997, Charles W. Bartholomew agreed to return 130,719 shares of
Common Stock to the Company solely in exchange for options to purchase 261,438
shares of Common Stock at an exercise price of $4.00 per share. The options are
five-year options exercisable upon closing of the offering. The Underwriter
believed there were too many shares outstanding and as a condition of
underwriting this Offering required these shares to be retired and the Company,
in consideration for returning these shares, issued the individuals options.

In September of 1997, Steven B. Myers agreed to return 150,327 shares of
Common Stock to the Company solely in exchange for options to purchase 300,654
shares of Common Stock at an exercise price of $4.00 per share. The options are
five-year options exercisable upon closing of the Offering. The Underwriter
believed there were too many shares outstanding and as a condition of
underwriting this Offering required these shares to be returned to treasury and
the Company, in consideration for returning these shares, issued the individuals
options.

In September of 1997, each of Messrs. Burkhardt, Bartholomew and Myers
agreed to return an additional 168,329, 100,495 and 115,569 shares of Common
Stock to the Company, respectively, in exchange for an agreement by the Company
to issue to them 336,658, 200,990 and 231,138 shares of Common Stock,
respectively, over a period of 3-4 years, provided the Company achieves minimum
pre-tax profits of $1 million, before depreciation and amortization, in either
of the first two years from the date of this Prospectus. See
'Management -- Employment Agreements.'

In October of 1997, David H. Cohen, the Company's CFO, was offered 10,000
shares of Common Stock as a bonus to be issued upon completion of the public
offering. The Company has agreed to pay for any additional tax liability the
stock bonus adds to his income.

TRANSACTIONS WITH PRINCIPAL SHAREHOLDERS

In January 1996, the Company issued Steven A. Cantor, 1,475,000 shares of
Common Stock for business and financial services valued at $50,000. This
represented 67% of the then issued and outstanding shares of Common Stock. The
value of these shares were appraised by Zweifler Financial Research at $.03 per
share. Mr. Cantor has provided investment banking services to the Company. Mr.
Cantor transferred his shares to Srotnac Group, LLC, a company which is 98%
owned by Mr. Cantor.

In October 1996, the Company completed a bridge financing pursuant to which
it sold 70 units ('Units') each Unit consisting of a $5,000 principal amount
promissory note bearing interest at a rate of 10% and 10,000 shares of the
Company's Common Stock or an aggregate of $350,000 promissory notes and 700,000
shares of Common Stock. In January 1997, the Company sold an additional 30
units, or an aggregate of 300,000 additional shares of Common Stock and
$150,000, promissory notes.

As a condition of the Underwriter underwriting this Offering, the
Underwriter required that the bridge lenders forgive the entire $500,00 of
principal of the promissory notes (and all interest due thereunder) sold in
October 1996 or January 1997. Company's indebtedness and that the funds loaned
to the Company be allocated to the purchase price of the shares of Common Stock.
In May 1997, the bridge lenders in the October 1996 and January 1997 private
placements released and discharged the Company from any and all obligations
arising out of promissory notes aggregating $500,000 and agreed to cancel such
notes.

Air Response purchases both fuel and oil from Response Aviation, Inc.
('Aviation'), a company wholly-owned by the Companies' shareholder. The total
amount of purchases for the years ended December 31, 1996 and 1995 approximated
$172,000 and $154,000, respectively. Due to the common ownership between Air
Response and Response Aviation, the prices for fuel and oil charged by Response
Aviation to Air Response may not be indicative of the prices that Response may
be able to obtain if common ownership did not exist.

DESCRIPTION OF SECURITIES

GENERAL

The Company amended its articles of incorporation in February 1997, which
increased the authorized capital stock of the Company to 20,500,000 shares, of
which 20,000,000 shares are Common Stock, par value $.001 per share, and 500,000
are Preferred Stock, par value $1.00 per share.

COMMON STOCK

As of the date of this Prospectus, there are 2,665,607 shares of Common
Stock outstanding and 32 record stockholders. Upon consummation of the Offering,
4,225,607 shares of Common Stock will be issued and outstanding, excluding (i)
350,000 shares of Common Stock reserved for issuance under the Company's stock
option plan (ii) 806,250 shares of Common Stock which will be issued to Louis R.
Capece, Jr., in connection with the acquisition of Air Responses, two years from
the closing of the Offering; (iii) 1,550,000 shares reserved for issuance upon
exercise of the Warrants offered hereby; (iv) 1,025,000 shares reserved for
issuance upon exercise of other outstanding options and warrants; (v) 232,500
shares of Common Stock issuable upon exercise of the Underwriter's Option.

Holders of Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of the shareholders. Holders of Common
Stock do not have any cumulative voting rights for the election of directors.
Subject to preferences that may be applicable to any outstanding shares of
Preferred Stock, the holders of Common Stock are entitled to receive ratably
such dividends, if any, as may be declared by the Board of Directors from time
to time out of funds legally available for that purpose. Upon any liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary,
holders of Common Stock are entitled to receive pro rata all assets of the
Company available for distribution to its shareholders after payment or
provision for payment of debts and other liabilities of the Company and the
liquidation preferences of any then outstanding shares of Preferred Stock. The
shares of Common Stock are neither redeemable nor convertible, except for the
put which will be issued to Mr. Capece and the holders thereof have no
preemptive or subscription rights to purchase any securities of the Company. See
'Certain Transactions -- Acquisition of Air Response and Air Response South.'

PREFERRED STOCK

As of the date of this Prospectus, no shares of Preferred Stock are
outstanding. The Board of Directors has the authority to issue Preferred Stock
in one or more series and to determine the powers, preferences and rights and
the qualifications, limitations or restrictions granted to or imposed upon any
series of Preferred Stock and to fix the number of shares constituting any
series and the designation of such series without any further vote or action by
the shareholders of the Company. Any Preferred Stock designated by the Board may
have voting, conversion, liquidation preference, redemption, dividend and other
rights which are superior to the Common Stock. The issuance of Preferred Stock
may have the effect of delaying, deferring or preventing a change in control of
the Company without further action by the shareholders, may discourage bids for
the Company's Common Stock and may adversely affect the market price of and the
voting and other rights of the Common Stock.

OPTIONS AND WARRANTS

As of the date hereof, other than as described in the Registration
Statement, there are no outstanding options or warrants to purchase, or
securities convertible into, Common Stock of the Company.

REDEEMABLE COMMON STOCK PURCHASE WARRANTS

The Warrants will be issued pursuant to a warrant agreement (the 'Warrant
Agreement') among the Company, the Underwriter and American Securities Transfer
& Trust, Inc., the warrant agent, and will be evidenced by warrant certificates
in registered form.

Each Warrant entitles the holder to purchase one share of Common Stock at
an exercise price of $6.00 per share, subject to adjustment, for three years
commencing on the Closing Date.

The exercise price of the Warrants and the number and the shares of Common
Stock or other securities and property issuable upon exercise of the Warrants
are subject to adjustment in certain circumstances, including stock splits,
stock dividends, subdivisions, combinations, reclassification or issuances of
stock at a price lower than the current market price. Additionally, an
adjustment will be made upon the sale of all or substantially all of the assets
of the Company in order to enable the holders of the Warrants to purchase the
kind and number of shares of stock or other securities or property (including
cash) receivable in such event by a holder of the number of shares of Common
Stock that might otherwise have been purchased upon exercise of the Warrants.

The Warrants do not confer upon the holder any voting or any other rights
of a shareholder of the Company. Upon notice to the holders of the Warrants, the
Company has the right to reduce the exercise or extend the expiration date of
the Warrants.

Warrants may be exercised upon surrender of the Warrant certificate
evidencing those Warrants on or prior to the expiration date (or earlier
redemption date) of the Warrants to the Warrant Agent, with the form of
'Election to Purchase' on the reverse side of the Warrant certificate completed
and executed as indicated, accompanied by payment of the full exercise price (in
United States funds, by cash or certified bank check payable to the order of the
Warrant Agent) for the number of Warrants being exercised.

No fractional shares will be issued upon exercise of the Warrants. However,
if a holder of a Warrant exercised all Warrants then owned of record by him, the
Company will pay to that holder in lieu of the issuance of any fractional share
which would otherwise be issuable, an amount in cash based on the market value
of the Common Stock on the last trading day prior to the exercised date.

No Warrant will be exercisable unless at the time of exercise the Company
has filed with the Securities and Exchange Commission a current prospectus
covering the issuance of shares of Common Stock issuable upon exercise of the
Warrants and the issuance of shares has been registered or qualified or is
deemed to be exempt from registration or qualification under the securities laws
of the state of residence of the holder of the Warrant. The Company has
undertaken to use its best efforts to maintain a current prospectus relating to
the issuance of shares of Common Stock upon the exercise of the Warrants until
the expiration of the Warrants, subject to the terms of the Warrant Agreement.
While it is the Company's intention to maintain a current prospectus, there is
no assurance that it will be able to do so.

The Warrants are redeemable, in whole or in part, by the Company at a price
of $.10 per Warrant, commencing twenty-four (24) months the closing date (except
the Warrants may be redeemed commencing twelve (12) months following the closing
date with the Underwriter's express written consent), and prior to their
expiration, provided that (i) prior written notice of not less than 30 days is
given to the Warrantholders and (ii) the closing bid price (as defined) of the
Company's Common Stock for the twenty (20) consecutive trading days immediately
prior to the date on which the notice of redemption is given, shall have
exceeded $8.50 per share. The Warrantholders shall have exercise rights until
the close of business, the day preceding the date fixed for redemption.

REGISTRATION RIGHTS

In connection with the acquisition of Air Response, the Company has granted
Louis R. Capece, Jr., upon the issuance of 806,250 shares of Common Stock two
years from the closing of the Offering, certain 'piggyback' registration rights
(other than a Registration Statement on Form S-4 or Form S-8 or successor form
thereto). These registration rights are not limited to a term and are subject to
approval of any underwriter for the Company. See 'Certain Transactions.'

Upon the consummation of the Offering, the Company will sell to the
Underwriter an Option to purchase 155,000 shares of Common Stock, and 155,000
Warrants, which may be exercised for an additional 155,000 shares of Common
Stock for $10. The Underwriter's Option will be exercisable for a period of four
years commencing one year from the date of this Prospectus. In addition, holders
of the Underwriter's Option will have certain demand or piggy-back registration
rights during the period the

Underwriter's Option is exercisable with respect to the Underwriter's Option and
the underlying shares of Common Stock. See 'Underwriting.'

TRANSFER AGENT

American Securities Transfer & Trust, Inc., 1825 Lawrence Street, Denver,
CO 80202-1817, will serve as the Company's transfer agent for the Common Stock.

SHARES ELIGIBLE FOR FUTURE SALE

Upon the consummation of the Offering, the Company will have outstanding an
aggregate of 4,225,607 shares of Common Stock of which 2,675,607 are 'restricted
securities' under Rule 144 under the Securities Act of 1933, as amended (the
'Securities Act') (exclusive of (i) the 350,000 shares of Common Stock reserved
for issuance under the Option Plan; (ii) 806,250 shares of Common Stock which
will be issued to Louis R. Capece, Jr. in connection with the acquisition of Air
Response, two years from the closing of the Offering; (iii) 1,550,000 shares
reserved for issuance upon exercise of the Warrants offered hereby, (iv)
1,025,000 shares reserved for issuance upon exercise of other outstanding
options and warrants; (iv) 232,500 shares of Common Stock issuable upon exercise
of the Underwriter's Warrants. All of the 1,550,000 shares of Common Stock sold
in the Offering will be freely tradeable without restriction under the
Securities Act except for any shares purchased by 'affiliates' of the Company
(as that term is defined in the rules and regulations under the Securities Act).

In the future, these restricted shares may be sold only pursuant to a
registration statement under the Securities Act or an applicable exemption,
including the exemption provided by Rule 144. The Securities and Exchange
Commission ('Commission') has amended Rule 144, effective April 29, 1997,
reducing the holding period before shares subject to Rule 144 become eligible
for sale in the public market. Under the revised Rule 144, a person who has
owned Common Stock for one year may, under certain circumstances, sell within
any three-month period, a number of shares of Common Stock that does not exceed
the greater of 1% of the then outstanding shares of Common Stock or the average
weekly trading volume during the four calendar weeks prior to such sale. In
addition, a person who is not deemed to have been an affiliate of the Company at
any time during the three months preceding a sale, and who has beneficially
owned the restricted securities for the last two years is entitled to sell all
such shares without regard to the volume limitations, current public information
requirements, manner of sale provisions and notice requirements. Sales or the
expectation of sales of a substantial number of shares of Common Stock in the
public market following this Offering could adversely affect the prevailing
market price of the Common Stock. In addition, the sale of substantial amounts
of Common Stock acquired through the exercise of the (i) options granted, or
(ii) Underwriter's Option could adversely affect prevailing market prices for
the Common Stock. Except as otherwise described herein, the Company and its
officers, directors and shareholders have agreed with the Underwriter not to,
directly or indirectly, register, issue, offer, sell, offer to sell, contract to
sell, hypothecate, pledge or otherwise dispose of any shares of Common Stock,
(or any securities convertible into or exercisable or exchangeable for shares of
Common Stock), for a period of two years from the date of this Prospectus,
except that shares held by Srotnac Group LLC such shares are subject to a
one-year lock-up period after which they may be sold with the prior written
consent of the Underwriter, which consent shall not be unreasonably withheld.
The Underwriter's consent may be based on several factors, including, but not
limited to the financial performance of the Company and market conditions,
including price and trading volume of the Company's Common Stock.

UNDERWRITING

First Liberty Investment Group, Inc. (the 'Underwriter') has agreed,
subject to the terms and conditions of the Underwriting Agreement, to purchase
from the Company and the Company has agreed to sell on a firm commitment basis
1,550,000 shares of Common Stock and 1,550,000 Warrants offered hereby, not
including the Over-Allotment Option. The Underwriter is committed to purchase
all Securities offered hereby, if any, such as purchases subject to certain
conditions, which may be waived by the Underwriter in its sole discretion,
specified in the Underwriting Agreement, including, but not limited to, the
failure of the Company to have its securities approved on Nasdaq SmallCap. Thus
the

Underwriter may refuse to go forward after effectiveness of the Registration
Statement containing this Prospectus if the Company is denied listing on Nasdaq
SmallCap.

The Underwriter has advised the Company that it proposes to offer the
Securities to the public at the public offering price set forth on the cover
page of this Prospectus and that it may allow to certain dealers who are members
of the National Association of Securities Dealers, Inc. ('NASD') concessions not
in excess of $ per share of Common Stock and $ per Warrant.

The Company has agreed to pay to the Underwriter a non-accountable,
non-refundable expense allowance of 3% of the gross proceeds of this Offering.
The Company has also agreed to pay all expenses in connection with qualifying
the Common Stock and Warrants offered hereby for sale under the laws of such
states as the Underwriter may designate, including expenses of counsel retained
for such purpose by the Underwriter.

The Company has agreed to sell to the Underwriter for $10, upon
consummation of this Offering, the Underwriter's Option exercisable to purchase
up to 155,000 shares of Common Stock and up to 155,000 Warrants to purchase
Common Stock. The Underwriter's Option may not be sold, transferred, assigned or
hypothecated for one year from the date of this Prospectus, except to the
officers or partners of the Underwriter and members of the selling group, and
are exercisable during the four-year period commencing one year from the
Effective Date (the 'Option Exercise Term'). During the Option Exercise Term,
the holders of the Underwriter's Option are given, at nominal cost, the
opportunity to profit from a rise in the market price of the Common Stock. To
the extent that the Underwriter's Option is exercised, in whole or in part,
dilution to the interests of the Company's shareholders will occur. Further, the
terms upon which the Company will be able to obtain additional equity capital
may be adversely affected since the holders of the Underwriter's Option can be
expected to exercise at a time when the Company would, in all likelihood, be
able to obtain any needed capital on terms more favorable to the Company than
those provided in the Underwriter's Option. Subject to certain limitations and
exclusions, the Company has agreed, at the request of the holders of a majority
of the Underwriter's Option to register the Underwriter's Option and the
underlying shares of Common Stock under the Securities Act on two occasions (one
at the Company's expense and one at the holder's expense) during the Option
Exercise Term and to include such Underwriter's Option and the underlying shares
of Common Stock in any appropriate registration statement which is filed by the
Company during the seven years following the date of this Prospectus.

The Company has granted to the Underwriter the Over-Allotment Option,
exercisable during the 45 calendar day period after the Closing Date, to
purchase from the Company at the initial public offering price less underwriting
discounts, up to an additional 232,500 shares of Common Stock and 232,500
Warrants, exercisable for up to an additional 232,500 shares of Common Stock, on
the same terms as the Securities offered hereby, solely to cover
over-allotments, if any. In addition, the Underwriter may short sell Securities
in its syndicate account in excess of the Securities offered hereby and included
in its over-allotment option and cover such short sales by purchases of
Securities in the open market or otherwise.

The Underwriter has informed the Company that it does not expect sales to
be made to discretionary accounts in excess of one percent (1%) of the
Securities offered hereby.

In the event the Underwriter exercises its registration rights to effect
the distribution of the Common Stock underlying the Underwriter's Option, the
Underwriter and any holder of such securities who is a market maker in the
Company's securities, prior to such distribution, will be unable to make a
market in the Company's securities for up to a period of nine days prior to the
commencement of such distribution and until such distribution is completed. If
the Underwriter ceases making a market, the market and market prices for the
Securities may be adversely affected, and the holders thereof may be unable to
sell such securities.

The Company has agreed to engage and pay for, on the Underwriter's behalf,
a consultant selected by the Underwriter and approved by the Company who is an
expert in the industry in which the Company does business to analyze the
Company's prospects and respond to the Underwriter's questions and concerns
regarding the offering of Securities hereby. The aggregate expenses of such
consultant shall not exceed $10,000.

Additionally, the Underwriter has been engaged by the Company as its
warrant solicitation agent and pursuant thereto may participate in the
solicitation of the exercise of the Warrants. Upon the

exercise of the Warrants, the Company will pay the Underwriter a commission of
5% of the aggregate exercise price of the Warrants exercised. In accordance with
the NASD Notice to Members 92-98, no fee shall be paid: (i) upon the exercise of
warrants where the market price of the underlying Common Stock is lower than the
exercise price; (ii) upon the exercise of any Warrants not solicited by the
Underwriter, (iii) for the exercise of Warrants held in any discretionary
account; or (iv) upon the exercise of Warrants where disclosure of compensation
arrangements has not been made and documents have not been provided to customers
both as part of the original offering and at the time of exercise. Further, the
exercise of any Warrant shall be presumed unsolicited unless the holder of such
Warrant states in writing that the transaction was solicited by the Underwriter.
Notwithstanding the foregoing, no fees will be paid to the Underwriter or any
other NASD members upon exercise of the Warrants within the first twelve months
from the Effective Date.

In connection with the solicitation of Warrant exercises, unless granted an
exemption by the Commission from Regulation M under the Exchange Act, the
Underwriter and any other soliciting broker-dealer will be prohibited from
engaging in any market-making activities with respect to the Securities for the
period commencing either two or nine business days (depending on the market
price of the Company's shares of Common Stock) prior to any solicitation
activity with respect to the exercise of Warrants until the later of (i) the
termination of such solicitation activity or (ii) the termination (by waiver or
otherwise) of any rights which the Underwriter or any other soliciting
broker-dealer may have to receive a fee for the exercise of Warrants following
such solicitation. As a result, the Underwriter or other soliciting
broker-dealer may be unable to provide a market for the Company's securities,
should it desire to do so, during certain periods in which the Warrants are
exercisable.

In addition, the Company has agreed to enter into a financial consulting
agreement with the Underwriter, which will act as a management and financial
consultant for the Company for a period of two years, commencing upon the
consummation of this Offering, for an aggregate fee of $120,000, all of which is
payable in full at the Closing.

Except as otherwise described herein, the Company has agreed not to issue
any equity and/or other securities for a period of two (2) years from the date
hereof without the express prior written consent of the Underwriter.

The Company and all of its current shareholders have agreed not to offer,
sell, contract to sell or otherwise dispose of any shares of Common Stock or
rights to acquire shares of Common Stock without the prior consent of the
Underwriter for a period of two (2) years from the date hereof, except for
shares owned by Srotnac Group LLC which are subject to a one-year lock-up period
from the Closing Date, after which such shares may be sold with the
Underwriter's prior written consent, which consent shall not be unreasonably
withheld. The Underwriter's consent may be based on a number of factors,
including, but not limited to the financial performance of the Company and
market conditions, including price and trading volume of the Company's Common
Stock.

Although the Underwriting Agreement will provide that the Underwriter may
designate for election one person to the Company's Board of Directors, the
Underwriter has advised the Company that it has not selected such individual and
has no immediate plans to do so. If the Underwriter elects not to assert such
right, then it may designate one person to attend all Board of Directors
meetings as an observer. In the event that such an individual is designated,
such individual shall receive reimbursement of expenses for attending the
meetings of the Board of Directors.

The Company has agreed to indemnify the Underwriter against certain civil
liabilities, including liabilities under the Securities Act. To the extent this
section may purport to provide exculpation from possible liabilities arising
under the Federal securities laws, it is the opinion of the Commission that such
indemnification is against public policy and is therefore unenforceable.

The foregoing is a summary of the principal terms of the Underwriting
Agreement, the Underwriter's Warrant and the Financial Advisory and Investment
Banking Agreement. Reference is made to the copies of the Underwriting
Agreement, the Underwriter's Warrants and the Financial Advisory and Investment
Banking Agreement which will be filed as exhibits to the Registration Statement
of which this Prospectus forms a part.

The Underwriter was incorporated on August 11, 1958, and first registered
as a broker-dealer on October 3, 1958. Prior to this Offering, although the
Underwriter has participated as a selling group member in two underwritings, it
has not participated as a sole or co-manager in any public offerings.

Prospective purchasers of the Common Stock and Warrants offered hereby should
consider the Underwriter's lack of experience in being a manager of an
underwritten public offering.

Prior to this Offering, there has been no public market for the Common
Stock or the Warrants. Accordingly, the Offering and exercise price of such
Securities being offered hereby was determined, in large part, by negotiations
between the Company and the Underwriters on an arbitrary basis and bear no
direct relationship to the assets, earnings, book value, results of operations
or other recognized criterion of value. Factors considered in determining such
prices, in addition to prevailing market conditions, include the history of and
the business prospects of the Company, as well as such other factors as were
deemed relevant, including an evaluation of management and the general economic
climate. The prices should in no event, however, be regarded as an indication of
any future market price of the Common Stock or the Warrants.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Bondy & Schloss LLP, New York, NY. Gerald A. Adler, a
partner of Bondy & Schloss LLP indirectly owns an aggregate of 2,500 shares of
Common Stock of the Company. Certain legal matters in connection with the
Offering will be passed upon for the Underwriter by Gusrae, Kaplan & Bruno,
New York, NY.

EXPERTS

The audited balance sheets of Proflight Medical Response, Inc. as of
December 31, 1996 and 1995, the audited statements of operations, cash flows and
stockholders' equity (deficit) for the year ended December 31, 1996 and 1995
have been included herein and in the Registration Statement in reliance upon the
report appearing elsewhere herein of Grant Thornton LLP, independent certified
public accountants, whose report thereon has been modified to include an
explanatory paragraph which refers to various matters which raise substantial
doubt about Proflight's ability to continue as a going concern, and upon the
authority of said firm as experts in accounting and auditing. The audited
combined balance sheet of Air Response and Air Response South as of December 31,
1996, the audited combined statements of operations and retained earnings and
cash flows, for the years ended December 31, 1996 and 1995 have been included
herein and in the Registration Statement in reliance upon the report appearing
elsewhere herein of Staff Maikels & Ciampino, P.C., independent certified public
accountants, and upon the authority of said firm as experts in accounting and
auditing.

ADDITIONAL INFORMATION

The Company has filed a Registration Statement on Form SB-2 (together with
all amendments, schedules and exhibits thereto, the 'Registration Statement')
under the Securities Act with respect to the Securities offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all the information set forth in the Registration Statement to which
reference is hereby made. Statements made in this Prospectus as to the contents
of any contract, agreement or other document referred to are not necessarily
complete. With respect to each such contract, agreement or other document filed
as an exhibit to the Registration Statement, reference hereby is made to the
exhibit for a more complete description of the matter involved, and each such
statement shall be deemed qualified in its entirety by such reference. For
further information with respect to the Company and the Securities offered
hereby, reference is made to the Registration Statement. The Registration
Statement filed by the Company may be inspected, without charge, at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, NW, Washington, DC 20549 and at the Commission's regional
offices at 1801 California Street, Suite 4800, Denver, Colorado 80202-2648 and 7
World Trade Center, Suite 1300, New York, NY 10048. Copies of such material also
may be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, NW, Washington, DC 20549, upon payment of certain fees prescribed by the
Commission. Electronic registration statements made through the Electronic Data
Gathering, Analysis and Retrieval system are publicly available through the
Commission's Web site (http://www.sec.gov).

[THIS PAGE INTENTIONALLY LEFT BLANK]

PROFLIGHT MEDICAL RESPONSE, INC.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE NO.
--------

<S> <C>
PROFLIGHT MEDICAL RESPONSE, INC.
Report of Independent Certified Public Accountants................................................ F-2
Balance Sheet as at December 31, 1996 and 1995.................................................... F-3
Statements of Operations For the Years Ended December 31, 1996 and 1995........................... F-4
Statements of Stockholders' Deficit For the Years Ended December 31, 1996 and 1995................ F-5
Statements of Cash Flows For the Years Ended December 31, 1996 and 1995........................... F-6
Notes to Financial Statements..................................................................... F-7
PROFLIGHT MEDICAL RESPONSE, INC. (UNAUDITED)
Condensed Combined Balance Sheets as at September 30, 1997 (Unaudited)............................ F-13
Condensed Combined Statements of Operations For the Nine Month Period Ended September 30, 1997 and
1996 (Unaudited)................................................................................. F-14
Condensed Combined Statements of Cash Flows For the Nine Month Period Ended September 30, 1997 and
1996 (Unaudited)................................................................................. F-15
Notes to Financial Statements (Unaudited)......................................................... F-16
AIR RESPONSE, INC. AND AIR RESPONSE SOUTH, INC.
Independent Auditors' Report -- Staff Maikels & Ciampino, P.C..................................... F-21
Combined Balance Sheet as at December 31, 1996.................................................... F-22
Combined Statements of Operations and Retained Earnings For the Years Ended December, 1996 and
1995............................................................................................. F-23
Combined Statements of Cash Flows For the Years Ended September 30, 1996 and 1995................. F-24
Notes to Financial Statements..................................................................... F-25
AIR RESPONSE AND AIR RESPONSE SOUTH, INC. (UNAUDITED)
Consolidated Balance Sheets as at September 30, 1997 and December 31, 1996 (Unaudited)............ F-31
Consolidated Statements of Operations For the Nine Month Period Ended September 30, 1997 and 1996
(Unaudited)...................................................................................... F-32
Consolidated Statements of Cash Flows For the Nine Month Period Ended September 30, 1997 and 1996
(Unaudited)...................................................................................... F-33
Notes to Financial Statements (Unaudited)......................................................... F-34
PROFLIGHT MEDICAL RESPONSE, INC. PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
Pro Forma Presentation Statement.................................................................. F-35
Pro Forma Statement of Operations For the Year Ended December 31, 1996 (Unaudited)................ F-36
Pro Forma Consolidated Balance Sheet as of September 30, 1997 (Unaudited)......................... F-37
Pro Forma Statement of Operations For the Nine Months Ended September 30, 1997 (Unaudited)........ F-39
</TABLE>

F-1

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
PROFLIGHT MEDICAL RESPONSE, INC.

We have audited the accompanying balance sheets of Proflight Medical
Response, Inc. (a Colorado corporation) as of December 31, 1996 and 1995 and the
related statements of operations, stockholders' deficit and cash flows for each
of the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements 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 Proflight Medical Response,
Inc. as of December 31, 1996 and 1995 and the results of its operations and cash
flows for each of the years then ended, in conformity with generally accepted
accounting principles.

The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in note B to the
financial statements, the Company's total current liabilities exceed total
current assets as of December 31, 1996, the Company experienced a significant
loss in 1996 and the Company has a stockholder's deficit as of December 31,
1996. These factors raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in note B. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

GRANT THORNTON LLP

Denver, Colorado

January 16, 1997 (except for note K,
Subsequent Events, as to which the
date is February 17, 1997, and note F,
Commitments and Contingencies -- Litigation,
as to which the date is April 24, 1997)

F-2

PROFLIGHT MEDICAL RESPONSE, INC.
BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1996 1995
---------- ----------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents........................................................ $ -- $ 1,684
Accounts receivable, trade
Air Response, Inc.............................................................. 131,887 46,600
Other.......................................................................... 369,908 313,782
---------- ----------
501,795 360,382
Less allowance for doubtful accounts........................................ 40,000 28,647
---------- ----------
461,795 331,739
Other current assets............................................................. 13,003 8,705
---------- ----------
Total current assets................................................... 474,798 342,124
Property and equipment -- at cost
Aircraft......................................................................... 4,281,883 1,760,873
Furniture and fixtures........................................................... 22,997 17,755
Medical equipment................................................................ 160,262 102,185
---------- ----------
4,465,142 1,880,813
Less accumulated depreciation and amortization.............................. (337,013) (405,233)
---------- ----------
4,128,129 1,475,580
Other assets
Note receivable -- Air Response, Inc............................................. 200,000 --
Deferred loan costs, less accumulated amortization of $16,250 in 1996............ 93,750 --
Deferred offering costs.......................................................... 10,000 --
Cost of intangible business asset, less accumulated amortization of $4,000....... 26,000 --
Other............................................................................ 42,489 --
---------- ----------
372,239 --
---------- ----------
Total assets........................................................... $4,975,166 $1,817,704
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Current portion of notes payable
Stockholders................................................................ $ 369,694 $ 56,160
Other....................................................................... 572,253 143,502
Bank overdraft................................................................... 19,910 --
Accounts payable -- trade........................................................ 495,791 281,031
Accrued liabilities.............................................................. 97,461 18,772
---------- ----------
Total current liabilities.............................................. 1,555,109 499,465
Notes payable, less current portion
Stockholders..................................................................... -- 10,000
Other............................................................................ 3,963,935 1,360,520
---------- ----------
3,963,935 1,370,520
---------- ----------
Total liabilities...................................................... 5,519,044 1,869,985
Commitments and contingencies......................................................... -- --
Stockholders' deficit
Common stock -- authorized 20,000,000 shares of $.001 par value; issued and
outstanding, 3,225,000 and 1,156,068 for 1996 and 1995, respectively............ 3,225 1,156
Paid-in capital (deficit)........................................................ (436,098) 143,662
Preferred stock -- authorized 500,000 shares of $1.00 par value; none issued and
outstanding..................................................................... -- --
---------- ----------
(432,873) 144,818
Accumulated deficit.............................................................. (111,005) (197,099)
---------- ----------
Total stockholders' deficit............................................ (543,878) (52,281)
---------- ----------
Total liabilities and stockholders' deficit....................... $4,975,166 $1,817,704
---------- ----------
---------- ----------
</TABLE>

The accompanying notes are an integral part of these statements.

F-3

PROFLIGHT MEDICAL RESPONSE, INC.
STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
------------------------
1996 1995
---------- ----------
<S> <C> <C>
Operating revenue
Air ambulance.................................................................... $3,090,527 $2,310,276
Medical.......................................................................... 607,490 515,578
Passenger........................................................................ 175,068 14,486
Maintenance...................................................................... 33,126 45,195
---------- ----------
Total operating revenue..................................................... 3,906,211 2,885,535
Operating expenses
Flying operations................................................................ 2,410,300 1,617,651
Maintenance...................................................................... 591,207 343,020
Promotion and sales.............................................................. 255,616 31,909
General and administrative....................................................... 650,036 353,969
Depreciation and amortization.................................................... 377,930 276,538
---------- ----------
Total operating expenses.................................................... 4,285,089 2,623,087
---------- ----------
Operating income (loss)............................................................... (378,878) 262,448
Nonoperating expenses (income)
Interest expense................................................................. 287,188 150,254
Other, net....................................................................... (34) (4,915)
---------- ----------
Total nonoperating expenses................................................. 287,154 145,339
---------- ----------
Net earnings (loss)......................................................... $ (666,032) $ 117,109
---------- ----------
---------- ----------
Net earnings (loss) per share......................................................... $(.19) $.03
Weighted average number of shares outstanding......................................... 3,525,000 3,525,000
---------- ----------
---------- ----------
</TABLE>

The accompanying notes are an integral part of these statements.

F-4

PROFLIGHT MEDICAL RESPONSE, INC.
STATEMENTS OF STOCKHOLDERS' DEFICIT
YEARS ENDED DECEMBER 31, 1996 AND 1995

<TABLE>
<CAPTION>
COMMON STOCK
------------------- PAID-IN (ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT) TOTAL
--------- ------ --------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1995....................... 1,156,068 $1,156 $ 137,162 $ (314,208) $(175,890)
Net earnings..................................... -- -- 117,109 117,109
Capital contribution recognized in lieu of
interest payment............................... -- -- 6,500 -- 6,500
--------- ------ --------- ------------ ---------
Balance at December 31, 1995..................... 1,156,068 1,156 143,662 (197,099) (52,281)
Net loss......................................... -- -- -- (666,032) (666,032)
Transfer of S-corporation accumulated deficit to
paid-in capital................................ -- -- (752,126) 752,126 --
Cost of 387,282 shares of common stock retired... (387,282) (387) (12,678) -- (13,065)
Common stock issued for cash..................... 231,214 231 99,769 -- 100,000
Common stock, issued for bridge loans............ 1,475,000 1,475 48,525 -- 50,000
Common stock issued for bridge loans............. 700,000 700 34,300 -- 35,000
Common stock issued for services................. 30,000 30 1,470 -- 1,500
Common stock issued in conjunction with loan..... 20,000 20 980 -- 1,000
--------- ------ --------- ------------ ---------
Balance at December 31, 1996..................... 3,225,000 $3,225 $(436,098) $ (111,005) $(543,878)
--------- ------ --------- ------------ ---------
--------- ------ --------- ------------ ---------
</TABLE>

The accompanying notes are an integral part of these statements.

F-5

PROFLIGHT MEDICAL RESPONSE, INC.
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
-----------------------
1996 1995
---------- ---------
<S> <C> <C>
Increase (decrease) in cash and cash equivalents.......................................
Cash flows from operating activities
Net earnings (loss)............................................................... $ (666,032) $ 117,109
Adjustment to reconcile net earnings (loss)
to net cash provided by operating activities
Depreciation and amortization................................................ 377,930 276,538
Stock issued for services.................................................... 2,500 --
Imputed interest on note..................................................... -- 6,500
Changes in assets and liabilities............................................
(Increase) in accounts receivable....................................... (130,060) (127,248)
(Increase) in other assets.............................................. (76,787) (8,705)
Increase in accounts payable............................................ 214,760 39,184
Increase in accrued liabilities......................................... 78,689 4,219
---------- ---------
Net cash provided by (used in) operating activities................ (199,000) 307,597
Cash flows from investing activities
Acquisition of property and equipment............................................. (3,858,564) (384,743)
Issuance of note receivable....................................................... (200,000) --
---------- ---------
Net cash flows used in investing activities........................ (4,058,564) (384,743)
Cash flows from financing activities...................................................
Increase in deferred costs........................................................ (35,000) --
Proceeds from sale of stock....................................................... 100,000 --
Retirement of common stock........................................................ (13,065) --
Increase (decrease) in bank overdraft............................................. 19,910 (43,419)
Principal payments on notes payable............................................... (175,745) (133,071)
Proceeds from notes payable....................................................... 4,359,780 255,320
---------- ---------
Net cash provided by financing activities.......................... 4,255,880 78,830
---------- ---------
Net increase (decrease) in cash and cash equivalents............... (1,684) 1,684
Cash and cash equivalents, beginning of year........................................... 1,684 --
---------- ---------
Cash and cash equivalents, end of year................................................. $ -- $ 1,684
---------- ---------
---------- ---------
Supplemental disclosure of cash flow information
Cash paid during the year for interest....................................... $ 262,808 $ 148,215
Supplemental schedule of noncash investing and financing activities
Common stock issued for promotion and financing services..................... 85,000 --
Capital contribution recognized in lieu of interest payment.................. -- 6,500
Property and equipment acquired through long-term debt financing............. -- 480,000
Refinancing of long-term debt................................................ 435,687 836,680
</TABLE>

The accompanying notes are an integral part of these statements.

F-6

PROFLIGHT MEDICAL RESPONSE, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of Proflight Medical Response, Inc.'s (the Company) significant
accounting policies consistently applied in the preparation of the accompanying
financial statements follows:

1. HISTORY AND BUSINESS ACTIVITY

Proflight Medical Response, Inc. provides airborne transport for patients
who are critically ill, injured or otherwise incapacitated such that they may
require emergency medical care during flight. Services are provided by the
Company for hospital patients who need to be transported to other hospitals;
hospital patients who need to be transported to residences or nursing homes and
other convalescent facilities; organ transplant harvest teams and harvested
organs and significant numbers of vacationers who become ill or injured during
trips. The flights operated are generally long distance in nature and they
include international as well as domestic transport.

2. CASH EQUIVALENTS

For purposes of the statement of cash flows, the Company considers all
highly liquid cash investments with an original maturity of three months or less
to be cash equivalents.

3. PROPERTY AND EQUIPMENT

Property and equipment are carried at cost. Major additions, betterments,
and renewals are capitalized. Maintenance and repairs are charged to operating
expenses as they are incurred. Depreciation and amortization to estimated
residual values are computed on the straight-line basis for the aircraft; the
units of production method for aircraft engines/overhauls; the double-declining
method is used for all other property and equipment, over the estimated useful
lives of the related assets as follows:

<TABLE>
<CAPTION>
<S> <C>
Aircraft.......................................................... 20 years
Aircraft engines/overhauls........................................ Estimated flight hours
Furniture and fixtures............................................ 5 - 7 years
Medical equipment................................................. 7 years
</TABLE>

4. DEFERRED OFFERING COSTS

The Company has deferred the costs in connection with the proposed public
offering (note B). The costs will be charged against common stock if the
offering is successful, or will be charged to expense if the offering is
unsuccessful.

5. EARNINGS (LOSS) PER SHARE

Earnings (loss) per share is computed by dividing net income (loss) by the
weighted average number of shares outstanding during the period. During the
years ended December 31, 1995 and 1996, the Company effected a 50 to 1 and
3.85356 to one stock split, respectively. All shares and per share amounts have
been retroactively restated to reflect the splits. In addition, the weighted
average calculation considers all stock issued in 1996 and 300,000 shares issued
in January, 1997 to be outstanding as of January 1, 1995.

6. INCOME TAXES

In 1995, income taxes on net earnings are payable personally by the
stockholders pursuant to an election under Subchapter S of the Internal Revenue
Code not to have the Company taxed as a corporation. Accordingly, no provision
has been made for Federal income taxes.

In October 1996, the Company lost its S corporation status as a result of
issuing stock to the corporation. Therefore, the Company will be taxed as a C
corporation for a portion of 1996. Accordingly, the accumulated deficit has been
closed to paid-in capital as of November 1, 1996. For

F-7

PROFLIGHT MEDICAL RESPONSE, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

1996, deferred income taxes are provided for items which are reported for tax
purposes in different periods than in the financial statements. See note I for a
summary of the income tax provision.

7. USE OF ESTIMATES

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

NOTE B -- REALIZATION OF ASSETS

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. However, as shown in the accompanying financial
statements, the Company experienced a $666,032 loss during 1996 and has
accumulated a deficit in stockholders' equity of $543,878 through December 31,
1996. In addition, total current liabilities exceed total current assets by
approximately $1,080,000 as of December 31, 1996.

In view of the matters described in the preceding paragraph, recoverability
of a major portion of the recorded asset amounts shown in the accompanying
balance sheet is dependent upon continued operations of the Company, which in
turn is dependent upon the Company's ability to meet its financing requirements
on a continuing basis, to maintain present financing, and to succeed in its
future operations. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
amounts and classification of liabilities that might be necessary should the
Company be unable to continue in existence.

Management plans to continue expanding services through the purchase of
additional aircraft, resulting in increased revenues, more efficient use of
current aircraft, and proportionately lower operating costs. Management believes
this should provide a higher gross margin. In addition, the Company is pursuing
additional financing from outside sources, including an initial public offering
(IPO) (see note E). With the proceeds of the IPO, management intends to acquire
a company which will more than double current sales. Management believes this
combination will allow both companies to operate more efficiently through
elimination of certain duplicate general and administrative costs, purchasing
discounts on aircraft fuel, and more efficient use of each aircraft. Management
believes that these actions will provide growth and improve the Company's
operating and financial condition, providing the opportunity to continue as a
going concern.

NOTE C -- NOTE RECEIVABLE - AIR RESPONSE, INC.

In 1996, the Company loaned $200,000 to Air Response, Inc., a company it
intends to purchase (see note E -- Acquisition), who is also a major customer.
The note bears interest at 10%. The note is payable in two installments of
$100,000 plus accrued interest on May 14, 1998 and May 14, 2000.

NOTE D -- DEFERRED LOAN COSTS

During 1996 the Company issued 1,475,000 shares and 700,000 shares of
Common Stock in conjunction with obtaining bridge loan financing. This stock was
recorded at a fair value of $.03 per share and $.05 per share, respectively, and
will be amortized as interest expense over the one year term of the Notes.

F-8

PROFLIGHT MEDICAL RESPONSE, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE E -- NOTES PAYABLE

Notes payable at December 31 consisted of the following:

<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Shareholders
10.0% note to a shareholder, issued on October 28, 1993, with interest
on the loan for the first 24 months to be in the form of additional
ownership in the Company. Thereafter, to be paid in sixteen monthly
installments of $5,026, including interest; due March 1997. At
December 31, 1996, the entire balance is in default and is reflected
as current........................................................... $ 19,694 $ 66,160
10.0% notes with nineteen shareholders payable in full, principal and
interest, on the earlier of one year from date of each note or upon
closing of an initial public offering................................ 350,000 --
---------- ----------
369,694 66,160
Less current maturities................................................ 369,694 56,160
---------- ----------
$ -- $ 10,000
---------- ----------
---------- ----------
Other
9.75% note due in monthly installments of $5,304 including interest,
due December 20, 2002; refinanced in 1996; collateralized by a 1969
Learjet 24B and other key components................................. $ -- $ 322,000
11.0% note due in monthly installments of $7,576 including interest,
due March 20, 2005; refinanced in 1996; collateralized by a 1971
Learjet 25C and other key components. Guaranteed by certain
stockholders......................................................... -- 526,334
10.5% note due in monthly installments of $8,023 including interest,
due February 14, 2000; refinanced in 1996; collateralized by a 1973
Learjet 25B-XR and other key components. Guaranteed by certain
stockholders......................................................... -- 435,688
9.75% note due in monthly installments of $19,419 including interest,
due November 10, 2006; collateralized by a 1978 Learjet 35A and other
equipment............................................................ 1,477,646 --
9.75% note due in 60 monthly installments of $14,720, including
interest, beginning December 15, 1996, with a balloon payment of
$322,284 due on December 15, 2001; collateralized by a 1973 Learjet
25B and other equipment. Guaranteed by certain stockholders.......... 886,139 --
10.5% note due in 59 monthly installments of $17,717, including
interest, beginning June 30, 1996, with a balloon payment of $841,995
due on May 31, 2001, collateralized by a 1978 Learjet 35A. Guaranteed
by certain stockholders.............................................. 1,268,241 --
10.5% note due in 55 monthly installments of $6,513, including
interest, beginning November 15, 1996, with a balloon payment of
$324,627 due on June 15, 2001; collateralized by a 1978 Learjet 35A.
Guaranteed by certain stockholders................................... 478,053 --
10.0% note, issued January 16, 1996, due in monthly installments of
$1,500, with the balance due on July 16, 1996. Defaulted in 1996 and
interest rate increased to 20.0%; entire balance reflected as
current.............................................................. 85,009 --
10.25% line of credit with bank, due February 27, 1997................. 43,100 --
</TABLE>

(table continued on next page)

F-9

PROFLIGHT MEDICAL RESPONSE, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(table continued from previous page)
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
3% plus prime note with monthly interest only payments, due May 20,
1997; secured by a third lien on a 1973 Learjet 25B-XR and a second
interest in all accounts receivable and certain medical equipment.... 100,000 --
11.0% note with monthly interest only payments and annual principal
payments of $22,000 for March 1996, $44,000 for March 1997 and
$154,000 for March, 1998; secured by a secondary lien in a 1973
Learjet 25B-XR and other key components, as well as all accounts
receivable, and certain medical equipment and other assets as
specified in the agreement........................................... $ 198,000 $ 220,000
---------- ----------
4,536,188 1,504,022
Less current maturities..................................................... 572,253 143,502
---------- ----------
$3,963,935 $1,360,520
---------- ----------
---------- ----------
</TABLE>

The aggregate maturities of the notes payable are as follows:

YEAR ENDING DECEMBER 31,
- ------------------------
1997 ...................................... $ 941,947
1998 ...................................... 485,679
1999 ...................................... 366,532
2000 ...................................... 405,054
2001 ...................................... 1,799,327
Thereafter ...................................... 907,343
----------
$4,905,882
----------
----------

NOTE F -- COMMITMENTS AND CONTINGENCIES

LEASES

The Company leased aircraft, office space and office equipment under
operating lease arrangements. Total lease payments were $86,738 and $24,734 for
the years ended December 31, 1996 and 1995, respectively. In addition, as part
of the aircraft lease, the Company is required to make monthly payments of $150
per engine hour flown. A total of $12,720 was recognized in 1996 as maintenance
expense.

The minimum rental commitments under the noncancelable lease agreements are
as follows:

YEAR ENDING DECEMBER 31,
- ------------------------
1997 ........................................ $181,788
1998 ........................................ 143,495
--------
$325,283
--------
--------

ACQUISITION

As of December 31, 1996, the Company has signed a letter of intent to
acquire Air Response, Inc. and Air Response South, Inc., air ambulance companies
based in New York and Florida. The purchase price for these companies is
$2,000,000, of which $1,000,000 is payable on the closing by the Company of an
initial public offering (IPO) and $1,000,000 is payable two years from the date
of the closing of the IPO. In addition, the Company will issue shares of common
stock equal to $2,500,000 based upon the initial public offering price two years
from the closing of the offering to the former shareholder of Air Response, Inc.
and Air Response South, Inc.

F-10

PROFLIGHT MEDICAL RESPONSE, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

In conjunction with the proposed public offering, the Company has also
signed an agreement to retain its attorneys for anticipated legal work. The
estimated range of legal fees for this work is between $75,000 and $100,000.

LITIGATION

In March 1997, the Company and the Company's President were named in a
lawsuit Susan Fuller v. Proflight, Inc., Kevin Burkhardt, Andrew Hiestand and
James Fuller, Arapahoe County District Court, Colorado which alleges that the
plaintiff's former husband merged a business into the Company to conceal and
otherwise preclude plaintiff from receiving plaintiff's share of her former
husband's interest in the Company. The lawsuit is in its early stages and the
Company is unable to predict the outcome of this matter and no provision has
been provided for in the financial statements. In April 1997, the Company filed
a motion to dismiss as is the alternative for summary judgment. The Company,
through its counsel, intends to vigorously defend against this action.

NOTE G -- MAJOR CUSTOMERS

The Company had approximate sales to major customers as follows:

<TABLE>
<CAPTION>
CUSTOMER 1996 1995
- ---------------------------------------------------------------------- ---- ----
<S> <C> <C>
A..................................................................... 13% 17%
B..................................................................... 10% 12%
C..................................................................... 8% 10%
D (Air Response, Inc.)................................................ 8% 10%
</TABLE>

In addition, the Company is due approximately $132,000 in accounts
receivable and $200,000 in a note receivable (see note C) from Air Response,
Inc. This customer is the company Proflight intends to purchase as discussed in
note E -- Acquisition.

NOTE H -- ACCOMMODATION AGREEMENT

In order for the Company to obtain sufficient financing to purchase a 1973
Learjet 25B-XR, it was necessary for the Company to have an accommodator
guarantee repayment of a loan. In exchange, the accommodator is paid a fee of
$100 per month for each month that the loan is outstanding.

NOTE I -- INCOME TAXES

There is no income tax expense or benefit for 1996. The provision for
income taxes differs from the amount determined by applying the statutory rate
to net income before taxes, due to the following reasons for the year ended
December 31, 1996:

<TABLE>
<S> <C>
Income tax benefit at statutory rate............................................. $(246,000)
Benefit for Subchapter S loss.................................................... 205,000
Change in valuation allowance.................................................... 52,000
Other............................................................................ (11,000)
---------
Income tax benefit............................................................... $ --
---------
---------
</TABLE>

Components of deferred tax assets at December 31, 1996 are as follows:

<TABLE>
<S> <C>
Net operating loss carryforwards................................................. $ 34,000
Allowance for bad debts.......................................................... 15,000
Accruals......................................................................... 3,000
---------
52,000
Valuation allowance.............................................................. (52,000)
---------
Net assets....................................................................... $ --
---------
---------
</TABLE>

F-11

PROFLIGHT MEDICAL RESPONSE, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

For pro forma purposes, there would be no income tax expense for 1995, as
the Company would have net operating loss carryovers available from prior years
to offset any taxable income. The Company has net operating loss carryforwards
for tax purposes of approximately $93,000 which expire in the year 2011.

NOTE J -- DISCLOSURES ABOUT FAIR VALUES OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value
of each class of financial instrument for which it is practicable to estimate
that value.

CASH AND CASH EQUIVALENTS

The carrying amount approximates fair value because of the short maturity
of those instruments.

NOTES RECEIVABLE

It is not considered practicable to estimate the fair value of the note
receivable due to the related-party nature of the transaction.

NOTES PAYABLE

Carrying amount approximates fair value as the interest rates approximate
market rates at December 31, 1996 and 1995.

NOTE K -- SUBSEQUENT EVENTS

On January 14, 1997, the Company paid $42,600 on a note payable that was in
default at December 31, 1996. The balance of the note was $85,009 at December
31, 1996.

On January 13, 1997, the Company received an additional $150,000 in a
bridge loan from an existing shareholder. The Company issued 300,000 shares of
common stock to the noteholder. The note bears interest at 10% and is due on the
earlier of one year from the date of the note or upon closing of an initial
public offering.

On February 17, 1997, the Company amended its Articles of Incorporation to
have the authority to issue 500,000 shares of $1 par value preferred stock and
increased the number of authorized common shares to 20,000,000. In addition, the
Company changed its name from Proflight, Inc. to Proflight Medical Response,
Inc. These changes have been given retroactive treatment.

F-12

PROFLIGHT MEDICAL RESPONSE, INC.
CONDENSED COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents..................................................... $ 59,370 $ --
Accounts receivable, trade.................................................... 569,767 501,795
Less allowance for doubtful accounts..................................... (40,000) (40,000)
------------- ------------
529,767 461,795
Other current assets.......................................................... 8,707 13,003
------------- ------------
Total current assets..................................................... 597,844 474,798
Property and equipment -- at cost
Aircraft...................................................................... 3,118,526 4,281,883
Furniture and fixtures........................................................ 40,700 22,997
Medical equipment............................................................. 164,787 160,262
------------- ------------
3,324,013 4,465,142
Less accumulated depreciation and amortization........................... (548,030) (337,013)
------------- ------------
2,775,983 4,128,129
Other assets....................................................................... 341,489 372,239
------------- ------------
$ 3,715,316 $4,975,166
------------- ------------
------------- ------------

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Current portion, notes payable
Stockholders................................................................ $ 194,857 $ 369,694
Other....................................................................... 571,811 572,253
Bank overdraft................................................................ 1,449 19,910
Accounts payable -- trade..................................................... 699,321 495,791
Accrued liabilities........................................................... 84,539 97,461
------------- ------------
Total current liabilities................................................ 1,551,977 1,555,109
Notes payable, less current portion
Stockholders.................................................................. -- --
Other......................................................................... 2,385,080 3,963,935
------------- ------------
2,385,080 3,963,935
------------- ------------
Total liabilities.................................................................. 3,937,057 5,519,044
Stockholders' equity (deficit)
Common stock -- authorized 20,000,000 shares of $.001 par value: 2,665,607
issued and outstanding at September 30, 1997, 3,225,000 issued and
outstanding at December 31, 1996............................................. 2,666 3,225
Paid in capital (deficit)..................................................... 30,711 (436,098)
Preferred stock -- authorized 500,000 at $1.00 par value: none issued and
outstanding.................................................................. -- --
Accumulated (deficit)......................................................... (255,118) (111,005)
------------- ------------
Total stockholder (deficit).............................................. (221,741) (543,878)
------------- ------------
Total liabilities and stockholders deficit.......................... $ 3,715,316 $4,975,166
------------- ------------
------------- ------------
</TABLE>

F-13

PROFLIGHT MEDICAL RESPONSE, INC.
CONDENSED COMBINED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Operating revenue........................................ $1,214,946 $1,205,291 $3,749,190 $2,942,888
Net gain on aircraft sales............................... -- -- 536,642 --
---------- ---------- ---------- ----------
Net sales 1,214,946 1,205,291 4,285,832 2,942,888
Flying operations........................................ 819,503 639,816 2,287,675 1,722,489
Maintenance.............................................. 219,391 98,927 660,408 375,481
Promotion and sales...................................... 23,852 53,148 85,305 96,838
General and administration............................... 489,796 212,888 946,683 478,901
Depreciation and amortization............................ 55,686 108,704 222,748 329,720
---------- ---------- ---------- ----------
Total operating expenses....................... 1,608,228 1,113,483 4,202,819 3,003,429
---------- ---------- ---------- ----------
Operaring income (loss).................................. (393,282) 91,808 83,013 (60,541)
Nonoperating expenses
Interest expense.................................... 68,970 83,370 227,126 180,812
---------- ---------- ---------- ----------
Total nonoperating expenses (income)........... 68,970 83,370 227,126 180,812
Income (loss) before taxes............................... (462,252) 8,438 (144,113) (241,353)
Income taxes............................................. -- -- -- --
---------- ---------- ---------- ----------
Net earnings (loss)............................ $ (462,252) $ 8,438 $ (144,113) $ (241,353)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net earnings (loss) per share............................ $(0.17) $0.002 $(0.05) $(0.07)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Number of shares outstanding............................. 2,665,607 3,525,000 2,665,607 3,525,000
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>

F-14

PROFLIGHT MEDICAL RESPONSE, INC.
CONDENSED COMBINED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------
1997 1996
----------- -----------

<S> <C> <C>
Increase (decrease) in cash and cash equivalents
Cash flows from operating activities
Net earnings (loss)............................................................ $ (144,113) $ (241,353)
Adjustment to reconcile net earnings (loss) to net cash provided by (used in)
operating activities
Gain on sale of aircraft.................................................. (536,642) --
Depreciation and amortization............................................. 222,748 498,887
Changes in assets and Liabilities
Decrease (increase) in accounts receivable........................... (67,972) (72,528)
Decrease in prepaids................................................. 4,296 --
(Increase) in other assets........................................... (13,000) (29,170)
(Decrease) increase in accounts payable.............................. 203,530 115,317
(Decrease) in accrued liabilities.................................... (12,922) 498,714
----------- -----------
Net cash provided by (used in) operating activities....................... (344,075) 770,867
Cash flows from investing activities
Net sale of property and equipment........................................ 1,666,040 --
Net purchase of property and equipment.................................... -- (1,728,191)
----------- -----------
Net cash provided by (used in) investing activities....................... 1,666,040 (1,728,191)
Cash flows from financing activities
Increase in deferred costs..................................................... 10,000 --
Proceeds from sale of stock.................................................... 500,000 100,000
Repurchase of company stock.................................................... -- (190,000)
Repayment of bank overdraft.................................................... (18,461) --
Principal payments on long-term debt........................................... (382,184) --
Proceeds from notes payable.................................................... 175,000 1,065,854
Repayment of notes payable..................................................... (1,546,950) --
----------- -----------
Net cash provided by (used in) financing activities....................... (1,262,595) 975,854
Net increase in cash and cash equivalents................................. 59,370 18,530
Cash and cash equivalents, beginning of period...................................... -- 1,684
----------- -----------
Cash and cash equivalents, end of period............................................ $ 59,370 $ 20,214
----------- -----------
----------- -----------
Supplemental disclosure of cash flow information
Cash paid during the period for interest....................................... $ 227,126 $ 180,812
Stock issued for debt.......................................................... 16,250 --
Notes forgiven from bridge lenders............................................. 500,000 --
</TABLE>

F-15

PROFLIGHT MEDICAL RESPONSE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1. SUMMARY OF ACCOUNTING POLICIES

The accompanying unaudited condensed combined financial statements of
Proflight Medical Response, Inc. (the Company) have been prepared in accordance
with generally accepted accounting principles for interim financial information
and pursuant to the rules and regulations of the Securities and Exchange
Commission. Accordingly, they do not include all of the information and notes
required by generally accepted accounting principles for annual financial
statements.

The accompanying unaudited condensed combined financial statements and
disclosures reflect all adjustments (consisting only of normal recurring
adjustments) which, in the opinion of the management, are necessary for fair
presentation of the results of operations, financial position, and cash flow of
the Company. The results of operations for the periods indicated are not
necessarily indicative of the results for the full year.

NOTE 2. STOCK OPTIONS

The Company has chosen to account for stock based compensation using the
intrinsic value method prescribed in Accounting Principles Broad Opinion No. 25,
'Accounting for Stock issued to Employees', and related interpretations.
Accordingly, compensation cost for stock options is measured as the excess, if
any, of the quoted market price of the Company's stock at the date of grant over
the exercise price.

NOTE 3. REALIZATION OF ASSETS

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. However, as shown in the accompanying financial
statements, the Company experienced a $144,113 loss during the nine months ended
September 30, 1997 and has accumulated a deficit in stockholders' equity of
$221,741 through September 30, 1997. In addition, total current liabilities
exceed total current assets by approximately $954,133 as of September 30, 1997.

Management plans to continue expanding services through the purchase of
additional aircraft, resulting in increased revenues, more efficient use of
current aircraft, and proportionately lower operating costs. Management believes
this should provide a higher gross margin. In addition, the Company is pursuing
additional financing from outside sources, including an initial public offering
(IPO). With the proceeds of the IPO, management intends to acquire a company
which will more than double current sales. Management believes this combination
will allow both companies to operate more efficiently through elimination of
certain duplicate general and administrative costs, purchasing discounts on
aircraft fuel, and more efficient use of each aircraft. Management believes that
these actions will provide growth and improve the Company's operating and
financial condition, providing the opportunity to continue as a going concern.

F-16

PROFLIGHT MEDICAL RESPONSE, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

NOTE 4. DEPRECIATION

The company owns the following aircraft. They have been depreciated using
the 20 year straight line method for the aircraft's airframe. The engines are
depreciated separately based on $50 (Lear 25) and $108 (Lear 35A) per engine
hour flown.

<TABLE>
<CAPTION>
AMOUNT OWED
AS OF
SEPTEMBER 30,
TYPE OF AIRCRAFT DATE OF PURCHASE PURCHASE PRICE 1997
- ----------------------------------------------------- ---------------- -------------- -----------
<S> <C> <C> <C>
1973 Lear 25B........................................ 04/01/95 $ 893,698 $ 824,242
1976 Lear 35A........................................ 05/31/96 1,480,000 1,206,534
MSP for the Lear 35A................................. 08/15/96 481,669 456,337
</TABLE>

NOTE 5. LOAN FROM DIRECTOR

In November of 1993, a stock purchase agreement was entered into by the
Company and a current director for the purchase of 20% of the Company's stock
for $75,000 plus a loan of $75,000. The loan is being repaid in 16 monthly
payments of $5,026.42 each, which includes interest of 10% APR. Balance owed as
of 9-30-97 is $19,857.08 which has been extended for payment, at 10%APR, until
11-30-97.

NOTE 6. EQUIPMENT LOANS

The Company has notes to the following lenders on each of its aircraft:

<TABLE>
<CAPTION>
AMOUNT MONTHLY
AIRCRAFT LENDER FINANCED (APR)% PAYMENT
- ----------------------------------------- ------------------ ---------- ------ -------
<S> <C> <C> <C> <C>
Lear 25B................................. Norwest Bank $ 893,698 9.75 $14,720(a)
Lear 35A................................. Textron Financial 1,313,000 10.5 17,717(b)
Lear 35A msp............................. Textron Financial 481,669 10.5 6,513(c)
</TABLE>

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

All of aircraft loans are personally guaranteed by one or more of the Company's
President and two directors.

(a) 60 monthly payments of $14,720 each conclude in November of 2001, with a
final payment of $319,786 due December 1, 2001.

(b) 59 monthly payments of $17,717 with a final payment of $841,995 due May 31,
2001.

(c) Engine maintenance insurance including overhauls for Lear 35A. 55 monthly
payments of $6,513 with a final payment of $324,627 due June 15, 2001.

NOTE 7. NOTES PAYABLE

In March of 1995 the company entered into a loan agreement to help with the
down payment and start up costs of the Lear 25B aircraft. The note was for
$220,000 at 11% APR due March 17, 1998 and secured by the Lear 24B. Terms are:
$22,000 due March 17, 1996 (which has been paid), $44,000 due March 17, 1997,
and balance of $154,000 due March 17, 1998. In March of 1997 the remaining
balance of $198,000 was extended to 9-30-98 with interest at 11% APR due
monthly. In February of 1996, the Company established a $50,000 credit line with
a bank to help its cash flow position. Terms are interest only monthly until
maturity in February of 1998. In May of 1996 the Company entered into a loan
agreement to help with the down payment and initial start up costs associated
with the Lear 35A. The note for $100,000 is interest only for 12 months based on
prime plus 3%. In March of 1997 the loan was extended to 9-30-98 with interest
only payments based on Cont. prime plus 3%, due monthly. In February of 1997 the
Company received a $150,000 loan to help offset slow receivables. The terms of
the note is interest only on prime plus 3% per month, payable monthly. The note
is due November 30, 1997. In March the Company received a $125,000 bridge loan
to be repaid a IPO or in one year,

F-17

PROFLIGHT MEDICAL RESPONSE, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

whichever occurs sooner. Interest on the loan is 10% APR and 25,000 shares of
common stock. In September of 1997 a shareholder loaned the Company $50,000 at
8% APR. Principal and interest is due on demand. In July of 1997 the Company
extended a note with a former shareholder to December of 1997. The balance of
this note as of September 30, 1997 is $35,291. Monthly installments of $1500 are
being paid to cover interest at 20% APR, with the balance being applied to
principle.

NOTE 8. LEASES

In December of 1996, the Company entered into a two year lease agreement on
a Lear 25B aircraft. Terms are for a $13,000 per month lease payment along with
$150 per engine hour flown. Minimum commitment under the noncancellable lease is
$325,000. In February Two the Company entered into a seven year office building
lease for 9364 sq. feet of office space at 7211 S. Peoria Street, Englewod, CO.
Monthly rental is $11,705. The Company moved to the facilities in June of 1997.

NOTE 9. RELATED PARTY TRANSACTIONS

In April of 1997 bridge loans from shareholders totaling $500,000 were
forgiven. In April of 1997 shares totaling 500,000 were retired that were owned
by the President and Directors in return for options to purchase 1,000,000
shares of common stock at $4.00 per share. In September of 1997 the President
and Directors agreed to retire an additional 384,393 shares in return for future
potential incentives. These incentives include the issuance of 768,786 shares of
common stock to the President and two directors if the Company achieves minimum
pre-tax profits of $1 million, before depreciation and amortization, in either
of the first two years from the date of this Prospectus.

NOTE 10. EMPLOYMENT AGREEMENTS

In March 1997, the Company entered into an amended employment agreement
with Donald Jones to serve as the Company's Vice President of Sales. The
employment agreement is for a six-year term commencing upon consummation of the
Offering and is subject to successive automatic renewal periods of one year
unless earlier terminated. Mr. Jones is to receive a 5% increase in his base
salary in years four, five and six. Pursuant to the terms of this employment
agreement, Mr. Jones is required to devote his full business time and attention
to fulfill his duties and responsibilities to the Company. Mr. Jones will
receive a base salary of $150,000 per annum. In addition, Mr. Jones will receive
a stock bonus in the total amount of 250,000 common shares if the Company
achieves a minimum of $1 million in pretax profits, before depreciation and
amortization, in either of the first two years from the date of this Prospectus,
provided, however, that such stock bonus will not be granted if it would
negatively affect the listing of the Company's Common Stock on the Nasdaq
Smallcap. Such bonus is subject to vesting at a rate of 50% upon realization by
the Company of the minimum $1 million in pretax profits and 25% on each of the
next two anniversaries thereof. The Company has agreed to pay Mr. Jones a
relocation bonus of $100,000 and reasonable relocation expenses. Mr. Jones will
also have the right to participate in all benefit plans afforded to other
comparable officers during the term of the agreement, including, executive
incentive plan, stock option plan, monetary bonus plan, participation or extra
compensation plan, pension plan, profit sharing plan, disability insurance,
health and major medical insurance. Mr. Jones's employment agreement contains
certain confidentiality and non-competition provisions. Either the Company or
Mr. Jones may cancel the agreement for any reason after six years upon 60 days
prior notice.

F-18

PROFLIGHT MEDICAL RESPONSE, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

shares of Common Stock if the Company achieves a minimum of $1 million in pretax
profits, before depreciation and amortization, in either of the first two years
from the date of this Prospectus. Such bonus is is subject to vesting at a rate
of 50% upon realization by the Company of the minimum profits and 25% on each of
the next two anniversaries thereof. Pursuant to the terms of this employment
agreement, Mr. Burkhardt is required to devote his full business time and
attention to fulfill his duties and responsibilities to the Company. Mr.
Burkhardt will also have the right to participate in all benefit plans afforded
to all executive officers during the term of the agreement, including, executive
incentive plan, stock option plan, monetary bonus plan, participation or extra
compensation plan, pension plan, profit sharing plan, disability insurance,
health and major medical insurance.

NOTE 11. LEGAL PROCEEDINGS

In March 1997, the Company and the Company's President were named in a
lawsuit Susan Fuller v. ProFlight, Inc., Kevin Burkhardt, Andrew Iliestand and
James Fuller, filed in Arapahoe County District Court, Colorado which alleges
that the plaintiff's former husband merged a business into the Company to
conceal and otherwise preclude plaintiff from receiving plaintiff's share of her
former husband's interest in the Company. The amount sought is $820,000, of
which $250,000 is for emotional distress and $410,000 is for exemplary damages.
The lawsuit is in its early stages, and the Company is unable to predict the
outcome of this matter. Accordingly, no provision has been made for the
litigation in the financial statements. In April 1997, the Company filed a
motion to dismiss as the alternative to a motion for summary judgement, which
the Company previously filed and which was denied. In September of 1997, Mr.
James Fuller filed a separate complaint against the Company claiming that he is
entitled to compensation for the value of shares of the Company's Common Stock
which he alleges he

F-19

PROFLIGHT MEDICAL RESPONSE, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

owns. No amount was stated in the suit. The Company maintains that Mr. Fuller
never paid the agreed upon price for the shares and therefore never owned them.
Moreover, Mr. Fuller signed the shares back to the Company in December 1994. The
Company is trying to have the two Fuller cases consolidated and tried jointly.
The Company, through its counsel, intends to vigorously defend against this
action. No assurance can be made that the Company will reach a satisfactory
resolution of the above stated proceedings. Failure to reach such a resolution
could have a material adverse effect on the Company's financial condition or
cash reserves.

NOTE 12. OTHER

SUBSEQUENT EVENTS

In January of 1997, the Company issued an option to purchase 25,000 shares
of common stock at $1.00 per share to a director of the Company. In March of
1997, the Company issued an option to purchase 25,000 shares common stock at
$4.00 per share to Tom Cox in consideration for extending the due date on
certain notes.

In October of 1997 the Company signed a letter of intent with First Liberty
Investment Group to act as managing underwriter on a firm commitment basis for a
$4,920,000 IPO. The underwriting calls for the sale of 1,200,000 shares of
common stock at $4.00 per share and 1,200,000 warrants at $0.10 each. The IPO is
scheduled for December of 1997.

On January 13, 1998 the Company entered into a release and settlement
agreement relating to the Susan Fuller lawsuit (see note 11). All claims will
be dismissed in exchange for $100,000 to be paid on or before February 20, 1998.

F-20

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
AIR RESPONSE, INC. and
AIR RESPONSE SOUTH, INC.
Fort Plain, New York 13339

We have audited the accompanying combined balance sheet of AIR RESPONSE,
INC. (a New York corporation) and AIR RESPONSE SOUTH, INC. (a Florida
corporation) (combined 'the Companies') as of December 31, 1996 and the
statements of operations and retained earnings, and cash flows for the years
ended December 31, 1996 and 1995. These financial statements are the
responsibility of the Companies' management. Our responsibility is to express an
opinion on the financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 combined financial position of Air Response, Inc.
and Air Response South, Inc. as of December 31, 1996, and the combined results
of their operations and their cash flows for the years ended December 31, 1996
and 1995 in conformity with generally accepted accounting principles.

June 13, 1997

STAFF MAIKELS & CIAMPINO P.C.
Albany, New York

F-21

AIR RESPONSE, INC. AND AIR RESPONSE SOUTH, INC.
COMBINED BALANCE SHEET
DECEMBER 31, 1996

<TABLE>
ASSETS
<S> <C>
Current assets:
Cash and cash equivalents...................................................................... $ 254,799
Cash and cash equivalents -- restricted........................................................ 37,498
Accounts receivable, net of allowance for doubtful accounts of $46,660......................... 523,964
Other receivables.............................................................................. 24,734
Prepaid expenses............................................................................... 297,369
Refundable income taxes........................................................................ 53,105
----------
Total current assets...................................................................... 1,191,469
----------
Property and equipment, at cost:
Aircraft fleet................................................................................. 2,535,598
Machinery and equipment........................................................................ 196,557
Office equipment............................................................................... 28,196
----------
Total property and equipment.............................................................. 2,760,351
Less -- accumulated depreciation............................................................... 1,320,008
----------
Property and equipment, net............................................................... 1,440,343
----------
Other assets:
Due from officer............................................................................... 322,422
Deposits....................................................................................... 12,800
----------
Total other assets........................................................................ 335,222
----------
Total assets......................................................................... $2,967,034
----------
----------

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Line of credit................................................................................. $ 374,984
Accounts payable............................................................................... 997,532
Current maturities of long-term debt........................................................... 173,954
Accrued expenses............................................................................... 8,844
Income taxes payable........................................................................... 14,358
Due to affiliate............................................................................... 66,601
----------
Total current liabilities................................................................. 1,636,273
Long-term debt, less current maturities............................................................. 1,346,606
----------
Total liabilities......................................................................... 2,982,879
----------
Commitments and contingencies:
Stockholder's equity:
Common stock................................................................................... 2,000
Retained earnings (deficit).................................................................... (17,845)
----------
Total stockholder's equity................................................................ (15,845)
----------
Total liabilities and stockholder's equity........................................... $2,967,034
----------
----------
</TABLE>

See accompanying notes to financial statements.

F-22

AIR RESPONSE, INC. AND AIR RESPONSE SOUTH, INC.
COMBINED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995

<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Air ambulance revenue................................................................. $7,658,243 $5,875,929
---------- ----------
Operating expenses
Flying operations................................................................ 4,495,123 3,475,847
Advertising...................................................................... 447,061 663,686
Repairs and maintenance.......................................................... 380,382 374,516
Depreciation..................................................................... 396,139 339,230
General and administrative....................................................... 1,538,761 1,099,404
---------- ----------
Total operating expenses.................................................... 7,257,466 5,952,683
---------- ----------
Income (loss) from operations......................................................... $ 400,777 $ (76,754)
---------- ----------
Other income (expense)
Loss on disposal of property and equipment....................................... (381,216) (63,875)
Bad debt expense -- affiliate.................................................... (18,328) (189,312)
Interest income.................................................................. 6,510 7,507
Interest expense................................................................. (136,148) (117,719)
Miscellaneous.................................................................... 43,444 30,170
---------- ----------
Total other income (expense)................................................ (485,738) (333,229)
---------- ----------
Loss before income taxes.............................................................. (84,961) (409,983)
Income tax benefit.................................................................... (38,747) (98,065)
---------- ----------
Net loss.............................................................................. (46,214) (311,918)
Retained earnings -- beginning of year................................................ 28,369 340,287
---------- ----------
Retained earnings (deficit) -- end of year............................................ $ (17,845) $ 28,369
---------- ----------
---------- ----------
</TABLE>

See accompanying notes to financial statements.

F-23

AIR RESPONSE, INC. AND AIR RESPONSE SOUTH, INC.
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995

<TABLE>
<CAPTION>
1996 1995
--------- ---------

<S> <C> <C>
Cash flows from operating activities
Net loss........................................................................... $ (46,214) $(311,918)
Adjustments to reconcile net loss to net cash provided by operations:
Depreciation.................................................................. 396,139 339,230
Loss on disposal of property and equipment.................................... 381,216 63,875
Deferred income taxes......................................................... 0 19,009
Provision for doubtful accounts............................................... 39,674 30,952
Bad debt expense -- affiliate................................................. 18,328 189,312
(Increase) decrease in assets:
Accounts receivable...................................................... 79,821 (186,874)
Other receivables........................................................ (24,734) 0
Refundable income taxes.................................................. 64,835 (117,940)
Prepaid expenses......................................................... (140,130) (141,017)
Deposits and other assets................................................ (12,250) 18,908
Increase (decrease) in liabilities:
Accounts payable......................................................... (10,803) 576,487
Income taxes payable..................................................... 14,358 (78,051)
Accrued expenses......................................................... (142,296) 53,678
--------- ---------
Net cash provided by operating activities................................ 617,944 455,651
--------- ---------
Cash flows from investing activities
Purchases of property and equipment................................................ (595,817) (377,441)
Net advances to officer............................................................ (308,893) (18,564)
Net advances to affiliates......................................................... (76,377) (98,008)
--------- ---------
Net cash used by investing activities.................................... (981,087) (494,013)
--------- ---------
Cash flows from financing activities
Net borrowings under line of credit................................................ 451 339,533
Proceeds from long-term debt....................................................... 798,074 0
Repayments of long-term debt....................................................... (218,277) (257,456)
--------- ---------
Net cash provided by financing activities................................ 580,248 82,077
--------- ---------
Net increase in cash and cash equivalents............................................... 217,105 43,715
Cash and cash equivalents -- beginning of year.......................................... 75,192 31,477
--------- ---------
Cash and cash equivalents -- end of year................................................ $ 292,297 $ 75,192
--------- ---------
--------- ---------
</TABLE>

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Income taxes paid....................................................................... $ 0 $ 92,862
--------- ---------
--------- ---------
Interest paid........................................................................... $ 136,148 $ 122,914
--------- ---------
--------- ---------
</TABLE>

NON-CASH INVESTING AND FINANCING ACTIVITIES

In 1996, the Companies refinanced certain debt associated with their
aircraft fleet. This refinancing amounted to $557,775 and has been excluded from
the statement of cash flows.

See accompanying notes to financial statements.

F-24

AIR RESPONSE, INC. AND AIR RESPONSE SOUTH, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF COMBINATION

The accompanying financial statements present the combined financial
results of Air Response, Inc. ('Response') and Air Response South, Inc.
('Response South') (combined 'the Companies'), which are wholly-owned by a
common shareholder. All significant intercompany accounts have been eliminated
in combination.

ORGANIZATION AND BUSINESS ACTIVITY

The Companies provide air ambulance services throughout the United States
and coordinate air ambulance services internationally through other carriers.
The Companies' aircraft are located in New York and Florida.

USE OF ESTIMATES

The process of preparing financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions
regarding certain types of assets, liabilities, income and expenses. Such
estimates primarily relate to unsettled transactions and events as of the date
of the financial statements. Accordingly, upon settlement, actual results may
differ from estimated amounts.

REVENUE RECOGNITION

Revenue is recognized when services have been performed and is reported net
of contractual allowances.

CASH AND CASH EQUIVALENTS

The Companies consider all short-term investments having a maturity of
three months or less, when purchased, to be cash equivalents. There were no cash
equivalents at December 31, 1996.

ACCOUNTS RECEIVABLE -- ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Companies provide for doubtful accounts receivable using the allowance
method based on outstanding accounts at year-end and management's estimation of
collectibility of these accounts.

MEDICAL SUPPLIES

It is the Companies' policy to expense all purchases of medical supplies as
incurred as large quantities of these items are generally not held in an
inventory for long periods.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost. Depreciation is computed using
the double-declining balance and straight-line methods over the estimated useful
lives of the assets, which range from five to seven years.

Expenditures for maintenance and repairs which do not extend the useful
lives of the assets are charged to income as incurred.

INCOME TAXES

The Companies account for income taxes under the provisions of the
Financial Accountant Standards Board Statement No. 109, 'Accounting for Income
Taxes'.

F-25

AIR RESPONSE, INC. AND AIR RESPONSE SOUTH, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996 AND 1995

GOVERNMENTAL REGULATION

Response is subject to the rules and regulations of the Federal Aviation
Administration (FAA) and the New York State Department of Health. Response South
is regulated by the State of Florida Department of Health and Rehabilitative
Services.

(2) LONG-TERM DEBT

Long-term debt as of December 31, 1996 consisted of the following:

<TABLE>
<S> <C>
Note payable to Cessna Finance Corporation -- Payable in monthly installments of $2,728
including interest at prime plus 1.5% (9.75% at December 31, 1996), maturing December
2000; secured by aviation equipment and equipment installed therein..................... $ 111,564
Note payable to Textron Financial Corporation -- Payable in monthly installments of $6,526
including interest at prime plus 1.5% (9.75% at December 31, 1996), maturing October
2006. This note is secured by aviation equipment and equipment installed therein and is
guaranteed corporately by Response Aviation, Inc. and Response Medical Transport, Inc.
(affiliated companies), and personally guaranteed by the Companies'
president/shareholder................................................................... 494,085
Note payable to Cessna Finance Corporation -- Payable in monthly installments of $2,069
including interest at prime plus 2% (10.25% at December 31, 1996), maturing August 1999;
secured by aviation equipment and equipment installed therein........................... 63,956
Note payable to Cessna Finance Corporation -- Payable in monthly installments of $4,149
including interest at prime plus 1.25% (9.5% at December 31, 1996), maturing September
2003; secured by aviation equipment and equipment installed therein. This note is
personally guaranteed by the Companies' president/shareholder........................... 247,114
Note payable to Textron Financial Corporation -- Payable in monthly installments of $5,429
including interest at prime plus 1.5% (9.75% at December 31, 1996), maturing December
2001. This note is secured by aviation equipment and equipment installed therein and is
guaranteed corporately by Response Aviation, Inc. and Response Medical Transport, Inc.
(affiliated companies), and personally guaranteed by the Companies'
president/shareholder................................................................... 257,000
Note payable to Proflight Medical Response, Inc. -- Payable in two installments of
$100,000 plus accrued interest at 10% on May 14, 1998 and 2000.......................... 200,000
Note payable to Textron Financial Corporation -- Payable in monthly installments of $3,057
including interest at prime plus 1.5% (9.75% at December 31, 1996), maturing October
2001. This note is secured by aviation equipment and equipment installed therein and is
guaranteed corporately by Response Aviation, Inc. and Response Medical Transport, Inc.
(affiliated companies), and personally guaranteed by the Companies'
president/shareholder................................................................... 140,944
Note payable to Central National Bank -- Payable in monthly installments of $385 including
interest at prime plus 2% (10.25% at December 31, 1996), maturing February 1998. This
note is secured by aviation equipment, real estate owned by the Companies'
president/shareholder and the personal guarantee of the Companies'
president/shareholder................................................................... 5,897
----------
Total long-term debt................................................................. 1,520,560
Less current maturities.............................................................. 173,954
----------
Total long-term debt, less current maturities........................................ $1,346,606
----------
----------
</TABLE>

F-26

AIR RESPONSE, INC. AND AIR RESPONSE SOUTH, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996 AND 1995

Based on borrowing rates currently available to the Companies for loans
with similar terms and maturities, the fair value of long-term debt approximates
the recorded amounts.

Maturities of long-term debt as of December 31, 1996 are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, PRINCIPAL PAYMENT
------------------------ -------------------
<S> <C>
1997............................................................ $ 173,954
1998............................................................ 287,628
1999............................................................ 200,578
2000............................................................ 300,412
2001............................................................ 177,422
Thereafter...................................................... 380,566
-------------------
Total...................................................... $ 1,520,560
-------------------
-------------------
</TABLE>

(3) LINE OF CREDIT/CASH AND CASH EQUIVALENTS-RESTRICTED

Response has a $375,000 line of credit with Central National Bank, with a
balance outstanding of $374,984 as of December 31, 1996. The line is secured by
specific accounts receivable as designated at the time of each advance, a cash
reserve of 10% of the outstanding borrowings on the line and the personal
guarantee of the stockholder. A finance charge of 2.85% of the receivables is
charged by the bank and deducted from the loan proceeds. Repayments are made
upon collection of the receivables. In addition, the bank is entitled to a
finance charge of 1.5% of the unremitted receivables outstanding over thirty
days. Total charges incurred by Response for the years ended December 31, 1996
and 1995 pursuant to this facility were approximately $129,000 and $72,000,
respectively.

(4) STOCKHOLDER'S EQUITY

Common stock of the entities consists of the following:

<TABLE>
<CAPTION>
SHARES
-----------------------------------
AUTHORIZED ISSUED OUTSTANDING
---------- ------ -----------
<S> <C> <C> <C>
Response:
Voting common stock; no par value.............................. 200 100 100
Response South:
Non-voting, Series A common stock;
$.01 par value............................................... 100,000 0 0
Voting, Series B common stock;
$.01 par value............................................... 100,000 51,000 51,000
</TABLE>

F-27

AIR RESPONSE, INC. AND AIR RESPONSE SOUTH, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996 AND 1995

(5) INCOME TAXES

The Companies provide for income taxes using the applicable statutory
rates. The components of income taxes for the years ended December 31, 1996 and
1995 are as follows:

<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Current:
Current tax expense........................................................ $ 14,358 $ 533
Fuel tax credit............................................................ (53,105) (85,020)
Benefit from net operating loss carryback.................................. 0 (32,587)
Deferred:
Deferred tax benefit, net.................................................. (28,246) (84,340)
Change in valuation allowance.............................................. 28,246 103,349
-------- --------
Income tax benefit.................................................... $(38,747) $(98,065)
-------- --------
-------- --------
</TABLE>

The following are the differences between the income tax provision
(benefit) and the amount computed by applying the federal statutory income tax
rate of 34% to income (loss) before taxes for the years ended December 31, 1996
and 1995:

<TABLE>
<CAPTION>
1996 1995
-------- ---------

<S> <C> <C>
Tax (benefit) at U.S. statutory rates.......................................... $(28,887) $(139,394)
State income taxes (benefit), net of federal tax benefit....................... (4,554) (21,975)
Fuel tax credit................................................................ (53,105) (85,020)
Permanent differences.......................................................... 31,692 42,441
Change in valuation allowance.................................................. 28,246 103,349
Other.......................................................................... (12,139) 2,534
-------- ---------
Income tax benefit........................................................ $(38,747) $ (98,065)
-------- ---------
-------- ---------
</TABLE>

Deferred income taxes at December 31, 1996 are as follows:

<TABLE>
<S> <C>
Deferred tax assets:
Non-deductible reserves............................................................... $ 19,597
Alternative minimum tax credit carryforwards -- Federal............................... 91,205
Net operating loss carryforwards -- Federal........................................... 133,007
Net operating loss carryforwards -- State............................................. 54,006
---------
$ 297,815
Valuation allowance.............................................................. (168,090)
---------
Total deferred tax assets........................................................ 129,725
Deferred tax liabilities:
Accelerated depreciation.............................................................. $(129,725)
---------
Net deferred taxes............................................................... $ 0
---------
---------
</TABLE>

At December 31, 1996, Response had approximately $91,000 in alternative
minimum tax credit carryforwards which may be used to offset future federal
income tax.

At December 31, 1996, Response had net operating loss carryforwards for
federal and state purposes of approximately $391,000 and $675,000, respectively.
These carryforwards begin to expire in 2009.

F-28

AIR RESPONSE, INC. AND AIR RESPONSE SOUTH, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996 AND 1995

(6) ADVERTISING COSTS

The Companies incur costs for yellow page advertising in local phone
directories. The advertisements remain listed for the life of the directory,
generally twelve months. The Companies pay the cost of this advertising prior to
publication of the directory and amortize those costs over a twelve month period
beginning with the month that the phone directory is distributed to the public.

At December 31, 1996, $282,727 of advertising was reported as assets and is
included as a prepaid expense. Advertising expense relating to the directory
advertising was $396,587 and $503,096 for the years ended December 31, 1996 and
1995, respectively.

(7) COMMITMENTS AND CONTINGENCIES

Response is a defendant in a lawsuit with alleged claims approximating $
100,000 plus unspecified damages which arose from a transaction in 1991 related
to the purchase of an aircraft. Management believes the suit is completely
without merit and will continue to vigorously defend its position.

(8) RELATED PARTY TRANSACTIONS

Response purchases both fuel and oil from Response Aviation, Inc.
('Aviation'), a company wholly-owned by the Companies' shareholder. The total
amount of purchases for the years ended December 31, 1996 and 1995 approximated
$172,000 and $154,000, respectively. Due to the common ownership between
Response and Aviation, the prices for fuel and oil charged by Aviation to
Response may not be indicative of the prices that Response may be able to obtain
if common ownership did not exist.

Response advanced approximately $200,000 to Aviation in the form of notes
receivable and working capital advances. These balances were deemed
uncollectible and written-off to expense as a bad debt in 1996 and 1995.

The Companies have a receivable due from an officer, the sole shareholder
of the Companies, amounting to $322,422 at December 31, 1996. This amount is due
on demand and is non-interest bearing. It is not the Companies' intent to
collect these balances within the next fiscal year.

Response owes Response Medical Transport, Inc. ('Medical') $66,601 at
December 31, 1996. This amount represents net advances to Response for working
capital purposes. No interest is charged on these outstanding balances.

Response leases hangar space from Aviation at Fulton County New York
Airport. Related rental expense for the years ended December 31, 1996 and 1995
was $18,000 and $18,000, respectively.

Certain of Response's expenses are paid by Medical and allocated back to
Response. These charges, including office salaries and benefits, and rent and
utilities at the Nelliston, New York office, were approximately $66,000 and
$118,000 for the years ended December 31, 1996 and 1995, respectively.

(9) EMPLOYEE BENEFIT PLANS

Response and Response South both have voluntary defined contribution
savings plans covering all of their employees who have met certain age and
length of service requirements. The plan qualifies under Section 401(k) of the
Internal Revenue Code. The Companies may provide discretionary matching
contributions each year. Matching contributions totaled $6,357 and $7,367 for
the years ended December 31, 1996 and 1995, respectively.

F-29

AIR RESPONSE, INC. AND AIR RESPONSE SOUTH, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996 AND 1995

(10) OPERATING LEASE

Response leases a 1972 Learjet which requires monthly payments of $8,798
through July 2003. Minimum lease payments under this agreement are as follows:

<TABLE>
<CAPTION>
FOR THE YEAR MINIMUM
ENDING DECEMBER 31, LEASE PAYMENT
------------------- -------------
<S> <C>
1997................................................................... $ 105,576
1998................................................................... 105,576
1999................................................................... 105,576
2000................................................................... 105,576
2001................................................................... 105,576
Thereafter............................................................. 167,162
-------------
$ 695,042
-------------
-------------
</TABLE>

(11) SUBSEQUENT EVENT

In May 1997, the Companies and the Companies' shareholder entered into an
Amended Agreement and Plan of Reorganization with Proflight Medical Response,
Inc. (Proflight), an unaffiliated entity, whereby Proflight agreed to acquire
all of the outstanding capital stock of the Companies. This acquisition is
contingent upon the success of the initial public offering of Proflight's
securities.

F-30

AIR RESPONSE AND AIR RESPONSE SOUTH, INC.
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
(UNAUDITED)

<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents..................................................... $ 197,297 $ 254,799
Cash and cash equivalents -- restricted....................................... 41,670 37,498
Accounts receivable, trade.................................................... 955,034 570,624
Less allowance for doubtful accounts..................................... (48,339) (46,660)
------------- ------------
1,145,662 816,261
Other current assets............................................................... 268,016 375,208
------------- ------------
Total current assets..................................................... 1,413,678 1,191,469
Property and equipment -- at cost
Aircraft inventory............................................................ 2,738,524 2,535,598
Office, medical and shop equipment............................................ 240,881 224,753
------------- ------------
2,979,405 2,760,351
Less accumulated depreciation and amortization................................ (1,635,353) (1,320,008)
------------- ------------
1,344,052 1,440,343

Other Assets:
Note due from officer......................................................... 447,278 322,422
Investment in common stock.................................................... 180,000
Other......................................................................... 12,800 12,800
------------- ------------
640,078 335,222
------------- ------------
Total assets............................................................. $ 3,397,808 $2,967,034
------------- ------------
------------- ------------

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable -- trade..................................................... $ 1,583,746 $ 997,532
Current portion, notes payable................................................ 300,000 173,954
Line of credit................................................................ 367,726 374,984
Accrued liabilities........................................................... 6,016 23,202
Due to affiliate.............................................................. 66,601
------------- ------------
Total current liabilities................................................ 2,257,488 1,636,273
Notes payable, less current portion........................................... 1,234,453 1,346,606
------------- ------------
Total liabilities........................................................ 3,491,941 2,982,879
------------- ------------
Stockholders' equity (deficit)
Common stock -- Air Response South authorized 100,000 shares of non-voting
$0.01 par value; issued and outstanding 0 and authorized 100,000 shares of
voting at $0.01 par value; issued and outstanding 51,000 shares Air Response;
authorized 200 shares of voting, no par value, issued and outstanding 100
shares....................................................................... 2,000 2,000
Retained earnings (deficit)................................................... (96,133) (17,845)
------------- ------------
Total stockholder equity (deficit)....................................... (94,133) (15,845)
------------- ------------
Total liabilities and stockholders' equity.......................... $ 3,397,808 $2,967,034
------------- ------------
------------- ------------
</TABLE>

F-31

AIR RESPONSE AND AIR RESPONSE SOUTH, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Operating revenue........................................ $2,588,780 $2,056,771 $6,537,380 $5,908,145
Flying operations........................................ 1,520,339 1,176,743 3,768,966 3,416,011
Maintenance.............................................. 260,700 121,150 562,308 428,032
Promotion and sales...................................... 135,568 94,579 372,560 435,207
General and administration............................... 536,647 425,025 1,491,410 1,043,196
Depreciation and amortization............................ 97,268 90,900 297,650 277,339
---------- ---------- ---------- ----------
Total operating expense........................ 2,550,522 1,908,397 6,492,894 5,599,785
---------- ---------- ---------- ----------
Operating income......................................... 38,258 148,374 44,486 308,360
Other (income) expense
Interest expense.................................... 45,391 23,382 108,197 69,355
Other............................................... -- 117,333 8,704 240,302
---------- ---------- ---------- ----------
Total non-operating expense.................... 45,391 140,715 116,901 309,657
Income (loss) before taxes.......................... (7,133) 7,659 (72,415) (1,297)
Income taxes (benefit).............................. -- 5,874 (49,309)
Net earnings (loss)............................ $ (7,133) $ 7,659 $ (78,289) $ 48,012
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net earnings (loss) per share............................ $(0.14) $0.15 $(1.54) $0.94
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Weighted average number of shares outstanding............ 51,000 51,000 51,000 51,000
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>

F-32

AIR RESPONSE AND AIR RESPONSE SOUTH, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
1997 1996
--------- ---------
<S> <C> <C>
Increase (decrease) in cash and cash equivalents
Cash flows from operating activities:
Net earnings............................................................. $ (78,289) $ 48,012
Adjustment to reconcile net earnings (loss) to net cash provided by
operating activities
Depreciation and amortization....................................... 315,345 277,339
(Increase) decrease in accounts receivable.......................... (357,997) 125,155
(Increase) decrease in other current assets......................... (97,542) 86,353
Due to/from affiliate............................................... (66,601) (39,429)
Increase (decrease) in accounts payable............................. 586,214 (119,612)
(Increase) in accrued liabilities................................... (17,185) (82,612)
--------- ---------
Net cash provided by operating activities................................ 283,945 295,206
Cash flows from investing activities (acquisition) of property and
equipment................................................................... (219,054) (235,824)
--------- ---------
Net cash flows from investing activities................................. (219,054) (235,824)
Cash flows from financing activities:
(Increase) in officers receivables....................................... (124,856) (48,817)
(Decrease) in line of credit............................................. (7,258) (11,997)
Principal (payments) increase on long-term debt.......................... 13,893 (56,768)
--------- ---------
Net cash (used) provided by financing activities.................... (118,221) (117,582)
Net (decrease) in cash and cash equivalents......................... (53,330) (58,200)
Cash and cash equivalents, beginning of period................................ 292,297 75,192
--------- ---------
Cash and cash equivalents, end of period...................................... $ 238,967 $ 16,992
--------- ---------
--------- ---------
</TABLE>

F-33

AIR RESPONSE AND AIR RESPONSE SOUTH INC
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1 -- SUMMARY OF ACCOUNTING POLICIES

The accompanying unaudited condensed combined financial statements of Air
Response and Air Response South (collectively, the Company) have been prepared
in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all of the
information and notes required by generally accepted accounting principles for
annual financial statements.

The accompanying unaudited condensed combined financial statements and
disclosures reflect all adjustments which, in the opinion of the management, are
necessary for fair presentation of the results of operations, financial
position, and cash flow of the Company. The results of operations for the
periods indicated are not necessarily indicative of the results for the full
year.

NOTE 2

The company owns the following aircraft:

<TABLE>
<CAPTION>
AMOUNT
DATE OF PURCHASE OWED
TYPE OF AIRCRAFT PURCHASE PRICE AS OF 9/30/97
---------------- -------- -------- -------------
<S> <C> <C> <C>
Lear 24.................................................. 10/90 $477,860 $ 225,873
Lear 25.................................................. 5/94 629,964 468,223
Navajo................................................... 6/93 136,500 48,392
Cessna 340............................................... 10/92 129,000 123,210
Cessna 421............................................... 9/94 160,065 94,022
MU2...................................................... 6/91 243,919 224,734
</TABLE>

NOTE 3

The Company has notes to the following lenders on each of its aircraft:

<TABLE>
<CAPTION>
AMOUNT MO.
AIRCRAFT LENDER FINANCED (APR)% PAYMENT
-------- ------------------ -------- ------------------ -------
<S> <C> <C> <C> <C>
Lear 24................................. Textron $257,000 Prime + 1.5% $5,429
Lear 25................................. Textron 500,000 Prime + 1.5% 6,526
Navajo.................................. Cessna Finance 118,000 8.0% APR 2,069
Cessna 340.............................. Textron 145,000 Prime + 1.5% 3,057
Cessna 421.............................. Cessna Finance 150,300 9.25% APR 2,728
MU2..................................... Cessna Finance 253,850 Prime + 1.5% 4,149
</TABLE>

NOTE 4

The Company has a receivable due from an officer, the sole shareholder of
the Companies, amounting to $447,278 on September 30, 1997. This amount is due
on demand and is non-interest bearing. It is not the Company's intention to
demand payment on this Note within the next fiscal year.

NOTE 5

The Company has a $375,000 factoring account collateralized by accounts
receivable and guaranteed by an officer. Rates are 2.9% per invoice sold plus a
1.5% finance charge of the unremitted receivables outstanding over 30 days. A
reserve account of least $35,000 is required to pay invoices that have been
factored over 90 days old.

NOTE 6

In August of 1997 committed to purchase 50% of the stock of Traveler's
Emergency Network ('TEN') for $180,000. 'TEN' provides emergency services to
travelers directly and through travel agencies. The terms of the purchase are
for 18 payments of $10,000 each beginning August 25, 1997.

F-34

PRO FORMA FINANCIAL STATEMENTS OF
PROFLIGHT AND AIR RESPONSE AND AIR RESPONSE SOUTH

The following unaudited pro forma consolidated statement of operations of
Proflight and Air Response and Air Response South for the year ended December
31, 1996 and nine months ended September 30, 1997 is presented as if the
acquisition had occurred on January 1, 1996. The pro forma consolidated balance
sheet assumes the acquisition occurred as of September 30, 1997. The acquisition
is to be treated as a purchase transaction.

The pro forma consolidated financial statements are derived from the
respective historical financial statements of Proflight and Air Response and Air
Response South. The pro forma balance sheet combines Proflight's September 30,
1997 balance sheet with Air Response and Air Response South's September 30, 1997
balance sheet. The pro forma statement of operations combines Air Response and
Air Response South's historical statement of earnings for the twelve months
ended December 31, 1996 and nine months ended September 30, 1997 with
Proflight's historical statement of operations for the year ended December 31,
1996 and nine months ended September 30, 1997.

The pro forma data is presented for informational purposes only and may not
be indicative of the future results of operations and financial position of the
Company or what the results of operations and financial position of the Company
would have been had the acquisition occurred immediately prior to the periods
indicated.

Assumptions underlying the pro forma adjustments are described in the
accompanying notes which should be read in conjunction with the statements.
These statements should also be read in conjunction with the attached financial
statements of Air Response and Air Response South, and notes thereto.

F-35

PROFLIGHT MEDICAL RESPONSE, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)

<TABLE>
<CAPTION>
HISTORICAL
--------------------------------
AIR RESPONSE AND PRO FORMA
PROFLIGHT AIR RESPONSE SOUTH ADJUSTMENTS(C) PRO FORMA
---------- ------------------ -------------- ------------
<S> <C> <C> <C> <C>
Net Sales.............................................. $3,906,211 $7,658,243 $ (250,000)(1) $ 11,314,454
Operating expense
Flying operations and maintenance................. 3,001,507 4,875,505 (250,000)(1) 7,627,012
Promotion and sales............................... 255,616 447,061 702,677
General and administrative........................ 650,036 1,538,761 2,188,797
Depreciation and amortization..................... 377,930 396,139 261,000(2) 1,035,069
---------- ------------------ -------------- ------------
Total operating expense...................... 4,285,089 7,257,466 11,000 11,553,555
Operating income (loss)...................... (378,878) 400,777 (239,101)
Nonoperating expenses (income)
Interest expense.................................. 287,188 136,148 71,331(3) 494,667
Other expense and (income)........................ (34) 349,590 -- 349,556
---------- ------------------ -------------- ------------
287,154 485,738 844,223
Income tax (benefit)................................... (38,747) (38,747)
---------- ------------------ -------------- ------------
Net income (loss)...................................... $ (666,032) $ (46,214) $ (332,331) $ (1,044,577)
---------- ------------------ -------------- ------------
---------- ------------------ -------------- ------------
Per share data
Net income (loss)................................. (0.33)
------------
------------
Average shares.................................... 3,171,857
------------
------------
</TABLE>

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

(1) Elimination of 1996 intercompany sales.

(2) Recognition of $161,000 of goodwill amortization and an additional
$100,000 in aircraft depreciation expense.

(3) Recognition of interest expense on new debt with Air Response
shareholder.

F-36

PROFLIGHT MEDICAL RESPONSE, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>

HISTORICAL
----------------------------
AIR RESPONSE
AND AIR PRO FORMA
PROFLIGHT RESPONSE SOUTH AJUSTMENT(A) PRO FORMA PRO FORMA(B)
---------- -------------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Current Assets
Cash and cash equivalents............. $ 59,370 $ 197,297 $ (800,000)(1) $ (543,333) $5,253,850(1)
(603,000)(2)
Restricted cash....................... 41,670 41,670
Accounts receivable................... 529,767 906,695 (320,230)(3) 1,116,232
Other current assets.................. 8,707 268,016 (475,000)(4) (198,277)
---------- -------------- ------------- ----------- ------------
Total current assets.............. 597,844 1,413,678 (1,595,230) 416,292 4,650,850
---------- -------------- ------------- ----------- ------------
Fixed Assets
Aircraft, property and equipment at
cost................................ 3,324,013 2,979,405 1,117,868(2) 7,421,286
Less accumlated depreciation and
amortization........................ (548,030) 1,635,353 (2,183,383)
Other assets.............................. 341,489 640,078 (200,000)(3) 781,567
Goodwill.................................. 3,476,265(1) 3,476,265
---------- -------------- ------------- ----------- ------------
Total assets...................... $3,715,316 $3,397,808 $ 2,798,903 $ 9,912,027 $4,650,850
---------- -------------- ------------- ----------- ------------
---------- -------------- ------------- ----------- ------------
Current Liabilities
Accounts payable...................... 699,321 1,583,746 (320,230)(3) 1,962,837
Current portion of notes.............. 766,668 667,725 (200,000)(3) 1,234,393
-- (603,000)(2)
Accrued liabilities................... 85,988 6,017 92,005
---------- -------------- ------------- ----------- ------------
Total current liabilities......... 1,551,977 2,257,488 (520,230) 3,289,235 (603,000)
Long term debt............................ 2,385,080 1,234,453 3,619,533 --
---------- -------------- ------------- ----------- ------------
Total liabilities................. 3,937,057 3,491,941 (520,230) 6,908,768 (603,000)
---------- -------------- ------------- ----------- ------------
Stockholders' Equity
Common Stock, par value .001 for
Proflight and $10.00 for Air
Response and Air Response South.....
Proflight has 2,665,607 shares issued
and outstanding. Air Response has
100 shares and AR South has 51,000
shares.............................. 2,666 2,000 (1,194)(1) 3,472 1,560(1)
Additional paid-in capital,
(deficit)........................... 30,711 -- 3,224,194(1)(4) 3,254,905 6,393,440(1)(5)
(1,101,150)(1)
Retained Earnings (deficit)........... (255,118) (96,133) 96,133(1) (255,118) (40,000)(5)
---------- -------------- ------------- ----------- ------------
Total Stockholders' Equity........ (221,741) (94,133) 3,319,133 3,003,259 5,253,850
---------- -------------- ------------- ----------- ------------
$3,715,316 $3,397,808 $ 2,798,903 $ 9,912,027 $4,650,850
---------- -------------- ------------- ----------- ------------
---------- -------------- ------------- ----------- ------------
</TABLE>

ADJUSTED PRO
FORMA
------------
Current Assets
Cash and cash equivalents............. $ 4,710,517

Restricted cash....................... 41,670
Accounts receivable................... 1,116,232
Other current assets.................. (198,277)
-----------
Total current assets.............. 5,067,142
-----------
Fixed Assets
Aircraft, property and equipment at
cost................................ 7,421,286
Less accumlated depreciation and
amortization........................ (2,183,383)
Other assets.............................. 781,567
Goodwill.................................. 3,476,265
-----------
Total assets...................... $14,562,877
-----------
-----------
Current Liabilities
Accounts payable...................... 1,962,837
Current portion of notes.............. 1,234,393
(603,000)
Accrued liabilities................... 92,005
-----------
Total current liabilities......... 2,686,235
Long term debt............................ 3,619,533
-----------
Total liabilities................. 6,305,768
-----------
Stockholders' Equity
Common Stock, par value .001 for
Proflight and $10.00 for Air
Response and Air Response South.....
Proflight has 2,665,607 shares issued
and outstanding. Air Response has
100 shares and AR South has 51,000
shares.............................. 5,032
Additional paid-in capital,
(deficit)........................... 8,547,195

Retained Earnings (deficit)........... (295,118)
-----------
Total Stockholders' Equity........ 8,257,109
-----------
$14,562,877
-----------
-----------
- ------------

(A) The pro forma adjustments to the historical balance sheets using purchase
acquisition accounting reflect the acquisition of Air Response and Air Response
South (Air Response) by Proflight. The adjustments reflect the following:

(1) Estimated purchase price of $4,500,000, comprised of $800,000 in cash
payable on the closing of an initial public offering, and shares of
stock equal to $3,225,000, less debt to the Company of $475,000, based
upon the initial public offering price issued within two years from
closing of the offering. The adjustments reflect the allocation of that
purchase price to the net assets acquired. Goodwill is being amortized
over 20 years using the straight-line method.

(2) A $1,117,868 adjustment in the basis of aircraft and medical equipment
acquired to fair market value.

(3) Elimination of intercompany receivables/payables of $320,230 and
$200,000.

F-37

RECONCILIATION OF ACQUISITION

<TABLE>

<S> <C>
Consideration paid.............................................................. $4,500,000
----------
----------
Net assets acquired............................................................. $ (94,133)
Adjustment of aircraft basis to FMV............................................. 1,117,868
Goodwill........................................................................ 3,476,265
----------
$4,500,000
----------
----------
</TABLE>

(4) To adjust number of shares paid for acquisition to reflect the
elimination of loan to officer.

(5) To reflect expense of shares issued as a bonus to an officer.

(B) The adjustments to pro forma represent:

(1) The offering of 1,550,000 shares of common stock and 1,550,000
redeemable common stock purchase warrants and 10,000 shares of common
stock given to an officer as a bonus. The initial public offering
prices of common stock and warrants are $4.00 and $.10, respectively.
The proceeds are recognized net of underwriter discounts and costs of
$826,150 and attorney fees, printing costs, consulting fees, and
miscellaneous closing costs totalling $275,000.

(2) Payment of debt with proceeds from offering.

F-38

PROFLIGHT MEDICAL RESPONSE, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)

HISTORICAL
--------------------------------
AIR RESPONSE
AND PRO FORMA
PROFLIGHT AIR RESPONSE SOUTH ADJUSTMENTS(C) PRO FORMA
---------- ------------------ -------------- -----------
<S> <C> <C> <C> <C>
Income..................................... $4,285,832 $6,537,380 $ (857,810)(1) $ 9,965,402
Operating expense
Flying operations..................... 2,287,675 3,768,966 (857,810)(1) 5,198,831
Maintenance........................... 660,408 562,308 1,222,716
Promotion and sales................... 85,305 372,560 457,865
General and administrative............ 946,683 1,491,410 2,438,093
Depreciation and amortization......... 222,748 297,650 195,750(2) 716,148
---------- ------------------ -------------- -----------
Total operating expense.......... 4,202,819 6,492,894 (662,060) 10,033,653
Operating income (loss).......... 83,013 44,486 (195,750) (68,251)
Nonoperating expenses (income)
Interest expense...................... 227,126 108,197 335,323
Other expense and (income)............ 8,704 8,704
---------- ------------------ -------------- -----------
227,126 116,901 344,027
Income tax................................. 5,874 5,874
---------- ------------------ -------------- -----------
Net income (loss).......................... $ (144,113) $ (78,289) $ (195,750) $ (418,152)
---------- ------------------ -------------- -----------
---------- ------------------ -------------- -----------
Per share data
Net income............................ $(0.12)
-----------
-----------
Average shares........................ 3,471,857
</TABLE>

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

(1) Elimination of 1997 intercompany sales.

(2) Recognition of $120,750 of goodwill amortization and an additional
$75,000 in depreciation expense, due to revaluation of aircraft assets.

F-39

[THIS PAGE INTENTIONALLY LEFT BLANK]

_____________________________ _____________________________

NO UNDERWRITER, DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE UNDERWRITER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF.

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

TABLE OF CONTENTS

PAGE
-----

<S> <C>
Prospectus Summary.......................................................................................................... 3
Risk Factors................................................................................................................ 9
Use of Proceeds............................................................................................................. 16
Dividend Policy............................................................................................................. 16
Capitalization.............................................................................................................. 17
Dilution.................................................................................................................... 18
Selected Financial Data..................................................................................................... 19
Management's Discussion and Analysis of Financial Condition and Results of Operations....................................... 21
Business.................................................................................................................... 27
Management.................................................................................................................. 33
Principal Shareholders...................................................................................................... 36
Certain Transactions........................................................................................................ 37
Description of Securities................................................................................................... 40
Shares Eligible For Future Sale............................................................................................. 42
Underwriting................................................................................................................ 42
Legal Matters............................................................................................................... 45
Experts..................................................................................................................... 45
Additional Information...................................................................................................... 45
Index to Financial Statements............................................................................................... F-1
</TABLE>

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

UNTIL , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS),
ALL DEALERS EFFECTING TRANSACTIONS IN THE SHARES OF COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

PROFLIGHT MEDICAL
RESPONSE, INC.

1,550,000 SHARES OF
COMMON STOCK
AND 1,550,000 REDEEMABLE COMMON STOCK
PURCHASE WARRANTS

--------------------------
PROSPECTUS
--------------------------

FIRST LIBERTY INVESTMENT
GROUP, INC.

, 1998

_____________________________ _____________________________

PART II

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Colorado Corporation Code, as revised, in general, allows corporations
to indemnify their directors and officers against reasonable expenses incurred
in connection with a proceeding, if the person acted in good faith and in a
manner the person believed to be in or not opposed to the best interests of the
corporation. In the case of a criminal action, the director or officer must have
had no reasonable cause to believe that the person's conduct was unlawful. Under
current law, a corporation may not indemnify a director or officer in connection
with a proceeding by or in the right of the corporation in which the director or
officer was adjudged liable to the corporation or if the director or officer
derived an improper personal benefit.

The Company's Articles of Incorporation and By-Laws provide that the
Company shall indemnify its directors and officers to the fullest extent
permitted by the Colorado Law.

The Company will enter into an indemnification agreement ('Indemnification
Agreement') with each of its directors and officers. Each Indemnification
Agreement will provide that the Company will indemnify the indemnitee against
expenses, including reasonable attorneys' fees, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with any civil or criminal action or administrative proceeding
arising out of his performance of his duties as a director or officer, other
than an action instituted by the director or officer. Such indemnification is
available if the indemnitee acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company, and, with
respect to any criminal action, had no reasonable cause to believe his conduct
was unlawful. Each Indemnification Agreement also will require that the Company
Indemnify the director or other party thereto in all cases to the fullest extent
permitted by applicable law. The term of the Indemnification Agreement will be
the later of (i) ten (10) years after the date that the indemnitee ceases to
serve as a director or officer of the Company, or (ii) the final termination of
all proceedings, as defined in the Indemnification Agreement, in which the
indemnitee is granted rights of indemnification.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the estimated expenses to be borne by the
Company (also referred to herein as the Registrant) in connection with the
issuance and distribution of the shares of Common Stock pursuant to the Offering
(other than underwriting discounts and commissions).

<TABLE>
<S> <C>
SEC registration fee....................................................................... $1,186.36
NASD filing fee............................................................................ $ *
Nasdaq SmallCap Market'sm'................................................................. $ *
Legal fees and expenses.................................................................... $ *
Accounting fees............................................................................ $ *
Blue Sky fees and expenses................................................................. $ *
Printing and engraving expenses............................................................ $ *
Underwriter's non-accountable expense allowance............................................ $ 117,450
Underwriter's consulting fee............................................................... $ 120,000
Miscellaneous.............................................................................. $ *
---------

Total fees and expenses.................................................................... $ *
---------
---------
</TABLE>

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

* To be completed by amendment

II-1

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

The following paragraphs set forth certain information with respect to all
securities sold by the Company within the past three years without registration
under the Securities Act of 1933, as amended (the 'Securities Act'). The
information includes the names of the purchasers, the date of issuance, the
title and number of securities sold and the consideration received by the
Company for the issuance of these shares.

In January 1996, Steven B. Myers, a Director of the Company, purchased
231,214 shares of Common Stock from the Company for $100,000. These shares of
Common Stock were issued by the Company without registration under the
Securities Act by reason of the exemption from registration afforded by the
provisions of Section 4(2) thereof, as transactions by an issuer not involving a
public offering. In September 1997, Mr. Myers agreed to return 115,569 shares of
Common Stock to the Company in exchange for an amendment to his employment
agreement which provides for the issue of 230,000 shares if the Company achieves
minimum pre-tax profits of $1 million, before depreciation and amortization, in
either of the two years following the effective date of the Registration
Statement.

In January 1996, the Company issued Steven A. Cantor, 1,475,000 shares of
Common Stock valued at $50,000. Mr. Cantor has provided investment banking
services to the Company. These shares of Common Stock were issued by the Company
without registration under the Securities Act by reason of the exemption from
registration afforded by the provisions of Section 4(2) thereof, as transactions
by an issuer not involving a public offering.

In November 1996, the Company issued 5,000 shares of Common Stock to
Loselle Greenwalt valued at $250. These shares of Common Stock were issued by
the Company without registration under the Securities Act by reason of the
exemption from registration afforded by the provisions of Section 4(2) thereof,
as transactions by an issuer not involving a public offering.

In November 1996, the Company issued 20,000 shares of Common Stock to Tom
Cox valued at $1,000. These shares of Common Stock were issued by the Company
without registration under the Securities Act by reason of the exemption from
registration afforded by the provisions of Section 4(2) thereof, as transactions
by an issuer not involving a public offering.

In November 1996, the Company issued 25,000 shares of Common Stock to Brett
Abrams valued at $1,250. These shares of Common Stock were issued by the Company
without registration under the Securities Act by reason of the exemption from
registration afforded by the provisions of Section 4(2) thereof, as transactions
by an issuer not involving a public offering.

In January 1997, the Company issued Arthur G. Rosenberg, a director of the
Company an option to purchase 25,000 shares of Common Stock of the Company at an
exercise price of $1.00 per share as an incentive to become a director of the
Corporation. These shares of Common Stock were issued by the Company without
registration under the Securities Act by reason of the exemption from
registration afforded by the provisions of Section 4(2) thereof, as transactions
by an issuer not involving a public offering.

In March 1997, the Company issued Tom Cox an option to purchase 25,000
shares of Common Stock of the Company at an exercise price of $4.00 per share in
consideration for Mr. Cox extending the due date of certain notes. These shares
of Common Stock were issued by the Company without registration under the
Securities Act by reason of the exemption from registration afforded by the
provisions of Section 4(2) thereof, as transactions by an issuer not involving a
public offering.

In April 1997, the Company entered into an Amended Agreement and Plan of
Reorganization with Air Response and Louis R. Capece, Jr., which agreement was
amended in May 1997, pursuant to which the Company agreed to acquire at the
closing of the Offering, subject to the terms and conditions contained therein,
all of the outstanding capital stock of Air Response in exchange for 806,250
shares of Common Stock of the Company to be issued two years from the closing of
the Offering. If the Company completes a second public offering, Mr. Capece has
the option to put such number of shares of Common Stock at the then current
market value, equal to 20% of the net proceeds of such offering, to the Company,
not to exceed $1,000,000. The Company simultaneously entered into an Amended
Stock Purchase and Sale Agreement with Air Response South and Louis R. Capece
Jr. pursuant to which the Company agreed to acquire at the closing of the
Offering, subject to the terms and conditions

II-2

contained therein, all of the outstanding capital stock of Air Response South
for $800,000 which is payable upon closing of the Offering.

In May 1997, Kevin L. Burkhardt and Jane S. Burkhardt agreed to return
218,954 shares of Common Stock to the Company in exchange for options to
purchase 437,908 shares of Common Stock at an exercise price of $4.00 per share.
The options are five year options exercisable upon closing of the offering. The
Underwriter believed there were too many shares outstanding and as a condition
of underwriting this Offering required these shares be retired and the Company
in consideration for returning these shares issued the individual warrants.
These shares were exchanged by reason of an exemption from registration afforded
by the provisions of Section 4(1) and 4(2). In September of 1997, Mr. Burkhardt
agreed to return 168,329 shares of Common Stock to the Company in exchange for
an amendment to his employment agreement which provides for the issue of 336,658
shares to Mr. Burkhardt, over the next 3-4 years, if the Company achieves
minimum pre-tax profits of $1 million, before depreciation and amortization, in
either of the two years following the effective date of the Registration
Statement.

In May 1997, Charles W. Bartholomew agreed to return 130,719 shares of
Common Stock to the Company in exchange for options to purchase 261,438 shares
of Common Stock at an exercise price of $4.00 per share. The options are five
year options exercisable upon closing of the offering. The Underwriter believed
there were too many shares outstanding and as a condition of underwriting this
Offering required these shares be returned to treasury and the Company in
consideration for returning these shares issued the individual warrants. These
shares were exchanged by reason of an exemption from registration afforded by
the provisions of Sections 4(1) and 4(2). In September of 1997, Mr. Bartholomew
agreed to return 100,495 shares of Common Stock to the Company and retired in
exchange for the Company's agreement to issue of 200,990 shares to Mr.
Bartholomew, over the next 3-4 years, if the Company achieves minimum pre-tax
profits of $1 million, before depreciation and amortization, in either of the
two years following the effective date of the Registration Statement.

In May 1997, Steven B. Myers agreed to return 150,327 shares of Common
Stock to the Company in exchange for options to purchase 300,654 shares of
Common Stock at an exercise price of $4.00 per share. The options are five year
options exercisable upon closing of the offering. The Underwriter believed there
were too many shares outstanding and as a condition of underwriting this
Offering and required these shares be retired. In consideration for returning
these shares issued the individual warrants. In September of 1997, Mr. Myers
agreed to return 115,569 shares of Common Stock in exchange for the Company's
agreement to issue 231,138 shares to Mr. Myers, over the next 3-4 years, if the
Company achieves minimum pre-tax profits of $1 million before depreciation and
amortization, in either of the two years following the effective date of the
Registration Statement. These shares were exchanged by reason of an exemption
from registration afforded by the provisions of Sections 4(1) and 4(2).

The investors in each of the above transactions were sophisticated and had
access to information about the Company.

The following shares of Common Stock were issued by the Company without
registration under the Securities Act in accordance with Rule 506 of Regulation
D of the Securities Act.

II-3

In October 1996, the Company completed a private placement issuing 70 Units
of the Company's securities ('Units'), each Unit consisting of a $5,000
principal amount 10% promissory note and 10,000 shares of the Company's Common
Stock. The following shares of Common Stock were issued by the Company without
registration under the Securities Act in accordance with Rule 506 of Regulation
D of the Securities Act. The offering was to 'Accredited Investors' only as that
term is defined in Rule 501 promulgated under the Securities Act.

<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES DATE
- -------------------------------------------------------------------------------- --------- ---------
<S> <C> <C>
Alphanet Communications Corp.................................................... 20,000 10/31/96
Barbara Banach and Sally Miglio................................................. 10,000 10/31/96
Cindy Bermingham custodian for Maverick Bermingham.............................. 5,000 10/31/96
Brite Lite Industries, Inc...................................................... 30,000 10/31/96
Annette Cantor.................................................................. 325,000 10/31/96
Charlene Cantor................................................................. 5,000 10/31/96
Rosemary D'Amato................................................................ 5,000 10/31/96
Tiffany D'Amato................................................................. 5,000 10/31/96
Merchant Investors Management Limited........................................... 30,000 10/31/96
Dolores Miller.................................................................. 30,000 10/31/96
Corey Morrison.................................................................. 20,000 10/31/96
Sherry Cantor Morrison.......................................................... 5,000 10/31/96
Josephine Pace.................................................................. 20,000 10/31/96
Gregory Pollack................................................................. 5,000 10/31/96
Sean Reid....................................................................... 5,000 10/31/96
River Rock Equities, Inc. ...................................................... 150,000 10/31/96
RII Partners, Inc............................................................... 30,000 10/31/96
</TABLE>

In January 1997, the Company issued 300,000 additional shares of Common
Stock and $150,000, 10% promissory note. The following shares of Common Stock
were issued by the Company without registration under the Securities Act in
accordance with Rule 506 of Regulation D of the Securities Act. The offering was
to 'Accredited Investors' only as that term is defined in Rule 501 promulgated
under the Securities Act.

<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES DATE
- -------------------------------------------------------------------------------- --------- ---------

<S> <C> <C>
Morbury Corporation............................................................. 160,000 01/13/97
Valinvest Corp.................................................................. 140,000 01/10/97
</TABLE>

In March 1997, the Company issued 25,000 additional shares of Common Stock
and $125,000, 10% promissory note. The following shares of Common Stock were
issued by the Company without registration under the Securities Act in
accordance with Rule 506 of Regulation D of the Securities Act. The offering was
to 'Accredited Investors' only as that term is defined in Rule 501 promulgated
under the Securities Act.

<TABLE>
<CAPTION>
NUMBER OF PROMISSORY
NAME SHARES NOTE DATE
- ------------------------------------------------------------------- --------- ---------- ---------
<S> <C> <C> <C>
Barry and Elizabeth Mevorach JTWROS................................ 2,500 $ 12,500 03/31/97
Raymond G. Hancock................................................. 2,500 $ 12,500 03/31/97
Barbara Banach..................................................... 17,500 $ 87,500 03/31/97
North Shore Financial Money Purchase Plan DLJSC-FBO
Richard Banach................................................... 2,500 $ 12,500 03/31/97
</TABLE>

II-4

ITEM 27. EXHIBITS

<TABLE>

<C> <S>
* 1.1 -- Form of Underwriting Agreement.
* 1.2 -- Selected Dealers Agreement.
2.1 -- Amended Agreement and Plan of Reorganization, dated April 8, 1997, by and among, Proflight, Louis R.
Capece, Jr. And Air Response, Inc.
2.2 -- Amended Stock Purchase Agreement, dated April 8, 1997, by and among, Proflight, Louis R. Capece, Jr.
And Air Response South, Inc.
3.1 -- Amended and Restated Articles of Incorporation.
3.2 -- Bylaws.
** 4.1 -- Form of Certificate for Shares of Common Stock.
* 4.2 -- Form of Underwriter's Warrant.
* 4.3 -- Form of Underwriter's Warrant Agreement.
5.1 -- Opinion and Consent of Loselle Greenawalt Kaplan Blair & Adler.
10.1 -- Lease Agreement dated February 27, 1997, between the Company and Airplaza Co., Inc.
10.2 -- Air Ambulance Transport Services Agreement dated February 9, 1996, by and between the Company and Aetna
Health Management, Inc.
10.3 -- Promissory Note and Accommodation Agreement dated March 17, 1995, between the Company and Lear Three,
L.L.C.
**10.4 -- First Promissory Note Extension, dated March 26, 1997, between the Company and Lear Three, L.L.C.
10.5 -- Promissory Note dated May 20, 1996, between the Company and Lear Three, L.L.C.
**10.6 -- Second Promissory Note Extension, dated March 26, 1997, between the Company and Lear Three, L.L.C.
10.7 -- Promissory Note date May 31, 1996, between the Company and Textron Financial Corporation.
10.8 -- Security Agreement dated May 31, 1996, between the Company and Textron Financial Corporation.
10.9 -- Promissory Note dated October 8, 1996, between the Company and Textron Financial Corporation.
10.10 -- Aircraft Lease Agreement dated November 15, 1996, between the Company and Superior Transport Service,
Inc.
10.11 -- Promissory Note dated November 13, 1996, between the Company and Norwest Equipment Finance, Inc.
10.12 -- Agreement Under Standards dated October 13, 1994, between the Company and the Arapahoe County Public
Airport Authority.
*10.13 -- Amended Employment Agreement dated May 1997, by and between the Company and Donald Jones.
10.14 -- Employment Agreement dated March 1997, by and between the Company and Kevin L. Burkhardt.
10.15 -- Employment Agreement dated March 1997, by and between the Company and David Cohen.
10.16 -- Employment Agreement dated March 1997, by and between the Company and Jane S. Burkhardt.
10.17 -- Consulting Agreement dated April 1997, by and between the Company and Louis R. Capece, Jr.
10.18 -- Agreement dated April 30, 1995, between Air Response, Inc. and Central National Bank Canajoharie.
10.19 -- Note and Security Agreement dated February 24, 1993, between Air Response, Inc. and Cessna Finance
Corporation.
10.20 -- Aircraft Lease Agreement dated June 27, 1996, between Air Response, Inc. and U.S. Bancorp Leasing &
Financial.
10.21 -- Promissory Note dated September 20, 1996, between Air Response, Inc. and Cessna Finance Corporation.
10.22 -- Promissory Note dated October 23, 1996, between Air Response, Inc. and Textron Financial Corporation.
10.23 -- Promissory Note dated October 23, 1996, between Air Response, Inc. and Textron Financial Corporation.
**10.24 -- Insurance Policy between the Company and Nationair Insurance Agency.
</TABLE>

(table continued on next page)

II-5

(table continued from previous page)

<TABLE>

<C> <S>
10.25 -- Stock Option Plan
10.26 -- Escrow Agreement
10.27 -- Employment Agreement dated September 15, 1997 by and between the Company and Steven B. Myers.
*10.28 -- Form of Consulting Agreement dated , 1998 by and between the Company and the
Underwriter.
*10.29 -- Letter of Amendment to Employment Agreement of Donald Jones, dated September 15, 1997.
*10.30 -- Letter of Amendment to Employment Agreement of Kevin L. Berkhardt, dated September 15, 1997.
*23.1 -- Consent of Grant Thornton LLP
23.2 -- Consent of Loselle Greenawalt Kaplan Blair & Adler (included Exhibit 5.1).
*23.3 -- Consents of Staff Maikels and Ciampino, P.C.
23.4 -- Consents of Kaufman Rossin & Co., P.C.
24.1 -- Power of Attorney.
</TABLE>

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

* Filed herewith

** To be filed by amendment.

ITEM 28. UNDERTAKINGS

(a) The Registrant will,

(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:

(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which
was registered) any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the 'Calculation of
Registration Fee' table in the effective registration statement.

(iii) Include any additional or changed material information on the
plan of distribution.

(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.

(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.

(b) The Registrant will provide to the Underwriter at the closing
certificates in such denominations and registered in such names as required by
the Underwriter to permit prompt delivery to each purchaser.

(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.

II-6

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements of filing on Form SB-2 and authorized this
Amendment No. 2 to the registration statement to be signed on its behalf by the
undersigned, in the City of Denver, State of Colorado on the 20th day of
January, 1998.

PROFLIGHT MEDICAL RESPONSE, INC.

By: /S/ KEVIN L. BURKHARDT
...................................
KEVIN L. BURKHARDT, PRESIDENT

In accordance with the requirements of the Securities Act of 1933, as
amended, this Amendment No. 2 to the registration statement was signed by the
following persons in the capacities indicated on the dates stated:

SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ KEVIN L. BURKHARDT Chief Executive Officer, President, Director January 20, 1998
.........................................
(KEVIN L. BURKHARDT)

/s/ JANE S. BURKHARDT Secretary January 20, 1998
.........................................
(JANE S. BURKHARDT)

/s/ DAVID COHEN Chief Financial Officer, Treasurer, Chief January 20, 1998
......................................... Accounting Officer
(DAVID COHEN)

* Director January 20, 1998
.........................................
(ARTHUR G. ROSENBERG)

* Director January 20, 1998
.........................................
(CHARLES W. BARTHOLOMEW)

* Director January 20, 1998
.........................................
(STEVEN B. MYERS)

Director January 20, 1998
.........................................
(STANLEY ABRAMS)

*By: /S/ KEVIN L. BURKHARDT
.........................................
KEVIN L. BURKHARDT
ATTORNEY-IN-FACT
</TABLE>

II-7

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each director and officer whose
signature appears below constitutes and appoints Kevin L. Burkhardt and David
Cohen, or either of them, as such person's true and lawful attorneys-in-fact and
agents, will full powers of substitution and re-substitution, for such person in
name, place and stead, to sign in any and all amendments (including
post-effective amendments) to this Registration Statement on Form SB-2, in any
and all capacities, and to file the same, with all exhibits thereto and all
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
such attorneys-in-fact and agents, or any of them, may lawfully do or cause to
be done by virtue hereof.

In accordance with the requirements of the Securities Act of 1933, as
amended, this Registration Statement was signed by the following persons in the
capacities and on the dates stated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ KEVIN L. BURKHARDT Chief Executive Officer, President, Director May 15, 1997
.........................................
(KEVIN L. BURKHARDT)

/s/ JANE S. BURKHARDT Secretary, Director May 15, 1997
.........................................
(JANE S. BURKHARDT)

/s/ DAVID COHEN Chief Financial Officer, Treasurer, Chief May 15, 1997
......................................... Accounting Officer
(DAVID COHEN)

/s/ ARTHUR G. ROSENBERG Director May 15, 1997
.........................................
(ARTHUR G. ROSENBERG)

/s/ CHARLES W. BARTHOLOMEW Director May 15, 1997
.........................................
(CHARLES W. BARTHOLOMEW)

/s/ STEVEN B. MYERS Director May 15, 1997
.........................................
(STEVEN B. MYERS)
</TABLE>

II-8

STATEMENT OF DIFFERENCES
------------------------

The service mark symbol shall be expressed as......................... 'sm'
The section symbol shall be expressed as.............................. 'SS'

<PAGE>

FORM OF UNDERWRITING AGREEMENT

PROFLIGHT MEDICAL RESPONSE, INC.

1,550,000 Shares of Common Stock
and
1,550,000 Redeemable Common Stock Purchase Warrants

UNDERWRITING AGREEMENT

_________ __, 1998

First Liberty Investment Group, Inc.
615 Chestnut Street
Philadelphia, Pennsylvania 19106

Dear Sirs:

Proflight Medical Response, Inc., a Colorado corporation (the
"Company"), hereby confirms its agreement with you (the "Underwriter") as
follows:

1. Description of the Securities.

The Company proposes to issue and sell to the Underwriter an aggregate
of 1,550,000 shares of common stock, $.001 par value per share (the "Common
Stock"), and 1,550,000 redeemable common stock purchase warrants of the Company
(the "Warrants," and collectively with the Common Stock, the "Securities"). Each
Warrant shall entitle the holder to purchase one share of Common Stock for
$6.00, subject to adjustment. The Company proposes to grant to the Underwriter
an option to purchase up to 232,500 additional shares of Common Stock and up to
an additional 232,500 Warrants (the "Additional Securities"). The offering of
Securities and Additional Securities contemplated hereby may sometimes be
referred to as the "Offering."

(a) The Warrants.

The Warrants are exercisable at any time from the effective date of the
Registration Statement, as defined in Paragraph 2(a) (the "Effective Date"), and
expire three (3) years after the Effective Date, subject to prior redemption by
the Company. The shares of Common Stock issuable upon the exercise of the
Warrants are hereinafter referred to as the "Warrant Shares."

The Warrants will be redeemable at a price of $.10 per Warrant,
commencing two (2) years after the Effective Date (or one (1) year after the
Effective Date with the prior written consent of the Underwriter) upon at least
30 days prior written notice provided that the average of the closing bid prices
of the Common Stock (or closing sales price if listed on an exchange or on a
reporting system that provides last sales prices) for 20

consecutive trading days ending immediately prior to the date on which notice of
redemption is given shall exceed $8.50 per share (subject to adjustment),
subject to the right of the holder to exercise his purchase rights thereunder
until redemption.

(b) Underwriter's Warrants.

The Company will sell to the Underwriter, for $10, a warrant to
purchase one share of Common Stock and one Warrant for each ten shares of Common
Stock and ten Warrants sold in this Offering excluding the Additional Securities
(a maximum of 155,000 shares of Common Stock and 155,000 Warrants) at a price
equal to $4.80 per share of Common Stock and $.12 per Warrant (the
"Underwriter's Warrants," and collectively with the Securities underlying the
Underwriter's Warrants, the "Underwriter's Securities"). The Warrants underlying
the Underwriter's Warrants shall be exercisable at a price of $6.00 per Warrant.
The Underwriter's Securities shall be non-exercisable and non-transferable
(other than to (i) officers of the Underwriter, and (ii) members of the selling
group and their officers or partners) for a period of 12 months following the
Effective Date. The Underwriter's Securities shall be registered for sale to the
public and shall be included in the Registration Statement filed in connection
with the Offering.

2. Representations and Warranties of the Company.

The Company represents and warrants to the Underwriter that:

(a) The Company has filed with the Securities and Exchange
Commission (the "Commission"), a registration statement on Form SB-2 (File No.
333-27197), including any related preliminary prospectus ("Preliminary
Prospectus"), for the registration of the Securities under the Securities Act of
1933 (the "Act"). The Company will file further amendments to said registration
statement in the form to be delivered to you and will not, before the
registration statement becomes effective, file any other amendment thereto to
which you shall have objected in writing after having been furnished with a copy
thereof. Except as the context may otherwise require, such registration
statement, as amended, on file with the Commission at the time the registration
statement becomes effective (including the prospectus, financial statements,
exhibits and all other documents filed as a part thereof or incorporated
therein), is hereinafter called the "Registration Statement", and the
prospectus, in the form filed with the Commission pursuant to Rule 424(b) of the
General Rules and Regulations of the Commission under the Act (the
"Regulations") or, if no such filing is made, the definitive prospectus used in
the Offering, is hereinafter called the "Prospectus". The Company has delivered
to you copies of each Preliminary Prospectus as filed with the Commission and
has consented to the use of such copies for purposes permitted

by the Act.

(b) The Commission has not issued any orders preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus has conformed in all material respects with the requirements of the
Act and has not included any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements therein, not misleading, subject to the provisions set forth below
and except as such untrue statement or omission has been cured in the a
subsequent preliminary prospectus or in the final prospectus.

(c) When the Registration Statement becomes effective under
the Act and at all times subsequent thereto including the Closing Date
(hereinafter defined) and the Option Closing Date (hereinafter defined) and for
such longer periods as in the opinion of counsel for the Underwriter, a
Prospectus is required to be delivered in connection with the sale of the
Securities by the Underwriters, the Registration Statement and Prospectus, and
any amendment thereof or supplement thereto, will contain all material
statements which are required to be stated therein in accordance with the Act
and the Regulations, and will in all material respects conform to the
requirements of the Act and the Regulations, and neither the Registration
Statement nor the Prospectus, nor any amendment or supplement thereto, will
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
not misleading; provided, however, that this representation and warranty does
not apply to statements or omissions made in reliance upon and in conformity
with written information furnished to the Company by you, for use in connection
with the preparation of the Registration Statement or Prospectus, or in any
amendment thereof or supplement thereto. It is understood that the statements
set forth under the heading "Underwriting" in the Prospectus with respect to (i)
the amounts of the selling concession and reallowance; (ii) the identity of
counsel to the Underwriter under the heading "Legal Matters;" (iii) the
information concerning the NASD affiliation of the Underwriter; and (iv) the
Risk Factor entitled "Lack of Underwriting History" constitute for purposes of
this Paragraph the only information furnished in writing by or on behalf of the
Underwriter for inclusion in the Registration Statement and Prospectus, as the
case may be.

(d) The Company and each of its subsidiaries (each a
"Subsidiary") are, and at the Closing Date and the Option Closing Date will be,
corporations duly organized, validly existing and in good standing under the
laws of the jurisdiction of their incorporation. The Company and each of its
Subsidiaries are duly qualified or licensed and in good standing as foreign
corporations in each jurisdiction in which their ownership or leasing of any

properties or the character of their operations requires such qualification or
licensing, except those jurisdictions in which the failure to so qualify would
not have a material adverse effect. The Company and each of its Subsidiaries
have all requisite corporate powers and authority, and, except as set forth in
the Registration Statement, the Company and each of its Subsidiaries and their
employees' have all material and necessary authorizations, approvals, orders,
licenses, certificates and permits of and from all governmental regulatory
officials and bodies to own or lease their properties and conduct their
businesses as described in the Prospectus, and the Company and each of its
Subsidiaries are doing business and have been doing business during the period
described in the Registration Statement in compliance with all such material
authorizations, approvals, orders, licenses, certificates and permits and all
material federal, state and local laws, rules and regulations concerning the
businesses in which the Company or its Subsidiaries are engaged. The disclosures
in the Registration Statement concerning the effects of federal, state and local
regulation on the Company's or its Subsidiaries' businesses as currently
conducted and as contemplated are correct in all material respects and do not
omit to state a material fact. The Company has all corporate power and authority
to enter into this Agreement and carry out the provisions and conditions hereof,
and all consents, authorizations, approvals and orders required in connection
therewith have been obtained or will have been obtained prior to the Closing
Date.

(e) This Agreement has been duly and validly authorized and
executed by the Company. The Securities (including the Common Stock and the
Warrants), the Warrant Shares, the Underwriter's Warrants to be issued and sold
by the Company pursuant to this Agreement, the Securities issuable upon exercise
of the Underwriter's Warrants and payment therefor, and the Common Stock and
Warrant Shares underlying such Underwriter's Warrants, have been duly authorized
(and, in the case of the Common Stock and the Warrant Shares, have been duly
reserved for issuance) and, when issued and paid for in accordance with this
Agreement (and, in the case of the Warrant Shares, upon exercise of the Warrants
and payment to the Company of the exercise price therefor), the Common Stock and
Warrant Shares will be validly issued, fully paid and non-assessable; the Common
Stock, Warrants, Warrant Shares, Underwriter's Warrants, Additional Securities
and Underwriter's Warrant Shares are not and will not be subject to the
preemptive rights of any stockholder of the Company and conform and at all times
up to and including their issuance will conform in all material respects to all
statements with regard thereto contained in the Registration Statement and
Prospectus; and all corporate action required to be taken for the authorization,
issuance and sale of the Common Stock, Warrants, Warrant Shares and
Underwriter's Warrants has been taken, and this Agreement

constitutes a valid and binding obligation of the Company, enforceable in
accordance with its terms, to issue and sell, upon exercise in accordance with
the terms thereof, the number and kind of securities called for thereby.

(f) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof will not result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
the Articles of Incorporation, as amended, or Bylaws of the Company or any of
its Subsidiaries or of any evidence of material indebtedness, lease, contract or
other agreement or instrument to which the Company or any of its Subsidiaries is
a party or by which the Company or any of its Subsidiaries or any of their
material properties is bound, or under any applicable law, rule, regulation,
judgment, order or decree of any government, professional advisory body,
administrative agency or court, domestic or foreign, having jurisdiction over
the Company or any of its Subsidiaries or their properties which are material to
the Company or its business, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the properties or assets of the Company
or any of its Subsidiaries; and no consent, approval, authorization or order of
any court or governmental or other regulatory agency or body is required for the
consummation by the Company or any of its Subsidiaries of the transactions on
their part herein contemplated, except such as may be required under the Act or
under state securities or blue sky laws, except where a breach, violation or
failure to obtain such consent would not have a material adverse effect upon the
business or operation of the Company or its Subsidiaries.

(g) Subsequent to the date hereof, and prior to the Closing
Date and the Option Closing Date, the Company will not issue or acquire any
equity securities other than securities of a wholly-owned subsidiary, except
that the Company may make short-term investments as contemplated in the "Use of
Proceeds" section of the Prospectus. Except as described in the Registration
Statement, the Company does not have, and at the Closing Date and at the Option
Closing Date will not have, outstanding any options to purchase or rights or
warrants to subscribe for, or any securities or obligations convertible into, or
any contracts or commitments to issue or sell shares of its Preferred Stock,
Common Stock or any such options, warrants, convertible securities or
obligations.

(h) The financial statements and notes thereto included in the
Registration Statement and the Prospectus fairly present the financial position
and the results of operations of the Company at the respective dates and for the
respective periods to which they apply; and such financial statements have been
prepared in conformity with generally accepted accounting principles,

consistently applied throughout the periods involved.

(i) Except as set forth in the Registration Statement, the
Company and each Subsidiary are not, and at the Closing Date and at the Option
Closing Date will not be, in violation or breach of, or default in, the due
performance and observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, note, loan or credit agreement, or any other agreement
or instrument evidencing an obligation for borrowed money, or any other
agreement or instrument to which the Company or any of its Subsidiaries are a
party or by which the Company or any of its Subsidiaries may be bound or to
which any of the property or assets of the Company or any of its Subsidiaries
are subject, which violations, breaches, default or defaults, singularly or in
the aggregate, would have a material adverse effect on the Company or any of its
Subsidiaries. The Company and each of its Subsidiaries have not and will not
have taken any action in material violation of the provisions of the Articles of
Incorporation, as amended, or the Bylaws of the Company or its Subsidiaries or
any statute or any order, rule or regulation of any court or regulatory
authority or governmental body having jurisdiction over or application to the
Company or its Subsidiaries, their businesses or properties.

(j) The Company and each of its Subsidiaries have, and at the
Closing Date and at the Option Closing Date will have, good and marketable title
to all properties and assets described in the Prospectus as owned by them, free
and clear of all liens, charges, encumbrances, claims, security interests,
restrictions and defects of any material nature whatsoever, except such as are
described or referred to in the Prospectus and liens for taxes not yet due and
payable. All of the material leases and subleases under which the Company or any
of its Subsidiaries are the lessor or sublessor of properties or assets or under
which the Company or any of its Subsidiaries hold properties or assets as lessee
as described in the Prospectus are, and will on the Closing Date and the Option
Closing Date be, in full force and effect, and except as described in the
Prospectus, the Company and its Subsidiaries are not and will not be in default
in respect to any of the terms or provisions of any of such leases or subleases
(which would have a material adverse effect on the business, business prospects
or operations of the Company or any of its Subsidiaries taken as a whole), and
no claim has been asserted by anyone adverse to rights of the Company or any of
its Subsidiaries as lessor, sublessor, lessee or sublessee under any of the
leases or subleases mentioned above, or affecting or questioning the right of
the Company or any of its Subsidiaries to continue possession of the leased or
subleased premises or assets under any such lease or sublease except as
described or referred to in the Prospectus, and the Company and each of its
Subsidiaries owns or leases all such properties as are necessary to its
operations as now conducted and, except as otherwise stated in the Prospectus,
as proposed to be conducted set

forth in the Prospectus (which would have a material adverse effect on the
business, business prospects or operations of the Company or any of its
Subsidiaries taken as a whole).

(k) The authorized, issued and outstanding capital stock of
the Company as of September 30, 1997 and as of the date of the Prospectus is as
set forth in the Prospectus under "Capitalization"; the shares of issued and
outstanding capital stock of the Company set forth thereunder have been duly
authorized, validly issued and are fully paid and non-assessable; except as set
forth in the Prospectus, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or agreements or other rights to
convert any obligation into, any shares of capital stock of the Company have
been granted or entered into by the Company; and the Common Stock, the Warrants
and all such options and warrants conform in all material respects, to all
statements relating thereto contained in the Registration Statement and
Prospectus.

(l) Except as described in the Prospectus, the Company does
not own or control any capital stock or securities of, or have any proprietary
interest in, or otherwise participate in any other corporation, partnership,
joint venture, firm, association or business organization; provided, however,
that this provision shall not be applicable to the investment, if any, of the
net proceeds from the sale of the Securities sold by the Company in certificates
of deposits, savings deposits, short-term obligations of the United States
Government, money market instruments or other short-term investments.

(m) To the knowledge of the Company, Grant Thornton LLP and
Staff Maikels & Ciampino who have given their reports on certain financial
statements filed and to be filed with the Commission as a part of the
Registration Statement, which are incorporated in the Prospectus, are with
respect to the Company, independent public accountants as required by the Act
and the Rules and Regulations.

(n) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, and except as may
otherwise be indicated or contemplated herein or therein, the Company has not
(i) issued any securities or incurred any material liability or obligation,
direct or contingent, for borrowed money; or (ii) entered into any material
transaction other than in the ordinary course of business; or (iii) declared or
paid any dividend or made any other distribution on or in respect to its capital
stock.

(o) There is no litigation or governmental proceeding pending
or to the knowledge of the Company or any Subsidiary

threatened against, or involving the properties or business of the Company or
any Subsidiary which might materially adversely affect the value, assets or the
operation of the properties or the business of the Company or any Subsidiary,
except as referred to in the Prospectus. Further, except as referred to in the
Prospectus, there are no pending actions, suits or proceedings related to
environmental matters or related to discrimination on the basis of age, sex,
religion or race, nor is the Company or any Subsidiary charged with or, to its
knowledge, under investigation with respect to any violation of any statutes or
regulations of any regulatory authority having jurisdiction over its business or
operations, and no labor disturbances by the employees of the Company or any
Subsidiary exist or, to the knowledge of the Company or any Subsidiary, have
been threatened.

(p) The Company has, and at the Closing Date and at the Option
Closing Date will have, filed all necessary federal, state and foreign income
and franchise tax returns or has requested extensions thereof (except in any
case where the failure to so file would not have a material adverse effect on
the Company), and has paid all taxes which it believes in good faith were
required to be paid by it except for any such tax that currently is being
contested in good faith or as described in the Prospectus.

(q) The Company has not at any time (i) made any contribution
to any candidate for political office, or failed to disclose fully any such
contribution, in violation of law, or (ii) made any payment to any state,
federal, foreign governmental or professional regulatory agency, officer or
official or other person charged with similar public, quasi-public or
professional regulatory duties, other than payments or contributions required or
allowed by applicable law.

(r) Except as set forth in the Registration Statement, to the
knowledge of the Company, neither the Company nor any of officer, director,
employee or agent of the Company has made any payment or transfer of any funds
or assets of the Company or conferred any personal benefit by use of the
Company's assets or received any funds, assets or personal benefit in violation
of any law, rule or regulation, which is required to be stated in the
Registration Statement or necessary to make the statements therein not
misleading.

(s) On the Closing Date and on the Option Closing Date, all
transfer or other taxes, if any (other than income tax) which are required to be
paid, and are due and payable, in connection with the sale and transfer of the
Securities by the Company to the Underwriters will have been fully paid or
provided for by the Company as the case may be, and all laws imposing such taxes
will have been fully complied with in all material respects.

(t) There are no contracts or other documents of the Company
which are of a character required to be described in the Registration Statement
or Prospectus or filed as exhibits to the Registration Statement which have not
been so described or filed.

(u) The Company will apply the net proceeds from the sale of
the Securities sold by it for the purposes and in the manner set forth in the
Registration Statement and Prospectus under the heading "Use of Proceeds."

(v) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (1) transactions are
executed in accordance with management's general or specified authorizations;
(2) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (3) access to assets is permitted only in
accordance with management's general or specific authorizations; and (4) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

(w) Except as set forth in the Prospectus, no holder of any
securities of the Company has the right to require registration of any
securities because of the filing or effectiveness of the Registration Statement.

(x) The Company has not taken and at the Closing Date will not
have taken, directly or indirectly, any action designed to cause or result in,
or which has constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of the Common Stock or the
Warrants to facilitate the sale or resale of such securities.

(y) To the Company's knowledge, there are no claims for
services in the nature of a finder's origination fee with respect to the sale of
the Securities hereunder, except as set forth in the Prospectus.

(z) No right of first refusal exists with respect to any sale
of securities by the Company.

(aa) No statement, representation, warranty or covenant made
by the Company in this Agreement or made in any certificate or document required
by this Agreement to be delivered to Underwriters was, when made, or as of the
Closing Date or as of the Option Closing Date will be materially inaccurate,
untrue or incorrect.

(bb) The Company and each of its Subsidiaries have generally
enjoyed satisfactory employer/employee relationships with

their respective employees and are in compliance with all federal, state and
local laws and regulations respecting the employment of their respective
employees and employment practices, terms and conditions of employment and wages
and hours relating thereto. To the knowledge of the Company, there are no
pending or threatened investigations involving the Company or any of its
Subsidiaries by the U.S. Department of Labor or any other federal, state or
local agency responsible for the enforcement of such laws and regulations. To
the knowledge of the Company, there are no unfair labor practice charges or
complaints against the Company or any Subsidiary pending before the National
Labor Relations Board or any strikes, picketing, boycotts, disputes, slowdowns
or stoppage pending or threatened against or involving the Company or any
Subsidiary, or any predecessor entity, and none has occurred. No collective
bargaining agreements or modifications thereof are currently in effect or being
negotiated by the Company or any Subsidiary and their respective employees. No
grievance or arbitration proceeding is pending under any expired or existing
collective bargaining agreements of the Company and any Subsidiary.

(cc) The Company has not maintained or contributed to any
deferred compensation, profit sharing, savings, retirement, pension or other
benefit plan or arrangements with or for the benefit of any person resulting
from a relationship with the Company, except as may be disclosed in the
Prospectus.

(dd) The Company is in compliance with all federal and state
laws, rules and regulations relating to consumer protection, occupational safety
and health and to the storage, handling or transportation of hazardous or toxic
materials and the Company has received all permits, licenses or other approvals
required of the Company under applicable federal and state occupational safety
and health and environmental laws and regulations to conduct its business and
the Company is in compliance with all terms and conditions of any such permit,
license or approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals which would not, singly or
in the aggregate, result in a material adverse change in the condition
(financial or otherwise), business, net worth or results of operations of the
Company, except as may be described in or contemplated by the Prospectus.

3. Covenants of the Company.

The Company covenants and agrees that:

(a) It will deliver to the Underwriter, without charge, two
conformed copies of each Registration Statement and of each amendment or
supplement thereto, including all financial statements and exhibits.

(b) The Company has delivered to the Underwriter, and each of
the Selected Dealers (as hereinafter defined) without charge, as many copies as
have been requested of each Preliminary Prospectus heretofore filed with the
Commission in accordance with and pursuant to the Commission's Rule 430 under
the Act and will deliver to the Underwriter and to others whose names and
addresses are furnished by the Underwriter or a Selected Dealer, without charge,
on the Effective Date of the Registration Statement, and thereafter from time to
time during such reasonable period as you may request if, in the opinion of
counsel for the Underwriter, the Prospectus is required by law to be delivered
in connection with sales by the Underwriter or a dealer, as many copies of the
Prospectus (and, in the event of any amendment of or supplement to the
Prospectus, of such amended or supplemented Prospectus) as the Underwriter may
reasonably request for the purposes contemplated by the Act. The Company will
take all necessary actions to furnish to whomever directed by the Underwriter,
when and as requested by the Underwriter, all necessary documents, exhibits,
information, applications, instruments and papers as may be reasonably required
or, in the written opinion of counsel to the Underwriters desirable, in order to
permit or facilitate the sale of the Securities.

(c) The Company has authorized the Underwriter to use, and
make available for use by prospective dealers, the Preliminary Prospectus, and
authorizes the Underwriter, all dealers selected by you in connection with the
distribution of the Securities (the "Selected Dealers") to be purchased by the
Underwriter and all dealers to whom any of such Securities may be sold by the
Underwriter or by any Selected Dealer, to use the Prospectus, as from time to
time amended or supplemented, in connection with the sale of the Securities in
accordance with the applicable provisions of the Act, the applicable Regulations
and applicable state law, until completion of the distribution of the Securities
and for such longer period as you may request if the Prospectus is required
under the Act, the applicable Regulations or applicable state law to be
delivered in connection with sales of the Securities by the Underwriters or the
Selected Dealers.

(d) The Company will use its best efforts to cause the
Registration Statement to become effective and will notify the Underwriter
immediately, and confirm the notice in writing: (i) when the Registration
Statement or any post-effective amendment thereto becomes effective; (ii) of the
issuance by the Commission of any stop order or of the initiation, or to the
best of the Company's knowledge, the threatening, of any proceedings for that
purpose; (iii) the suspension of the qualification of the Securities and the
Underwriter's Warrants, or underlying securities, for offering or sale in any
jurisdiction or of the initiating, or to the best of the Company's knowledge the

threatening, of any proceeding for that purpose; and (iv) of the receipt of any
comments from the Commission. If the Commission shall enter a stop order at any
time, the Company will make every reasonable effort to obtain the lifting of
such order at the earliest possible moment.

(e) During the time when a prospectus is required to be
delivered under the Act, the Company will comply with all requirements imposed
upon it by the Act and the Securities Exchange Act of 1934 (the "Exchange Act"),
as now and hereafter amended and by the Regulations, as from time to time in
force, as necessary to permit the continuance of sales of or dealings in the
Securities in accordance with the provisions hereof and the Prospectus. If at
any time when a prospectus relating to the Securities is required to be
delivered under the Act, any event shall have occurred as a result of which, in
the opinion of counsel for the Company or counsel for the Underwriter, the
Prospectus as then amended or supplemented includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act, the
Company will notify you promptly and prepare and file with the Commission an
appropriate amendment or supplement in accordance with Section 10 of the Act and
will furnish to you copies thereof.

(f) The Company will endeavor in good faith, in cooperation
with you, at or prior to the time the Registration Statement becomes effective,
to qualify the Securities for offering and sale under the securities laws or
blue sky laws of such jurisdictions as you may reasonably designate. In each
jurisdiction where such qualification shall be effected, the Company will,
unless you agree that such action is not at the time necessary or advisable,
file and make such statements or reports at such times as are or may reasonably
be required by the laws of such jurisdiction.

(g) The Company will make generally available to its security
holders, as soon as practicable, but in no event later than the first day of the
fifteenth full calendar month following the Effective Date of the Registration
Statement, an earnings statement of the Company, which will be in reasonable
detail but which need not be audited, covering a period of at least twelve
months beginning after the Effective Date of the Registration Statement, which
earnings statements shall satisfy the requirements of Section 11(a) of the Act
and the Regulations as then in effect. The Company may discharge this obligation
in accordance with Rule 158 of the Regulations.

(h) During the period of five years commencing on the
Effective Date of the Registration Statement, the Company will make

available to its stockholders an annual report (including financial statements
audited by its independent public accountants), in reasonable detail, and, at
its expense, furnish the Underwriter (i) within 90 days after the end of each
fiscal year of the Company, a consolidated balance sheet of the Company and its
consolidated subsidiaries and a separate balance sheet of each subsidiary of the
Company the accounts of which are not included in such consolidated balance
sheet as of the end of such fiscal year, and consolidated statements of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries and separate statements of operations, stockholders'
equity and cash flows of each of the subsidiaries of the Company the accounts of
which are not included in such consolidated statements, for the fiscal year then
ended all in reasonable detail and all certified by independent accountants
(within the meaning of the Act and the Regulations), (ii) within 45 days after
the end of each of the first three fiscal quarters of each fiscal year, similar
balance sheets as of the end of such fiscal quarter and similar statements of
operations, stockholders' equity and cash flows for the fiscal quarter then
ended, all in reasonable detail, and subject to year end adjustment, all
certified by the Company's principal financial officer or the Company's
principal accounting officer as having been prepared in accordance with
generally accepted accounting principles applied on a consistent basis, (iii) as
soon as available, each report furnished to or filed with the Commission or any
securities exchange and each report and financial statement furnished to the
Company's shareholders generally and (iv) as soon as available, such other
material as the Underwriter may from time to time reasonably request regarding
the financial condition and operations of the Company.

(i) For a period of eighteen months from the Closing Date, the
Company, at its expense, shall cause its regularly engaged independent certified
public accountants to review (but not audit), the Company's financial statements
for each of the first three quarters prior to the announcement of quarterly
financial information, the filing of the Company's 10-Q quarterly report and the
mailing of quarterly financial information to stockholders.

(j) Prior to the Closing Date or the Option Closing Date, the
Company will not issue, directly or indirectly, without your prior written
consent and that of counsel for the Underwriter, any press release or other
public announcement or hold any press conference with respect to the Company or
its activities with respect to this Offering.

(k) The Company will deliver to you prior to filing, any
amendment or supplement to the Registration Statement or Prospectus proposed to
be filed after the Effective Date of the Registration Statement and will not
file any such amendment or supplement to

which you shall reasonably object after being furnished such copy.

(l) During the period of 120 days commencing on the date
hereof, the Company will not at any time take, directly or indirectly, any
action designed to, or which will constitute or which might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Securities to facilitate the sale or resale of any of the Securities.

(m) The Company will apply the net proceeds from the Offering
received by it in the manner set forth under "Use of Proceeds" in the
Prospectus.

(n) Counsel for the Company, the Company's accountants, and
the officers and directors of the Company will, respectively, furnish the
opinions, the letters and the certificates referred to in subsections of
Paragraph 9 hereof, and, in the event that the Company shall file any amendment
to the Registration Statement relating to the offering of the Securities or any
amendment or supplement to the Prospectus relating to the offering of the
Securities subsequent to the Effective Date of the Registration Statement, such
counsel, such accountants, such officers and directors, respectively, will, at
the time of such filing or at such subsequent time as you shall specify, so long
as securities being registered by such amendment or supplement are being
underwritten by the Underwriter, furnish to you such opinions, letters and
certificates, each dated the date of its delivery, of the same nature as the
opinions, the letters and the certificates referred to in said Paragraph 9, as
you may reasonably request, or, if any such opinion or letter or certificate
cannot be furnished by reason of the fact that such counsel or such accountants
or any such officer or director believes that the same would be inaccurate, such
counsel or such accountants or such officer or director will furnish an accurate
opinion or letter or certificate with respect to the same subject matter.

(o) The Company will comply with all of the provisions of any
undertakings contained in the Registration Statement in all material respects.

(p) The Company will reserve and keep available for issuance
that maximum number of its authorized but unissued shares of Common Stock which
are issuable upon exercise of the Warrants and issuable upon exercise of the
Underwriter's Warrants (including the underlying securities) outstanding from
time to time.

(q) Following the Effective Date and from time to time
thereafter, so long as the Warrants are outstanding, the Company will timely
prepare and file at its sole cost and expense one or more post-effective
amendments to the Registration Statement or a

new registration statement as required by law as will permit Warrant holders to
be furnished with a current prospectus in the event Warrants are exercised, and
to use its best efforts and due diligence to have same be declared effective.
The Company will deliver a draft of each such post-effective amendment or new
registration statement to the Underwriter at least ten days prior to the filing
of such post-effective amendment or registration statement.

(r) Following the Effective Date and from time to time
thereafter so long as any of the Warrants remain outstanding, the Company will
timely deliver and supply to its Warrant Agent sufficient copies of the
Company's current Prospectus, as will enable such Warrant Agent to deliver a
copy of such Prospectus to any Warrant or other holder where such Prospectus
delivery is by law required to be made.

(s) So long as any of the Warrants remain outstanding, the
Company shall continue to employ the services of a firm of independent certified
public accountants reasonably acceptable to the Underwriter in connection with
the preparation of the financial statements to be included in any registration
statement to be filed by the Company hereunder, or any amendment or supplement
thereto (it being understood that Grant Thornton LLP is acceptable to the
Underwriter). During the same period, the Company shall employ the services of a
law firm(s) suitably experienced in corporate and securities laws in connection
with all legal work of the Company, including the preparation of a registration
statement to be filed by the Company hereunder, or any amendment or supplement
thereto.

(t) So long as any of the Warrants remain outstanding, the
Company shall continue to appoint a Warrant Agent for the Warrants, who shall be
reasonably acceptable to the Underwriter.

(u) The Company agrees that it will, upon the Closing Date,
for a period of no less than three (3) years, engage a designee of the
Underwriter as an advisor (the "Advisor") to its Board of Directors where such
Advisor shall attend meetings of the Board, receive all notices and other
correspondence and communications sent by the Company to members of its Board of
Directors and shall be entitled to receive compensation therefor equal to the
entitlement of all non-employee directors. Such Advisor shall also be entitled
to receive reimbursement for all reasonable costs incurred in attending such
meetings including, but not limited to, food, lodging, and transportation. The
Company further agrees that during said three (3) year period, it shall schedule
no less than four (4) formal and "in person" meetings of its Board of Directors
in each such year and fifteen (15) days advance notice of such meetings shall be
given to the Advisor. Further, during such three (3) year period, the Company
shall give

notice to the Underwriter with respect to any proposed acquisitions, mergers,
reorganizations or other similar transactions. In lieu of the Underwriter's
right to designate an Advisor, the Underwriter shall have the right during such
three-year period, in its sole discretion, to designate one person for election
as a Director of the Company and the Company will utilize its best efforts to
obtain the election of such person who shall be entitled to receive the same
compensation, expense reimbursements and other benefits set forth above.

The Company agrees to indemnify and hold the Underwriter and
such Advisor or Director harmless against any and all claims, actions, damages,
costs and expenses, and judgments arising solely out of the attendance and
participation of your designee at any such meeting described herein. In the
event the Company maintains a liability insurance policy affording coverage for
the acts of its of officers and directors, it agrees, if possible, to include
the Underwriter's designee as an insured under such policy.

(v) Upon the Closing Date, the Company shall have entered into
a two year agreement with the Underwriter in form reasonably satisfactory to the
Underwriter (the "Consulting Agreement"), pursuant to which the Underwriter will
be retained as a management and financial consultant and will be paid an
aggregate fee of $120,000 all of which shall be paid upon the Closing Date.

(w) The Company's Common Stock and Warrants shall be listed on
the Nasdaq SmallCap Market ("Nasdaq"), not later than the Effective Date. Prior
to the Effective Date, the Company will make all filings required, including
registration under the Exchange Act, to obtain the listing of the Common Stock
and Warrants on Nasdaq, and will effect and use its best efforts to maintain
such listing (unless the Company is acquired) for at least five years from the
date of this Agreement.

(x) The Company will apply for listing in Standard and Poors
Corporation Reports or Moodys OTC Guide and shall use its best efforts to have
the Company included in such publications, as soon as is practicable following
the Closing Date and for at least five years from the Closing Date.

(y) For a period of twenty-four (24) months from the Effective
Date, no officer, director or holder of any securities of the Company prior to
the Offering (twelve (12) months with respect to the shares held by Srotnac
Group LLC) will, directly or indirectly, offer, sell (including any short sale),
grant any option for the sale of, acquire any option to dispose of, or otherwise
dispose of any shares of Common Stock into public markets, including shares of
Common Stock issuable upon exercise of options, warrants or any convertible
securities of the Company,

without the prior written consent of the Underwriter, other than as set forth in
the Registration Statement. In the case of Srotnac Group LLC, after such twelve
(12) month period, the shares which they hold may be sold with the Underwriter's
prior written consent, which consent may not be unreasonably withheld; such
consent may be based on, but not limited to, the financial performance of the
Company and market conditions, including the price and trade volume of the
Company's Common Stock. In order to enforce this covenant, the Company shall
impose stop-transfer instructions with respect to the securities owned by every
stockholder prior to the Offering until the end of such period (subject to any
exceptions to such limitation on transferability set forth in the Registration
Statement). Notwithstanding the foregoing, the Company's current stockholders
shall be permitted to make transfers for estate planning purposes or in private
sales, so long as the transferee agrees in writing to be bound by the foregoing
provisions. If necessary to comply with any applicable Blue-sky Law, the shares
held by such stockholders will be escrowed with counsel for the Company or
otherwise as required.

(z) Except for the issuance of shares of capital stock by the
Company in connection with a dividend, recapitalization, reorganization,
acquisition of a business or similar transactions or as result of the exercise
of warrants or options disclosed in or issued or granted pursuant to plans
disclosed in the Registration Statement, the Company shall not, for a period of
twenty-four (24) months following the Closing Date, directly or indirectly,
offer, sell, issue or transfer any shares of its capital stock, or any security
exchangeable or exercisable for, or convertible into, shares of the capital
stock or register any of its capital stock (under any form of registration
statement, including Form S-8), without the prior written consent of the
Underwriter. Options granted pursuant to plans must be exercisable at the fair
market value on the date of grant.

(aa) For so long as any of the Warrants remain outstanding,
the Company shall maintain key person life insurance payable to the Company on
the life of Kevin L. Burkhardt, its Chief Executive Officer, in the amount of
$1,000,000, unless his employment with the Company is earlier terminated. In
such event, the Company will obtain a comparable policy on the life of his
successor for the balance of such period.

(bb) The Company will use its best efforts to obtain, as soon
after the Closing Date as is reasonably possible, liability insurance covering
its officers and directors.

(cc) The Company agrees that any conflict of interest arising
between a member of the Company's Board of Directors and the Company in
connection with such Director's dealing with, or

obligations to, the Company, shall be resolved by a vote of the majority of the
independent members of the Board of Directors.

(dd) The Company agrees that it will employ the services of a
financial public relations firm reasonably acceptable to the Underwriters for a
period of at least twelve months following the Effective Date.

(ee) For a period of two (2) years from the Effective Date, at
the request of the Underwriter, the Company shall provide promptly, at its
expense, copies of the Company's monthly transfer sheets furnished to it by its
transfer agent and copies of the securities positions provided to it by the
Depository Trust Company.

4. Sale, Purchase and Delivery of Securities: Closing Date.

(a) The Company agrees to sell to the Underwriter, and the
Underwriter, on the basis of the warranties, representations and agreements of
the Company herein, and subject to the terms and conditions herein, agrees to
purchase the Securities from the Company at a price of $4.00 per share of Common
Stock and $.10 per Warrant, less an underwriting discount of ten percent (10%)
of the offering price for each security. The Underwriter may allow a concession
not exceeding $.__ per share of Common Stock and $.___ per Warrant to Selected
Dealers who are members of the National Association of Securities Dealers, Inc
("NASD"), and to certain foreign dealers.

(b) Delivery of the Securities and payment therefor shall be
made at 10:00 A.M., New York time on the Closing Date, as hereinafter defined,
at the offices of the Underwriter or such other location as may be agreed upon
by you and the Company. Delivery of certificates for the Common Stock and
Warrants (in definitive form and registered in such names and in such
denominations as you shall request by written notice to the Company delivered at
least two business days' prior to the Closing Date), shall be made to you
against payment of the purchase price therefor by certified or bank check or
wire transfer payable in New York Clearing House funds to the order of the
Company. The Company will make such certificates available for inspection at
least two business days prior to the Closing Date at such place as you shall
designate.

(c) The "Closing Date" shall be ______ __, 1998, or such other
date not later than the sixth business day following the effective date of the
Registration Statement as you shall determine and advise the Company by at least
three full business days' notice, confirmed in writing.

(d) The cost of original issue tax stamps, if any, in
connection with the issuance and delivery of the Securities by the Company to
the Underwriters shall be borne by the Company. The Company will pay and hold
the Underwriters, and any subsequent holder of the Securities, harmless from any
and all liabilities with respect to or resulting from any failure or delay in
paying federal and state stamp taxes, if any, which may be payable or determined
to be payable in connection with the original issuance or sale to the
Underwriters of the Securities or any portions thereof.

5. Sale Purchase and Delivery of Additional Securities: Option Closing
Date.

(a) The Company agrees to sell to the Underwriter, and upon
the basis of the representations, warranties and agreements of the Company
herein contained, subject to the satisfaction of all the terms and conditions of
this Agreement, the Underwriter shall have the option (the "Option") to purchase
the Additional Securities from the Company, at the same price per Security as
set forth in Paragraph 4(a) above. Additional Securities may be purchased solely
for the purpose of covering over-allotments made in connection with the
distribution and sale of the Securities.

(b) The Option to purchase all or part of the Additional
Securities covered thereby is exercisable by you at any time and from time to
time before the expiration of a period of 45 calendar days from the date of the
Effective Date of the Registration Statement (the "Option Period") by written
notice to the Company setting forth the number of Additional Securities for
which the Option is being exercised, the name or names in which the certificates
for such Additional Securities are to be registered and the denominations of
such certificates. Upon each exercise of the Option, the Company shall sell to
the Underwriters the aggregate number of Additional Securities specified in the
notice exercising such Option.

(c) Delivery of the Additional Securities with respect to
which Options shall have been exercised and payment therefor shall be made at
10:00 A.M., New York time on the Option Closing Date, as hereinafter defined, at
the offices of the Underwriter or at such other locations as may be agreed upon
by you and the Company. Delivery of certificates for Additional Securities shall
be made to you against payment of the purchase price therefor by certified or
bank check or wire transfer in New York Clearing House Funds to the order of the
Company. The Company will make certificates for Additional Securities to be
purchased at the Option Closing Date available for inspection at least two
business days prior to such Option Closing Date at such place as you shall
designate.

(d) The "Option Closing Date" shall be the date not later than
five business days after the end of the Option Period as you shall determine and
advise the Company by at least three full business days' notice, unless some
other time is agreed upon between you and the Company.

(e) The obligations of the Underwriter to purchase and pay for
Additional Securities at such Option Closing Date shall be subject to compliance
as of such date with all the conditions specified in Paragraph 2 herein and the
delivery to you of opinions, certificates and letters, each dated such Option
Closing Date, substantially similar in scope to those specified in Paragraph 9
herein.

(f) The cost of original issue tax stamps, if any, in
connection with the issuance and delivery of the Additional Securities by the
Company to the Underwriter shall be borne by the Company. The Company will pay
and hold the Underwriter, and any subsequent holder of Additional Securities,
harmless from any and all liabilities with respect to or resulting from any
failure or delay in paying federal and state stamp taxes, if any, which may be
payable or determined to be payable in connection with the original issuance or
sale to the Underwriter of the Additional Securities or any portion thereof.

6. Warrant Solicitation Fee.

The Company agrees to pay the Underwriter a fee of seven percent (7%)
of the aggregate exercise price of the Warrants if: (i) the market price of the
Common Stock is greater than the exercise price of the Warrants on the date of
exercise; (ii) the exercise of the Warrants are solicited by a member of the
NASD and the customer states in writing that the transaction was solicited and
designates in writing the broker-dealer to receive compensation for the
exercise; (iii) the Warrants are not held in a discretionary account; (iv) the
disclosure of compensation arrangements was made both at the time of the
Offering and at the time of the exercise of the Warrant; and (v) the
solicitation of the Warrant is not in violation of Regulation M promulgated
under the Exchange Act. The Company agrees not to solicit the exercise of any
Warrants other than through the Underwriter and will not authorize any other
dealer to engage in such solicitation without the prior written consent of the
Underwriter which will not be unreasonably withheld. The Warrant solicitation
fee will not be paid in a non-solicited transaction. No Warrant solicitation by
the Underwriter will occur prior to one year from the Effective Date.

7. Representations and Warranties of the Underwriter.

The Underwriter represents and warrants to the Company that:

(a) The Underwriter is a member in good standing of the
National Association of Securities Dealers, Inc., and has complied with all NASD
requirements concerning net capital and compensation to be received in
connection with the Offering.

(b) To the Underwriter's knowledge, there are no claims for
services in the nature of a finder's origination fee with respect to the sale of
the Securities hereunder to which the Company is, or may become, obligated to
pay.

(c) Neither the Underwriter nor its registered representatives
have provided purchasers of the Securities with any information concerning the
Company other than the Preliminary Prospectus and the Prospectus.

8. Payment of Expenses.

(a) The Company will pay and bear all costs, fees, taxes and
expenses incident to and in connection with: (i) the issuance, offer, sale and
delivery of the Securities, including all expenses and fees incident to the
preparation, printing, filing and mailing (including the payment of postage with
respect to such mailing) of the Registration Statement (including all exhibits
thereto), each Preliminary Prospectus, the Prospectus, and amendments and
post-effective amendments thereof and supplements thereto, and this Agreement
and related documents, Preliminary and Final Blue Sky Memoranda, including the
cost of preparing and copying all copies thereof in quantities deemed necessary
by the Underwriters; (ii) the costs of preparing and printing all "Tombstone"
and other appropriate advertisements; (iii) the printing, engraving, issuance
and delivery of the Common Stock, Warrants, Warrant Shares, Additional
Securities, Underwriter's Warrants and the securities underlying the
Underwriter's Warrants, including any transfer or other taxes payable thereon in
connection with the original issuance thereof; (iv) the qualification of the
Common Stock and Warrants under the state or foreign securities or "Blue Sky"
laws selected by the Underwriter and the Company, and disbursements and
reasonable fees of counsel for the Underwriter in connection therewith (not to
exceed $40,000) plus the filing fees for such states; (v) a fee of $15,000 to be
paid to counsel to the Underwriter for the preparation of a secondary trading
memorandum; (vi) fees and disbursements of counsel and accountants for the
Company; (vii) other expenses and disbursements reasonably incurred on behalf of
the Company; (viii) the filing fees payable to the Commission and the National
Association of Securities Dealers, Inc. ("NASD"); and (ix) any listing of the
Common Stock and Warrants on

a securities exchange or on NASDAQ.

(b) In addition to the expenses to be paid and borne by the
Company referred to in Paragraph 8(a) above, the Company shall reimburse you at
closing for expenses incurred by you in connection with the Offering (for which
you need not make any accounting), in the amount of 3% of the price to the
public of the Securities and Additional Securities sold in the Offering. This 3%
non-accountable expense allowance shall cover the fees of your legal counsel,
but shall not include any expenses for which the Company is responsible under
Paragraph 8(a) above, including the reasonable fees and disbursements of your
legal counsel with respect to Blue Sky matters. As of the date hereof, $______
has been advanced by the Company to the Underwriter with respect to such
non-accountable expense allowance.

(c) In the event that the Company does not or cannot, for any
reason whatsoever other than a default by the Underwriter, proceed with the
Offering, or if any of the representations, warranties or covenants contained in
this Agreement are not materially correct or cannot be complied with by the
Company, or business prospects or obligations of the Company are adversely
affected and the Company does not commence or continue with the Offering at any
time or terminates the proposed transaction prior to the Closing Date, the
Company shall reimburse the Underwriter on an accountable basis for all
out-of-pocket expenses actually incurred in connection with the Underwriting,
this Agreement and all of the transactions hereby contemplated (including,
without limitation, your legal fees and expenses).

9. Conditions of Underwriter's Obligations.

The obligations of the Underwriter to consummate the transactions
contemplated by this Agreement shall be subject to the continuing accuracy of
the representations and warranties of the Company contained herein as of the
date hereof and as of the Closing Date, the accuracy of the statements of the
Company and its officers and directors made pursuant to the provisions hereof,
and to the performance by the Company of its covenants and agreements hereunder
and under each certificate, opinion and document contemplated hereunder and to
the following additional conditions:

(a) The Registration Statement shall have become effective not
later than 5:00 p.m., New York time, on the date following the date of this
Agreement, or such later date and time as shall be consented to in writing by
you and, on or prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement or the qualification or registration
of the Securities under the securities laws of any jurisdiction shall have been
issued and no proceedings for that purpose shall have been

instituted or shall be pending or to your knowledge or the knowledge of the
Company, shall be contemplated by the Commission or any such authorities of any
jurisdiction and any request on the part of the Commission or any such
authorities for additional information shall have been complied with to the
reasonable satisfaction of the Commission or such authorities and counsel to the
Underwriter and after the date hereof no amendment or supplement shall have been
filed to the Registration Statement or Prospectus without your prior consent.

(b) The Registration Statement or the Prospectus or any
amendment thereof or supplement thereto shall not contain an untrue statement of
a fact which is material, or omit to state a fact which is material and is
required to be stated therein or is necessary to make the statements therein,
not misleading.

(c) Between the time of the execution and delivery of this
Agreement and the Closing Date, there shall be no litigation instituted against
the Company or any of its officers or directors and between such dates there
shall be no proceeding instituted or, to the Company's knowledge, threatened
against the Company or any of its officers or directors before or by any
federal, state or county commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, in which litigation or proceeding
an unfavorable ruling, decision or finding would have a material adverse effect
on the Company or its business, business prospects or properties, or have a
material adverse effect on the financial condition or results of operation of
the Company.

(d) Each of the representations and warranties of the Company
contained herein and each certificate and document contemplated under this
Agreement to be delivered to you shall be true and correct at the Closing Date
as if made at the Closing Date, and all covenants and agreements contained
herein and in each such certificate and document to be performed on the part of
the Company, and all conditions contained herein and in each such certificate
and document to be fulfilled or complied with by the Company at or prior to the
Closing Date shall be fulfilled or complied with.

(e) At the Closing Date, you shall have received the opinion
of Bondy & Schloss LLP, counsel to the Company, dated as of such Closing Date,
addressed to the Underwriter and in form and substance satisfactory to counsel
to the Underwriter, to the effect that:

(i) The Company and each of its Subsidiaries are
corporations duly organized, validly existing and in good standing under the
laws of the jurisdiction of their incorporation with full corporate power and
authority, and all licenses, permits,

certifications, registrations, approvals, consents and franchises to own or
lease and operate their properties and to conduct their businesses as described
in the Registration Statement. The Company and each of its Subsidiaries are duly
qualified to do business as foreign corporations and are in good standing in all
jurisdictions wherein such qualification is necessary and failure so to qualify
could have a material adverse effect on the financial condition, results of
operations, business or properties of the Company and each of its Subsidiaries;

(ii) The Company has full corporate power and
authority to execute, deliver and perform the Underwriting Agreement, the
Consulting Agreement, the Warrant Agreement and the Underwriter's Warrants and
to consummate the transactions contemplated thereby. The execution, delivery and
performance of the Underwriting Agreement, the Consulting Agreement, the Warrant
Agreement and the Underwriter's Warrants by the Company, the consummation by the
Company of the transactions therein contemplated and the compliance by the
Company with the terms of the Underwriting Agreement, the Consulting Agreement,
the Warrant Agreement and the Underwriter's Warrants have been duly authorized
by all necessary corporate action, and each of the Underwriting Agreement, the
Consulting Agreement, the Warrant Agreement and the Underwriter's Warrants have
been duly executed and delivered by the Company. Each of the Underwriting
Agreement, the Consulting Agreement, the Warrant Agreement and the Underwriter's
Warrants is a valid and binding obligation of the Company, enforceable in
accordance with their respective terms, subject, as to enforcement of remedies,
to applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the rights of creditors generally and the discretion of courts in
granting equitable remedies and except that enforceability of the
indemnification provisions and the contribution provisions set forth in the
Underwriting Agreement may be limited by the federal securities laws or public
policy underlying such laws;

(iii) The execution, delivery and performance of the
Underwriting Agreement, the Consulting Agreement, the Warrant Agreement and the
Underwriter's Warrants by the Company, the consummation by the Company of the
transactions therein contemplated and the compliance by the Company with the
terms of the Underwriting Agreement, the Consulting Agreement, the Warrant
Agreement and the Underwriter's Warrants do not, and will not, with or without
the giving of notice or the lapse of time, or both, (A) result in a violation of
the Articles of Incorporation, as the same may be amended, or Bylaws of the
Company or any of its Subsidiaries, (B) to the best of our knowledge, result in
a breach of, or conflict with, any terms or provisions of or constitute a
default under, or result in the modification or termination of, or result in the
creation or imposition of any lien, security

interest, charge or encumbrance upon any of the properties or assets of the
Company or any of its Subsidiaries pursuant to, any indenture, mortgage, note,
contract, commitment or other material agreement or instrument to which the
Company or any of its Subsidiaries are a party or by which the Company or any of
its Subsidiaries or any of their properties or assets are or may be bound or
affected, except where any of the foregoing would not result in a material
adverse effect upon the Company's or any Subsidiaries business or operations;
(C) to the best of our knowledge, violate any existing applicable law, rule or
regulation or judgment, order or decree known to us of any governmental agency
or court, domestic or foreign, having jurisdiction over the Company or any of
its Subsidiaries or any of their properties or businesses; or (D) to the best of
our knowledge, have any effect on any permit, certification, registration,
approval, consent, license or franchise necessary for the Company or any of its
Subsidiaries to own or lease and operate their properties and to conduct their
business or the ability of the Company or any of its Subsidiaries to make use
thereof;

(iv) To the best of our knowledge, no authorization,
approval, consent, order, registration, license or permit of any court or
governmental agency or body (other than under the Act, the Regulations and
applicable state securities or Blue Sky laws) is required for the valid
authorization, issuance, sale and delivery of the Securities, the Additional
Securities, the Common Stock, the Warrants, the Warrant Shares, or the
Underwriter's Warrants, and the consummation by the Company of the transactions
contemplated by the Underwriting Agreement, the Consulting Agreement, the
Warrant Agreement or the Underwriter's Warrants;

(v) The Registration Statement was declared effective
under the Act on ______ __, 1998; to the best our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued, and
no proceedings for that purpose have been instituted or are pending, threatened
or contemplated under the Act or applicable state securities laws;

(vi) The Registration Statement and the Prospectus,
as of the Effective Date (except for the financial statements and other
financial data included therein or omitted therefrom, as to which we express no
opinion), comply as to form in all material respects with the requirements of
the Act and Regulations and the conditions for use of a registration statement
on Form SB-2 have been satisfied by the Company;

(vii) The description in the Registration Statement
and the Prospectus of statutes, regulations, contracts and other documents have
been reviewed by us, and, based upon such review,

are accurate in all material respects and present fairly the information
required to be disclosed, and to the best of our knowledge, there are no
material statutes or regulations, or, to the best of our knowledge, material
contracts or documents, of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement, which are not so described or filed as required.

To the best of our knowledge, none of the material
provisions of the contracts or instruments described above violates any existing
applicable law, rule or regulation or judgment, order or decree known to us of
any United States governmental agency or court having jurisdiction over the
Company or any of its assets or businesses;

(viii) The outstanding Common Stock and Warrants have
been duly authorized and validly issued. The outstanding Common stock is fully
paid an nonassessable. To the best of our knowledge, none of the outstanding
Common Stock has been issued in violation of the preemptive rights of any
stockholder of the Company. None of the holders of the outstanding Common Stock
is subject to personal liability solely by reason of being such a holder. The
authorized Common Stock conforms to the description thereof contained in the
Registration Statement and Prospectus. To the best of our knowledge, except as
set forth in the Prospectus, no holders of any of the Company's securities has
any rights, "demand," "piggyback" or otherwise, to have such securities
registered under the Act;

(ix) The issuance and sale of the Securities, the
Additional Securities, the Common Stock, the Warrants, the Warrant Shares and
the Underwriter's Warrants have been duly authorized and when issued and paid
for in accordance with the Underwriting Agreement or the respective Warrants
will be validly issued, fully paid and nonassessable, and the holders thereof
will not be subject to personal liability solely by reason of being such
holders. Neither the Securities, the Additional Securities, nor the Common Stock
are subject to preemptive rights of any stockholder of the Company. The
certificates representing the Securities are in proper legal form;

(x) The issuance and sale of the Warrant Shares and
the Underwriter's Warrants have been duly authorized and, when paid for, issued
and delivered pursuant to the terms of the Warrant Agreement or the
Underwriter's Warrants, as the case may be, the Warrants and the Underwriter's
Warrants will constitute the valid and binding obligations of the Company,
enforceable in accordance with their terms, to issue and sell the Warrants, the
Warrant Shares and/or Underwriter's Warrants. All corporate action required to
be taken for the authorization, issuance and sale of the

securities has been duly, validly and sufficiently taken. The Common Stock and
the Warrants have been duly authorized by the Company to be offered in the form
of the Securities. The Warrants, the Warrant Shares and the Underwriter's
Warrants conform to the descriptions thereof contained in the Registration
Statement and Prospectus;

(xi) The Underwriter has acquired good title to the
Securities, free and clear of all liens, encumbrances, equities, security
interests and claims, provided that the Underwriter is a bona fide purchaser as
defined in 'SS'8-302 of the Uniform Commercial Code;

(xii) Assuming that the Underwriter exercises the
over-allotment option to purchase the Additional Securities and make payments
therefor in accordance with the terms of the Underwriting Agreement, upon
delivery of the Additional Securities to the Underwriter thereunder, the
Underwriter will acquire good title to the Additional Securities, free and clear
of any liens, encumbrances, equities, security interests and claims, provided
that the Underwriter is a bona fide purchaser as defined in 'SS'8-302 of the
Uniform Commercial Code;

(xiii) To the best of our knowledge, there are no
claims, actions, suits, proceedings, arbitrations, investigations or inquiries
before any governmental agency, court or tribunal, foreign or domestic, or
before any private arbitration tribunal, pending or threatened against the
Company or any of its Subsidiaries or involving their properties or businesses,
other than as described in the Prospectus, such description being accurate, and
other than litigation incident to the kind of business conducted by the Company
or any of its Subsidiaries which, individually and in the aggregate, is not
material, and, except as otherwise disclosed in the Prospectus and the
Registration Statement, the Company and its Subsidiaries have complied with all
federal and state laws, statutes and regulations concerning its business;

(xiv) All sales of the Company's securities have been
made in compliance with or under an exemption from the registration requirements
of the Act, and no purchaser of such securities in any such sale has a right of
action against the Company for failure to comply with the registration or filing
requirements of any state; and

(xv) We have participated in reviews and discussions
in connection with the preparation of the Registration Statement and the
Prospectus. Although we are not passing upon and do not assume responsibility
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement,

no facts came to our attention which lead us to believe that (A) the
Registration Statement (except as to the financial statements and other
financial data contained therein, as to which we express no opinion), on the
Effective Date, contained any untrue statement of a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or that (B) the
Prospectus (except as to the financial statements and other financial data
contained therein, as to which we express no opinion) contains any untrue
statement or a material fact or omits to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;

(f) At the Closing Date, you shall have received the opinion
of _____________________, government regulatory counsel to the Company, dated as
of such Closing Date, addressed to the Underwriter and in form and substance
satisfactory to counsel to the Underwriter, to the effect that they have
carefully read and analyzed the material set forth under "Risk Factors -
Government Regulation" and "Business - Government Regulation," and in their
opinion such disclosure accurately reflects the present status of all regulatory
matters which relate to the Company's business, and that the Company is in
compliance with all regulatory requirements applicable to its business,
including regulations promulgated by the Federal Aviation Administration and the
Occupational Safety and Health Administration.

(g) On or prior to the Closing Date, counsel for the
Underwriter shall have been furnished such documents, certificates and opinions
as they may reasonably require for the purpose of enabling them to review the
matters referred to in subparagraph (e) and (f) of this Paragraph 9, or in order
to evidence the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained.

(h) Prior to the Closing Date:

(i) There shall have been no material adverse change
in the condition or prospects or the business activities, financial or
otherwise, of the Company from the latest dates as of which such condition is
set forth in the Registration Statement and Prospectus;

(ii) There shall have been no transaction, outside
the ordinary course of business, entered into by the Company from the latest
date as of which the financial condition of the Company is set forth in the
Registration Statement and Prospectus which is material to the Company, which is
either (x) required to be disclosed in the Prospectus or Registration Statement
and is not so

disclosed, or (y) likely to have a material adverse effect on the Company's
business or financial condition;

(iii) The Company shall not be in default under any
material provision of any instrument relating to any outstanding indebtedness,
except as described in the Prospectus;

(iv) No material amount of the assets of the Company
shall have been pledged, mortgaged or otherwise encumbered, except as set forth
in the Registration Statement and Prospectus;

(v) No action, suit or proceeding, at law or in
equity, shall have been pending or to its knowledge threatened against the
Company or affecting any of its properties or businesses before or by any court
or federal or state commission, board or other administrative agency wherein an
unfavorable decision, ruling or finding would materially and adversely affect
the business, operations, prospects or financial condition or income of the
Company, taken as a whole, except as set forth in the Registration Statement and
Prospectus;

(vi) No stop order shall have been issued under the
Act and no proceedings therefor shall have been initiated or, to the Company's
knowledge, threatened by the Commission; and

(vii) Each of the representations and warranties of
the Company contained in this Agreement and in each certificate and document
contemplated under this Agreement to be delivered to you was, when originally
made and is at the time such certificate is dated, true and correct.

(i) Concurrently with the execution and delivery of this
Agreement and at the Closing Date, you shall have received a certificate of the
Company signed by the Chief Executive Officer of the Company and the principal
financial officer of the Company, dated as of the Closing Date, to the effect
that the conditions set forth in subparagraph (h) above have been satisfied and
that, as of the Closing Date, the representations and warranties of the Company
set forth in Paragraph 2 herein and the statements in the Registration Statement
and Prospectus were and are true and correct in all material respects. Any
certificate signed by any officer of the Company and delivered to you or for
counsel for the Underwriter shall be deemed a representation and warranty by the
Company to the Underwriter as to the statements made therein.

(j) At the time this Agreement is executed, and at the Closing
Date, you shall have received a "cold comfort" letter, addressed to the
Underwriter and in form and substance satisfactory in all respects to you and
counsel for the Underwriter, from Grant Thornton LLP and Staff, Maikels &
Ciampino, P.C., dated as of the

date of this Agreement and as of the Closing Date.

(k) All proceedings taken in connection with the
authorization, issuance or sale of the Common Stock, Warrants, Warrant Shares,
Additional Securities, the Underwriter's Warrants and the Underwriter's Warrant
Shares as herein contemplated shall be satisfactory in form and substance to you
and to counsel to the Underwriter, and the Underwriter shall have received from
such counsel an opinion, dated as the Closing Date with respect to such of these
proceedings as you may reasonably require.

(l) The Company shall have furnished to you such certificates,
additional to those specifically mentioned herein, as you may have reasonably
requested in a timely manner as to the accuracy and completeness, at the Closing
Date, of any statement in the Registration Statement or the Prospectus, as to
the accuracy, at the Closing Date, of the representations and warranties of the
Company herein and in each certificate and document contemplated under this
Agreement to be delivered to you, as to the performance by the Company of its
obligations hereunder and under each such certificate and document or as to the
fulfillment of the conditions concurrent and precedent to your obligations
hereunder.

(m) The obligation of the Underwriter to purchase Additional
Securities hereunder is subject to the accuracy of the representations and
warranties of the Company contained herein on and as of the Option Closing Date
and to the satisfaction on and as of the Option Closing Date of the conditions
set forth herein.

(n) On the Closing Date there shall have been duly tendered to
you for your account the appropriate number of shares of Common Stock and
Warrants constituting the Securities.

(o) No action shall have been taken by the Commission or the
NASD the effect of which would make it improper, at any time prior to the
Closing Date, for members of the NASD to execute transactions (as principal or
agent) in the Securities and no proceedings for the taking of such action shall
have been instituted or shall be pending, or, to the knowledge of the
Underwriter or the Company, shall be contemplated by the Commission or the NASD.
The Company and the Underwriter represent that at the date hereof each has no
knowledge that any such action is in fact contemplated against it by the
Commission or the NASD.

(p) Prior to the Effective Date, the Company will make all
filings required, including registration under the Exchange Act, to obtain the
listing of the Common Stock and Warrants on the Nasdaq SmallCap market.

(q) If any of the conditions herein provided for in this
Paragraph shall not have been fulfilled in all material respects as of the date
indicated, this Agreement and all obligations of the Underwriter under this
Agreement may be canceled at, or at any time prior to, each Closing Date by the
Underwriter notifying the Company of such cancellation in writing or by telegram
at or prior to the applicable Closing Date. Any such cancellation shall be
without liability of the Underwriter to the Company.

10. Indemnification and Contribution.

(a) Subject to the conditions set forth below, the Company
agrees to indemnify and hold harmless the Underwriter and each person, if any,
who controls the Underwriters ("controlling person") within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act, against any and
all losses, liabilities, claims, damages, actions and expenses or liability,
joint or several, whatsoever (including but not limited to any and all expense
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever), joint or
several, to which it or such controlling persons may become subject under the
Act, the Exchange Act or under any other statute or at common law or otherwise
or under the laws of foreign countries, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any Preliminary Prospectus or the Prospectus (as from
time to time amended and supplemented); in any post-effective amendment or
amendments or any new registration statement and prospectus in which is included
the Warrant Shares of the Company issued or issuable upon exercise of the
Warrants, or Underwriter's Warrants Shares upon exercise of the Underwriter's
Warrants; or in any application or other document or written communication (in
this Paragraph 10 collectively called "application") executed by the Company or
based upon written information furnished by the Company filed in any
jurisdiction in order to qualify the Common Stock, Warrants, Warrant Shares,
Additional Securities, Underwriter's Warrants and Underwriter's Warrant Shares
(including the Shares issuable upon exercise of the Warrants underlying the
Underwriter's Warrants) under the securities laws thereof or filed with the
Commission or any securities exchange; or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading (in the case of the Prospectus, in the
light of the circumstances under which they were made), unless such statement or
omission was made in reliance upon or in conformity with written information
furnished to the Company with respect to the Underwriter by or on behalf of the
Underwriter expressly for use in any Preliminary Prospectus, the Registration
Statement or Prospectus, or any amendment or supplement thereof, or in
application, as the case may

be. Notwithstanding the foregoing, the Company shall have no liability under
this Paragraph 10(a) if any such untrue statement or omission made in a
Preliminary Prospectus, is cured in the Prospectus and the Underwriter failed to
deliver to the person or persons alleging the liability upon which
indemnification is being sought, at or prior to the written confirmation of such
sale, a copy of the Prospectus. This indemnity will be in addition to any
liability which the Company may otherwise have.

(b) The Underwriter agrees to indemnify and hold harmless the
Company and each of the officers and directors of the Company who have signed
the Registration Statement and each other person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
the Underwriter in Paragraph 10(a), but only with respect to any untrue
statement or alleged untrue statement of any material fact contained in or any
omission or alleged omission to state a material fact required to be stated in
any Preliminary Prospectus, the Registration Statement or Prospectus or any
amendment or supplement thereof or necessary to make the statements therein not
misleading or in any application made solely in reliance upon, and in conformity
with, written information furnished to the Company by you specifically expressly
for use in the preparation of such Preliminary Prospectus, the Registration
Statement or Prospectus directly relating to the transactions effected by the
Underwriters in connection with this Offering. This indemnity agreement will be
in addition to any liability which the Underwriter may otherwise have.
Notwithstanding the foregoing, the Underwriter shall have no liability under
this Paragraph 10(b) if any such untrue statement or omission made in a
Preliminary Prospectus is cured in the Prospectus, and the Prospectus is
delivered to the person or persons alleging the liability upon which
indemnification is being sought.

(c) If any action is brought against any indemnified party
(the "Indemnitee") in respect of which indemnity may be sought against another
party pursuant to the foregoing (the "Indemnitor"), the Indemnitor shall assume
the defense of the action, including the employment and fees of counsel
(reasonably satisfactory to the Indemnitee) and payment of expenses. Any
Indemnitee shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
Indemnitee unless the employment of such counsel shall have been authorized in
writing by the Indemnitor in connection with the defense of such action. If the
Indemnitor shall have employed counsel to have charge of the defense or shall
previously have assumed the defense of any such action or claim, the Indemnitor
shall not thereafter be liable to any Indemnitee in investigating, preparing or
defending any such action or claim.

Each Indemnitee shall promptly notify the Indemnitor of the commencement of any
litigation or proceedings against the Indemnitee in connection with the issue
and sale of the Common Stock, Warrants, Warrants Shares, Additional Securities,
Underwriter's Securities or in connection with the Registration Statement or
Prospectus.

(d) In order to provide for just and equitable contribution
under the Act in any case in which: (i) the Underwriter makes a claim for
indemnification pursuant to Paragraph 10 hereof, but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction
and the time to appeal has expired or the last right of appeal has been denied)
that such indemnification may not be enforced in such case notwithstanding the
fact that this Paragraph 10 provides for indemnification of such case; or (ii)
contribution under the Act may be required on the part of the Underwriter in
circumstances for which indemnification is provided under this Paragraph 10,
then, and in each such case, the Company and the Underwriter shall contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after any contribution from others) in such proportion so that the
Underwriter is responsible for the portion represented by dividing the total
compensation received by the Underwriter herein by the total purchase price of
all Securities sold in the public offering and the Company is responsible for
the remaining portion; provided, that in any such case, no person guilty of a
fraudulent misrepresentation (within the meaning of Section 11 (f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

The foregoing contribution agreement shall in no way affect
the contribution liabilities of any persons having liability under Section 11 of
the Act other than the Company and the Underwriter. As used in this Paragraph
10, the term "Underwriter" includes any officer, director, or other person who
controls the Underwriter within the meaning of Section 15 of the Act, and the
word "Company" includes any of officer, director or person who controls the
Company within the meaning of Section 15 of the Act. If the full amount of the
contribution specified in this paragraph is not permitted by law, then the
Underwriter and each person who controls the Underwriter shall be entitled to
contribution from the Company to the full extent permitted by law. No
contribution shall be requested with regard to the settlement of any matter from
any party who did not consent to the settlement.

(e) Within fifteen (15) days after receipt by any party to
this Agreement (or its representative) of notice of the commencement of any
action, suit or proceeding, such party will, if a claim for contribution in
respect thereof is made against another

party (the "contributing party"), notify the contributing party of the
commencement thereof, but the omission so to notify the contributing party will
not relieve it from any liability it may have to any other party other than for
contribution hereunder.

In case any such action, suit or proceeding is brought against
any party, and such party notifies a contributing party or his or its
representative of the commencement thereof within the aforesaid fifteen (15)
days, the contributing party will be entitled to participate therein with the
notifying party and any other contributing party similarly notified. Any such
contributing party shall not be liable to any party seeking contribution on
account of any settlement of any claim, action or proceeding effected by such
party seeking contribution without the written consent of such contributing
party. The indemnification provisions contained in this Paragraph 10 are in
addition to any other rights or remedies which either party hereto may have with
respect to the other or hereunder.

11. Representations, Warranties, Agreements to Survive Delivery.

The respective indemnity and contribution agreements by the Underwriter
and the Company contained in Paragraph 10 hereof, and the covenants,
representations and warranties of the Company and the Underwriter set forth in
this Agreement, shall remain operative and in full force and effect regardless
of (i) any investigation made by the Underwriter or on its behalf or by or on
behalf of any person who controls the Underwriter, or by the Company or any
controlling person of the Company or any director or any of officer of the
Company, (ii) acceptance of any of the Securities and payment therefor, or (iii)
any termination of this Agreement, and shall survive the delivery of the
Securities and any successor of the Underwriter or the Company, or of any person
who controls you or the Company or any other indemnified party, as the case may
be, shall be entitled to the benefit of such respective indemnity and
contribution agreements. The respective indemnity and contribution agreements by
the Underwriter and the Company contained in this Paragraph 11 shall be in
addition to any liability which the Underwriter and the Company may otherwise
have.

12. Effective Date of This Agreement and Termination Thereof.

(a) This Agreement shall become effective at 10:00 A.M., New
York time, on the first full business day following the day on which you and the
Company receive notification that the Registration Statement became effective.

(b) This Agreement may be terminated by the Underwriter by
notifying the Company at any time on or before the Closing Date,

if any domestic or international event or act or occurrence has materially
disrupted, or in your opinion will in the immediate future materially disrupt,
securities markets; or if trading on the New York Stock Exchange, the American
Stock Exchange, or in the over-the-counter market shall have been suspended, or
minimum or maximum prices for trading shall have been fixed, or maximum ranges
for prices for securities shall have been required on the over-the-counter
market by the NASD or NASDAQ or by order of the Commission or any other
governmental authority having jurisdiction; or if a moratorium in foreign
exchange trading by major international banks or persons has been declared; or
if the Company shall have sustained a loss material or substantial to the
Company taken as a whole by fire, flood, accident, hurricane, earthquake, theft,
sabotage or other calamity or malicious act which, whether or not such loss
shall have been insured, will, in your opinion, make it inadvisable to proceed
with the delivery of the Securities; or if there shall have been a material
adverse change in the conditions of the securities market in general, as in your
reasonable judgment would make it inadvisable to proceed with the offering, sale
and delivery of the Securities; or if there shall have been a material adverse
change in the financial or securities markets, particularly in the
over-the-counter market, in the United States having occurred since the date of
this Agreement; or your clearing agent has refused to grant you credit in
connection with the purchase of the Common Stock and Warrants; or the NASDAQ
Stock Market, Inc. has refused to release the Common Stock and Warrants for
trading on the Nasdaq SmallCap market.

(c) If you elect to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Paragraph 12, the
Company shall be notified promptly by you by telephone or facsimile, confirmed
by letter.

(d) If this Agreement shall not become effective or if this
Agreement shall not be carried out within the time specified herein by reason of
any failure on the part of the Company to perform any undertaking, or to
materially satisfy any condition of this Agreement by it to be performed or
satisfied, the sole liability of the Company to the Underwriter, in addition to
the obligations assumed by the Company pursuant to Paragraph 8 herein, will be
to reimburse the Underwriter for the following: (i) Blue Sky counsel fees and
expenses to the extent set forth in Paragraph 8(a)(iv); (ii) Blue Sky filing
fees; and (iii) such reasonable out-of-pocket expenses of the Underwriter
(including the fees and disbursements of their counsel), to the extent set forth
in Paragraph 8(c), in connection with this Agreement and the proposed offering
of the Securities.

Notwithstanding any contrary provision contained in this
Agreement, any election hereunder or any termination of this

Agreement, and whether or not this Agreement is otherwise carried out, the
provisions of Paragraph 8 and 10 hereof shall not be in any way affected by such
election or termination or failure to carry out the terms of this Agreement or
any part hereof.

13. Notices.

All communications hereunder, except as herein otherwise specifically
provided, shall be in writing and, if sent to the Underwriter, shall be mailed,
delivered or telegraphed and confirmed to the Underwriter at First Liberty
Investment Group, Inc., 615 Chestnut Street, Philadelphia, Pennsylvania 19106,
Attention: President, with a copy thereof to Lawrence G. Nusbaum, Esq., Gusrae
Kaplan & Bruno, 120 Wall Street, New York, New York 10005, and, if sent to the
Company, shall be mailed, delivered or telegraphed and confirmed to the Company
at 7211 S. Peoria Street, Littleton, Colorado 80112, Attention: Kevin L.
Burkhardt, President, with a copy thereof to Bondy & Schloss LLP, 6 East 43rd
Street, New York, New York 10017, Attention: Gerald A. Adler, Esq.

14. Parties.

This Agreement shall inure solely to the benefit of and shall be
binding upon, the Underwriter, the Company and the controlling persons,
directors and officers referred to in Paragraph 10 hereof, and their respective
successors, legal representatives and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.

15. Construction.

This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York and shall supersede any
agreement or understanding, oral or in writing, express or implied, between the
Company and you relating to the sale of any of the Securities.

16. Jurisdiction and Venue.

The Company agrees that the courts of the State of New York shall have
jurisdiction over any litigation arising from this Agreement, and venue shall be
proper in the Southern District of New York.

17. Counterparts.

This agreement may be executed in counterparts.

If the foregoing correctly sets forth the understanding
between the Underwriter and the Company, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement between us.

Very truly yours,

PROFLIGHT MEDICAL RESPONSE, INC.

By:_____________________________
Kevin L. Burkhardt, President

Accepted as of the date first above written:

FIRST LIBERTY INVESTMENT GROUP, INC.

By:_________________________________

<PAGE>

SELECTED DEALERS AGREEMENT

PROFLIGHT MEDICAL RESPONSE, INC.

1,550,000 shares of Common Stock
and

1,550,000 Redeemable Common Stock Purchase Warrants

SELECTED DEALERS AGREEMENT

______ __, 1998

Dear Sirs:

First Liberty Investment Group, Inc., the underwriter (the
"Underwriter") named in the Prospectus dated _______ __, 1998, has agreed to
purchase, subject to the terms and conditions set forth in the Underwriting
Agreement referred to in the Prospectus, an aggregate of 1,550,000 shares of
common stock, par value $.001 per share (the "Common Stock"), and 1,550,000
redeemable common stock purchase warrants (the "Warrants") of Proflight Medical
Response, Inc. (the "Company"), and up to 232,500 additional shares of Common
Stock and 232,500 additional Warrants (the "Additional Securities"), pursuant to
an option for the purpose of covering over-allotments (said 1,550,000 shares of
Common Stock and 1,550,000 Warrants plus any of said Additional Securities
purchased upon exercise of the option being herein collectively called the
"Securities"). The Securities and the terms upon which they are to be offered
for sale by the Underwriter are more particularly described in the Prospectus.

1. The Securities are to be offered to the public by the Underwriter at
a price of $4.00 per share of Common Stock and $.10 per Warrant (herein called
the "Public Offering Price") and in accordance with the terms of the offering
set forth in the Prospectus.

2. The Underwriter is offering, subject to the terms and conditions
hereof, a portion of the Securities for sale to certain dealers which are
members of the National Association of Securities Dealers, Inc. and agree to
comply with the provisions of Rule 2740 of the NASD Conduct Rules, and to
foreign dealers or institutions ineligible for membership in said Association
which agree (a) not to resell Securities (i) to purchasers located in, or to
persons who are nationals of, the United States of America or (ii) when there is
a public demand for the Securities to persons specified as those to whom members
of said Association participating in a distribution may not sell; and (b) to
comply, as though such foreign dealer or institution were a member of such
Association,

with Rules 2730 and 2750 of the NASD Conduct Rules (such dealers and
institutions agreeing to purchase Common Stock and/or Warrants hereunder being
hereinafter referred to as "Selected Dealers") at the Public Offering Price less
a selling concession of $.__ per share of Common Stock and $.___ per Warrant,
payable as hereinafter provided. The Underwriter may be included among the
Selected Dealers.

3. The Underwriter shall act as your representative under this
Agreement and shall have full authority to take such action as they may deem
advisable in respect to all matters pertaining to the public offering of the
Securities.

4. If you desire to purchase any of the Securities, your application
should reach us promptly by telephone or facsimile at the office of the
Underwriter, and we will use our best efforts to fill the same. We reserve the
right to reject all subscriptions in whole or in part, to make allotments and to
close the subscription books at any time without notice. The shares of Common
Stock and the Warrants allotted to you will be confirmed, subject to the terms
and conditions of this Agreement.

5. The privilege of purchasing the shares of Common Stock and the
Warrants is extended to you by the Underwriter only if they may lawfully sell
the Securities to dealers in your state.

6. Any of the shares of Common Stock and Warrants purchased by you
under the terms of this Agreement may be immediately reoffered to the public in
accordance with the terms of the offering set forth herein and in the
Prospectus, subject to the securities laws of the various states. Neither you
nor any other person is or has been authorized to give any information or to
make any representations in connection with the sale of Securities other than as
contained in the Prospectus.

7. This Agreement will terminate when we shall have determined that the
public offering of the Securities has been completed and upon telegraphic notice
to you of such termination, but, if not previously terminated, this Agreement
will terminate at the close of business on the 20th full business day after the
date hereof; provided, however, that we shall have the right to extend this
Agreement for an additional period or periods not exceeding 20 full business
days in the aggregate upon telegraphic notice to you. Promptly after the
termination of this Agreement there shall become payable to you the selling
concession on all shares of Common Stock and Warrants which you shall have
purchased hereunder and which shall not have been purchased or contracted for
(including certificates issued upon transfer) by us, in the open market or
otherwise (except pursuant to Section 10 hereof), during the terms of this
Agreement for the account of the Underwriter.

8. For the purpose of stabilizing the market in the Common Stock and
Warrants of the Company, we have been authorized to make purchases and sales
thereof, in the open market or otherwise, and, in arranging for sale of the
Securities, to over-allot.

9. You agree to advise us from time to time, upon request, prior to the
termination of this Agreement, of the number of Securities purchased by you
hereunder and remaining unsold at the time of such request, and, if in our
opinion any such Securities shall be needed to make delivery of the Securities
sold or over- allotted for the account of the Underwriter, you will, forthwith
upon our request, grant to us, or such party as we determine for, our account
the right, exercisable promptly after receipt of notice from you that such right
has been granted, to purchase, at the Public Offering Price less the selling
concession as we shall determine, such number of Securities owned by you as
shall have been specified in our request.

10. On becoming a Selected Dealer and in offering and selling the
Securities, you agree to comply with all applicable requirements of the
Securities Act of 1933, the Securities Exchange Act of 1934 and the NASD's
Conduct Rules.

11. Upon application, you will be informed as to the jurisdictions in
which we have been advised that the Securities have been qualified for sale
under the respective securities or blue sky laws of such jurisdictions, but we
assume no obligation or responsibility as to the right of any Selected Dealer to
sell the Securities in any jurisdiction or as to any sale therein.

12. Additional copies of the Prospectus will be supplied to
you in reasonable quantities upon request.

13. It is expected that public advertisement of the Securities will be
made on the first day after the effective date of the Registration Statement.
Twenty-four hours after such advertisement shall have appeared but not before,
you will be free to advertise at your own expense, over your own name, subject
to any restrictions of local laws, but your advertisement must conform in all
respects to the requirements of the Securities Act of 1933, and we will not be
under any obligation or liability in respect of your advertisement.

14. No Selected Dealer is authorized to act as our agent or to make any
representation as to the existence of an agency relationship otherwise to act on
our behalf in offering or selling the Securities to the public or otherwise.

15. We shall not be under any liability for or in respect of
the value, validity or form of the certificates for the shares of

Common Stock and Warrants, or delivery of the certificates for the Common Stock
or Warrants, or the performance by anyone of any agreement on his part, or the
qualification of the Securities for sale under the laws of any jurisdiction, or
for or in respect of any matter connected with this Agreement, except for lack
of good faith and for obligations expressly assumed by us in this Agreement. The
foregoing provisions shall be deemed a waiver of any liability imposed under the
Securities Act of 1933.

16. Payment for the Securities sold to you hereunder is to be made at
the Public Offering Price, on or about ______ __, 1998, or such later date as we
may advise, by certified or official bank check payable to the order of First
Liberty Investment Group, Inc., in current New York Clearing House funds at such
place as we shall specify on one day's notice to you against delivery of
certificates for the Common Stock and Warrants.

17. Notice to us should be addressed to us at the office of First
Liberty Investment Group, Inc., 615 Chestnut Street, Philadelphia, Pennsylvania
19106. Notices to you shall be deemed to have been duly given if telefaxed or
mailed to you at the address to which this letter is addressed.

18. If you desire to purchase any of the Securities, please confirm
your application by signing and returning to us your confirmation on the
duplicate copy of this letter enclosed herewith even though you have previously
advised us thereof by telephone or facsimile.

Dated: , 1998

FIRST LIBERTY INVESTMENT GROUP, INC.

By:_________________________________

Accepted and agreed:
as to shares of Common Stock
and Warrants this day

of , 1998.

By:__________________________________

<PAGE>

FORM OF UNDERWRITER'S WARRANT

NO SALE OR TRANSFER OF THIS WARRANT OR THE SECURITIES UNDERLYING THIS WARRANT
MAY BE MADE UNTIL THE EFFECTIVENESS OF A REGISTRATION STATEMENT OR OF A
POST-EFFECTIVE AMENDMENT THERETO UNDER THE SECURITIES ACT OF 1933 (THE "ACT"),
COVERING THIS WARRANT OR THE SECURITIES UNDERLYING THIS WARRANT, OR UNTIL THE
COMPANY IS IN RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE ACT. TRANSFER OF THIS WARRANT IS RESTRICTED UNDER PARAGRAPH 2 BELOW.

UNDERWRITER'S WARRANT TO PURCHASE
COMMON STOCK AND/OR REDEEMABLE WARRANTS

PROFLIGHT MEDICAL RESPONSE, INC.

(a Colorado corporation)

Dated: ______ __, 1998

THIS CERTIFIES THAT First Liberty Investment Group, Inc. ( the
"Underwriter," and together with its assigns, the "Holder"), is entitled to
purchase from Proflight Medical Response, Inc., a Colorado corporation (the
"Company"), for an aggregate price of $10, an option ("Purchase Option"), during
the period as hereinafter specified, for up to 155,000 shares of the Company's
common stock, $.001 par value per share (the "Common Stock"), and 155,000
redeemable warrants (the "Warrants" and collectively with the Common Stock, the
"Securities"), at a purchase price of $4.80 per share of Common Stock and $.12
per Warrant which Warrant is exercisable at $6.00 per share of Common Stock (the
"Exercise Price") (the "Underwriter's Warrant").

This Underwriter's Warrant is issued pursuant to an Underwriting
Agreement dated ______ __, 1998, between the Company and First Liberty
Investment Group, Inc. (the "Underwriter"), in connection with a public offering
through the Underwriter (the "Public Offering") of 1,550,000 shares of Common
Stock and 1,550,000 Warrants.

1. Exercise of the Underwriter's Warrant.

(a) The rights represented by this Underwriter's Warrant shall be
exercised at the prices and during the periods as follows:

(i) During the period from ______ __, 1998 to ______
__, 1999, inclusive, the Holder shall have no right to purchase any Securities
hereunder.

(ii) Between ______ __, 1999 and ______ __, 2003,
inclusive, the Holder shall have the option to purchase shares of Common Stock
and Warrants hereunder at a price of $4.80 and $.12, respectively, the purchase
price of the Common Stock and the Warrants being 120% of the public offering
price for the Securities set forth in the Prospectus forming a part of the
registration statement on Form SB-2 (File No. 333-27197) of the Company, as
amended (the "Registration Statement").

(iii) After ______ __, 2003, the Holder shall have no
right to purchase any Securities hereunder and this Underwriter's Warrant shall
expire effective at 5:00 p.m., New York time.

(b) The rights represented by this Underwriter's Warrant may
be exercised at any time within the period above specified, in whole or in part,
by (i) the surrender of this Underwriter's Warrant (with the purchase form at
the end hereof properly executed) at the principal executive of office of the
Company (or such other of office or agency of the Company as it may designate by
notice in writing to the Holder at the address of the Holder appearing on the
books of the Company); (ii) payment to the Company of the Exercise Price then in
effect for the number of shares of

Common Stock and Warrants specified in the above-mentioned purchase form
together with applicable stock transfer taxes, if any; and (iii) delivery to the
Company of a duly executed agreement signed by the person(s) designated in the
purchase form to the effect that such person(s) agree(s) to be bound by the
provisions of Paragraph 5 and subparagraphs (b), (c) and (d) of Paragraph 6
hereof. This Underwriters' Warrant shall be deemed to have been exercised, in
whole or in part to the extent specified, immediately prior to the close of
business on the date this Underwriter's Warrant is surrendered and payment is
made in accordance with the foregoing provisions of this Paragraph 1, and the
person or persons in whose name or names the certificates for the Securities
shall be issuable upon such exercise shall become the Holder or Holders of
record of such Common Stock and Warrants at that time and date. The Common Stock
and Warrants so purchased shall be delivered to the Holder within a reasonable
time, not exceeding ten (10) business days, after the rights represented by this
Underwriter's Warrant shall have been so exercised.

2. Restrictions on Transfer.

This Underwriter's Warrant shall not be transferred, sold,
assigned, or hypothecated for a period of one year commencing ______ __, 1998,
except that it may be transferred to successors of the Holder, and may be
assigned in whole or in part to any person who is an of officer or partner of
the Underwriter or an officer or partner of any member of the selling group
during such period; and after such one-year period, such a transfer may occur
providing the Underwriter's Warrant is exercised immediately upon transfer, and
if not exercised immediately on transfer, the Underwriter's Warrant shall lapse.
Any such assignment shall be effected by the Holder by (i) completing and
executing the form of assignment at the end hereof and (ii) surrendering this
Underwriter's Warrant with such duly completed and executed assignment form for
cancellation, accompanied by funds sufficient to pay any transfer tax, at the
office or agency of the Company referred to in Paragraph 1 hereof, accompanied
by a certificate (signed by a duly authorized representative of the Holder),
stating that each transferee is a permitted transferee under this Paragraph 2
hereof; whereupon the Company shall issue, in the name or names specified by the
Holder (including the Holder) a new Underwriter's Warrant or Underwriter's
Warrants of like tenor and representing in the aggregate rights to purchase the
same number of Securities as are then purchasable hereunder.

3. Covenants of the Company.

(a) The Company covenants and agrees that all Common Stock and
Common Stock issuable upon exercise of the Warrants will, upon issuance, be duly
and validly issued, fully paid

and nonassessable and no personal liability will attach to the holder thereof by
reason of being such a holder, other than as set forth herein.

(b) The Company covenants and agrees that during the period
within which this Underwriter's Warrant may be exercised, the Company will at
all times have authorized and reserved a sufficient number of shares of Common
Stock to provide for the exercise of this Underwriter's Warrant and the Warrants
included therein.

(c) The Company covenants and agrees that for so long as the
Securities shall be outstanding, the Company shall use its best efforts to cause
all shares of Common Stock issuable upon the exercise of the Underwriter's
Warrant and the Warrants contained therein, to be listed on or quoted by the
Nasdaq National Market System or on the Nasdaq SmallCap Market.

4. No Rights of Stockholder.

This Underwriter's Warrant shall not entitle the Holder to any
voting rights or other rights as a stockholder of the Company, either at law or
in equity, and the rights of the Holder are limited to those expressed in this
Underwriter's Warrant and are not enforceable against the Company except to the
extent set forth herein.

5. Registration Rights.

(a) The Company shall advise the Holder or its transferee,
whether the Holder holds this Underwriter's Warrant or has exercised this
Underwriter's Warrant and holds Common Stock and Warrants, or Common Stock
underlying the Warrants (the "Warrant Shares"), by written notice at least 30
days prior to the filing of any post-effective amendment to the Registration
Statement or of any new registration statement or post-effective amendment
thereto under the Act, covering any securities of the Company, for its own
account or for the account of others, and will for a period of four years from
______ __, 1999, upon the request of the Holder, include in any such
post-effective amendment or registration statement such information as may be
required to permit a public offering of any of the Common Stock or Warrants
issuable hereunder, and/or the Warrant Shares (the "Registerable Securities"),
provided however that this Section 5(a) is not applicable to any registration
statement by the Company on Forms S-4 or S-8 (including any Form S-3 related to
such Form S-8) or any other comparable form. The Company shall supply
prospectuses in order to facilitate the public sale or other disposition of the
Registerable Securities, use its best efforts to register and qualify any of the
Registerable Securities for sale in such states as such Holder reasonably
designates, provided such qualification is not solely

for the purpose of subjecting the Company to jurisdiction in that state or is
not unduly burdensome, and do any and all other acts and things which may be
necessary to enable such Holder to consummate the public sale of the
Registerable Securities, and furnish indemnification in the manner provided in
Paragraph 6 hereof. The Holder shall furnish information reasonably requested by
the Company in accordance with such post-effective amendments or registration
statements, including its intentions with respect thereto, and shall furnish
indemnification as set forth in Paragraph 6. The Company shall continue to
advise the Holders of the Registerable Securities of its intention to file a
registration statement or amendment pursuant to this Paragraph 5(a) until the
earlier of (i) ______ __, 2003; or (ii) such time as all of the Registerable
Securities have been registered and sold under the Act.

(b) If any fifty-one (51%) percent holder (as defined below)
shall give notice to the Company at any time during the four (4) year period
beginning one (1) year from ______ __, 1998 to the effect that such holder
desires to register under the Act any Registerable Securities, under such
circumstances that a public distribution (within the meaning of the Act) of any
such Registerable Securities will be involved, then the Company will as promptly
as practicable after receipt of such notice, but not later than thirty (30) days
after receipt of such notice, file a post effective amendment to the current
Registration Statement or a new registration statement pursuant to the Act to
the end that the Registerable Securities may be publicly sold under the Act as
promptly as practicable thereafter and the Company will use its best efforts to
cause such registration to become and remain effective as provided herein
(including the taking of such steps as are necessary to obtain the removal of
any stop order); provided, that such fifty-one (51%) percent holder shall
furnish the Company with appropriate information in connection therewith as the
Company may reasonably request; and provided, further, that the Company shall
not be required to file such a post effective amendment or registration
statement on more than one occasion at its expense. The Company will maintain
such registration statement or post-effective amendment current under the Act
for a period of at least six (6) months from the effective date thereof. The
Company shall supply prospectuses in order to facilitate the public sale of the
Registerable Securities, use its best efforts to register and qualify any of the
Registerable Securities for sale in such states as such holder reasonably
designates, provided such qualification is not solely for the purpose of
subjecting the Company to jurisdiction in that state or is not unduly
burdensome, and furnish indemnification in the manner provided in Paragraph 6
hereof.

(c) The Holder may, in accordance with Paragraphs 5(a) or (b),
at his or its option, and subject to the limitations set forth in Paragraph 1(a)
hereof, request the registration of any of

the Registerable Securities in a filing made by the Company prior to the
acquisition of the Securities upon exercise of this Representative's Warrant.
The Holder may thereafter exercise the Warrants at any time or from time to time
subsequent to the effectiveness under the Act of the registration statement in
which the Common Stock underlying the Underwriter's Warrants and Warrants were
included.

(d) The term "51% holder," as used in this Paragraph 5, shall
include any owner or combination of owners of Underwriter's Warrants or
Registerable Securities if the aggregate number of Common Shares and Warrant
Shares included in and underlying the Underwriter's Warrants and Registerable
Securities held of record by it or them, would constitute a majority of the
aggregate of such Common Shares and Warrant Shares.

(e) The following provisions of this Paragraph 5 shall also be
applicable:

(i) Within ten (10) days after receiving any notice
pursuant to Paragraph 5(b), the Company shall give notice to the other Holders
of Underwriter's Warrants or Registerable Securities, advising that the Company
is proceeding with such post-effective amendment or registration and offering to
include therein the Registerable Securities of such other Holders, provided that
they shall furnish the Company with all information in connection therewith as
shall be necessary or appropriate and as the Company shall reasonably request in
writing. Following the effective date of such post-effective amendment or
registration, the Company shall, upon the request of any Holder of Registerable
Securities, forthwith supply such number of prospectuses meeting the
requirements of the Act, as shall be reasonably requested by such Holder. The
Company shall use its best efforts to qualify the Registerable Securities for
sale in such states as the 51% holder shall designate, provided such
qualification is not solely for the purpose of subjecting the Company to
jurisdiction in that state or is not unduly burdensome, at such times as the
registration statement is effective under the Act.

(ii) The Company shall bear the entire cost and
expense of any registration of securities initiated by it under Paragraph 5(a)
hereof notwithstanding that the Registerable Securities subject to this
Underwriter's Warrant may be included in any such registration. The Company
shall also comply with one request for registration made by the 51% holder
pursuant to Paragraph 5(b) hereof at the Company's own expense and without
charge to any holder of the Registerable Securities, and with one request at the
expense of the Holders thereof. Notwithstanding the foregoing, any Holder whose
Registerable Securities are included in any such registration statement pursuant
to this Paragraph 5 shall, however, bear the fees of any counsel retained by him
and any

transfer taxes or underwriting discounts or commissions applicable to the
Registerable Securities sold by him pursuant thereto and, in the case of a
registration pursuant to Paragraph 5(a) hereof, any additional registration fees
attributable to the registration of such Holder's Registerable Securities.

(iii) If the managing underwriter in any such
underwritten offering shall advise the Company that it declines to include a
portion or all of the Registerable Securities requested by the Holders to be
included in the registration statement, then distribution of all or a specified
portion of the Registerable Securities shall be excluded from such registration
statement (in case of an exclusion as to a portion of such Registerable
Securities, such portion to be allocated among such Holders in proportion to the
respective numbers of Registerable Securities requested to be registered by each
such Holder). In such event the Company shall give the Holder prompt notice of
the number of Registerable Securities excluded. Further, in such event the
Company shall, within six (6) months of the completion of such subsequent
offering, file and use its best efforts to have declared effective, at its sole
expense, a registration statement relating to such excluded securities.

6. Indemnification.

(a) Whenever pursuant to Paragraph 5, a registration statement
relating to any Registerable Securities is filed under the Act, amended or
supplemented, the Company will indemnify and hold harmless each Holder of the
Registerable Securities covered by such registration statement, amendment or
supplement (such holder hereinafter referred to as the "Distributing Holder"),
each person, if any, who controls (within the meaning of the Act) the
Distributing Holder, and each officer, employee, partner or agent of the
Distributing Holder, if the Distributing Holder is a broker or dealer, against
any losses, claims, damages or liabilities, joint or several, to which the
Distributing Holder may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any such registration statement or any
preliminary prospectus or final prospectus constituting a part thereof or any
amendment or supplement thereto, or arise out of or are based upon the omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; and will reimburse the Distributing
Holder for any legal or other expenses reasonably incurred by the Distributing
Holder, in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case (i) to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged

untrue statement or omission or alleged omission made in said registration
statement, said preliminary prospectus, said final prospectus or said amendment
or supplement in reliance upon and in conformity with written information
furnished by such Distributing Holder, any other Distributing Holder or any such
underwriter for use in the preparation thereof, and (ii) such losses, claims,
damages or liabilities arise out of or are based upon any actual or alleged
untrue statement or omission made in or from any preliminary prospectus, but
corrected in the final prospectus, as amended or supplemented.

(b) Whenever pursuant to Paragraph 5 a registration statement
relating to the Registerable Securities is filed under the Act, or is amended or
supplemented, the Distributing Holder will indemnify and hold harmless the
Company, each of its directors, each of its of officers who have signed said
registration statement and such amendments and supplements thereto, and each
person, if any, who controls the Company (within the meaning of the Act) against
any losses, claims, damages or liabilities to which the Company or any such
director, officer or controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained in any such registration statement or
any preliminary prospectus or final prospectus constituting a part thereof, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent that such untrue statement or
alleged untrue statement or omission was made in said registration statement,
said preliminary prospectus, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information furnished
by such Distributing Holder for use in the preparation thereof; and will
reimburse the Company or any such director, officer or controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action.

(c) Promptly after receipt by an indemnified party under this
Paragraph 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying
party, give the indemnifying party notice of the commencement thereof; but the
omission to so notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Paragraph 6.

(d) In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the

commencement thereof, the indemnifying party will be entitled to participate in,
and, to the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election to so assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Paragraph 6 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation.

7. Adjustments of Exercise Price and Number of Securities.

(a) The Warrant Price shall be subject to adjustment from time
to time as follows:

(1) In case the Company shall at any time after the
date hereof pay a dividend in shares of Common Stock or make a distribution in
shares of Common Stock, then upon such dividend or distribution the Warrant
Price in effect immediately prior to such dividend or distribution shall
forthwith be reduced to a price determined by dividing:

(a) an amount equal to the total number of
shares of Common Stock outstanding immediately prior to such dividend or
distribution multiplied by the Warrant Price in effect immediately prior to such
dividend or distribution, by;

(b) the total number of shares of Common
Stock outstanding immediately after such issuance or sale.

For the purposes of any computation to be made in accordance with the
provisions of this clause (i), the following provisions shall be applicable:
Common Stock issuable by way of dividend or other distribution on any stock of
the Company shall he deemed to have been issued immediately after the opening of
business on the date following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution.

(2) In case the Company shall at any time subdivide
or combine the outstanding Common Stock, the Warrant Price shall forthwith be
proportionately decreased in the case of subdivision or increased in the case of
combination to the nearest one cent. Any such adjustment shall become effective
at the time such subdivision or combination shall become effective.

(3) Within a reasonable time after the close of each
quarterly fiscal period of the Company during which the Warrant Price has been
adjusted as herein provided, the Company shall:

(a) Deliver to the Underwriter a certificate
signed by the President or Vice President of the Company and by the Treasurer or
Assistant Treasurer or the Secretary or an Assistant Secretary of the Company,
showing in detail the facts requiring all such adjustments occurring during such
period and the Warrant Price after each such adjustment.

(b) Notwithstanding anything contained
herein to the contrary, no adjustment of the Warrant Price shall be made if the
amount of such adjustment shall be less than $.05, but in such case any
adjustment that would otherwise be required then to be made shall be carried
forward and shall be made at the time and together with the next subsequent
adjustment which, together with any adjustment so carried forward, shall amount
to not less than $.05.

(b) In the event that the number of outstanding shares of
Common Stock is increased by a stock dividend payable in Common Stock or by a
subdivision of the outstanding Common Stock, then, from and after the time at
which the adjusted Warrant Price becomes effective pursuant to Subsection (b) of
this Section by reason of such dividend or subdivision, the number of shares of
Common Stock issuable upon the exercise of each Warrant shall be increased in
proportion to such increase in outstanding shares. In the event that the number
of shares of Common Stock outstanding is decreased by a combination of the
outstanding Common Stock, then, from and after the time at which the adjusted
Warrant Price becomes effective pursuant to Subsection (b) of this Section by
reason of such combination, the number of shares of Common Stock issuable upon
the exercise of each Warrant shall be decreased in proportion to such decrease
in the outstanding shares of Common Stock.

(c) In case of any reorganization or reclassification of the
outstanding Common Stock (other than a change in par value, or from par value to
no par value, or as a result of a subdivision or combination), or in case of any
consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any reclassification of the
outstanding Common Stock), or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, the holder of each Warrant then outstanding shall thereafter have the
right to purchase the kind and amount of shares of Common Stock and/or other
securities and property receivable upon such reorganization, reclassification,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock which the holder of such Warrant shall then be entitled to
purchase; such adjustments shall apply with respect to all such changes
occurring between the date of this Warrant Agreement and the date of exercise of
such Warrant.

(d) Subject to the provisions of this Section, in case the
Company shall, at any time prior to the exercise of the Warrants, make any
distribution of its assets to holders of its Common Stock as a liquidating or a
partial liquidating dividend, then the holder of Warrants who exercises his
Warrants after the record date for the determination of those holders of Common
Stock entitled to such distribution of assets as a liquidating or partial
liquidating dividend shall be entitled to receive for the Warrant Price per
Warrant, in addition to each share of Common Stock, the amount of such
distribution (or, at the option of the Company, a sum equal to the value of any
such assets at the time of such distribution as determined by the Board of
Directors of the Company in good faith), which would have been payable to such
holder had he been the holder of record of the Common Stock receivable upon
exercise of his Warrant on the record date for the determination of those
entitled to such distribution.

(e) In case of the dissolution, liquidation or winding-up of
the Company, all rights under the Warrants shall terminate on a date fixed by
the Company, such date to be no earlier than ten (10) days prior to the
effectiveness of such dissolution, liquidation or winding-up and not later than
five (5) days prior to such effectiveness. Notice of such termination of
purchase rights shall be given to the last registered holder of the Warrants, as
the same shall appear on the books of the Company maintained by the Warrant
Agent, by registered mail at least thirty (30) days prior to such termination
date.

(f) In case the Company shall, at any time prior to the
expiration of the Warrants and prior to the exercise thereof, offer to the
holders of its Common Stock any rights to subscribe for additional shares of any
class of the Company, then the Company shall give written notice thereof to the
last registered holder thereof not less than thirty (30) days prior to the date
on which the books of the Company are closed or a record date is fixed for the
determination of the stockholders entitled to such subscription rights. Such
notice shall specify the date as to which the books shall be closed or record
date fixed with respect to such offer of subscription and the right of the
holder thereof to participate in such offer of subscription shall terminate if
the Warrant shall not be exercised on or before the date of such closing of the
books or such record date.

(g) Any adjustment pursuant to the aforesaid provisions shall
be made on the basis of the number of shares of Common Stock which the holder
thereof would have been entitled to acquire by the exercise of the Warrant
immediately prior to the event giving rise to such adjustment.

(h) Irrespective of any adjustments in the Warrant Price or
the number or kind of shares purchasable upon exercise of

the Warrants, Warrants previously or thereafter issued may continue to express
the same price and number and kind of shares as are stated in the similar
Warrants initially issuable pursuant to this Warrant Agreement.

(i) The Company may retain a firm of independent public
accountants (who may be any such firm regularly employed by the Company) to make
any computation required under this Section, and any certificate setting forth
such computation signed by such firm shall be conclusive evidence of the
correctness of any computation made under this Section.

(j) If at any time, as a result of an adjustment made pursuant
to paragraph (d) above, the holders of a Warrant or Warrants shall become
entitled to purchase any securities other than shares of Common Stock,
thereafter the number of such securities so purchasable upon exercise of each
Warrant and the Warrant Price for such shares shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Common Stock contained in paragraphs (b)
and (c).

(k) No adjustment to the Warrant Price or to the number of
shares of Common Stock purchasable upon the exercise of such Warrants will be
made, however under the following circumstances:

(i) upon the grant or exercise of any of the options
presently outstanding (or options which may hereafter be granted and/or
exercised) under the Company's Stock Option Plan for officers, directors and/or
employees, consultants and similar situated parties of the Company; or

(ii) upon the sale or exercise of the Warrants issued
to the public pursuant to the ______ __, 1998 Prospectus; or

(iii) upon exercise of this Warrant; or

(iv) upon exercise or sale of the Warrants issuable
upon exercise of the Underwriter's Warrant; or

(v) upon any amendment to or change in the term of
any rights or warrants to subscribe for or purchase, or options for the purchase
of Common Stock or convertible securities, including, but not limited to, any
extension of any expiration date of any such right, warrant or option, any
change in any exercise or purchase price provided for in any such right, warrant
or option, any extension of any date through which any convertible securities
are convertible into or exchangeable for Common Stock or any change in the rate
at which any convertible securities are convertible into or exchangeable for
Common Stock (other than rights, warrants, options or convertible securities
issued or sold after the close of

business on the date of the original issue of the Common Stock, (i) for
presently outstanding securities, or (ii) for which an adjustment in the Warrant
Price then in effect was theretofore made or required to be made, upon issuance
or sale thereof).

8. Fractional Shares.

(a) The Company shall not be required to issue fractions of
shares of Common Shares on the exercise of the Warrants subject to this
Underwriter's Warrant. The Company shall not be obligated to issue any
fractional share interests or fractional warrant interests upon the exercise of
any Warrant or Warrants, nor shall it be obligated to issue scrip or pay cash in
lieu of fractional interests, provided, however, that if a holder exercises all
the Warrants held of record by such holder, the fractional interests shall be
eliminated by rounding any fraction up to the nearest whole number of shares.

(b) The Holder of this Underwriter's Warrant, by acceptance
hereof, expressly waives his right to receive any fractional share of Common
Stock upon exercise of the Warrants subject to this Underwriter's Warrant.

9. Redemption of Warrants underlying the Underwriter's Warrant.

The Warrants underlying the Underwriter's Warrant shall not be subject
to redemption by the Company until they have been exercised and the underlying
Warrants are outstanding.

10. Miscellaneous.

(a) This Underwriter's Warrant shall be governed by and in
accordance with the laws of the State of New York.

(b) All notices, requests, consents and other communications
hereunder shall be made in writing and shall be deemed to have been duly made
when delivered, or mailed by registered or certified mail, return receipt
requested: (i) if to a Holder, to the address of such Holder as shown on the
books of the Company, or (ii) if to the Company, 7211 S. Peoria Street,
Littleton, Colorado 80112.

(c) The Company and the Underwriter may from time to time
supplement or amend this Underwriter's Warrant without the approval of any other
Holders in order to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with any provisions
herein, or to make any other provisions in regard to matters or questions
arising hereunder which the Company and the Underwriter may deem necessary or
desirable and which the Company and the Underwriters deem not to

adversely affect the interest of the Holders.

(d) All the covenants and provisions of this Underwriter's
Warrant by or for the benefit of the Company and the Holders inure to the
benefit of their respective successors and assigns hereunder.

(e) Nothing in this Underwriter's Warrant shall be construed
to give to any person or corporation other than the Company and the Underwriter
and any other registered Holder or Holders, any legal or equitable right and
that any such right is for the sole and exclusive benefit of the Company and the
Underwriter and any other Holder or Holders.

(f) This Underwriter's Warrant may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and such counterparts shall together constitute but one and
the same instrument.

IN WITNESS WHEREOF, Proflight Medical Response, Inc. has
caused this Underwriter's Warrant to be signed by its duly authorized officer
and this Underwriter's Warrant to be dated ______ __, 1998.

PROFLIGHT MEDICAL RESPONSE, INC.

By:_________________________________
Kevin L. Burkhardt, President

PURCHASE FORM

(To be signed only upon exercise of the Underwriter's Warrant)

The undersigned, the Holder of the foregoing Underwriter's Warrant,
hereby irrevocably elects to exercise the purchase rights represented by such
Underwriter's Warrant for, and to purchase thereunder, ________ shares of Common
Stock and/or ___ Warrants of Proflight Medical Response, Inc. and herewith makes
payment of $______ thereof, and requests that the certificates for Common
Stock/or Warrants be issued in the name(s) of, and delivered to ____________
whose address(es) is (are) ___________________________

Dated: __________________

_________________________

_________________________
Address

TRANSFER FORM

(To be signed only upon transfer of the Underwriter's Warrant)

For value received, the undersigned hereby sells, assigns, and
transfers unto _______________________ the right to purchase shares of Common
Stock and/or Warrants of Proflight Medical Response, Inc. represented by the
foregoing Underwriter's Warrant to the extent of _____________ shares of Common
Stock and/or ____ Warrants, and appoints ______________, attorney to transfer
such rights on the books of Proflight Medical Response, Inc., with full power of
substitution in the premises.

Dated:__________________

________________________
(name of holder)

________________________
Address

________________________
In the presence of:

________________________

<PAGE>

PROFLIGHT MEDICAL RESPONSE, INC.
A COLORADO CORPORATION

AND

AMERICAN SECURITIES TRANSFER & TRUST, INC.
WARRANT AGENT

WARRANT AGREEMENT

TABLE OF CONTENTS

Section Page
- ------- ----
1. Appointment of Warrant Agent....................................... 1

2. Form of Warrant.................................................... 1

3. Countersignature and Registration.................................. 2

4. Transfers and Exchanges............................................ 2

5. Exercise of Warrants; Payment of Warrant Solicitation
Fee................................................................ 2

6. Payment of Taxes................................................... 5

7. Mutilated or Missing Warrants...................................... 5

8. Reservation of Common Stock........................................ 5

9. Warrant Price: Adjustments......................................... 6

10. Fractional Interests.............................................. 11

11. Notices to Warrantholders......................................... 11

12. Disposition of Proceeds on Exercise of Warrants................... 12

13. Redemption of Warrants............................................ 12

14. Merger or Consolidation or Change of Name of Warrant
Agent............................................................. 13

15. Duties of Warrant Agent........................................... 13

16. Change of Warrant Agent........................................... 15

17. Identity of Transfer Agent........................................ 16

18. Notices........................................................... 16

19. Supplements and Amendments........................................ 16

20. New York Contract................................................. 17

21. Benefits of this Agreement........................................ 17

22. Successors........................................................ 17

WARRANT AGREEMENT, dated as of ______ __, 1998, by and among PROFLIGHT
MEDICAL RESPONSE, INC., a Colorado corporation (the "Company"), and AMERICAN
SECURITIES TRANSFER & TRUST INC., as warrant agent (hereinafter called the
"Warrant Agent").

WHEREAS, the Company proposes to issue and sell, through an initial
public offering (the "Offering") by First Liberty Investment Group, Inc. (the
"Underwriter"), pursuant to an Underwriting Agreement dated ______ __, 1998, an
aggregate of up to 1,782,500 shares of common stock, $.001 par value per share
(the "Common Stock"), and up to 1,782,500 Common Stock Purchase Warrants (the
"Warrants") of the Company; and in connection with such offering the Company has
agreed to issue to the Underwriter or its designees options to purchase up to
155,000 shares of Common Stock and up to 155,000 Warrants (the "Underwriter's
Warrant");

WHEREAS, each Warrant will entitle the holder to purchase one
share of Common Stock;

WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act in connection with the
issuance, registration, transfer, exchange and exercise of the Warrants;

NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:

Section 1. Appointment of Warrant Agent. The Company hereby appoints
the Warrant Agent to act as Warrant Agent for the Company in accordance with the
instructions hereinafter set forth in this Agreement, and the Warrant Agent
hereby accepts such appointment.

Section 2. Form of Warrant. The text of the Warrants and of the form of
election to purchase Common Stock to be printed on the reverse thereof shall be
substantially as set forth in Exhibit A attached hereto. Each Warrant shall
entitle the registered holder thereof to purchase one share of Common Stock at a
purchase price of $6.00, at any time from the effective date of the prospectus
of the public offering (________ __, 1998) ("Effective Date") until 5:00 p.m.
Eastern time, on ________ __, 2001. The warrant exercise price and the number of
shares of Common Stock issuable upon exercise of the Warrants are subject to
adjustment upon the occurrence of certain events, all as hereinafter provided.
The Warrants shall be executed on behalf of the Company by the manual or
facsimile signature of the present or any future President or Vice President of
the Company, and attested to by the manual or facsimile signature of the present
or any future Secretary or Assistant Secretary of the Company.

Warrants shall be dated as of the issuance by the Warrant Agent either
upon initial issuance or upon transfer or exchange.

In the event the aforesaid expiration dates of the Warrants falls on a
Saturday or Sunday, or on a legal holiday on which the New York Stock Exchange
is closed, then the Warrants shall expire at 5:00 p.m. Eastern time on the next
succeeding business day.

Section 3. Countersignature and Registration. The Warrant Agent shall
maintain books for the transfer and registration of the Warrants. Upon the
initial issuance of the Warrants, the Warrant Agent shall issue and register the
Warrants in the names of the respective holders thereof. The Warrants shall be
countersigned manually or by facsimile by the Warrant Agent (or by any successor
to the Warrant Agent then acting as warrant agent under this Agreement) and
shall not be valid for any purpose unless so countersigned. The Warrants may,
however, be so countersigned by the Warrant Agent (or by its successor as
Warrant Agent) and be delivered by the Warrant Agent, notwithstanding that the
persons whose manual or facsimile signatures appear thereon as proper officers
of the Company shall have ceased to be such officers at the time of such
countersignature or delivery.

Section 4. Transfers and Exchanges. The Warrant Agent shall transfer,
from time to time, any outstanding Warrants upon the books to be maintained by
the Warrant Agent for that purpose, upon surrender thereof for transfer properly
endorsed or accompanied by appropriate instructions for transfer. Upon any such
transfer, a new Warrant shall be issued to the transferee and the surrendered
Warrant shall be cancelled by the Warrant Agent. Warrants so cancelled shall be
delivered by the Warrant Agent to the Company from time to time upon request.
Warrants may be exchanged at the option of the holder thereof, when surrendered
at the office of the Warrant Agent, for another Warrant, or other Warrants of
different denominations of like tenor and representing in the aggregate the
right to purchase a like number of shares of Common Stock.

Section 5. Exercise of Warrants; Payment of Warrant Solicitation Fee.
Subject to the provisions of this Agreement, each registered holder of Warrants
shall have the right, which may be exercised commencing at the opening of the
business on _________ __, 1998, to purchase from the Company (and the Company
shall issue and sell to such registered holder of Warrants) the number of fully
paid and non-assessable shares of Common Stock specified in such Warrants upon
surrender of such Warrants to the Company at the office of the Warrant Agent,
with the form of election to purchase on the reverse thereof duly filled in and
signed, and upon payment to the Company of the warrant price, determined in
accordance with the provisions of Sections 9 and 10 of this Agreement, for the
number of shares of Common Stock in respect of which such Warrants

are then exercised. Payment of such warrant price shall be made in cash or by
certified check or bank draft to the order of the Company. Subject to Section 6,
upon such surrender of Warrants and payment of the warrant price, the Company
shall issue and cause to be delivered with all reasonable dispatch to or upon
the written order of the registered holder of such Warrants and in such name or
names as such registered holder may designate, a certificate or certificates for
the number of full shares of Common Stock so purchased upon the exercise of such
Warrants. Such certificate or certificates shall be deemed to have been issued
and any person so designated to be named therein shall be deemed to have become
a holder of record of such shares of Common Stock as of the date of the
surrender of such Warrants and payment of the warrant price as aforesaid. The
rights of purchase represented by the Warrants shall be exercisable, at the
election of the registered holders thereof, either as an entirety or from time
to time for a portion of the shares specified therein and, in the event that any
Warrant is exercised in respect of less than all of the shares of Common Stock
specified therein at any time prior to the date of expiration of the Warrants, a
new Warrant or Warrants will be issued to the registered holder for the
remaining number of shares of Common Stock specified in the Warrant so
surrendered, and the Warrant Agent is hereby irrevocably authorized to
countersign and to deliver the required new Warrants pursuant to the provisions
of this Section and of Section 3 of this Agreement and the Company, whenever
requested by the Warrant Agent, will supply the Warrant Agent with Warrants duly
executed on behalf of the Company for such purpose. Anything in the foregoing to
the contrary notwithstanding, no Warrant will be exercisable unless at the time
of exercise the Company has filed with the Securities and Exchange Commission a
registration statement under the Securities Act of 1933 (the "Act") covering the
shares of Common Stock issuable upon exercise of such Warrant and such
registration statement shall have been declared effective, such shares have been
so registered or qualified or deemed to be exempt under the securities laws of
the state of residence of the holder of such Warrant. The Company shall use its
best efforts to have all shares so registered or qualified on or before the date
on which the Warrants become exercisable.

(a) If at the time of exercise of any Warrant after ________
__, 1999 (i) the market price of the Company's Common Stock is equal to or
greater than the then exercise price of the Warrant, (ii) the exercise of the
Warrant is solicited by an Underwriter at such time as it is a member of the
National Association of Securities Dealers, Inc. ("NASD"), (iii) the Warrant is
not held in a discretionary account, (iv) disclosure of the compensation
arrangement is made both at the time of the offering and at the time of the
exercise of the Warrants, (v) the Underwriter is designated in writing as the
soliciting broker and

(vi) the solicitation of the exercise of the Warrant is not in violation of
Regulation M (as such rule or any successor rule may be in effect as of such
time of exercise) promulgated under the Securities Exchange Act of 1934, then
the Underwriter soliciting such Warrant shall be entitled to receive from the
Company upon exercise of each of the Warrants so exercised a fee of seven
percent (7%) of the aggregate price of the Warrants so exercised (the "Exercise
Fee"). The procedures for payment of the warrant solicitation fee are set forth
in Section 5(b) below.

(b) (1) Within five (5) days of the last day of each month
commencing with ________ __, 1998, the Warrant Agent will notify the Underwriter
of each Warrant Certificate which has been properly completed for exercise by
holders of Warrants during the last month. The Company and Warrant Agent shall
determine, in their sole and absolute discretion, whether a Warrant Certificate
has been properly completed. The Warrant Agent will provide the Underwriter with
such information, in connection with the exercise of each Warrant, as the
Underwriter shall reasonably request.

(2) The Company hereby authorizes and instructs the
Warrant Agent to deliver to the soliciting Underwriter the Exercise Fee promptly
after receipt by the Warrant Agent from the Company of a check payable to the
order of the soliciting Underwriter in the amount of the Exercise Fee. In the
event that an Exercise Fee is paid to the Underwriter with respect to a Warrant
which the Company or the Warrant Agent determines is not properly completed for
exercise or in respect of which the Underwriter is not entitled to an Exercise
Fee, the soliciting Underwriter will return such Exercise Fee to the Warrant
Agent which shall forthwith return such fee to the Company.

The Underwriter and the Company may at any time commencing ________ __,
1998, and during business hours, examine the records of the Warrant Agent,
including its ledger of original Warrant certificates returned to the Warrant
Agent upon exercise of Warrants. Notwithstanding any provision to the contrary,
the provisions of paragraph 5(a) and 5(c) may not be modified, amended or
deleted without the prior written consent of the Underwriter.

Section 6. Payment of Taxes. The Company will pay any documentary stamp
taxes attributable to the initial issuance of Common Stock issuable upon the
exercise of Warrants; provided, however, that the Company shall not be required
to pay any tax which may be payable in respect of any transfer involved in the
issuance or delivery of any certificates of shares of Common Stock in a name
other than that of the registered holder of Warrants in respect of which such
shares are issued, and in such case neither the Company nor the Warrant Agent
shall be required to issue or deliver any certificate for shares of Common Stock
or any Warrant until the person requesting the same has paid to the Company the
amount of such tax or has established to the Company's satisfaction that such
tax has been paid.

Section 7. Mutilated or Missing Warrants. In case any of the Warrants
shall be mutilated, lost, stolen or destroyed, the Company may, in its
discretion, issue and the Warrant Agent shall countersign and deliver in
exchange and substitution for and upon cancellation of the mutilated Warrant, or
in lieu of and in substitution for the Warrant lost, stolen or destroyed, a new
Warrant of like tenor and representing an equivalent right or interest, but only
upon receipt of evidence satisfactory to the Company and the Warrant Agent of
such loss, theft or destruction and, in case of a lost, stolen or destroyed
Warrant, indemnity, if requested, also satisfactory to them. Applicants for such
substitute Warrants shall also comply with such other reasonable regulations and
pay such reasonable charges as the Company or the Warrant Agent may prescribe.

Section 8. Reservation of Common Stock. There have been reserved, and
the Company shall at all times keep reserved, out of the authorized and unissued
shares of Common Stock, a number of shares of Common Stock sufficient to provide
for the exercise of the rights of purchase represented by the Warrants, and the
transfer agent for the shares of Common Stock and every subsequent transfer
agent for any shares of the Company's Common Stock issuable upon the exercise of
any of the rights of purchase aforesaid are irrevocably authorized and directed
at all times to reserve such number of authorized and unissued shares of Common
Stock as shall be required for such purpose. The Company agrees that all shares
of Common Stock issued upon exercise of the Warrants shall be, at the time of
delivery of the certificates of such shares, validly issued and outstanding,
fully paid and nonassessable and listed on any national securities exchange upon
which the other shares of Common Stock are then listed. So long as any unexpired
Warrants remain outstanding, the Company will file such post-effective
amendments to the registration statement (Form SB-2, Registration No. 333 -
27197) (the "Registration Statement") filed pursuant to the Act with respect to
the Warrants (or other appropriate registration statements or post-effective

amendment or supplements) as may be necessary to permit it to deliver to each
person exercising a Warrant, a prospectus meeting the requirements of Section
10(a)(3) of the Act and otherwise complying therewith, and will deliver such
prospectus to each such person. To the extent that during any period it is not
reasonably likely that the Warrants will be exercised, due to market price or
otherwise, the Company need not file such a post-effective amendment during such
period. The Company will keep a copy of this Agreement on file with the transfer
agent for the shares of Common Stock and with every subsequent transfer agent
for any shares of the Company's Common Stock issuable upon the exercise of the
rights of purchase represented by the Warrants. The Warrant Agent is irrevocably
authorized to requisition from time to time from such transfer agent stock
certificates required to honor outstanding Warrants. The Company will supply
such transfer agent with duly executed stock certificates for that purpose. All
Warrants surrendered in the exercise of the rights thereby evidenced shall be
cancelled by the Warrant Agent and shall thereafter be delivered to the Company,
and such cancelled Warrants shall constitute sufficient evidence of the number
of shares of Common Stock which have been issued upon the exercise of such
Warrants. Promptly after the date of expiration of the Warrants, the Warrant
Agent shall certify to the Company the total aggregate amount of Warrants then
outstanding, and thereafter no shares of Common Stock shall be subject to
reservation in respect of such Warrants which shall have expired.

Section 9. Warrant Price: Adjustments.

(a) The warrant price at which Common Stock shall be
purchasable upon the exercise of the Warrants shall be $6.00 at any time from
________ __, 1998 until 5:00 Eastern time on _________ __, 2001 or after
adjustment, as provided in this Section, shall be such price as so adjusted (the
"Warrant Price").

(b) The Warrant Price shall be subject to adjustment from time
to time as follows:

(i) In case the Company shall at any time after the
date hereof pay a dividend in shares of Common Stock or make a distribution in
shares of Common Stock, then upon such dividend or distribution the Warrant
Price in effect immediately prior to such dividend or distribution shall
forthwith be reduced to a price determined by dividing:

(A) an amount equal to the total number of
shares of Common Stock outstanding immediately prior to such dividend or
distribution multiplied by the Warrant Price in effect immediately prior to such
dividend or distribution, by

(B) the total number of shares of Common
Stock outstanding immediately after such issuance or sale.

For the purposes of any computation to be made in accordance with the
provisions of this clause:

(i) The following provisions shall be applicable:
Common Stock issuable by way of dividend or other distribution on any stock of
the Company shall be deemed to have been issued immediately after the opening of
business on the date following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution.

(ii) In case the Company shall at any time
subdivide or combine the outstanding Common Stock, the Warrant Price shall
forthwith be proportionately decreased in the case of subdivision or increased
in the case of combination to the nearest one cent. Any such adjustment shall
become effective at the time such subdivision or combination shall become
effective.

(iii) Within a reasonable time after the close of
each quarterly fiscal period of the Company during which the Warrant Price has
been adjusted as herein provided, the Company shall:

(A) File with the Warrant Agent a
certificate signed by the President or Vice President of the Company and by the
Treasurer or Assistant Treasurer or the Secretary or an Assistant Secretary of
the Company, showing in detail the facts requiring all such adjustments
occurring during such period and the Warrant Price after each such adjustment;
and

(B) The Warrant Agent shall have no duty
with respect to any such certificate filed with it except to keep the same on
file and available for inspection by holders of Warrants during reasonable
business hours, and the Warrant Agent may conclusively rely upon the latest
certificate furnished to it hereunder. The Warrant Agent shall not at any time
be under any duty or responsibility to any holder of a Warrant to determine
whether any facts exist which may require any adjustment of the Warrant Price,
or with respect to the nature or extent of any adjustment of the Warrant Price
when made, or with respect to the method employed in making any such adjustment,
or with respect to the nature or extent of the property or securities
deliverable hereunder. In the absence of a certificate having been furnished,
the Warrant Agent may conclusively rely upon the provisions of the Warrants with
respect to the Common Stock deliverable upon the exercise of the Warrants and
the applicable Warrant Price thereof.

(C) Notwithstanding anything contained
herein to the contrary, no adjustment of the Warrant Price shall be made if the
amount of such adjustment shall be less than $.05, but in such case any
adjustment that would otherwise be required then to be made shall be carried
forward and shall be made at the time and together with the next subsequent
adjustment which, together with any adjustment so carried forward, shall amount
to not less than $.05.

(c) In the event that the number of outstanding shares of
Common Stock is increased by a stock dividend payable in Common Stock or by a
subdivision of the outstanding Common Stock, then, from and after the time at
which the adjusted Warrant Price becomes effective pursuant to Subsection (b) of
this Section by reason of such dividend or subdivision, the number of shares of
Common Stock issuable upon the exercise of each Warrant shall be increased in
proportion to such increase in outstanding shares. In the event that the number
of shares of Common Stock outstanding is decreased by a combination of the
outstanding Common Stock, then, from and after the time at which the adjusted
Warrant Price becomes effective pursuant to Subsection (b) of this Section by
reason of such combination, the number of shares of Common Stock issuable upon
the exercise of each Warrant shall be decreased in proportion to such decrease
in the outstanding shares of Common Stock.

(d) In case of any reorganization or reclassification of the
outstanding Common Stock (other than a change in par value, or from par value to
no par value, or as a result of a subdivision or combination), or in case of any
consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any reclassification of the
outstanding Common Stock), or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, the holder of each Warrant then outstanding shall thereafter have the
right to purchase the kind and amount of shares of Common Stock and/or other
securities and property receivable upon such reorganization, reclassification,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock which the holder of such Warrant shall then be entitled to
purchase; such adjustments shall apply with respect to all such changes
occurring between the date of this Warrant Agreement and the date of exercise of
such Warrant.

(e) Subject to the provisions of this Section 9, in case the
Company shall, at any time prior to the exercise of the Warrants, make any
distribution of its assets to holders of its Common Stock as a liquidating or a
partial liquidating dividend, then the holder of Warrants who exercises his
Warrants after the

record date for the determination of those holders of Common Stock entitled to
such distribution of assets as a liquidating or partial liquidating dividend
shall be entitled to receive for the Warrant Price per Warrant, in addition to
each share of Common Stock, the amount of such distribution (or, at the option
of the Company, a sum equal to the value of any such assets at the time of such
distribution as determined by the Board of Directors of the Company in good
faith), which would have been payable to such holder had he been the holder of
record of the Common Stock receivable upon exercise of his Warrant on the record
date for the determination of those entitled to such distribution.

(f) In case of the dissolution, liquidation or winding-up of
the Company, all rights under the Warrants shall terminate on a date fixed by
the Company, such date to be no earlier than ten (10) days prior to the
effectiveness of such dissolution, liquidation or winding-up and not later than
five (5) days prior to such effectiveness. Notice of such termination of
purchase rights shall be given to the last registered holder of the Warrants, as
the same shall appear on the books of the Company maintained by the Warrant
Agent, by registered mail at least thirty (30) days prior to such termination
date.

(g) In case the Company shall, at any time prior to the
expiration of the Warrants and prior to the exercise thereof, offer to the
holders of its Common Stock any rights to subscribe for additional shares of any
class of the Company, then the Company shall give written notice thereof to the
last registered holder thereof not less than thirty (30) days prior to the date
on which the books of the Company are closed or a record date is fixed for the
determination of the stockholders entitled to such subscription rights. Such
notice shall specify the date as to which the books shall be closed or record
date fixed with respect to such offer of subscription and the right of the
holder thereof to participate in such offer of subscription shall terminate if
the Warrant shall not be exercised on or before the date of such closing of the
books or such record date.

(h) Any adjustment pursuant to the aforesaid provisions shall
be made on the basis of the number of shares of Common Stock which the holder
thereof would have been entitled to acquire by the exercise of the Warrant
immediately prior to the event giving rise to such adjustment.

(i) Irrespective of any adjustments in the Warrant Price or
the number or kind of shares purchasable upon exercise of the Warrants, Warrants
previously or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the similar Warrants initially
issuable pursuant to this Warrant Agreement.

(j) The Company may retain a firm of independent public
accountants (who may be any such firm regularly employed by the Company) to make
any computation required under this Section, and any certificate setting forth
such computation signed by such firm shall be conclusive evidence of the
correctness of any computation made under this Section.

(k) If at any time, as a result of an adjustment made pursuant to
paragraph (d) above, the holders of a Warrant or Warrants shall become entitled
to purchase any securities other than shares of Common Stock, thereafter the
number of such securities so purchasable upon exercise of each Warrant and the
Warrant Price for such shares shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Common Stock contained in paragraphs (b) and (c).

(l) No adjustment to the Purchase Price of the Warrants or to
the number of shares of Common Stock purchasable upon the exercise of such
Warrants will be made, however under the following circumstances:

(i) upon the grant or exercise of any of the
options presently outstanding (or options which may hereafter be granted and/or
exercised) under the Company's Stock Option Plan for officers, directors and/or
employees, consultants and similar situated parties of the Company; or

(ii) upon the sale or exercise of the Warrants; or

(iii) upon exercise of the Underwriter's Warrant as
otherwise described in the Company's Prospectus dated ______ __, 1998; or

(iv) upon exercise or sale of the Warrants issuable
upon exercise of the Underwriter's Warrant; or

Section 10. Fractional Interests. The Warrants may only be exercised to
purchase full shares of Common Stock and the Company shall not be required to
issue fractions of shares of Common Stock on the exercise of Warrants. However,
if a Warrantholder exercises all Warrants then owned of record by him and such
exercise would result in the issuance of a fractional share, the Company will
pay to such Warrantholder, in lieu of the issuance of any fractional share
otherwise issuable, an amount of cash based on the market value of the Common
Stock of the Company on the last trading day prior to the exercise date.

Section 11. Notices to Warrantholders.

(a) Upon any adjustment of the Warrant Price and the number of
shares of Common Stock issuable upon exercise of a Warrant, then and in each
such case, the Company shall give written notice thereof to the Warrant Agent,
which notice shall state the Warrant Price resulting from such adjustment and
the increase or decrease, if any, in the number of shares purchasable at such
price upon the exercise of a Warrant, setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based. The
Company shall also mail such notice to the holders of the Warrants at their
respective addresses appearing in the Warrant register. Failure to give or mail
such notice, or any defect therein, shall not affect the validity of the
adjustments.

(b) In case at any time:

(i) the Company shall pay dividends payable in stock
upon its Common Stock or make any distribution (other than regular cash
dividends) to the holders of its Common Stock; or

(ii) the Company shall offer for subscription pro
rata to all of the holders of its Common Stock any additional shares of stock of
any class or other rights; or

(iii) there shall be any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with, or sale of substantially all of its assets to another
corporation; or

(iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding-up of the Company; then in any one or more
of such cases, the Company shall give written notice in the manner set forth in
Section 1 l(a) of the date on which (A) a record shall be taken for such
dividend, distribution or subscription rights, or (B) such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up shall take place, as the case may be. Such notice shall also specify
the date as of which the holders of Common Stock of record

shall participate in such dividend, distribution or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up as the case may be. Such
notice shall be given at least thirty (30) days prior to the action in question
and not less than thirty (30) days prior to the record date in respect thereof.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of any of the matters set forth in this Section 1(b).

(c) The Company shall cause copies of all financial statements
and reports, proxy statements and other documents that are sent to its
stockholders to be sent by first-class mail, postage prepaid, on the date of
mailing to such stockholders, to each registered holder of Warrants at his
address appearing in the Warrant register as of the record date for the
determination of the stockholders entitled to such documents.

Section 12. Disposition of Proceeds on Exercise of Warrants.

(a) The Warrant Agent shall promptly forward to the Company
all monies received by the Warrant Agent for the purchase of shares of Common
Stock through the exercise of such Warrants.

(b) The Warrant Agent shall keep copies of this Agreement
available for inspection by holders of Warrants during normal business hours.

Section 13. Redemption of Warrants. The Warrants are redeemable by the
Company commencing on _________ __, 2000, (or ________ __, 1999, with the prior
written consent of the Underwriter) and prior to their expiration on ________
__, 2001, in whole or in part, on not less than thirty (30) days' prior written
notice, at a redemption price of $.10 per Warrant; provided that the closing bid
price per share on the Nasdaq SmallCap Market, or the last sale price, if listed
on the Nasdaq National Market or a national exchange (the "Market Place"), of
the Common Stock for a period of twenty (20) consecutive trading days ending
immediately prior to the date of any redemption notice, exceeds $8.50. Any
redemption in part shall be made pro rata to all Warrant holders. The redemption
notice shall be mailed to the holders of the Warrants at their respective
addresses appearing in the Warrant register. Holders of the Warrants will have
exercise rights until the close of business on the date fixed for redemption.

The Warrants underlying the Underwriter's Warrant shall not be subject
to redemption by the Company until they have been exercised and the underlying
Warrants are outstanding.

Section 14. Merger or Consolidation or Change of Name of Warrant Agent.
Any corporation or company which may succeed to the corporate trust business of
the Warrant Agent by any merger or consolidation or otherwise shall be the
successor to the Warrant Agent hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that
such corporation would be eligible for appointment as a successor Warrant Agent
under the provisions of Section 16 of this Agreement. In case at the time such
successor to the Warrant Agent shall succeed to the agency created by this
Agreement, any of the Warrants shall have been countersigned but not delivered,
any such successor to the Warrant Agent may adopt the countersignature of the
original Warrant Agent and deliver such Warrants so countersigned.

In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrants shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignature under its prior name
and deliver Warrants so countersigned. In all such cases such Warrants shall
have the full force provided in the Warrants and in the Agreement.

Section 15. Duties of Warrant Agent. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Warrants, by their
acceptance thereof, shall be bound:

(a) The statements of fact and recitals contained herein and
in the Warrants shall be taken as statements of the Company, and the Warrant
Agent assumes no responsibility for the correctness of any of the same except as
such describe the Warrant Agent or action taken or to be taken by it. The
Warrant Agent assumes no responsibility with respect to the distribution of the
Warrants except as herein expressly provided.

(b) The Warrant Agent shall not be responsible for any failure
of the Company to comply with any of the covenants in this Agreement or in the
Warrants to be complied with by the Company.

(c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant Agent
shall incur no liability or responsibility to the Company or to any holder of
any Warrant in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the opinion or the advice of such counsel.

(d) The Warrant Agent shall incur no liability or
responsibility to the Company or to any holder of any Warrant for any action
taken in reliance on any notice, resolution, waiver,

consent, order, certificate or other instrument believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.

(e) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the execution of
this Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges incurred by the Warrant Agent in the
execution of this Agreement and to indemnify the Warrant Agent and save it
harmless against any and all liabilities, including judgments, costs and
reasonable counsel fees, for anything done or omitted by the Warrant Agent in
the execution of this Agreement except as a result of the Warrant Agent's
negligence, willful misconduct or bad faith.

(f) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve expenses unless the Company or one or more registered holders
of Warrants shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred (for which there is
no obligation of the Company to do so, except as provided herein) but this
provision shall not affect the power of the Warrant Agent to take such action as
the Warrant Agent may consider proper, whether with or without any such security
or indemnity. All rights of action under this Agreement or under any of the
Warrants may be enforced by the Warrant Agent without the possession of any of
the Warrants or the production thereof at any trial or other proceeding, and any
such action, suit or proceeding instituted by the Warrant Agent shall be brought
in its name as Warrant Agent, and any recovery of judgment shall be for the
ratable benefit of the registered holders of the Warrants, as their respective
rights and interests may appear.

(g) The Warrant Agent and any stockholder, director, officer,
partner or employee of the Warrant Agent may buy, sell or deal in any of the
Warrants or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to or otherwise act as fully and freely as though it were not the Warrant
Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal entity.

(h) The Warrant Agent shall act hereunder solely as agent and
its duties shall be determined solely by the provisions hereof.

(i) The Warrant Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys, agents or

employees, and the Warrant Agent shall not be answerable or accountable for any
such attorneys, agents or employees or for any loss to the Company, provided
reasonable care had been exercised in the selection and continued employment
thereof.

(j) Any request, direction, election, order or demand of the
Company shall be sufficiently evidenced by an instrument signed in the name of
the Company by its President or a Vice President or its Secretary or an
Assistant Secretary or its Treasurer or an Assistant Treasurer (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Warrant Agent by a
copy thereof certified by the Secretary or an Assistant Secretary of the
Company.

Section 16. Change of Warrant Agent. The Warrant Agent may resign and
be discharged from its duties under this Agreement by giving to the Company
notice in writing, and to the holders of the Warrants notice by mailing such
notice to the holders at their respective addresses appearing on the Warrant
register, of such resignation, specifying a date when such resignation shall
take effect. The Warrant Agent may be removed by like notice to the Warrant
Agent from the Company and the like mailing of notice to the holders of the
Warrants. If the Warrant Agent shall resign or be removed or shall otherwise
become incapable of action, the Company shall appoint a successor to the Warrant
Agent. If the Company shall fail to make such appointment within a period of
thirty (30) days after such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Warrant Agent
or after the Company has received such notice from a registered holder of a
Warrant (who shall, with such notice, submit his Warrant for inspection by the
Company), then the registered holder of any Warrant may apply to any court of
competent jurisdiction for the appointment of a successor to the Warrant Agent.
Any successor Warrant Agent, whether appointed by the Company or by such a
court, shall be a bank or trust company, in good standing, incorporated under
any state or federal law. After appointment, the successor Warrant Agent shall
be vested with the same powers, rights, duties and responsibility as if it had
been originally named as Warrant Agent without further act or deed and the
former Warrant Agent shall deliver and transfer to the successor Warrant Agent
all cancelled Warrants, records and property at the time held by it hereunder,
and execute and deliver any further assurance or conveyance necessary for the
purpose. Failure to file or mail any notice provided for in this Section,
however, or any defect therein, shall not affect the validity of the resignation
or removal of the Warrant Agent or the appointment of the successor Warrant
Agent, as the case may be.

Section 17. Identity of Transfer Agent. Forthwith upon the appointment
of any transfer agent for the shares of Common Stock or of any subsequent
transfer agent for the shares of Common Stock or other shares of the Company's
Common Stock issuable upon the exercise of the` rights of purchase represented
by the Warrants, the Company will file with the Warrant Agent a statement
setting forth the name and address of such transfer agent.

Section 18. Notices. Any notice pursuant to this Agreement to be given
by the Warrant Agent, or by the registered holder of any Warrant to the Company,
shall be sufficiently given if sent by first-class mail, postage prepaid,
addressed (until another is filed in writing by the Company with the Warrant
Agent) as follows:

Proflight Medical Response, Inc.
7211 S. Peoria Street
Littleton, Colorado 80112
Attention: Kevin L. Burkhardt, President

and a copy thereof to:

Bondy & Schloss LLP
6 East 43rd Street
New York, New York 10017
Attention: Gerald A. Adler, Esq.

Any notice pursuant to this Agreement to be given by the Company or by
the registered holder of any Warrant to the Warrant Agent shall be sufficiently
given if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing by the Warrant Agent with the Company) as follows:

American Securities Transfer & Trust, Inc.
185 Lawrence Street
Denver, Colorado 80202
Attention: Ms. Margo Ankele

Section 19. Supplements and Amendments. The Company, the Warrant Agent
and the Representative may from time to time supplement or amend this Agreement
in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions in regard to matters or questions
arising hereunder which the Company and the Warrant Agent and the Representative
may deem necessary or desirable and which shall not be inconsistent with the
provisions of the Warrants and which shall not adversely affect the interest of
the holders of Warrants.

Section 20. New York Contract. This Agreement and each Warrant issued
hereunder shall be deemed to be a contract made under the laws of the State of
New York and shall be construed in accordance with the laws of New York
applicable to agreements to be performed wholly within New York.

Section 21. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrants any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Warrant Agent and the registered
holders of the Warrants.

Section 22. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Warrant
Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.

IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.

PROFLIGHT MEDICAL RESPONSE, INC.

By:_________________________________
Kevin L. Burkhardt, President

AMERICAN SECURITIES TRANSFER & TRUST,
INC.

By:_________________________________
Name:
Title:

EXHIBIT A

[Form of Face of Warrant Certificate]

No. W Warrants

VOID AFTER ________ __, 2001

WARRANT CERTIFICATE FOR PURCHASE OF COMMON STOCK

PROFLIGHT MEDICAL RESPONSE, INC.

THIS CERTIFIES THAT FOR VALUE RECEIVED _________________________________________
________________________________________________________________________________
or registered assigns (the "Registered Holder") is the owner of the number of
Redeemable Common Stock Purchase Warrants ("Warrants") specified above. Each
Warrant initially entitles the Registered Holder to purchase, subject to the
terms and conditions set forth in this Certificate and the Warrant Agreement (as
hereinafter defined), one fully paid and nonassessable share of Common Stock,
$.001 par value per share ("Common Stock"), of PROFLIGHT MEDICAL RESPONSE, INC.,
a Colorado corporation (the "Company"), at any time between the Initial Warrant
Exercise Date and the Expiration Date (as hereinafter defined), upon the
presentation and surrender of this Warrant Certificate with the Subscription
Form on the reverse hereof duly executed, at the corporate office of AMERICAN
SECURITIES TRANSFER & TRUST, INC. as Warrant Agent, or its successor (the
"Warrant Agent"), accompanied by payment of $6.00 (the "Purchase Price") in
lawful money of the United States of America in cash or by official bank or
certified check made payable to Proflight Medical Response, Inc.

This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions set
forth in the Warrant Agreement (the "Warrant Agreement") dated ______ __, 1998,
by and between the Company and the Warrant Agent.

In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price or the number of shares of Common Stock subject to
purchase upon the exercise of each Warrant represented hereby are subject to
modifications or adjustment.

Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional shares of Common Stock will be issued. In
the case of the exercise of less than all the Warrants represented hereby, the
Company shall cancel this Warrant Certificate upon the surrender hereof and
shall execute and deliver a new Warrant Certificate or Warrant Certificates of
like tenor, which the Warrant Agent shall countersign, for the balance of such
Warrants.

A-1

The term "Initial Warrant Exercise Date" shall mean _________ __, 1998.

The term "Expiration Date" shall mean 5:00 p.m. New York time) on
_________ __, 2001, or such earlier date as the Warrants shall be redeemed. If
such date shall in the State of New York be a holiday or a day on which the
banks are authorized to close, then the Expiration Date shall mean 5:00 p.m.
(New York time) the next following day which in the State of New York is not a
holiday or a day on which banks are authorized to close.

The Company shall not be obligated to deliver any securities pursuant to
the exercise of this Warrant unless a registration statement under the
Securities Act of 1933, as amended, with respect to such securities is then
effective. This Warrant shall not be exercisable by a Registered Holder in any
state where such exercise would be unlawful.

This Warrant Certificate is exchangeable, upon the surrender hereof by the
Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. Upon due presentment with any transfer fee in addition
to any tax or other governmental charge imposed in connection therewith, for
registration of transfer of this Warrant Certificate at such office, a new
Warrant Certificate or Warrant Certificates representing an equal aggregate
number of Warrants will be issued to the transferee in exchange therefor,
subject to the limitations provided in the Warrant Agreement.

Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.

This Warrant may be redeemed at the option of the Company, at a redemption
price of $.10 per Warrant any time commencing ______ __, 2000 (or _____ __, 1999
with the prior consent of First Liberty Investment Group, Inc. (the
"Underwriter"), provided the per share Market Price (as defined in the Warrant
Agreement) for the securities issuable upon exercise of such Warrant shall
exceed $8.50 on each of the twenty (20) consecutive trading days during a period
ending immediately prior to the date on which notice of redemption is given.
Notice of redemption shall be given not later than the thirtieth day before the
date fixed for redemption, all as provided in the Warrant Agreement. On and
after the date fixed for redemption, the Registered Holder shall have no rights
with respect to this Warrant except to receive the $.10 per Warrant upon
surrender of this Certificate.

A-2

Prior to due presentment for registration of transfer hereof, the
Company and the Warrant Agent may deem and treat the Registered Holder as the
absolute owner hereof and of each Warrant represented hereby (notwithstanding
any notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary.

The Company has agreed to pay a fee of 7% of the Purchase Price upon
certain conditions as specified in the Warrant Agreement upon the exercise of
any Warrants represented hereby.

This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York.

This Warrant Certificate is not valid unless countersigned by the Warrant
Agent.

IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted hereon.

PROFLIGHT MEDICAL RESPONSE, INC.

By:_____________________________

Dated:_______________________

[Seal]

COUNTERSIGNED:

AMERICAN SECURITIES TRANSFER & TRUST, INC.
as Warrant Agent

By:_____________________________________
Authorized Officer

A-3

[Form of Reverse of Warrant Certificate]

NOTICE OF ELECTION TO EXERCISE

To Be Executed by the Registered Holder
in Order to Exercise Warrants

THE UNDERSIGNED REGISTERED HOLDER hereby irrevocably elects to exercise
_______________ Warrants represented by this Warrant Certificate, and to
purchase the securities issuable upon the exercise of such Warrants, and
requests that certificates for such securities shall be issued in the name of

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER and
be delivered to:

_______________________________________
_______________________________________
_______________________________________
_______________________________________
(please print or type name and address)

and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.

The undersigned represents that the exercise of the Warrants evidenced
hereby was solicited by a member of the National Association of Securities
Dealers, Inc. If not solicited by an NASD member firm, please write
"unsolicited" in the space below. Unless otherwise indicated by listing the name
of another NASD member firm, it will be assumed that the exercise was solicited
by First Liberty Investment Group, Inc.

------------------------------------
(Name of NASD Member, if other than
First Liberty Investment Group, Inc.)

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

Dated:______________ ------------------------------------

------------------------------------
Address

------------------------------------
Taxpayer Identification Number

------------------------------------
Signature Guaranteed

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

A-4

ASSIGNMENT

To Be Executed by the Registered Holder in Order to Assign Warrants

FOR VALUE RECEIVED, __________________________________ hereby sells,
assigns, and transfers unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF TRANSFEREE

________________________________________
________________________________________
________________________________________
________________________________________
(please print or type name and address)

__________ of the Warrants represented by this Warrant Certificate, and hereby
irrevocably constitutes and appoints _________________________ Attorney to
transfer this Warrant Certificate on the books of the Company, with full power
of substitution in the premises.

Dated:_________________ X__________________________
Signature Guaranteed

___________________________

THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE
GUARANTEED BY AN ELIGIBLE INSTITUTION (AS DEFINED IN RULE 17Ad-15 UNDER THE
SECURITIES AND EXCHANGE ACT OF 1934) WHICH MAY INCLUDE A COMMERCIAL BANK OR
TRUST COMPANY, SAVINGS ASSOCIATION, CREDIT UNION OR A MEMBER FIRM OF THE
AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR
MIDWEST STOCK EXCHANGE.

A-5

<PAGE>

AMENDED EMPLOYMENT AGREEMENT, NON-COMPETITION
AND CONFIDENTIALITY AGREEMENT

THIS AGREEMENT made as of the -- day of March 1997, by and between
Proflight Medical Response, Inc., a Colorado corporation, with its principal
office at 12420 E. Control Tower Road, Englewood, Colorado 80122 (the "Company")
and Donald Jones, residing at 2163 Turkey Run, Winter Park, Florida 32789 ( the
"Employee").

W I T N E S S E T H

WHEREAS, the Company is engaged in air ambulance transport services (the
"Business"); and

WHEREAS, the Company is desirous of employing the Employee on a
full-time basis as its Vice President of Sales to develop and oversee new and
existing business accounts on the terms and conditions hereinafter set forth;
and

WHEREAS, the Employee is desirous and willing to accept such employment
on the terms and conditions hereinafter set forth.

NON, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties, the Company and the
Employee agree

as follows:

1. Incorporation of Recitals.

The recitals set forth above are incorporated herein by reference and
made part of this Agreement.

2. Employment and Term.

(a) The Company hires and employs the Employee and the Employee agrees
to perform for the Company, the services set forth in Paragraph 3 hereof, on a
full-time basis under the terms and conditions hereinafter set forth.

(b) The term of this Agreement (the "Initial Term") shall commence on
the closing date of the Company's initial public offering (the "Commencement
Date") and shall continue until the sixth (6th) anniversary of the Commencement
Date. This Agreement will automatically renew for successive one (1) year
periods upon the terms and conditions contained herein ("Renewal Option"),
unless the Employee has advised the Company and/or the Company has advised the
Employee, at least sixty (60) days prior to the end of the Initial Term or the
end of any other year extended by the Renewal Option, of either party's
intention not to extend the Agreement beyond any such term. Hereinafter, the
Initial Term and any successive one-year periods shall collectively be referred
to as the "Term."

3. Extent of Service.

(a) During the Term, the Employee shall serve on a full-

time basis as Vice President of Sales and have the responsibility for the sales
and dispatch of the services provided by the Company. The Employee shall be
required to relocate his residence to the Denver Colorado Metropolitan area and
the Company shall pay all reasonable relocation expenses, to be agreed upon by
the Company and the Employee, for the Employee and his family. In the event the
Employee does not relocate his residence this Agreement shall be null and void.

(b) The Employee shall devote all of his business time, skill, labor and
attention to the affairs of the Company, and shall promptly and faithfully,
perform all services pertaining thereto that are or may hereafter be required of
him by the Company, provided that such services shall be consistent with his
position as Vice President of Sales of the Company. Nothing in this Agreement
shall preclude the Employee from devoting time to managing his personal
investments, provided that such investments are not in competition with the
business of the Company and that such activities do not unreasonably interfere
with the performance of his duties hereunder.

4. Compensation.

(a) Base Compensation. As base compensation for the services rendered
hereunder, the Employee shall be paid a salary of $150,000 per annum. The
Employee shall receive a 5% increase in his base salary in years four, five and
six. The aforesaid salary shall initially be payable in 26 equal payments
commencing two

(2) weeks from the Commencement Date or on such other basis, such as weekly
and/or monthly as determined by the Board of Directors of the Company.

(b) Relocation Bonus. In addition to the relocation expenses to be paid
by the Company as set forth in paragraph 3(a), the Company also agrees to pay
the Employee One Hundred Thousand Dollars ($100,000) for relocating. In the
event the Company requires the Employee to relocate a second time, the Company
agrees to pay the Employee an Additional One Hundred Thousand Dollars
($100,000).

(c) Shares of Common Stock. The Company has also agreed to give the
Employee, the number of shares of common stock, par value $.001, of the Company
equal to an amount of $500,000 as follows: In calculating the number of shares
of common stack to which the Employee shall be entitled, the value of each share
of common stock shall be the per share price to the public at which the common
stock is sold in the Company's initial public offering. The Employee's shares
will not be registered under the Securities Act of 1933 and will be legended to
that effect. The Employee agrees that he will not, directly or indirectly,
register, offer, sell, offer to sell, contract to sell, hypothecate, pledge or
otherwise dispose of any shares of common stock prior to two years from the
closing of the Company's initial public offering, without the prior written
consent of the Company's underwriter. The Employee agrees to enter into a
lock-up agreement with the Company's underwriter with respect to the

above.

(d) Bonuses and Additional Benefits. The Employee may be awarded bonuses
as agreed and set by the Board of Directors of the Company. Employee shall also
be entitled to, and shall be accorded, all rights and benefits under any
executive incentive plan (including the Company's Stock Option Plan), monetary
bonus plan, participation or extra compensation plan, pension plan, profit
sharing plan, disability insurance, health and major medical insurance policy or
policies, and any other plans or benefits that the Company may from time to time
provide for any officers generally during the Term. The Company shall accord the
Employee such rights and benefits on a basis no less favorable than any other
officers of comparable status of the Company or its subsidiaries or affiliates.

(e) Vacation and Sick Leave. For each year during which this Agreement
is in effect, Employee shall be entitled to vacation and sick leave benefits,
without a deduction of salary or other compensation in accordance with the
Company's standard policies. The Employee shall have no less than three (3)
weeks vacation per year, provided the Employee works full time each year for the
Company and under the terms of this Agreement. Such vacation shall be taken at
such time or times during such year as may be mutually agreed upon by the
Company and the Employee.

(f) Business Expenses. The Employee shall be authorized to incur
reasonable business expenses for promoting the business of

the Company, including expenditures for entertainment, gift and travel, within
the guidelines as are set by the Board of Directors of the Company and which are
consistent with the Internal Revenue Service guidelines, provided that the
Employee submits vouchers therefore in the form reasonably satisfactory to the
Company.

(g) Other Benefits. The Company will provide the Employee with fringe
benefits in the aggregate not less favorable than those received generally by
other officers of comparable status of the Company.

5. Life Insurance.

The Company, in its discretion may apply for and procure as owner and
for its own benefit insurance on the life of the Employee, in such amounts and
in such form or forms as the Company may choose.

6. Disability and Death of Employee.

(a) Disability. For purpose hereof, the term "disability" shall mean
the inability of the Employee to work for a period of six (6) consecutive months
or any 140 days in any 185 day period.

In the event the Employee shall become disabled, the Employee shall be
entitled to all base compensation due and payable pursuant Paragraph 4(a) for a
period of three (3) months following the date that he is determined to have
become disabled pursuant to the previous sentence. Such amounts payable shall

be offset by any amounts paid to the Employee under disability insurance
policies maintained by the Company.

(b) Death. In the event of death during the Term, the normal monthly
compensation of the Employee shall be paid and all benefits the Employee was
then receiving will continue to be paid to the Employee's spouse or his
survivors for a period of six (6) months. In all other respects, this Agreement
shall be deemed to terminate upon death of the Employee.

7. Covenant Not To Compete

(a) The Employee hereby acknowledges and recognizes the highly
competitive and confidential nature of the Company's Business, and for the
consideration stated above, accordingly agrees that, unless the employee is
terminated without cause, during the entire period, commencing with the
Commencement Date, the Employee's employment by the Company, to include twelve
(12) months after the termination of the Employee's employment with the Company,
Employee will not directly or indirectly, in any capacity:

(i) Engage in any capacity in any business endeavor which has among its
purposes and/or endeavors air ambulance services or related businesses within
100 miles in any geographic area, city and/or state in which the Company's
services have been provided within the last year.

(ii) Induce employees of the Company, or any of its respective
subsidiaries, to terminate their employment or to

engage in any activities hereby prohibited to the Employee;

(iii) Contact, communicate or solicit any customer and/or any contact of
the Company derived from any customer list, customer lead, mail, printed
material or other information of the Company with any other party.

(iv) Discuss any activities, methods of operation, finances,
confidential practices and private business information of the Company with any
other party.

(b) It is expressly understood and agreed that although the Employee and
the Company consider the restrictions contained in clause (a) above to be
reasonable, for the purpose of reserving for the Company or any of its
subsidiaries, their good will and other proprietary rights, if a final judicial
determination is made by a Court having jurisdiction as to the restrictions
agreed to by the parties hereto the provisions of such restriction clauses by
this Agreement shall not be rendered void, but shall be deemed amended to apply
as to such maximum time and territory and to such other extent as such Court may
judicially determine or indicate to be reasonable.

(c) As to the reasonableness of the non-competition and restrictive
covenants contained herein, Employee further acknowledges and confesses that his
is capable of making a living in employment areas other than the business
engaged in by the Company, and, that the non-competition and restrictive
covenants contained herein will not in the least manner impair or interfere with
Employee from earning a living after Employee terminates his

relations with the Company.

8. Disclosure of Information.

The Employee acknowledges that the Company's trade secrets, private or
secret processes as they may exist from time to time, and confidential
information concerning their services development, all technical information,
procurement and sales activities and procedures, promotion and pricing
techniques and credit and financial data concerning customers are valuable,
special and unique assets of the Company and its subsidiaries, access to and
knowledge of which are essential to the performance of the Employee's duties
hereunder. In light of the highly competitive nature of the industry in which
the Company and its subsidiaries' business is conducted, the Employee further
agrees that all knowledge and information described in the preceding sentence
not in the public domain and heretofore or in the future obtained by him as a
result of his employment by the Company or its subsidiaries shall be considered
confidential information. In recognition of this fact, the Employee agrees that
he will not, during or after the Term, disclose any such secrets, processes or
information to any person or their entity for any reason or purpose whatsoever,
except as is necessary in the performance of his duties as an employee of the
Company or its subsidiaries and then only upon a written confidentiality
agreement in such form and content as requested by the Company from time to
time; nor shall the Employee make use of any such

secrets, processes or information (other than information in the public domain)
for his own purposes or for the benefits of any person or other entity (except
the Company and its subsidiaries) under any circumstances during or after the
Term.

9. Termination.

The Employee's employment, if not already terminated under paragraph
2(b) may be terminated at any time during the Term for Cause (as hereinafter
defined) by action of the Board of Directors of the Company upon giving the
Employee notice of such termination at least thirty (30) days prior to the date
upon which termination shall take effect. As used herein, the term "Cause" shall
mean any of the following events:

(i) The Employee's conviction of or plea of guilty or nolo
contendere to a crime involving moral turpitude.

(ii) The Employee's willful misconduct, or neglect of duties or
failure to act with respect to duties or actions previously communicated to the
Employee in writing by the Board of Directors of the Company.

If the Employee's employment is terminated under the provisions of this
Section 9 all rights of the Executive pursuant to Section 4 hereof shall cease
as of the effective date of such termination.

10. Arbitration

Any and all disputes between the Employee and the Company

arising with respect to the employment by the Company or any of its
subsidiaries, including any dispute arising under this Agreement, shall be
submitted to binding, expedited arbitration in Denver, Colorado under the then
prevailing rules of the American Arbitration Association.

11. Assignment.

This Agreement shall not be assignable by the Employee. This Agreement
is assignable by the Company and/or any of its subsidiaries to any successor in
interest of the Company or any of its subsidiaries.

12. Notices.

All notices, requests, demands and communications under or in respect
hereof shall be deemed to have been duly given and made if in writing (including
fax) if delivered by hand or left at a posted pre-paid registered or certified
mail to the party concerned at its address appearing below or sent by fax to the
number and with a copy as indicated below. Service shall be deemed to be
effective: so far as delivery by hand is concerned when handed to the recipient
or left at the recipient's address; by post two days after posting; by fax on
the same day as dispatch and receipt is confirmed. The said addresses and fax
numbers are as follows:

If to the Employee:

Donald Jones
2163 Turkey Run
Winter Park, FL 32789
Tel: (407) 740-7269
Fax: (407) 740-5798

If to the Company:
Kevin L. Burkhardt
Proflight, Inc.
12420 E Control Tower Road
Englewood, Colorado 80112
Tel: 800-949-5387
Fax: 303-799-1367

13. Complete Agreement: Amendments

This Agreement contains the full and complete understanding of the
parties pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings of the parties in connection
therewith. No amendment or modification of this Agreement shall be valid unless
made pursuant to an instrument signed by the Company and the Employee.

14. Governing Law.

This Agreement shall be governed by and construed in accordance with the
laws of the State of Colorado.

15. Severability.

If any one or more of the terms, provisions, covenants or restrictions
of this Agreement shall be determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of

this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. If any one or more of the provisions
contained in this Agreement shall for any reason be determined by a court of
competent jurisdiction to be excessively broad or vague as to duration,
geographical scope, activity or subject or otherwise, this Agreement shall be
construed by limiting, reducing or defining it, so as to be enforceable to the
fullest extent compatible with then applicable law.

16. Headings.

The descriptive headings of the several Paragraphs of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.

17. Prior Employment Agreements.

This Agreement supersedes all prior employment agreements between the
parties.

18. Waiver of Breach.

The waiver by the Company or Employee of a breach of any provision of
this Agreement by the Company or the Employee shall not operate or be construed
as a waiver of any subsequent breach by the Company or the Employee.

19. Counterparts.

This Agreement may be executed in any number of counterparts, each of
which shall be an original, and ail of which shall constitute one and the same
agreement.

IN WITNESS WHEREOF the parties hereto have duly executed this Agreement
as of the day and year first above written.

PROFLIGHT MEDICAL RESPONSE, INC.

By: Kevin L. Burkhardt
-----------------------------------
Kevin L. Burkhardt, President

Donald Jones
-----------------------------------
Donald Jones

<PAGE>

EMPLOYMENT AGREEMENT, NON-COMPETITION
AND CONFIDENTIALITY AGREEMENT

THIS AGREEMENT made as of the 15th day of September 1997, by and between
Proflight Medical Response, Inc., a Colorado corporation, with its principal
office at 7211 S. Peoria Street, Littleton, Colorado 80122 (the "Company") and
Steven B. Myers, residing at __________________________________ (the
"Employee").

W I T N E S S E T H

WHEREAS, the Company is engaged in air ambulance transport services (the
"Business"); and

WHEREAS, the Company is desirous of employing the Employee on a full-time
basis as its Assistant Vice President of marketing and contracting on the terms
and conditions hereinafter set forth; and

WHEREAS, the Employee is desirous and willing to accept such employment on
the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties, the Company and the
Employee agree as follows:

1. Incorporation of Recitals.

The recitals set forth above are incorporated herein by reference and made
part of this Agreement.

2. Employment and Term.

(a) The Company hires and employs the Employee and the Employee agrees to
perform for the Company, the services set forth in Paragraph 3 hereof, on a
full-time basis under the terms and conditions hereinafter set forth.

(b) The term of this Agreement (the "Initial Term") shall commence on the
closing date of the Company's initial public offering (the "Commencement Date")
and shall continue until the fifth (5th) anniversary of the Commencement Date.
This Agreement will automatically renew for successive one (1) year periods upon
the terms and conditions contained herein ("Renewal Option"), unless the
Employee has advised the Company and/or the Company has advised the Employee, at
least sixty (60) days prior to the end of the Initial Term or the end of any
other year extended by the Renewal Option, of either party's intention not to
extend the Agreement beyond any such term. Hereinafter, the Initial Term and any
successive one-year periods shall collectively be referred to as the "Term."

3. Extent of Service.

(a) During the Term, the Employee shall serve on a full-time basis as
Assistant Vice President of marketing and contracting and have the
responsibility for the day to day management of the business of the Company.

(b) The Employee shall devote all of his business time, skill, labor and
attention to the affairs of the Company, and shall promptly and faithfully,
perform all services pertaining thereto that are or may hereafter be required of
him by the Company, provided that such services shall be consistent with his
position as Assistant Vice President of marketing and contracting of the
Company. Nothing in this Agreement shall preclude the Employee from devoting
time to managing his personal investments, provided that such investments are
not in competition with the business of the Company and that such activities do
not unreasonably interfere with the Performance of his duties hereunder.

4. Compensation.

(a) Base Compensation. As base compensation for the services rendered
hereunder, the Employee shall be paid a salary of $70,000.00 per annum.

(b) Bonuses and Additional Benefits. The Employee may be awarded bonuses as
agreed and set by the Board of Directors of the Company. Employee shall also be
entitled to, and shall be accorded, all rights and benefits under any executive
incentive plan (including the Company's Stock Option Plan), monetary bonus plan,
participation or extra compensation plan, pension plan, profit sharing plan,
disability insurance, health and major medical insurance policy or policies, and
any other plans or benefits that the Company may from time to time provide for
any officers generally during the Term. The Company shall accord the Employee
such rights and benefits on a basis no less favorable than any other officers of
comparable status of the Company or its subsidiaries or affiliates.

Notwithstanding any other provision of this Agreement, if, at the end of
either of the first two years commencing on the effective date of the Company's
Registration Statement filed with the Securities and Exchange Commission in
connection with the pending initial public offering, the Company achieves
$1,000,000 in pretax profits, before depreciation and amortization, the Employee
shall receive a stock bonus in the amount of ___________ shares of the Company's
Common Stock provided, however, that the Company shall not issue such stock
bonus to the Employee if it is determined, based upon the audited financial
statements during the year in which it is to be granted, that the issuance of
such a stock bonus would negatively affect the listing of the Company's Common
Stock

on the Nasdaq SmallCap Market. Such bonus shall be subject to vesting at a rate
of 50% upon realization by the Company of the minimum $1,000,000 in pretax
profits and 25% on each of the next two anniversaries thereof.

(c) Vacation and Sick Leave. For each year during which this Agreement is
in effect, Employee shall be entitled to vacation and sick leave benefits,
without a deduction of salary or other compensation in accordance with the
Company's standard policies. The Employee shall have no less than four(4) weeks
vacation per year, provided the Employee works full time each year for the
Company and under the terms of this Agreement. Such vacation shall be taken at
such time or times during such year as may be mutually agreed upon by the
Company and the Employee.

(d) Business Expenses. The Employee shall be authorized to incur reasonable
business expenses for promoting the business of the Company, including
expenditures for entertainment, gift and travel, within the guidelines as are
set by the Board of Directors of the Company and which are consistent with the
Internal Revenue Service guidelines, provided that the Employee submits vouchers
therefore in the form reasonably satisfactory to the Company.

(e) Other Benefits. The Company will provide the Employee with fringe
benefits in the aggregate not less favorable than those received generally by
other officers of comparable status of the Company.

5. Life Insurance.

The Company, in its discretion may apply for and procure as owner and for
its own benefit insurance on the life of the Employee, in such amounts and in
such form or forms as the Company may choose.

6. Disability and Death of Employee.

(a) Disability. For purpose hereof, the term "disability" shall mean the
inability of the Employee to work for a period of six (6) consecutive months or
any 140 days in any 185 day period. In the event the Employee shall become
disabled, the Employee shall be entitled to all base compensation due and
payable pursuant Paragraph 4(a) for a period of six (6) months following the
date that he is determined to have become disabled pursuant to the previous
sentence. Such amounts payable shall be offset by any amounts paid to the
Employee under disability insurance policies maintained by the Company.

all other respects, this Agreement shall be deemed to terminate upon death of
the Employee.

7. Covenant Not To Compete

(a) The Employee hereby acknowledges and recognizes the highly competitive
and confidential nature of the Company's business, and for the consideration
stated above, accordingly agrees that, unless the employee is terminated without
cause, during the entire period, commencing with the Commencement Date, he
Employee's employment by the Company, to include twelve (12) months after the
termination of the Employee's employment with the Company, Employee will not
directly or indirectly, in any capacity:

(i) Engage in any capacity in any business endeavor which has among its
purposes and/or endeavors air ambulance services or elated businesses within 100
miles of any geographic area, city and/or state in which the Company's services
have been provided within the last year.

(ii) Induce employees of the Company, or any of it:s respective
subsidiaries, to terminate their employment or to engage in any activities
hereby prohibited to the Employee;

(iv) Discuss any activities, methods of operation, finances, confidential
practices and private business information of the Company with any other party.

(c) As to the reasonableness of the non-competition and restrictive
covenants contained herein, Employee further acknowledges and confesses that he
is capable of making a living in employment areas other than the business
engaged in by the Company, and, that the non-competition and restrictive
covenants contained herein will not in the least manner impair or interfere with

Employee from earning a living after Employee terminates his relations with the
Company.

8. Disclosure of Information.

The Employee acknowledges that the Company's trade secrets, private or
secret processes as they may exist from time to time, and confidential
information concerning their services, development, all technical information,
procurement and sales activities and procedures, promotion and pricing
techniques and credit and financial data concerning customers and other trade
secrets are valuable, special and unique assets of the Company and its
subsidiaries, access to and knowledge of which are essential to the performance
of the Employee's duties hereunder. In light of the highly competitive nature of
the industry in which the Company and its subsidiaries' business is conducted,
the Employee further agrees that all knowledge and information described in the
preceding sentence not in the public domain and heretofore or in the future
obtained by him as a result of his employment by the Company or its subsidiaries
shall be considered confidential information. In recognition of this fact, the
Employee agrees that he will not, during or after the Term, disclose any such
secrets, processes or information to any person or their entity for any reason
or purpose whatsoever, except as is necessary in the performance of his duties
as an employee of the Company or its subsidiaries and then only upon a written
confidentiality agreement in such form and content as requested by the Company
from time to time; nor shall the Employee make use of any such secrets,
processes or information (other than information in the public domain) for
his-own purposes or for the benefits of any person or other entity (except the
Company and its subsidiaries) under any circumstances during or after the Term.

9. Termination.

(a) The Employee's employment may be terminated at any time during the Term for
Cause (as hereinafter defined) by action of the Board of Directors of the
Company upon giving the Employee notice of such termination at least thirty (30)
days prior to the date upon which termination shall take effect. As used herein,
the term "Cause" shall mean any of the following events:

(i) The Employee's conviction of or plea of guilty or nolo contendere to a
crime involving moral turpitude.

(ii) The Employee's willful misconduct, or neglect of duties or failure to
act with respect to duties or actions previously communicated to the Employee in
writing by the Board of Directors of the Company.

If the Employee's employment is terminated under the provisions of this
Section 9(a) all rights of the Employee

pursuant to Section 4 hereof shall cease as of the effective date of such
termination.

(b) Upon the termination of this Agreement, other than for cause, the
Company shall be responsible to pay the Employee the salary he was presently
earning and continue all benefits available to the Employee hereunder for an
additional one (1) year period from the date of termination.

(c) Upon the termination of this Agreement, for any reason, the Employee
(or his estate) shall be entitled to receive payment for base compensation
earned and accrued prior to the date of such termination.

(d) If this Agreement shall be terminated as a result of a violation of the
terms hereof by the Company, the Employee shall be entitled to all remedies and
damages available under applicable law. The Employee shall not be required to
mitigate damages.

10. Arbitration.

Any and all disputes between the Employee and the Company arising with
respect to the employment by the Company or any of its subsidiaries, including
any dispute arising under this Agreement, shall be submitted to binding,
expedited arbitration in Denver, Colorado under the then prevailing rules of
the American Arbitration Association.

11. Assignment.

This Agreement shall not be assignable by the Employee. This Agreement is
assignable by the Company and/or any of its subsidiaries to any successor in
interest of the Company or any of its subsidiaries.

12. Notices.

All notices, requests, demands and communications under or in respect
hereof shall be deemed to have been duly given and made if in writing (including
fax) if delivered by hand or by pre-paid registered or certified mail to the
party concerned at its address appearing below or sent by fax to the number and
with a copy as indicated below. Service shall be deemed to be effective: so far
as delivery by hand is concerned when handed to the recipient or left at the
recipient's address; by post two days after posting; by fax on the same day as
dispatch and receipt is confirmed. The said addresses and fax numbers are as
follows:

If to the Employee:

Steven B. Myers
- ---------------
- ---------------
- ---------------

If to the Company:

Proflight Medical Response, Inc.
7211 S. Peoria Street
Littleton, Colorado 80112
Attn: David Cohen
Tel: 800-949-5387
Fax: 303-799-1367

13. Complete Agreement; Amendments

This Agreement contains the full and complete understanding of the parties
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings of the parties in connection
therewith. No amendment or modification of this Agreement shall be valid unless
made pursuant to an instrument signed by the Company and the Employee.

14. Governing Law.

This Agreement shall be governed by and construed in accordance with the
laws of the State of Colorado.

15. Severability.

If any one or more of the terms, provisions, coven,ants or restrictions of
this Agreement shall be determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. If any one or
more of the provisions contained in this Agreement shall for any reason be
determined by a court of competent jurisdiction to be excessively broad or vague
as to duration, geographical scope, activity or subject or otherwise, this
Agreement shall be construed by limiting, reducing or defining it, so as to be
enforceable to the fullest extent compatible with then applicable law.

16. Headings.

The descriptive headings of the several Paragraphs of this

Agreement are inserted for convenience only and do not constitute a part of this
Agreement.

17. Prior Employment Agreements.

This Agreement supersedes all prior employment agreements between the
parties.

18. Waiver of Breach.

The waiver by the Company or Employee of a breach of any provision of this
Agreement by the Company or the Employee shall not operate or be construed as a
waiver of any subsequent breach by the Company or the Employee.

19. Counterparts.

This Agreement may be executed in any number of counterparts, each of which
shall be an original, and all of which shall constitute one and the same
agreement.

IN WITNESS WHEREOF the parties hereto have duly executed this Agreement as
of the day and year first above written.

PROFLIGHT MEDICAL RESPONSE, INC.

By:
----------------------------
David Cohen,
Chief Financial Officer

----------------------------
Steven B. Myers

<PAGE>

FORM OF CONSULTING AGREEMENT

CONSULTING AGREEMENT

______ __, 1998

Proflight Medical Response, Inc.
7211 S. Peoria Street
Littleton, Colorado 80112

Attention: Kevin L. Burkhardt, President

Gentlemen:

This will confirm the arrangements, terms and conditions pursuant to
which First Liberty Investment Group, Inc. (the "Consultant") has been retained
to serve as consultant and advisor to Proflight Medical Response, Inc., a
Colorado corporation (the "Company"), on a non-exclusive basis for the term set
forth in Section 2 below. The undersigned hereby agree to the following terms
and conditions:

1. Duties of Consultant.

(a) Consulting Services. Consultant will provide such financial
consulting services and advice pertaining to the Company's business affairs as
the Company may from time to time reasonably request. Without limiting the
generality of the foregoing, Consultant will assist the Company in developing,
studying and evaluating financing, merger and acquisition proposals, prepare
reports and studies thereon when advisable, and assist in negotiations and
discussions pertaining thereto.

(b) Financing. Consultant will assist and represent the Company in
obtaining both short and long-term financing, when so requested by the Company.
The Consultant will be entitled to additional compensation under such terms as
may be agreed to by the parties.

(c) Wall Street Liaison. Consultant will, when appropriate, arrange
meetings between representatives of the Company and individuals and financial
institutions in the investment community, such as security analysts, portfolio
managers and market makers.

The services described in this Section 1 shall be rendered by
Consultant without any direct supervision by the Company and at such time and
place and in such manner (whether by conference, telephone, letter or otherwise)
as Consultant may determine.

2. Term.

This Agreement shall continue for a period of twenty-four months from
the date hereof (the "Term").

3. Compensation.

(a) As compensation for Consultant's services hereunder, the Company
shall pay to Consultant the sum of $5,000,00 per month, or an aggregate fee of
$120,000. Consultant's fee shall be due and payable on the date hereof.

4. Relationship. Nothing herein shall constitute Consultant as an
employee or agent of the Company, except to such extent as might
hereinafter be agreed upon for a particular purpose. Except as
might hereinafter be expressly agreed, Consultant shall not have
the authority to obligate or commit the Company in any manner
whatsoever.

5. Confidentiality. Except in the course of the performance of its duties
hereunder, Consultant agrees that it shall not disclose any trade secrets,
know-how, or other proprietary information not in the public domain learned as a
result of this Agreement unless and until such information becomes generally
known.

6. Assignment and Termination. This Agreement shall not be assignable by
either party except to successors to all or substantially all of the business of
such party for any reason whatsoever without the prior written consent of the
other party, which consent may not be arbitrarily withheld by the party whose
consent is required.

Very truly yours,

FIRST LIBERTY INVESTMENT
GROUP, INC.

By:__________________________

AGREED AND ACCEPTED:

PROFLIGHT MEDICAL RESPONSE, INC.

By:__________________________
Kevin L. Burkhardt, President

<PAGE>

[Letterhead of Proflight Medical Response, Inc.]

September 15, 1997

Mr. Donald Jones
2163 Turkey Run
Winter Park, FL 32789

RE: AMENDED EMPLOYMENT AGREEMENT,
NON-COMPETITION AND CONFIDENTIALITY AGREEMENT

Dear Mr. Jones:

Reference is made to that certain Amended Employment Agreement,
Non-Competition and Confidentiality Agreement, dated as of March ___, 1997,
including the Addendum (the "Addendum") thereto dated as of May 13, 1997 (the
"Employment Agreement"), by and between Proflight Medical Response, Inc. (the
"Company") and Mr. Donald Jones (the "Employee").

In connection with the Company's initial public offering, which is
pending as of the date hereof, pursuant to the Addendum, the Employee has agreed
to give up his rights to receive an amount of stock equal in value to $500,000,
as originally provided in Section 4(c) of the Employment Agreement.

In consideration for the Employee's agreement to return such Shares to
the Company, the Company has agreed to amend the Employment Agreement, and the
Employment Agreement is hereby amended, as follows:

Section 4(c) is amended by replacing such section with the following
paragraph:

Notwithstanding any other provision of this Agreement or
of the Addendum, if, at the end of either of the first two years
commencing on the effective date of the Company's Registration Statement
filed with the Securities and Exchange Commission in connection with the
pending initial public offering, the Company achieves $1,000,000 in
pretax profits, before depreciation and amortization, the Employee shall
receive a stock bonus in the amount of ____________ shares of the
Company's Common Stock, provided, however, that the Company shall not
issue such stock bonus to the Employee if it is determined, based upon
the audited financial statements during the year in which it is to be
granted, that the issuance of such a stock bonus would negatively affect
the listing of the Company's Common Stock on the Nasdaq SmallCap Market.
Such bonus shall be subject to vesting at

Mr. Donald Jones
September 15, 1997
Page 2

a rate of 50% upon realization by the Company of the minimum $1,000,000
in pretax profits and 25% on each of the next two anniversaries thereof.

Please acknowledge your agreement to the foregoing by signing your name
as indicated at the bottom hereof.

Sincerely,
PROFLIGHT MEDICAL RESPONSE, INC.

By:
----------------------------
Name:
Title:

Agreed and acknowledged:

- ----------------------
Donald Jones

<PAGE>

[Letterhead of Proflight Medical Response, Inc.]

September 15, 1997

Mr. Kevin L. Burkhardt
20417 Sagewood Lane
Parker, CO 80134

RE: EMPLOYMENT AGREEMENT, NON-COMPETITION
AND CONFIDENTIALITY AGREEMENT

Dear Mr. Burkhardt:

Reference is made to that certain Employment Agreement, Non-Competition
and Confidentiality Agreement, dated as of March 31, 1997 (the "Employment
Agreement"), by and between Proflight Medical Response, Inc. (the "Company") and
Mr. Kevin Burkhardt (the "Employee"). In connection with the Company's initial
public offering, which is pending as of the date hereof, the Employee has agreed
to return to the Company, and the Company has agreed to retire 168,329 shares
(the "Shares") of the Company's Common Stock held by the Employee.

Section 4(b) is amended by adding thereto the following additional
paragraph:

Notwithstanding any other provision of this Agreement,
if, at the end of either of the first two years commencing on the
effective date of the Company's Registration Statement filed with the
Securities and Exchange Commission in connection with the pending
initial public offering, the Company achieves $1,000,000 in pretax
profits, before depreciation and amortization, the Employee shall
receive a stock bonus in the amount of __________ shares of the
Company's Common Stock, provided, however, that the Company shall not
issue such stock bonus to the Employee if it is determined, based upon
the audited financial statements during the year in which it is to be
granted, that the issuance of such a stock bonus would negatively affect
the listing of the Company's Common Stock on the Nasdaq SmallCap Market.
Such bonus shall be subject to vesting at a rate of 50% upon realization
by the Company of the minimum $1,000,000 in pretax profits and 25% on
each of the next two anniversaries thereof.

Mr. Kevin L. Burkhardt
September 15, 1997
Page 2

Please acknowledge your agreement to the foregoing by signing your name
as indicated at the bottom hereof.

Sincerely,
PROFLIGHT MEDICAL RESPONSE, INC.

By:
---------------------------
Name:
Title:

Agreed and acknowledged:

- ----------------------
Kevin L. Burkhardt

<PAGE>

[LETTERHEAD OF GRANT THORNTON]

We have issued our reports dated January 16, 1997 (except for note K. Subsequent
Events, as to which the date is February 17, 1997, and note F. Commitments and
Contingencies - Litigation, as to which the date is April 24, 1997) accompanying
the financial statements of Proflight Medical Response, Inc. contained in the
Registration Statement and Prospectus. We consent to the use of the
aforementioned reports in Amendment No. 2 to the Registration Statement and
Prospectus, and to the use of our name as it appears under the caption
"Experts"; "Summary Historical and Pro Forma Financial Data" and "Selected
Financial Data."

GRANT THORNTON LLP

Denver, Colorado
January 21, 1998

<PAGE>

[LETTERHEAD OF STAFF MAIKELS & CIAMPINO, P.C.]

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the inclusion in this Amendment No. 2 to the registration
statement on Form SB-2 of our report dated June 13, 1997, on our audit of the
combined financial statements of Air Response, Inc. and Air Response South, Inc.
We also consent to the reference to our firm under the caption "Experts."

January 21, 1998 /s/ Staff Maikels & Ciampino, P.C.

<PAGE>