METALLURGICAL INDUSTRIES INC, 10KSB, 1995-12-29

METALLURGICAL INDUSTRIES INC
10KSB, 1995-12-29
MISCELLANEOUS PRIMARY METAL PRODUCTS

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

FORM 10-KSB

Annual report under Section 13 or 15(d) of the Securities Exchange Act of 1934
for the fiscal year ended December 31, 1994

Commission file number: Q-2549

BRIA COMMUNICATIONS CORP.
(Name of Small Business Issuer as stated in its Charter)

New Jersey 22-1644111
(State of Incorporation) (I.R.S. Employer I.D. No.)

268 West 400 South, Suite 300, Salt Lake City, Utah 84101
(Address of Principal Executive Offices) (Zip Code)

(801) 575-8073
(Issuer's Telephone Number)

Metallurgical Industries, Inc.
179 Avenue at the Common, Suite 2, Shrewsbury, New Jersey 07702
(Previous name and address of Issuer's principal executive offices,
if changed since the last report)

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:
Class A Common Stock, $0.001 Par Value

Check whether the issuer: (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

Yes [ ] No [X]

Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

The issuer's total revenues for the year ended December 31, 1994, were
$535,737.

The aggregate market value of the voting stock held by non-affiliates
computed by reference to the average bid and asked prices of such stock, as of
December 31, 1994, was $329,475 and as at November 15, 1995 was $3,498,413.

The number of shares outstanding of each of the issuer's classes of
common stock, as of December 31, 1994 and November 15, 1995, was as follows.
(The November 15, 1995, number of shares of Class A common stock reflects a 1-40
reverse stock split that occurred on February 1, 1995. See "Item 5 - Market for
Common Equity and Related Stockholder Matters.")
12/31/94 11/15/95
Class A Common Stock, (par value $0.001): 8,299,800 26,778,559

Class B Common Stock, (par value $0.001): 98,438.5 213,438.5

Transitional Small Business Format
Yes [ ] No [X]

<PAGE>

TABLE OF CONTENTS

PART I Page

ITEM 1. DESCRIPTION OF BUSINESS 1

ITEM 2. DESCRIPTION OF PROPERTY 3

ITEM 3. LEGAL PROCEEDINGS 3

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 5

PART II

ITEM 5. COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 8

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS 9

ITEM 7. FINANCIAL STATEMENTS 19

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS 37

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS 18

ITEM 10. EXECUTIVE COMPENSATION 19

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS 21

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 24

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K 28

<PAGE>

PART I

ITEM 1. DESCRIPTION OF BUSINESS

INTRODUCTION

The term the "Company" refers to Metallurgical Industries, Inc., now
known as BRIA Communications Corporation, a New Jersey corporation that is
hereafter referred to as the "Company." See "Item 4 - Submission of Matters to a
Vote of Security Holders" for a discussion on the Company's name change. The
Company's executive offices are located at 268 West 400 South, Suite 300, Salt
Lake City, Utah 84101.

BUSINESS DEVELOPMENT

The Company was incorporated in New Jersey in 1959. Until 1993, the
Company was engaged in the repair of aircraft turbine engine components and the
purchase, processing and selling of specialty refractory metals. In 1993,
competitive pressure from the aircraft turbine engine original equipment
manufacturers ("OEMs") forced the Company to discontinue operations in that
market. In addition, low levels of demand, surplus domestic capacity, and
increased competition from imports reduced the Company's profit margins in the
specialty refractory metals business to below the break-even level. As a result,
the Company began a downsizing process of its existing operations. In August
1993, the Company began to aggressively search for new opportunities or
replacements for its existing businesses.

In early 1994, the Company agreed to merge into MAXMusic, Inc., a
Delaware corporation ("MAX"). (See the Company's reports on Form 8-K filed on
March 11, 1994 and July 12, 1994.) The Company, pursuant to the Agreement and
Plan of Merger dated July 11, 1994 ("Merger Agreement"), began extensive
restructuring and reorganization. Upon the completion of merger and
recapitalization, the shareholders of MAXMusic, Inc. would have exchanged 100%
of their shares for a minimum of 80% of the Class A common stock of the Company.
However, MAX rescinded the merger on November 8, 1994, pursuant to the Merger
Agreement's provisions. See also "Item 6 - Management Discussion and Analysis"
for information regarding MAX and this rescission.

On March 18, 1994, a petition was filed in the U.S. Bankruptcy Court
against the Company requesting an order for relief under Chapter 7 of Bankruptcy
Code (case No: 94-31635). This involuntary bankruptcy petition was filed by
three of the Company's major creditors with claims totaling approximately
$147,000. MAXMusic agreed to purchase the debts of the three creditors and the
original petitioners stipulated to an extension of time to answer the petition
until June 1, 1994. This information was disclosed in Form 8-K Current Report
filed with SEC on April 11, 1994. On June 28, 1994, the Company reached a
settlement with the petitioning creditors and a payment was put in escrow to
settle the debt. On July 27, 1994, the U.S. Bankruptcy Court dismissed the
petition pursuant to 11 U.S.C. Section 303(j) of the United States Bankruptcy
Code.

<PAGE>

The Company ceased all active operations on June 30, 1994. Four
administrative employees remained on the payroll until September 30, 1994, to
facilitate the sale of the final Company assets in preparation for a planned
merger with MAXMusic, Inc. The four employees were terminated on September 30,
1994, after which the Company's officers, directors, and certain consultants
(see Item 6- Management Discussion and Analysis for a description of the
Company's major consultant, Canton Financial Services Corporation) sought to
merge with or acquire a viable entity.

In September 1994, the Company placed its two wholly owned
subsidiaries, Intermet Resources, Inc., and Advanced Welding and Coating
Services, Inc., into Chapter 7 bankruptcy, case numbers 94-36556 and 94-36561,
respectively. The decision to file for bankruptcy stemmed from the fact that
neither subsidiary was profitable or, in management's decision, had prospects of
becoming profitable. A trustee was appointed by the Court. At a hearing before
the U. S. Bankruptcy Court in Trenton, New Jersey, on December 7, 1994, the
Chapter 7 filings were accepted and the assets of both corporations were
liquidated. See also "Item 3 - Legal Proceedings" for information on these
bankruptcies.

In August 1994, the Company repaid its largest secured creditor,
Midlantic National Bank, in full. In September 1994, the Company settled with
another secured creditor, who was an officer and director of the Company, by
selling him the remaining equipment owned by the Company for $5,000. This
settled a debt totaling approximately $92,000 plus interest. The equipment had
not been sold by the Company after diligent efforts on its part for over a year.

On or about June 30, 1994, the Company's charter was involuntarily
dissolved by the State of New Jersey for failure to file its 1994 annual tax
return and remit the necessary fees due to preserve its status as a corporation
in good standing. The Company paid the State of New Jersey $5,652.66 to settle
all outstanding obligations on or about September 30, 1995. On November 29,
1995, the Company filed Form CBT-100 (corporate business tax return) with the
State of New Jersey. The Company received its Certificate of Reinstatement of a
Corporation in Good Standing on December 22, 1995, that was effective on
December 20, 1995.

BUSINESS OF ISSUER (Subsequent to December 31, 1994)

While the Company began searching for merger or acquisition candidates,
it became involved in the barter and trade industry. On March 1, 1995, the
Company appointed Richard Lifschutz ("Lifschutz") as the Company's president and
a director. See "Item 6 - Management's Discussion and Analysis, Change in
Corporate Management" for a discussion on the Company's change in management and
control. Lifschutz is very experienced in the barter industry and has been an
Itex broker for many years. (Itex is America's largest barter exchange.) Soon
after the arrival of Lifschutz, the Company began trading restricted shares of
its publicly traded Class A common stock for other tangible assets such as media
and trade credits. See "Item 6 - Management Discussion and Analysis" for a
discussion of the results of operations.

The Company entered into a Stock Exchange Agreement on December 1,
1995, by and between it and AltaChem Group, Inc., a corporation formed under the
laws of the Republic of Ireland ("AltaChem"). AltaChem is a chemical company
that manufactures, distributes, and sells chemicals used in the building
industry, including a polyurethane foam product used as insulation, sealants and
caulking materials. The Stock Exchange Agreement provides for the Company's
acquisition of 100% of the issued and outstanding capital stock of AltaChem in
exchange for 21,623,996 shares of the Company's Class A common stock, which
equaled 75% of the issued and outstanding shares of Class A common stock on
September 1, 1995, the date of stock issuance.

<PAGE>

The legal and beneficial shareholders of AltaChem's common stock "ACS,"
include James Tilton, the Company's current chief executive officer and one of
its directors, and ADS Group, Inc., a Belgian corporation whose majority
shareholder and president is Aster De Schrijver and whose chief executive
officer is James Tilton. Jane Zheng is the wife of James Tilton. See "Item 9
Directors, Executive Officers and Control Persons" and "Item 12 - Certain
Relationships and Related Transactions" for more information on Tilton, ADS
Group and De Schrijver. These shares were issued with the understanding that
they will be retired in the event the merger did not transpire. The net effect
of this stock exchange (which has been effected as a tax free reorganization
pursuant to Section 368(1)(b) of the Internal Revenue Code of 1986, as amended)
is that ACS owns a 75% interest in the Company and the Company owns 100% of
AltaChem.

To encourage AltaChem and ACS to enter into the Stock Exchange
Agreement, on August 3, 1995, the Company's board of directors unanimously
appointed James Tilton, Jane Zheng and Aster De Schrijver to serve as directors
of the Company. Upon the resignation of Richard D. Surber, on August 5, 1995,
from the position as a director of the Company and as its secretary/treasurer,
the board of directors appointed Ms. Zheng to serve as secretary/treasurer, and
also appointed Mr. Tilton as the chief executive officer of the Company. Mr.
Surber resigned for personal reasons and with no disagreements or disputes with
the Company or its management.

Since May 1995, the Company has been engaged in merger negotiations
with AltaChem Group, Inc., a corporation formed under the laws of the Republic
of Ireland ("AltaChem"). AltaChem is a chemical company that manufactures,
distributes, and sells chemicals used in the building industry, including a
polyurethane foam product used as insulation, sealants and caulking materials.
The document being discussed to formalize this merger is a Stock Exchange
Agreement that would provide for the Company's acquisition of 100% of the issued
and outstanding capital stock of AltaChem from the legal and beneficial owners
of AltaChem's common stock, which shareholders include Mr. James Tilton, ADS
Group, Inc., and indirectly Mr. Aster De Schrijver and shall hereinafter be
referred to as "ACS." In consideration for this proposed stock transfer, the
Company has issued 21,623,996 shares of its Class A common stock, which equaled
75% of the issued and outstanding shares of Class A common stock on September 1,
1995, the date of stock issuance. These shares were issued with the
understanding that they will be retired in the event the merger does not
transpire. The net effect of this stock exchange (which would be effected as a
tax free reorganization pursuant to Section 368(1)(b) of the Internal Revenue
Code of 1986, as amended) is that ACS would own a 75% interest in the Company
and the Company would own 100% of AltaChem.

ITEM 2. DESCRIPTION OF PROPERTY

The Company's principal offices are located at 268 West 400 South,
Suite 300, Salt Lake City, Utah 84101. The Company receives office space,
accounting, secretarial services and office supplies from Canton Financial
Services Corporation, a Nevada corporation ("CFSC"), pursuant to a Consulting
Agreement dated May 16, 1995. According to the agreement, the Company pays CFSC
with shares of the Company's Class A common stock. For another discussion on
this Consulting Agreement, see "Item 6 - Management Discussion and Analysis" and
"Item 12 Certain Relationships and Related Transactions." The Company expects to
relocate its offices upon a successful merger or acquisition.

<PAGE>

ITEM 3. LEGAL PROCEEDINGS

The following discussion describes all material pending legal
proceedings involving the Company.

In September 1994, the Company placed its two wholly-owned
subsidiaries, Intermet Resources, Inc., and Advanced Welding and Coating
Services, Inc., into Chapter 7 bankruptcy, case numbers 94-36556 and 94-36561,
respectively. The decision to file for bankruptcy stemmed from the fact that
neither subsidiary was profitable or, in then-management's decision, had
prospects of becoming profitable. A trustee was appointed by the Court. At a
hearing before the U. S. Bankruptcy Court in Trenton, New Jersey, on December 7,
1994, the Chapter 7 filings were accepted and the assets of both corporations
were liquidated. See "Item 1 - Description of Business" for additional
information on these subsidiaries.

On March 18, 1994, a petition was filed in the U.S. Bankruptcy Court
against the Company requesting an order for relief under Chapter 7 of Bankruptcy
Code (case No: 94-31635). This involuntary bankruptcy petition was filed by
three of the Company's major creditors with claims totaling approximately
$147,000. MAXMusic agreed to purchase the debts of the three creditors and the
original petitioners stipulated to an extension of time to answer the petition
until June 1, 1994. This information was disclosed in a Form 8-KSB filed with
SEC on April 11, 1994. On Jun 28, 1994, the Company reached a settlement with
the petitioning creditors and a payment was put in escrow to settle the debt. On
July 27, 1994, the U.S. Bankruptcy Court dismissed the petition pursuant to 11
U.S.C. Section 303(j) of the United States Bankruptcy Code.

Between November 1986 and March 1994, the Company leased office and
plant site at 1 Coldstream Way, Tinton Falls, New Jersey from Mid-Monmouth
Realty Association, whose principal offices are at 75 Eisenhower Parkway,
Roseland, New Jersey. The Environmental Cleanup and Responsibility Act ("ECRA")
of New Jersey imposed a number of obligations on the Company; however, since the
Company does not own its facility in Tinton Falls, the obligations are jointly
and severally the obligations of the Company and Landlord. On November 29, 1995,
the New Jersey Department of Environmental Protection and Energy (NJDEPE)
completed a review of this site with the cooperation of Company's former
landlord. NJDEPE requested that the Company/landlord do further sampling on
various portions of the site, such as the storage and waste tanks, the former
settling pond, pipe discharges, below-ground-surface soil and groundwater. The
Company/landlord is also required to submit a revised Remedial Action Schedule
and summarized analytical results on the samplings.

<PAGE>

The Company and the Landlord entered into a lease modification in
October 1993 under which, among other things, the landlord agreed to perform
whatever environmental study and remediation would be required to satisfy the
NJDEPE. The Company agreed to reimburse the landlord for the costs associated
with this, all of which is secured. The first $100,000 is secured and
subordinate only to the secured interest of Midlantic National Bank, taxes owed
to Internal Revenue Services, and State of New Jersey taxes. Any liability in
excess of $100,000 is secured but subordinate to security interest of the same
entities plus that of Ira Friedman and Lawrence Friedman. As of November 15,
1995, the landlord has not advised the Company of the cost it has incurred and
has not disclosed to the Company the results of the studies and tests it has
conducted. The company had insurance policies with Greater New York Mutual
Insurance Company which the Company believes should cover approximately $100,000
of the cleanup costs. Although the insurance company has indicated that it would
decline coverage, in the opinion of the Company's special insurance counsel and
with the support of New Jersey case law, the Company believes that it has
insurance coverage for the first $100,000 incurred in remediating the Tinton
Falls plant site. However, no assurance can be given that Greater New York
Mutual Insurance Company will cover any costs incurred at this site.

The Company brought suit in New Jersey Superior Court in September 1991
against Lawrence S. Lorman, the former Executive Vice President and Chief
Financial Officer of the Company, alleging breach of his employment contract
dated June 13, 1990. Mr. Lorman countersued in New Jersey Superior Court against
the Company and Messrs. Ira Friedman, Lawrence Friedman, and Ross Radtke
alleging breach of his employment contract. In August 1994, the countersuit
filed by Lawrence Lorman was dismissed without prejudice by the New Jersey
Superior Court. Mr. Lorman agreed to pay the legal expenses that the Company
incurred in the suit against him (approximately $6,000) and the lawsuit was
dropped.

On August 3, 1993, Praxair Inc., filed a lawsuit against the Company
for the amount of $9,858. The suit was filed with the Union County Superior
Court, docket number is 004773-93, and was dismissed with prejudice by the
court.

North Tool and Manufacturing Company filed a lawsuit against the
Company on August 5, 1993, in Monmouth County Small Claims Court, docket number
93007704, seeking $4,285 in past due bills. A judgment for the amount of $4,285
has been issued against the company and remains unsatisfied; however, the amount
has been accrued on the Company's financial statements for the year ended
December 31, 1994.

Globe Petroleum Inc. filed a lawsuit against the Company on August 17,
1993, in Monmouth County Small Claims Court, docket number 93003632, for the
amount of $1,183. The Company believes that the suit, if the plaintiff were to
prevail, will have no material impact on the Company's financial position due to
the nominal dollar amount involved; however, no such assurances can be given.

On August 18, 1993, Spragues Oil Services Inc. filed a lawsuit against
the Company in Monmouth County Small Claims Court, docket numbers 93003700 for
the amount of $1,075. A judgment for the amount of $1,075 has been issued
against the company and is yet to be satisfied. The Company has accrued this
amount on its 1994 financial statements.
<PAGE>

Jersey Printing Associates Inc. filed a lawsuit against the Company
seeking $871 on August 30, 1993, in Monmouth County Small Claims Court, docket
number 93008510. A judgment for the amount of $269 was sought against the
Company and remains unsatisfied. $269 has been recorded on the Company's 1994
financial statements.

On September 20, 1993, Monmouth Building Center Inc. filed a lawsuit
against the Company in Monmouth County Small Claims Court, docket number
93004174, seeking $926. This case is still pending. The Company believes that
the suit, if the plaintiff were to prevail, will have no material impact on the
Company's financial position due to the nominal dollar amount involved; although
no such assurances can be given.

Budget Rent-A-Car Inc. received an unsatisfied judgment against the
Company in the amount of $3,826 as a result of the lawsuit it filed against the
Company on January 11, 1994, in Monmouth County Small Claims Court, docket
number SC-00000367-94DC. Damages of $3,734 were sought and have been recorded on
the Company's financial statements for the year ended December 31, 1994.

Eaton Financial Corporation filed a lawsuit against the Company on
August 22, 1994, in Monmouth County Superior Court, docket number SL-004706-94,
seeking $27,159. The suit was dismissed with prejudice by the court.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company did not submit any matters to a vote of security holders
during the fourth quarter of the fiscal year 1994.

SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS AFTER DECEMBER 31, 1994.

On February 17, 1995, the Company mailed all of its shareholders a
notice of a special meeting to be held on March 14, 1995 and asked them to
consider and vote upon the following matters:

1. PROPOSAL NO. 1 - amend the Company's Articles of Incorporation to
increase the number of the Company's authorized shares of Class A
common stock to two hundred million (200,000,000) and Class B common
stock to two hundred and twenty thousand (220,000);

2. PROPOSAL NO. 2 - amend the Company's Certificate of Incorporation
to reduce the par value per share of Class A and Class B Common
Stock of the Company from $0.10 to $0.001;

3. PROPOSAL NO. 3 - amend the Company's Certificate of Incorporation to
permit amendments to the Company's Certificate of Incorporation by a
majority vote of the Company's shareholders;

4. PROPOSAL NO. 4 - ratify the appointment of Michael L. Roper, CPA, as
the Company's independent auditor for the fiscal year ending December
31, 1994;

5. PROPOSAL NO. 5 - amend the Company's Certificate of Incorporation
to change the Company's name to BRIA Communications Corp;
<PAGE>

6. PROPOSAL NO. 6 - transact such other business as may properly come
before the Special Meeting or any adjournment thereof.

Included with the notice of meeting was a proxy statement furnished in
connection with the solicitation of proxies by the Board to be voted at the
special meeting. Due to an inability to form a proper quorum on March 14, 1995,
the meeting was adjourned to March 21, 1995. As of March 21, 1995, the total
number of shares eligible to vote was approximately 306,516, of which 153,258
(or at least 50%) was required to constitute a quorum. The number of shares
represented at the meeting was 157,544 (or 51%).

The Board of Directors removed Proposal 4 from the agenda of the
Special Meeting because it had decided against engaging Michael L. Roper, CPA,
as its independent auditor for the fiscal year ending December 31, 1994.

This March 14, 1995, Special Meeting was called by the Board of
Directors to effectuate changes management deemed necessary for the Company's
survival. All of the Board of Directors and the owners of at least two-thirds of
the shares voted at the meeting, by actual votes or written consent thereto, and
approved the following proposals: to increase the number of authorized shares of
the Company to two hundred million shares of Class A common stock and two
hundred twenty thousand shares of Class B common stock, par value $0.10; to
amend the Company's Certificate of Incorporation to reduce the par value per
share of Class A and Class B Common Stock of the Company from $0.10 to $0.001;
to amend the Company's Certificate of Incorporation to permit amendments to the
Company's Certificate of Incorporation to be effected by a majority of
shareholders; and to change the company's name to BRIA Communications Corp.,
effective April 1, 1995. Now that the Company is in good standing with the State
of New Jersey, it is in the process of filing a Certificate of Amendment to the
Certificate of Incorporation that sets forth these changes with the State of New
Jersey. See "Item 1 - Description of Business" for an additional discussion on
the Company's corporate status in New Jersey.
<TABLE>

PROPOSALS(1)(2) Number of Shares That Number of Shares That Number of Abstentions
Voted For Proposal Voted Against Proposal Shares Not
Represented1
<S> <C> <C> <C> <C>
Proposal No. 1 143,832 13,712 148,971.5 Not Applicable

Proposal No. 2 143,672 13,872 148,971.5 Not Applicable

Proposal No. 3 143,999 13,545 148,971.5 Not Applicable

Proposal No. 5 145,147 12,397 148,971.5 Not Applicable
</TABLE>

(1) Proposals 1,2,3 and 5 involved an amendment to the Company's articles of
incorporation and therefore required two-thirds majority vote (or 105,029 voting
shares) of the quorum represented at the meeting to pass and thus be approved.

(2) Proposal 4 was withdrawn at the discretion of the board of directors because
it decided against engaging Michael L. Roper, CPA, as its independent auditor
for the fiscal year ending December 31, 1994. See "Item 8 Changes in and
Disagreements with Accountants on Accounting and Financial Disclosure" for a
discussion on the Company's past and present independent auditors.

[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]

<PAGE>

PART II

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

The following table sets forth the prices of the Company's Class A
common stock in the over-the-counter market for each quarter during fiscal years
1993 and 1994 and the first three quarters of fiscal year 1995. The National
Association of Securities Dealer, Inc. was the source of the information for
these prices. These over-the-counter market quotations are based on inter-dealer
bid prices, without markup, markdown, or commission, and may not necessarily
represent actual transactions.

BID QUOTATION

Fiscal Year 1993 High ($) Low ($)
Quarter ended 03/31/93 3.75 1.25
Quarter ended 06/30/93 1.50 0.50
Quarter ended 09/30/93 1.25 0.03
Quarter ended 12/31/93 0.63 0.09

Fiscal Year 1994
Quarter ended 03/31/94 1.19 0.16
Quarter ended 06/30/94 0.69 0.28
Quarter ended 09/30/94 0.34 0.25
Quarter ended 12/31/94 0.28 0.03

Fiscal Year 1995
Quarter ended 03/31/95 1.87* 1.25*
Quarter ended 06/30/95 1.25* 0.50*
Quarter ended 09/30/95 1.50* 0.50*

* These quotes reflect the 1-for-40 Reverse Stock Split of the Company's Class A
common stock effective February 1, 1995.

On February 1, 1995, the Board of Directors unanimously approved a
1-for-40 reverse stock split of the Class A Common Stock (the "Reverse Stock
Split"). The bid price of the Class A common stock before the Reverse Stock
Split was $1/32, roughly three cents per share whereas after the Reverse Stock
Split, on February 6, 1995, the bid price was $1.13. Simultaneous with the
Reverse Stock Split, the Board of Directors decreased the authorized number of
shares to assure that the rights and preferences of the holders of outstanding
shares of Class A Common Stock were not adversely affected by the reverse split.
The percentage of authorized shares of Class A Common Stock that remained
unissued after the Reverse Stock Split did not significantly exceed the
percentage of authorized shares of Class A Common Stock that was unissued before
the Reverse Stock Split. Pursuant to the Reverse Stock Split, the authorized
number of shares of Class A Common Stock decreased from 10,000,000 to 250,000,
although the total capitalization of the Company and the intrinsic value of each
shareholders' investment did not change significantly when the Reverse Stock
Split took effect. The authorized number of shares of Class A stock was later
raised to 200,000,000 at the March 21, 1995, special shareholders' meeting. See
"Item 4 - Submission of Matters to a Vote of Security Holders" for additional
information on the special meeting.
<PAGE>

STOCKHOLDERS

The approximate number of stockholders (of record) of Class A common
stock was 500 on December 31, 1994, holding 8,299,800 shares. As of November 15,
1995, there were approximately 694 shareholders of record holding approximately
26,778,559 shares of the Company's Class A common stock, which takes the
February 1, 1995, reverse stock split (as discussed above) into account. The
Class B common stock was held by only one stockholder of record as of December
31, 1994, who owned 98,438.5 shares. On November 15, 1995, there were two
stockholders of record owning 213,438.5 shares of the Company's Class B common
stock.

DIVIDENDS

Due to its limited cash flow, the Company has not declared a cash
dividend for the past two fiscal years on either the Class A Common Stock or the
Class B Common Stock and does not anticipate doing so in the near future.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION AND PLAN OF OPERATION

COMPARISON OF FISCAL 1994 AND FISCAL 1993

During June 1994, the Company ceased all active operations. This
cessation significantly affected the Company's performance for fiscal 1994
relative to fiscal 1993.

DISCUSSION OF OPERATIONS

The Company ceased all active operations on June 30, 1994. Four
administrative employees remained on the payroll until September 30, 1994 in
order to facilitate the sale of the final Company assets in preparation for a
proposed merger with MAXMusic, Inc. The services of the four employees were
terminated on September 30, 1994.

On February 14, 1994, the Company signed a Binding Letter of Intent
with MAXMusic, Inc., a Delaware corporation located in Denver, Colorado ("MAX").
The Letter of Intent called for recapitalization of the Company and a subsequent
merger between MAX and the Company. This information was disclosed in a Form 8-K
filed with the Commission on March 11, 1994. On July 11, 1994, MAX and the
Company signed a Definitive Merger Agreement. A current report on Form 8-K and a
press release regarding this definitive agreement were issued on July 12, 1994.
<PAGE>

The Company was advised on November 8, 1994, that MAX was exercising
its option to rescind the Definitive Merger Agreement pursuant to the terms of
the Definitive Merger Agreement. MAX had signed promissory notes totaling over
$776,000 plus accrued interest, that were due on July 31, 1994. These notes
would have been eliminated as part of the merger, however, since the merger was
cancelled, $287,000 worth of the notes, including interest, became immediately
due with the remaining $489,250 worth of notes, plus accrued interest, becoming
due over a twelve month period.

MAX filed Chapter 7 bankruptcy on March 3, 1995, claiming that no
assets were available for bankruptcy liquidation to unsecured creditors such as
the Company. The Company does not expect to receive any portion of the $776,000
worth of promissory notes and will not unless MAX's bankruptcy trustee declares
that assets are available to MAX's unsecured creditors. As of November 15, 1995,
no such declaration had been made and the Company does not expect such a
statement to be made in the future. The Company is currently in negotiations to
settle this matter although no assurances can be given that this will in fact
occur. See "Item 1 - Description of Business" for an additional discussion on
this rescinded merger.

In September 1994, the Company placed its two wholly-owned
subsidiaries, Intermet Resources, Inc., and Advanced Welding and Coating
Services, Inc. ("AWACS"), into Chapter 7 bankruptcy, case numbers 94-36556 and
94-36561, respectively. The decision to file for bankruptcy stemmed from the
fact that neither subsidiary was profitable or, in then-management's decision,
had prospects of becoming profitable. A trustee was appointed by the Court. At a
hearing before the U. S. Bankruptcy Court in Trenton, New Jersey, on December 7,
1994, the Chapter 7 filings were accepted and the assets of both corporations
were liquidated.

Control of the Company shifted to Richard D. Surber in December 1994,
pursuant to a Settlement Agreement dated December 16, 1994, by and among the
Company, Ira L. Friedman, formerly the president, chief executive officer and a
director of the Company ("Friedman"), Richard T. Johnson, formerly the chief
financial officer, vice president of finance and a director of the Company
("Johnson"), The Canton Industrial Corporation, a Nevada corporation ("Canton"),
and A-Z Professional Consultants, Inc., a Utah corporation ("A-Z") (the
"Settlement Agreement"). The Settlement Agreement resolved disputes over
agreements that involved consulting arrangements and organizational
consolidations among the Company, Canton and A-Z, many of which were never
consummated. Richard D. Surber, a director and the chief executive officer of
Canton, is the president and sole director of A-Z. Mr. Surber's control arose
from his appointment as the Company's president and a director, and his indirect
beneficial ownership of voting securities. The basis of Mr. Surber's control is
described below. Canton and A-Z may be deemed affiliates by virtue of being
under common control. See "Item 1 - Description of Business and Item 6
Management Discussion and Analysis, Changes in Corporate Management" for
additional information on this settlement and the change in control of the
Company.

In consideration for the release by Canton and A-Z of the Company,
Friedman and Johnson from any and all claims, causes of action, and obligations
relating to the agreements, Friedman and Johnson appointed Richard D. Surber as
president and director of the Company and agreed to appoint two other persons to
the Company's board that Canton would nominate. Canton nominated Bobby G. Welch,
II and Christopher Swaner as directors of the Company and both were in fact
appointed. The Settlement Agreement also called for Friedman and Johnson to
resign from their positions and request that the Company's other officers and
directors also resign. Effective December 16, 1994, the Company's officers along
with directors Keith R. Garrity and Edward Mentzer resigned. The board of
directors appointed Mr. Surber to fill Mr. Garrity's term as a director.
Effective December 17, 1994, Friedman, Johnson and Lawrence S. Friedman resigned
from the board of directors, leaving Mr. Surber as the Company's sole director,
until the appointments of Mr. Welch and Mr. Swaner in January 1995. See "Item 6
- - Management Discussion and Analysis, Changes in Corporate Management" for
additional information on the change in control of the Company.
<PAGE>

In addition, as payment for services rendered prior to 1995, the
Company agreed to issue Friedman, Johnson, and Lawrence Friedman 10% of the then
issued and outstanding Class A Common Stock on March 24, 1995 after any reverse
stock split excluding any shares owned by Friedman, Johnson, and Lawrence
Friedman. The shares were issued on April 1, 1995 when the number of issued and
outstanding Class A Common Stock was 1,860,080 (excluding shares owned by the
three former officers and directors). The Company issued such shares as follows:
4.9% to Friedman, 4.9% to Johnson, and 0.2% to Lawrence Friedman. Consequently,
Friedman and Johnson each received 91,144 shares and Lawrence Friedman received
3,720 shares.

Immediately after Mr. Surber's December 16, 1994 appointment as
president and a director of the Company, the principal offices of the Company
moved from Tinton Falls, New Jersey, to 268 West 400 South, Suite 300, Salt Lake
City, Utah. The services of Canton Financial Services Corporation, a Nevada
corporation and wholly owned subsidiary of Canton ("CFSC"), were initially
retained pursuant to the Settlement Agreement and later pursuant to a Consulting
Agreement dated May 16, 1995. The Settlement Agreement stipulated Canton's
initial compensation at 1,612,000 restricted shares of the Company's Class A
common stock for services relating to the completion of the Company's proxy
statement. See "Item 4 - Submission of Matters to a Vote of Security Holders"
for more information on this proxy statement. After the relocation of corporate
offices, the Company became largely dependent on CFSC's services. Pursuant to
the Consulting Agreement, which was retroactively effective on February 18,
1995, CFSC has continued to provide a variety of consulting services and
administrative tasks in exchange for a monthly fee based on the rates at which
the services of CFSC's employees are billed that is payable in the restricted
shares of the Company's Class A common stock. The Consulting Agreement's term is
one year; however, it is terminable with 30 days notice and it can be extended
on a monthly basis. CFSC has provided the Company with office space as well as
internal record keeping, the preparation of reports required to be filed with
Securities and Exchange Commission ("SEC"), the negotiation of settlement of the
Company's debts, and the search for a viable merger or acquisition candidate.
The Company was acquainted with AltaChem through CFSC's efforts.

DISCUSSION OF OPERATIONS (Since December 31, 1994)

On February 1, 1995, the Board of Directors unanimously approved a
1-for-40 reverse stock split of the Class A Common Stock (the "Reverse Stock
Split"). The bid price of the Class A common stock before the Reverse Stock
Split was $1/32, roughly three cents per share whereas after the Reverse Stock
Split, on February 6, 1995, the bid price was $1.13. Simultaneous with the
Reverse Stock Split, the Board of Directors decreased the authorized number of
shares to assure that the rights of the holders of outstanding shares of Class A
Common Stock were not adversely affected by the reverse split. The percentage of
authorized shares of Class A Common Stock that remained unissued after the
Reverse Stock Split did not significantly exceed the percentage of authorized
shares of Class A Common Stock that was unissued before the Reverse Stock Split.
Pursuant to the Reverse Stock Split, the authorized number of shares of Class A
Common Stock decreased from 10,000,000 to 250,000, although the total
capitalization of the Company and the intrinsic value of each shareholders'
investment did not change significantly when the Reverse Stock Split took
effect. See "Item 5 - Market for Registrant's Common Equity and Related
Stockholder Matters" for an additional discussion on this stock split.
<PAGE>

A Special Meeting of Shareholders of the Company was scheduled for
March 14, 1995; however, because of the lack of a quorum, it was adjourned to
and completed on March 21, 1995 (the "Meeting"). The Meeting was called by the
board of directors to effectuate changes it deemed necessary for the Company's
survival. All of the directors and the owners of at least two-thirds of the
shares voted at the Meeting, by actual votes or written consent thereto, and
approved the following proposals: to increase the number of authorized shares of
the Company to two hundred million shares of Class A common stock and two
hundred twenty thousand shares of Class B common stock, par value $0.10; to
amend the Company's Certificate of Incorporation to reduce the par value per
share of Class A and Class B Common Stock of the Company from $0.10 to $0.001;
to amend the Company's Certificate of Incorporation to permit amendments to the
Company's Certificate of Incorporation to be effected by a majority of
shareholders; and to change the company's name to BRIA Communications Corp.,
effective April 1, 1995. A Certificate of Amendment to the Certificate of
Incorporation was filed with the Secretary of State of New Jersey on December
20, 1995, which sets forth these changes. See "Item 1 - Description of Business"
for an additional discussion on the Company's corporate status in New Jersey and
see "Item 4 - Submission of Matters to a Vote of Security Holders" for
additional information regarding the special meeting of shareholders.

One of the more important results of the Meeting was to increase the
amount of authorized but unissued shares of common stock. When combined with the
heightened attraction of the Class A common stock due to its increased price,
which stemmed from the Reverse Stock Split, this increase in authorized shares
has made it possible for the Company to issue shares of its common stock to
settle a portion of its debts as well as to trade and barter for other assets.
See immediately below for additional information on the Company's acquisition of
other assets and settlement of debts.

Through the efforts of CFSC, in the Spring of 1995 the Company was able
to settle debts with 16 of the Company's creditors. The terms typically offered
by the Company to its creditors involve the issuance of restricted shares of
common stock in the Company equal to 10% of the amount of each debt in exchange
for the creditors' complete discharge of such liabilities. The Company issued
158,166 restricted shares of the Class A common stock in exchange for the
written discharge of $233,726 in debt. This debt settlement campaign reduced the
Company's accounts payable from over $900,000 on December 31, 1994, to less than
$700,000 on September 30, 1995. Although the Company is still attempting to
settle its existing liabilities, no assurances can be given that any additional
debts will be settled for a number of shares of common stock acceptable to the
Company.

While the Company began searching for merger or acquisition candidates,
it became involved in the barter and trade industry. On March 1, 1995, the
Company appointed Richard Lifschutz ("Lifschutz") as the Company's president and
a director. Lifschutz is very experienced in the barter industry and has been an
Itex broker for many years. (Itex is America's largest barter exchange.) Soon
after the arrival of Lifschutz, the Company began trading its publicly-traded
Class A common stock for other tangible assets such as media and trade credits,
including the following:
<PAGE>

- the purchase of $500,000 worth of media credits on July 31,
1995, from Associated Reciprocal Traders ("ART"), a British Virgin
Island corporation, in exchange for 500,000 restricted shares of
the Company's Class A common stock.

- the sale of 200,000 shares of its Class A restricted common
stock, effective July 11, 1995, to Itex Corporation, a Nevada
corporation, in exchange for 100,000 ITEX Trade Dollars which can
be used on the Itex Barter Exchange to acquire a variety of goods
and services.

On March 1, 1995, the Company entered into two Consulting Agreements,
one with Karston Electronics, Ltd., a corporation formed under the laws of the
British Virgin Islands ("Karston"), and the other with East-West Trading Corp.,
a corporation formed under the laws of the West Indies ("East-West"). The
Company retained East-West and Karston to assist the Company in general business
consulting. As compensation for these services, the Company issued to Karston
and East-West each 120,000 shares of its Class A common stock pursuant to
Regulation S of the Securities Act of 1933. The Company also granted both
Karston and East-West options to purchase up to 250,000 shares of the Company's
common stock at an exercise price of $0.50 per shares to be exercised no later
than August 4, 1996.

Pursuant to a Letter Agreement dated July 7, 1995 and its Addendum
dated July 11, 1995, the parties to the December 16, 1994 Settlement Agreement
modified certain terms of Settlement Agreement to include, among other terms,
the issuance of certain shares of the Company's common stock to Friedman and
Johnson. Ira Friedman was issued 85,800 shares, which include 55,800 shares for
services rendered prior to 1995 and 30,000 shares for the services that Material
Technology, Inc., rendered in 1995, over which Ira Friedman shares control with
Richard Johnson. The Company also issued 79,200 shares to Richard Johnson,
including 55,800 shares for services rendered prior to 1995 and 23,400 shares
for services that Material Technology, Inc. provided during 1995, over which
Richard Johnson shares control with Ira Friedman. In addition, the Company
issued 20,000 shares to Ira Friedman and Richard Johnson, jointly, for their
March 1995 payment of $12,537 to the IRS for payroll taxes. The Company also
agreed to use its best efforts to register said shares (as well as all shares
issued to Friedman, Lawrence Friedman and Johnson pursuant to paragraph 1(b)(v)
of the Settlement Agreement) on an available registration statement format,
which may include Form S-8, as soon as it is feasible for the Company to so
undertake.

The legal and beneficial shareholders of AltaChem's common stock "ACS,"
include James Tilton, the Company's current chief executive officer and one of
its directors, and ADS Group, Inc., a Belgian corporation, whose majority
shareholder and president is Aster De Schrijver and whose chief executive
officer is James Tilton. Jane Zheng is the wife of James Tilton. See "Item 9
Directors, Executive Officers and Control Persons" and "Item 12 - Certain
Relationships and Related Transactions" for more information on Tilton, ADS
Group and De Schrijver. These shares were issued with the understanding that
they will be retired in the event the merger did not transpire. The net effect
of this stock exchange (which has been effected as a tax free reorganization
pursuant to Section 368(1)(b) of the Internal Revenue Code of 1986, as amended)
is that ACS owns a 75% interest in the Company and the Company owns 100% of
AltaChem.
<PAGE>

On September 28, 1995, Tianrong Building Material Holding, Ltd., of
which James Tilton is the President and a director, purchased 40,000 shares of
the Company's Class A Common Stock at $0.25 per share. The Company has received
the payment of $10,000. See "Item 9 - Directors, Executive Officers and Control
Persons" and "Item 12 - Certain Relationships and Related Transactions" for more
information on James Tilton and his relationship with ACS and AltaChem.

CHANGES IN CORPORATE MANAGEMENT

As discussed in the preceding paragraphs of this Item 6, the Company
experienced a change in management on December 16, 1994, when the Company's
officers and directors resigned and appointed Richard Surber as the Company's
president and a director. On January 15 and 16, 1995, Bobby G. Welch II and
Christopher Swaner were respectively appointed as a director of the Company.

CHANGES IN CORPORATE MANAGEMENT (Subsequent to December 31, 1994)

On March 1, 1995, Richard Surber resigned as president of the Company.
The board of directors accepted this resignation and appointed him as the
Company's Secretary/Treasurer and appointed Richard Lifschutz ("Lifschutz") as
the President and a director of the Company. See "Item 1 - Description of
Business" and "Item 6 - Management Discussion and Analysis - Discussion of
Operations" for additional information on Lifschutz's appointment.

For personal reasons and with no complaints, disagreements or disputes
with the Company or its management in any respect, Mr. Welch resigned as
director on March 3, 1995. Mr. Swaner resigned due to personal reasons and not
because of any disagreements or disputes with the Company or its management in
any respect, on March 30, 1995. Mark Knudson ("Knudson") was appointed as a
director of the Company on March 30, 1995, to fill the vacancy created by
Christopher Swaner's resignation. Mr. Knudson subsequently resigned on July 31,
1995 without any disagreements with the Company.

To encourage AltaChem and ACS to enter into the Stock Exchange
Agreement, on August 3, 1995, the Company's board of directors unanimously
appointed James Tilton, Jane Zheng and Aster De Schrijver to serve as directors
of the Company. See "Item 1 - Description of Business" and the preceding
paragraphs of this item for additional information regarding this merger. James
Tilton and Aster De Schrijver are officers and directors of AltaChem, and, aside
from these positions, are the beneficial owners, directly or indirectly, of 100%
of AltaChem's common stock. Jane Zheng is the wife of James Tilton. See "Item 11
- - Security Ownership of Certain Beneficial Owners and Management" and "Item 12
Certain Relationships and Related Transactions" for more information on James
Tilton, Jane Zheng and Aster De Schrijver. Upon the resignation of Richard D.
Surber, on August 5, 1995, from the position as a director of the Company and as
its secretary/treasurer, the board of directors appointed Ms. Zheng to serve as
Secretary/Treasurer, and also appointed Mr. Tilton as the chief executive
officer of the Company. Mr. Surber resigned for personal reasons and with no
disagreements or disputes with the Company or its management. For more
information on these officers and directors, please see "Item 9 Directors,
Executive Officers, Promoters and Control Persons; Compliance with Section 16(a)
of the Exchange Act."
<PAGE>

The Company is not aware of any arrangements that may result in a
change in control of the Company in the future.

Results of Operations

Revenues for 1994 were $535,737 compared to $2,758,018 for 1993, a
decrease of $2,222,281, or 81%. The sharp decline is due to the fact that the
Company ceased all active operations on or about June 1994. During 1994, the
Company generated $327,734 from Refractory Metals Division (RMD), $163,371 from
Intermet Resources Inc., and $44,632 from miscellaneous sales. See "Item 1
Description of Business, Business of Issuer" or "Item 6 - Management Discussion
and Analysis" for additional information on these subsidiaries.

Costs of sales decreased from $3,442,695 in 1993 to $559,828 in 1994.
Costs of sales as a percentage of Revenue was 104% for 1994 compared to 125% for
1993. The higher level in 1993 was attributable to reduced level of demand,
surplus domestic capacity, growing level of imports, and acquisition of several
major customers by competitors. The percentage improved in 1994 due to the
cessation of two subsidiaries' operations, AWACS and RMD, which had historically
been low-margin businesses.

Selling, general and administrative expenses for 1994 decreased to
$1,043,582 from $1,765,797 for 1993. The decrease was due to the reduction in
staff and the lower level of activity resulting from the asset liquidation
process.

Interest expense decreased to $31,440 from $102,422 in 1993. The
decline was due to the reduction in principal owed to Midlantic National Bank
(MNB), a secured creditor. In August 1994, the Company repaid the debt owed to
MNB in full.

Loss before extraordinary items as a percentage of sales was 205% for
1994 and 93% for 1993. The actual loss before extraordinary items was $1,099,113
for 1994 compared to 2,552,896 to 1993.

The Company sustained a loss $97,503 from disposition of assets in 1994
compared to $0 for 1993. During 1994, the Company wound up its businesses and
many assets were liquidated at prices significantly below the original costs.

The Company incurred a net loss of $1,135,434 for 1994 as compared to a
net loss of $2,552,896 for 1993. The substantial loss for these years was mainly
attributable to losses sustained as a result of the Company's liquidation of
operations.
<PAGE>

Capital Resources and Liquidity

During 1994 and 1995, the Company settled a portion of its existing
liabilities and issued stock as a means to pay its creditors as well as
consultants and other professionals for various services rendered.

The deficiency in working capital of the Company increased from
$1,131,086 in 1993 to $1,243,431 in 1994 as a result of the liquidation of fixed
assets at prices substantially below the cost.

Net stockholders' deficit in the Company was $1,201,718 in 1994, as
compared to $750,193 in 1993. The decline is primarily attributable to operating
losses and loss on disposition of assets sustained in 1994.

ITEM 7. FINANCIAL STATEMENTS

Please see Pages F-1 through F-17 for the financial statements the
Company is required to file in this report.

[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]

<PAGE>

ITEM 7. FINANCIAL STATEMENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Independent Auditor's Report.................................................F-2

Independent Auditor's Report.................................................F-3

Consolidated Balance Sheets..................................................F-4

Consolidated Statements of Operations........................................F-5

Statements of Consolidated Stockholders Equity...............................F-6

Statements of Consolidated Cash Flows........................................F-7

Notes to Consolidated Financial Statements...................................F-8

F-1
<PAGE>
ANDERSON, ANDERSON & STRONG, L.C.
Certified Public Accountants & Business Consultants
941 East 3300 South, Suite 202
Salt Lake City, Utah 84106

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors and Stockholders of
Metallurgical Industries, Inc.

We have audited the consolidated balance sheet of Metallurgical Industries, Inc.
and subsidiaries as of December 31, 1994 and the related statements of
operations, stockholders' equity (deficit), and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. The financial statements of
Metallurgical Industries, Inc. and subsidiaries for the years ended December 31,
1993 and December 31, 1992 were audited by other auditors. Their report dated
March 21, 1994 included an explanatory paragraph that described uncertainties as
to the Company's ability to continue as a going concern.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the 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 audit provides 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 Metallurgical Industries, Inc. and
subsidiaries as of December 31, 1994 and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency. Those conditions raise substantial doubt about
the Company's ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

Salt Lake City, Utah
December 22, 1995

F-2
<PAGE>

BROZA, BLOCK & RUBINO GRAND PLAZA
601 Grand Avenue
CERTIFIED PUBLIC ACCOUNTANTS, P.A. Asbury Park, New Jersey 07712
(908) 774-0100 Fax 774-7242

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Metallurgical Industries, Inc.

We have audited the accompanying consolidated balance sheets of Metallurgical
Industries, Inc. and Subsidiaries as of December 31, 1993 and 1992 and the
related consolidated statements of operations, stockholders' equity (deficit),
and cash flows for the two years ended December 31, 1993. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our 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 consolidated financial position of Metallurgical
Industries, Inc. and Subsidiaries as of December 31, 1993 and 1992, and the
consolidated results of its operations and its cash flows for the two years
ended December 31, 1993, in conformity with generally accepted accounting
principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As shown in the financial
statements, the Company incurred a net loss of $2,552,896 during the year ended
December 31, 1993, and, as of that date, had a working capital deficiency of
$1,131,086 and an accumulated deficit of $5,440,552. As described more fully in
Notes 4 and 15 to the financial statements, the Company is in default on its
loan agreements with a bank and in arrears on accounts with certain vendor
creditors which, among other things, causes the balances to become due on
demand. The Company is not aware of any alternate sources of capital to meet
such demands, if made. Those conditions raise substantial doubt about the
Company's ability to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

BROZA, BLOCK & RUBINO
Certified Public Accountants

March 21, 1994

Member of AICPA Division for Certified Public Accountant Firms - SEC and Private
Companies Practice Sections

Abraham E. Block, CPA
Anthony Rubino, CPA
Jerome C. Donovan, CPA
Ralph Ciambrone, Jr., CPA

F-3

<PAGE>
<TABLE>
<CAPTION>
METALLURGICAL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1994 and 1993

1994 1993
ASSETS ----------- -----------
<S> <C> <C>

CURRENT ASSETS:
Cash ................................................................................... $ 166 $ 6,006
Accounts receivable .................................................................... 291,221
Inventory .............................................................................. -- 482,089
Other current assets -- 925
----------- -----------
TOTAL CURRENT ASSETS ..................... 166 780,241
----------- -----------

PROPERTY AND EQUIPMENT, at cost:
Machinery and equipment ................................................................ -- 491,168
Leasehold improvements and other equipment ............................................. -- 82,672
----------- -----------

Total Property and Equipment ........................................................ -- 573,840
Less accumulated depreciation .......................................................... -- (226,785)
----------- -----------
NET PROPERTY AND EQUIPMENT ..................... -- 347,055
----------- -----------

OTHER ASSETS 41,713 47,452
----------- -----------
TOTAL ASSETS ..................... $ 41,879 $ 1,174,748
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
Notes payable - bank ................................................................... $ -- $ 297,130
Notes payable - officers and directors ................................................. 59,310 145,835
Accounts payable ....................................................................... 1,030,592 1,246,673
Other current liabilities .............................................................. 153,695 208,856
Current portion of capital lease obligation -- 12,833
----------- -----------
TOTAL CURRENT LIABILITIES ..................... 1,243,597 1,911,327
----------- -----------

LONG-TERM DEBT - NET OF CURRENT PORTION
Long-term capital leases ............................................................... -- 13,614
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock:
Class A, $.10 par value, shares issued and outstanding,
8,299,800 and 3,622,654 ........................................................... 829,980 362,265
Class B $.10 par value, shares issued and outstanding,
98,438 (convertible into Class A shares) .......................................... 9,844 9,844
Capital in excess of par value ......................................................... 4,534,444 4,318,250
Accumulated deficit .................................................................... (6,575,986) (5,440,552)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) ..................... (1,201,718) (750,193)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ ................... $ 41,879 $ 1,174,748
----------- -----------

See accompanying notes to consolidated financial statements.

F-4
</TABLE>

METALLURGICAL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1994, 1993 and 1992

1994 1993 1992
----------- ----------- ------------
<S> <C> <C> <C>
REVENUE ............................................... $ 535,737 $ 2,758,018 $ 3,177,901
----------- ----------- ------------

COSTS AND EXPENSES:
Cost of sales .................................... 559,828 3,442,695 3,285,196
Selling, general and administrative .............. 1,043,582 1,765,797 1,536,266
Interest ......................................... 31,440 102,422 108,339
----------- ----------- ------------
1,634,850 5,310,914 4,929,801
----------- ----------- ------------
LOSS BEFORE EXTRAORDINARY ITEMS: ...................... (1,099,113) (2,552,896) (1,751,900)

EXTRAORDINARY ITEMS:
Loss on disposition of assets .................... (97,503) -- --
Gain from elimination of debt .................... 61,182 -- --
----------- ----------- ------------
(36,321) -- --
----------- ----------- ------------
NET LOSS .............................................. $(1,135,434) $ (2,552,896) $ (1,751,900)
=========== =========== ============

NET LOSS PER SHARE:
Loss before extraordinary items .................. $ (0.15) $ (1.03) $ (0.88)
Extraordinary item ............................... (0.01) -- --
----------- ----------- ------------
NET LOSS PER SHARE .................................... $ (0.16) $ (1.03) $ (0.88)
=========== =========== ============

AVERAGE COMMON SHARES OUTSTANDING ..................... 7,206,422 2,486,983 1,989,315

See accompanying notes to consolidated financial statements

F-5
</TABLE>

METALLURGICAL INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

Capital
Class A Class A Class B Class B In Excess Accumulated
Shares Amount Shares Amount Of Par Deficit
----------- ----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1991 ................. 1,549,217 $ 154,922 98,438 $ 9,844 $ 2,776,365 $ (1,135,756)

Shares issued through private
placement ............................ 423,437 42,343 -- -- 1,486,885 --
Net loss for the year .................. -- -- -- -- -- (1,751,900)
----------- ----------- ----------- ----------- ----------- -------------
BALANCE, December 31, 1992 ................. 1,972,654 197,265 98,438 9,844 4,263,250 (2,887,656)

Exercise of stock options .............. 1,400,000 140,000 -- -- 55,000 --

Additional shares issued ............... 250,000 25,000 -- -- -- --

Net loss for the year .................. -- -- -- -- -- (2,552,896)
----------- ----------- ----------- ----------- ----------- -------------
BALANCE, December 31, 1993 ................. 3,622,654 362,265 98,438 9,844 4,318,250 (5,440,552)

Exercise of stock options .............. 4,487,800 448,780 -- -- 216,194 --

Additional shares issued for services .. 189,346 18,935 -- -- -- --

Net loss for the year .................. -- -- -- -- -- (1,135,434)
----------- ----------- ----------- ----------- ----------- -------------
BALANCE, December 31, 1994 ................. 8,299,800 $ 829,980 98,438 $ 9,844 $ 4,534,444 $ (6,575,986)
=========== =========== =========== =========== =========== =============

See accompanying notes to consolidated financial statements.

F-6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

METALLURGICAL INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ................................................................ $(1,135,434) $ (2,552,896) $ (1,751,900)
----------- ----------- -----------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization ........................................ 16,595 206,594 152,718
Common stock issued for services ..................................... 683,909 -- --
Loss on disposal of property ......................................... 97,503 (38,260) (10,606)
Abandonment of fixed assets .......................................... -- 26,722 --
Gain from elimination of debt ........................................ (61,182) -- --
(Increase) decrease in accounts receivable ........................... 291,221 124,070 350,622
(Increase) decrease in inventories ................................... 482,089 1,859,117 (248,135)
(Increase) decrease in other assets .................................. 6,664 32,700 168,449
Increase (decrease) in accounts payable .............................. (154,899) 272,611 562,739
Increase (decrease) in accrued liabilities ........................... (55,161) (20,654) (76,350)
----------- ----------- -----------

Total adjustments ....... 1,306,739 2,462,900 899,437
----------- ----------- -----------

Net cash provided (used) by operating activities ....... 171,305 (89,996) (852,463)
----------- ----------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash payments for the purchase of property .............................. -- (9,587) (410,002)
Cash proceeds from the sale of property ................................. 232,957 513,262 90,000
----------- ----------- -----------

Net cash provided (used) by investing activities ....... 232,957 503,675 (320,002)
----------- ----------- -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options and
issuance of additional shares ......................................... -- 220,000 --
Net proceeds from private placement ..................................... -- -- 1,154,228
Repayment of debt ....................................................... -- -- (100,000)
Principal payments on capital leases .................................... (26,447) (4,743) (6,471)
Principal payments on long-term debt .................................... (297,130) (719,537) (33,333)
Loans from officers and directors ....................................... -- 100,000 61,000
Repayment of officers and directors loans ............................... (86,525) (5,165) (45,000)
----------- ----------- -----------

Net cash provided (used) by financing activities ....... (410,102) (409,445) 1,030,424
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS ............................ (5,840) 4,234 (142,041)
Cash, beginning ......................................................... 6,006 1,772 143,813
----------- ----------- -----------
Cash, ending ............................................................ $ 166 $ 6,006 $ 1,772
=========== =========== ===========
SUPPLEMENTAL DISCLOSURES:
Interest expense ........................................................ $ 31,440 $ 100,838 $ 113,578
=========== =========== ===========
Noncash financing activities:
Issuance of common stock for services ................................ $ 683,909 $ -- --
=========== =========== ===========

See accompanying notes to consolidated financial statements.

F-7

</TABLE>
<PAGE>
METALLURGICAL INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Metallurgical
Industries, Inc. and its wholly-owned subsidiaries, Intermet Resources, Inc. and
Advanced Welding & Coating Services, Inc. (collectively, the Company). However,
since the Company's wholly-owned subsidiaries were dissolved during 1994 through
chapter 7 bankruptcies, no accounts of subsidiaries are included in the December
31, 1994 balance sheet. Investment in a joint venture, owned 50% by the Company,
was accounted for by the equity method and is included in the accompanying
consolidated statement of operations. All significant intercompany transactions
have been eliminated.

Nature of Business

The Company is located in the United States and marketed various powdered metals
which it either processed or sold without processing. The Company ceased all
active operations on June 30, 1994. Since then the Company's activity has been
largely restricted to maintaining its corporate legal status, negotiating
creditor settlements and searching for mergers or acquisitions.

Inventory

Inventory is valued at the lower of cost or market. Cost is determined by the
first-in, first-out (FIFO) method.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is provided over the
estimated useful lives of the assets on the straight-line method for financial
reporting purposes and accelerated methods for income tax purposes. Gains and
losses on the disposition of fixed assets are recognized in current operations.
Fully depreciated fixed assets are written off against accumulated depreciation.

Revenue Recognition

The Company prepares its financial statements on the accrual basis of accounting
whereby sales are recognized in the period in which they are shipped. The
Company owned certain patents relating to the processing of metals. The patents
were sold in June 1993. Royalty income was based on a percentage of sales of the
licensed products and was included in income in the period that payments were
scheduled to be received.

F-8
<PAGE>

METALLURGICAL INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Elimination of debt

The Company's wholly-owned subsidiaries had debt in amount of $61,182 which was
discharged in Chapter 7 bankruptcy filings. This amount is reflected in the
consolidated statements of operations as a gain from elimination of debt during
the year ended December 31, 1994.

Taxes on Income

Effective January 1, 1993 the Company adopted Statement of Financial Accounting
Standards No. 109, Accounting for Income taxes. The cumulative effect of the
change in accounting principle is immaterial.

Research and Development

The cost related to basic research and product development is expensed as
incurred. No research and development costs were incurred during the years 1994,
1993 and 1992.

Net Income Per Share

Net income per share is based on the average number of shares outstanding during
each year retroactively adjusted to give effect to all stock splits. Stock
options and warrants have been excluded from the 1994, 1993 and 1992 per share
calculations due to their anti-dilutive effect.

F-9
<PAGE>

Basis of Financial Statement Presentation

The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. The Company incurred losses before
extraordinary items of $1,099,113 in 1994, $2,552,896 in 1993 and $1,751,900 in
1992. At December 31, 1994, the Company's current liabilities exceeded its
current assets by $1,243,431, and the stockholders equity reflects a deficit of
$1,201,718. The Company's continued existence is dependent on its ability to
generate sufficient cash flow to cover operating expenses, to settle its
obligations and develop an active business. As described in Note 14, the
Company's management has started negotiations for a merger with a "going
concern" company.

METALLURGICAL INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 2 - INVENTORY

Inventory consists of the following:

December 31,
1994 1993

Raw materials $ - $163,385
Work-in-process - -
Finished goods 318,704
--------- --------
$ - $482,089
========= ========

NOTE 3 - NOTES PAYABLE - OFFICERS AND DIRECTORS

Notes payable to officers and directors consists of the following:

December 31,
1994 1993

Note payable, with interest at 8% $ 41,760 $ 51,000
Note payable, with interest at 8.5% 17,550 -
Note payable, due $2,149 per month
in 60 monthly installments, with
interest at prime plus 2.5%
secured by all machinery and
equipment - 94,835
-------- --------
$ 59,310 $145,835
======== ========

At December 31, 1994 and 1993 the above notes payable to officers and directors
were in default.

NOTE 4 - NOTES PAYABLE - BANK

In 1993 the bank notified the Company that it was declaring its loans to the
Company in default. Accordingly, all long-term bank debt was reclassified from
long-term to current.

Long-term debt as of December 31, 1993 $297,130
Less current maturity 297,130
--------

Long-term debt $ -
========

F-10
<PAGE>

METALLURGICAL INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 5 - CAPITAL AND OPERATING LEASE OBLIGATIONS FOR EQUIPMENT

During 1994, the Company defaulted on its capital and operating lease
obligations and the equipment was repossessed.

NOTE 6 - STOCK OPTIONS AND WARRANTS

No options relating to the Company's 1989 stock option plan were exercised
during 1994, and the outstanding options expired on March 22, 1994.

On September 8, 1993, the Company adopted its 1993 stock option plan. Pursuant
to the plan, the Board of Directors of the Company can issue options to purchase
up to 2,587,800 shares of the Class A common stock over a 10 year period. All
options under the plan are non-qualified stock options. The exercise price of
options granted was based on the average of the closing bid/asked prices for the
common stock over the 20 day trading period immediately prior to the grant or
upon the bid price on the date of the grant.

On February 11, 1994, the Company adopted its 1994 stock option plan. Pursuant
to the plan, the Board of Directors of the Company can issue options to purchase
up to 3,300,000 shares of the Class A common stock over a 10 year period. All
options under the plan are non-qualified stock options. The exercise price of
options granted was based on the average of the closing bid/asked prices for the
common stock over the 20 day trading period immediately prior to the grant or
upon the bid price on the date of the grant.

Activity under the Company's plans was as follows:
Number of Option
Shares Price per share
Outstanding at December 31, 1991 39,100 $3.125 - $8.50
Granted - -
Exercised - -
Cancelled - -
---------

Outstanding at December 31, 1992 39,100
Granted ,587,800 .10 - .25
Exercised (1,400,000) .10 - .25
Cancelled -
---------

Outstanding at December 31, 1993 1,226,900 .10 - 8.50
Granted 3,300,000 .10 - .25
Exercised (4,487,800) .10 - .25
Cancelled ( 39,100)
---------

Outstanding at December 31, 1994 -
=========

F-11
<PAGE>

METALLURGICAL INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 7 - COMMON STOCK

The details of the Company's Common Stock at December 31, 1994, 1993 and 1992
are as follows:
Number of Shares
1994 1993 1992
---------- ---------- ----------
Class A, $.10 par value:
Authorized 10,000,000 10,000,000 10,000,000
Issued and outstanding 8,299,800 3,622,654 1,982,654

Class B, $.10 par value:
Authorized 222,000 222,000 222,000
Issued and outstanding 98,438 98,438 98,438

Class B shares are convertible into Class A shares on a one-for-one basis and
each class has the same rights and privileges with the exception of voting.

Pursuant to a 1966 stock purchase contract, the Company agreed not to issue
additional shares of Class A or B stock as long as a certain major stockholder
owns a minimum of 57,000 shares of Class A Common Stock. This restriction does
not include the issuance of Class A Common Stock for (l) property, (2) options
and warrants, (3) conversion of Class B shares. However in the event of a public
or private offering, the major Class A stockholder is entitled to purchase its
pro-rata share of such placement at the offering price.

NOTE 8 - INCOME TAXES

At December 31, 1994, the Company had a net operating loss (NOL) carryforward
totaling approximately $2,700,000 that may be offset against future taxable
income in varying amounts through 2001. In addition, the Company has certain tax
credit carryforwards of approximately $131,000 which expire in varying amounts
between 2000 and 2005. The Company has a $7,000,000 capital loss carryover that
expires in 1999. Loss carryovers of approximately $6,500,000 and tax credits of
Approximately $122,000 were lost during 1994 when the Company's subsidiaries
were dissolved pursuant to Chapter 7 bankruptcy. No benefit has been reported in
the financial statements, however, because the Company believes there is at
least a 50% chance that the carryforwards will expire unused. Accordingly, the
tax benefit of the loss carryforward has been offset by a valuation allowance of
the same amount. The expected tax benefit resulting from applying federal
statutory tax rates to the pretax loss differs from amounts reported in the
financial statements because of the increase in valuation allowance. Certain
provisions of the tax law may limit the net operating loss, capital loss and
credit carryovers in the event of a significant change in ownership of the
Company.

F-12
<PAGE>

METALLURGICAL INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENT
(Continued)

NOTE 9 - PROFIT SHARING PLANS

During 1994, 1993, and 1992, the Company made no employer contributions to its
qualified profit-sharing plan or its 401K plan. Contributions are made solely at
the discretion of management.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

The Company leased manufacturing, storage and office facilities under an
operating lease. The lease agreement stated that tenancy was from month to month
after December 31, 1993, terminable by either party on 30 days prior notice but
no later than March 31, 1994. The Company was evicted on or about March 31,
1994. The Company believes that additional charges after that date are not
justified according to the terms of the lease agreement. The landlord has billed
the Company for a variety of charges since that date resulting in a disagreement
over the amount owed by the Company. As of December 31, 1994, the Company has
recorded an obligation of $354,711 as compared to the landlord's claim of
$651,047, resulting in an amount in dispute of approximately $296,000. This
disputed amount does not appear as an obligation on the Company's financial
statements. No law suits have been filed to date regarding the disputed amount,
however, the landlord received a judgment in its favor in 1993 in the amount of
$351,005 representing the Company's obligation at September 24, 1993. The
Company believes that the possibility of an unfavorable outcome regarding this
disputed amount is reasonably possible but not probable.

Additionally, the Company is obligated under its lease agreement to reimburse
the landlord for all costs of environmental clean-up. The Company executed two
security agreements with the landlord as the secured party for the costs of
clean-up. The first $100,000 is subordinate only to the security interest of the
bank debt, if any, taxes owed to Internal Revenue Service, and State of New
Jersey taxes. Any liability in excess of $100,000 is secured but subordinate to
the security interest of the same entities plus that of Ira and Lawrence
Friedman. The Company had insurance policies which it believes should cover
approximately $100,000 of the clean-up costs. The Company cannot determine at
this time what impact, if any, this matter will ultimately have on its financial
position.

F-13
<PAGE>

METALLURGICAL INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 11 - BUSINESS SEGMENT DATA

The Company's operations were conducted through two business segments: specialty
metals processing and advanced welding technology activities. These segments and
the primary operations of each are described below.

Information concerning this data is as follows: Loss from operations is total
revenue less operating expenses and state income taxes. Identifiable assets are
those assets used in the Company's operation for each segment.

December 31,
1994 1993 1992
----------- ----------- ------------
REVENUE:

Specialty metals
processing $ 535,681 $ 2,302,320 $ 2,094,036
Advanced welding
activities - 444,323 853,642
----------- ----------- -----------

$ 535,681 $ 2,746,643 $ 2,947,678
=========== =========== ===========
LOSS FROM OPERATIONS:

OPERATING LOSSES:

Specialty metals
processing $(1,062,413) $(1,958,979) $( 936,036)
Advanced welding
activities ( 5,316) ( 502,872) ( 937,748)
Interest expense ( 31,440) ( 102,420) ( 108,339)
Other income 56 11,375 230,223
----------- ----------- -----------
LOSS FROM OPERATIONS $(1,099,113) $(2,552,896) $(1,751,900)
=========== =========== ===========
IDENTIFIABLE ASSETS:

Specialty metals
processing $ 41,879 $ 1,016,291 $ 2,761,005
Advances welding
activities - 148,457 1,140,932
----------- ----------- -----------

$ 41,879 $ 1,174,748 $ 3,901,937
=========== =========== ===========

F-14
<PAGE>

METALLURGICAL INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 11 - BUSINESS SEGMENT DATA (Continued)

CAPITAL SPENDING:
December 31,
1994 1993 1992
Specialty metals
processing $ - $ 9,587 $ 152,068
Advanced welding
activities - - 293,780
---------- ----------- -----------

$ - $ 9,587 $ 445,848
========== =========== ===========

DEPRECIATION:

Specialty metals
processing $ 12,665 $ 100,804 $ 70,182
Advanced welding
Activities 3,930 26,613 82,536
---------- ----------- -----------

16,595 $ 127,417 $ 152,718
========== =========== ===========

F-15
<PAGE>

For the years ended December 31, 1994 and 1993, there were no individual
customers who accounted for sales of 10% or greater.

For the year ended December 31, 1992, one customer comprised 10% of the
Company's sales. Sales to this customer were approximately $417,000.

NOTE 12 - PRIVATE PLACEMENT

During 1992, the Company issued 423,437 shares of Class A common stock through a
private placement offering at $4.00 per share. Total proceeds from the offering
were $1,529,228 net of applicable expenses in the amount of $164,520. Included
in the private placement was the conversion of $375,000 of notes payable to
officers and directors.

In addition, for every share issued, a stock warrant was issued to purchase one
additional share of Class A common stock. The warrants are exercisable over a
five-year period at a price of $4.00 per share.

METALLURGICAL INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 13 - RELATED PARTY TRANSACTIONS

In December of 1994, the Company moved its offices from Tinton Falls, New Jersey
to the offices of Canton Financial Services Corporation (CFSC) in Salt Lake
City, Utah. CFSC is a wholly- owned subsidiary of Canton Industrial Corporation.
At that time the Company entered into a management and consulting agreement with
CFSC and Richard D. Surber became the Company's president and chief executive
officer. Mr Surber is a shareholder of the Company and also Chief Executive
Officer and shareholder of Canton Industrial Corporation.

NOTE 14 - SUBSEQUENT EVENTS

During the first six months of 1995 the Company settled debts with various
creditors in the amount of $233,726 in exchange for the issuance of 158,566
shares of Class A common stock.

On February 1, 1995, the Board of Directors unanimously approved a 1 for 40
reverse stock split of the Class A common stock, and a decrease in the
authorized number of shares of Class A common stock from 10,000,000 to 250,000.
Authorized Class A common stock was subsequently increased to 200,000,000
shares.

Pursuant to an agreement dated February 28, 1995 the Company's president is
entitled to receive as compensation for services rendered 5,000 shares of Class
A common stock per month and an option to purchase 5,000 additional shares per
month at an option price of $0.50 per share. Compensation through July 1995 for
services has been made through the issuance of 37,500 shares in August 1995. On
November 21, 1995, the Company issued another 15,000 shares to Mr. Lifschutz for
services rendered from August to October. In addition 28,463 shares were issued
for a finders fee.

On March 1, 1995, the Company entered into consulting agreements with Karston
Electronics, Ltd. and East-West Trading Corp. As compensation for consulting
services, the Company issued to Karston and East-West each 120,000 shares of its
Class A common stock. The Company also granted both Karston and East-West
options to purchase up to 250,000 shares of the Company's common stock at an
exercise price of $0.50 per share to be exercised no later than August 4, 1996.

On April 1, 1995, the Company issued 186,008 shares of Class A common stock to
officers and directors for services rendered prior to 1995.

F-16
<PAGE>

METALLURGICAL INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 14 - SUBSEQUENT EVENTS (Continued)

A Special Meeting of Shareholders of the Company held on March 21, 1995 approved
the following proposals: to increase the number of authorized shares of the
Company to 200,000,000 of Class A common stock and 220,000 shares of Class B
common stock; to reduce par value per share of Class A and Class B common stock
from $0.10 to $0.001; and to change the Company's name to BRIA Communications
Corp., effective April 1, 1995. On March 24, the Company issued 115,000 shares
of its Class B common stock to Canton Financial Services Corporation for
services rendered in relation to the shareholders' meeting.

On May 16, 1995, the Company entered into a one-year consulting agreement with
Canton Financial Services Corporation (CFSC). This agreement replaces an earlier
agreement dated December 16, 1994 (see Note 13). According to the agreement CFSC
would assist the Company in locating a potential corporate entity for
acquisition or merger, assist with the restructuring of the Company's common
stock, arrange for a public stock offering, and assist in the preparation of
agreements, documents, filings and other material necessary to effectuate the
above services. The agreement also entitled CFSC to receive a finders fee upon
the presentation of a suitable merger or acquisition candidate. Accordingly,
CFSC received shares of the Company's Class A common stock in July, 1995:
1,954,931 shares for services and 1,144,660 as a finders fee related to the
proposed AltaChem transaction discussed below.

During July, 1995, the Company issued 500,000 shares of Class A common stock in
exchange for media credits and 200,000 shares in exchange for trade credits, and
53,400 shares to officers and directors for services.

On September 1, 1995 the Company issued 21,623,996 shares of its Class A common
stock. The issuance represents 75% of the Company's issued and outstanding Class
A common stock and was done pursuant to a proposed Stock Exchange Agreement
which would give the Company 100% ownership of AltaChem Group, Inc. AltaChem is
a chemical company, formed under laws of the Republic of Ireland. AltaChem
manufactures, distributes and sells chemicals used in the building industry. The
Company believes that the exchange will qualify as a tax free reorganization
under the provisions of the Internal Revenue Code. If the exchange is completed,
the present shareholders of AltaChem would own 75% of the Company, and the
Company would own 100% of AltaChem. If the transaction is not completed by
December 31, 1995, the shares will be returned to the Company.

F-17

<PAGE>

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE (Subsequent to December 31, 1994)

On January 11, 1995, the Company relieved its independent accountant,
Broza, Block & Rubino ("Broza") of its duties. Broza had been the Company's
independent accountant for over ten years. The Company filed a Form 8-K on
January 16, 1995, and a Form 8-K/A on February 6, 1995 and also on March 8,
1995. The February 6, 1995 Form 8-K/A was filed to respond to Rule 304(a)(1)(iv)
of Regulation S-B which was not done in the January 16, 1995 report. The March
8, 1995 Form 8-K/A was filed because the Company had then just received Broza's
response to the original Form 8-K.

Neither of Broza's reports on the financial statements for the two
years prior to Broza's discharge contained an adverse opinion or disclaimer of
opinion, or was modified as to uncertainty, audit scope or accounting
principles; however, the financial statements included in the Company's 1993
10-K report, prepared by Broza, included a single sentence expressing its doubt
as to the Company's ability to continue as a going concern.

The decision to change accountants was recommended by the board of
directors and stemmed from a change in the Company's headquarters, which were
moved from Shrewsbury, New Jersey to Salt Lake City, Utah. The board of
directors believed that the vast distance between the Company and Broza made
continuation of the relationship logistically and financially impractical.

There were no disagreements between Broza and the Company on any matter
of accounting principles, financial statement disclosure or auditing scope or
procedure during the two most recent fiscal years and subsequent period.

In January 1995, the Company reached an agreement to have Michael L.
Roper, CPA, become its independent auditor for the fiscal year ending December
31, 1994. Included in the proxy material relating to the March 14, 1995 Special
Meeting was a proposal asking for shareholder ratification of this selection.
However, after the definitive proxy material was distributed to shareholders and
before the Special Meeting, the Company decided against utilizing Mr. Roper's
accounting and auditing skills and therefore never formally engaged Mr. Roper as
its independent auditor.

A new independent auditor, Andersen, Andersen & Strong, was retained by
the Company on August 28, 1995 to perform the Company's audit for the fiscal
year ending December 31, 1994. The need to retain a new auditor for the fiscal
year ending December 31, 1994, contributed to the Company's delay in filing this
Form 10-KSB.

[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]

<PAGE>

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Directors, Executive Officers and Control Persons

Name Age Position(s) and Office(s)

Richard Lifschutz 49 Director, President

James Tilton 34 Director, Chief Executive Officer

Aster De Schrijver 53 Director

Jane Zheng 33 Director, Secretary and Treasurer

Richard Lifschutz works as a business consultant in several industries
and was appointed the Company's president and one of its directors on March 1,
1995. During the last five years, Mr. Lifschutz has been involved with Lev-Ari
Communications in public relations, advertising and film and video production.
Additionally, Mr. Lifschutz has been a media and barter broker for approximately
the last three years on the "Itex" barter network. Mr. Lifschutz is a member of
the Screen Actors Guild and also works as a consultant to movie production
companies and has appeared in several productions as an actor.

Aster De Schrijver was appointed a director and Chairman of the Board
of the Company on August 3, 1995. Mr. De Schrijver is a plastics engineer with
an MBA degree from the University of Antwerp, Belgium. He has over 15 years of
experience in polyurethane foams and worked in the development and technical
services departments at Shell and ICI Europe. He founded a polyurethane foam
company, PCO A.G. Switzerland, in 1976 and went on to represent Belgium on a
plastic technology exchange mission to China in 1982. Mr. De Schrijver is also a
director of Tianrong Building Material Holdings, Ltd., a Utah corporation, and
OMAP Holdings, Inc., a Nevada corporation. He is the majority shareholder and
president of ADS Group, Inc., a Belgian corporation which owns a majority of the
Company's Class A common stock. For more information on this stock ownership,
see "Item 11 - Security Ownership of Certain Beneficial Owners and Management."

James Tilton was appointed the Company's chief executive officer and
one of its directors on August 3, 1995. Mr. Tilton has extensive business and
marketing experience in the Far East and has worked with his wife, Jane Zheng,
in partnership with the Metallic Building Company ("MBC"), a subsidiary of NCI
Building Systems (a NASDAQ listed company), to market its pre-engineered
building materials and chemicals in the People's Republic of China ("PRC") since
1991. For over the last five years and again with Jane Zheng, he has assisted
Star bright, a division of Ocean Bio-Tech, in establishing a sales distribution
system in PRC for its chemical products. Mr. Tilton is also a director of
Tianrong Building Material Holdings, Ltd., a Utah corporation, and OMAP
Holdings, Inc., a Nevada corporation.
<PAGE>

Jane Zheng was appointed as a director and secretary/treasurer of the
Company on August 3, 1995. Ms. Zheng has extensive business and marketing
experience in the Far East and has worked with her husband, James Tilton, in
partnership with the Metallic Building Company ("MBC"), a subsidiary of NCI
Building Systems (a NASDAQ listed company), to market its pre-engineered
building materials and chemicals in the Peoples Republic of China since 1991.
For over the last five years and again with James Tilton, Ms. Zheng has assisted
Star bright, a division of Ocean Bio-Tech, in establishing a sales distribution
system in PRC for its chemical products. She received her engineering degree
from Shanghai University, in Shanghai, China. Ms. Zheng also has an MBA degree
in Finance from Adelphi University, New York, and serves as a director of
Tianrong Building Material Holdings, Ltd., a Utah corporation, and OMAP
Holdings, Inc., a Nevada corporation.

Compliance with Section 16(a) of the Exchange Act

The Company is not aware of any person who, at any time during the
fiscal year ended December 31, 1994, was a director, officer, or beneficial
owner of more than ten percent of the common stock of the company, and failed to
file on a timely basis reports required by Section 16(a) of the Securities
Exchange Act of 1934 during such fiscal year.

The Company is aware that James Tilton, the Company's chief executive
officer and one of its directors, failed to timely file reports required by
Section 16(a) of the Securities Exchange Act of 1934 as required to have been
filed in August 1995. The Company is aware that Aster De Schrijver, one of the
Company's directors, failed to timely file reports required by Section 16(a) of
the Securities Exchange Act of 1934 as required to have been filed in August
1995. Mr. Tilton and Mr. De Schrijver filed these Forms 3 with the SEC on
December 6, 1995.

ITEM 10. EXECUTIVE COMPENSATION

Executive Compensation

No compensation in excess of $100,000 was awarded to, earned by, or
paid to any executive officer of the Company during the 1994 fiscal year.

The following table provides summary information for each of the last
three fiscal years concerning cash and non-cash compensation paid or accrued by
the Company to or on behalf of Ira Friedman, who, until his resignation in
December of 1994, had served as the president and chief executive officer of the
Company since 1972 and a director since 1967. The Company's current chief
executive officer, James Tilton, has not received any compensation from the
Company.

[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]

SUMMARY COMPENSATION TABLE
Long Term Compensation
-------------------------------------------
Annual Compensation Awards Payouts
------------------------------------- ------------------------------ ---------
Other Annual Restricted Securities All Other
Name and Compen- Stock Underlying LTIP Compen-
Principal Position Year Salary($) Bonus($) sation($) Award(s)($) Options/SARs(#) Payouts($) sation($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ira Friedman 1994 100,000(1) - 0 - - - -
Former CEO & 1993 85,157 - 0 - - - -
President 1992 86,833 - 2,000 - - - -

</TABLE>

(1) Mr. Ira Friedman recieved the sum of $50,000 towards his annual salary.

COMPENSATION OF DIRECTORS

There is no standard arrangement by which the Company's directors are
compensated for services provided as directors. No director received any cash
compensation for services as a director in the fiscal year ended December 31,
1994, or as of November 15, 1995. Directors are not precluded from serving in
any other capacity as an officer, agent, employee, or otherwise, and receiving
compensation therefor.

Richard Lifschutz, the Company's president and one of its directors,
has an Letter of Agreement dated February 28, 1995. Pursuant to this Agreement
Mr. Lifschutz is entitled to receive 5,000 restricted shares per month for
services rendered as the Company's president as well as options to purchase
5,000 additional shares per month at an option price of $0.50 per share. As of
November 15, 1995, the Company has issued Mr. Lifschutz 25,000 shares for five
months of service and 12,500 shares that were optioned. The option price was
waived by the board of directors as a bonus. On November 21, 1995, another
15,000 shares ware issued to Mr. Lifschutz for services rendered. In addition,
pursuant to his employment contract, Mr. Lifschutz received 28,463 shares of the
Company's Class A common stock. On August 16, 1995 as finders' fee for
introducing ITEX to the Company. See "Item 11 - Security Ownership of Certain
Beneficial Owners and Management" for additional information on the amount of
shares which Mr. Lifschutz beneficially owned as of November 15, 1995.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

On November 15, 1995, there were 26,778,559 shares of the Company's
Class A common stock and 213,438.5 shares of its Class B common stock issued and
outstanding. The following table sets forth selected information concerning the
stock ownership as of November 15, 1995, with respect to (i) each person who is
known to the Company to be the beneficial owner of more than 5 percent of the
Company's common stock; (ii) all directors; (iii) each of the executive
officers; and (iv) directors and executive officers of the Company as a group
(for more information on the Company's Class A common stock and Class B common
stock, see "Item 5 - Market for Registrant's Common Equity and Related
Stockholder Matters"):

<PAGE>

<TABLE>

- ----------------------- ------------------------------------------ -------------------------------- -----------------
Name and Address Amount and Nature of Percent
Title of Class of Beneficial Owner Beneficial Ownership (*Please of Class
see note below) (*Please see
note below)
<S> <C> <C> <C> <C>
- ----------------------- ------------------------------------------ -------------------------------- -----------------
Class A Common Stock ADS Group 18,740,796 69.98%
$0.001 par value 18 St. Georges Street
Douglas, Isle of Man IM11PC
- ----------------------- ------------------------------------------ -------------------------------- -----------------
Class A Common Stock Canton Financial Services Corp. 1,487,531 5.55%
$0.001 par value 268 West 400 South, Suite 300
Salt Lake City, UT 84101
- ----------------------- ------------------------------------------ -------------------------------- -----------------
Class A Common Stock A-Z Professional Consultants, Inc. 1,612,000 6.02%
$0.001 par value 268 West 400 South, Suite 300
Salt Lake City, UT 84101
- ----------------------- ------------------------------------------ -------------------------------- -----------------
Class A Common Stock Richard Surber 3,099,531(1) 11.57%
$0.001 par value 268 West 400 South, Suite 300
Salt Lake City, Utah 84101
- ----------------------- ------------------------------------------ -------------------------------- -----------------
OFFICERS AND DIRECTORS
- ----------------------- ------------------------------------------ -------------------------------- -----------------
Class A Common Stock James Tilton(2) 21,663,996(2) 80.90%
$0.001 par value 82-66 Austin Street
Kew Gardens, NY 11415
- ----------------------- ------------------------------------------ -------------------------------- -----------------
Class A Common Stock Jane Zheng(3) 40,000(3) 0.15%
$0.001 par value 82-66 Austin Street
Kew Gardens, NY 11415
- ----------------------- ------------------------------------------ -------------------------------- -----------------
Class A Common Stock Richard Lifschutz(4) 133,463 0.41%
$0.001 par value 147-17 Newport Avenue
Neponsit, NY 11964
- ----------------------- ------------------------------------------ -------------------------------- -----------------
Class A Common Stock Aster De Schrijver(5) 18,780,796(5) 70.13%
$0.001 par value 18 St. Georges Street
Douglas, Isle of Man IM11PC
- ----------------------- ------------------------------------------ -------------------------------- -----------------
Class A Common Stock All Officers and Directors as a Group 21,730,139(6) 81.15%(6)
$0.001 par value
- ----------------------- ------------------------------------------ -------------------------------- -----------------
CLASS B COMMON STOCK
- ----------------------- ------------------------------------------ -------------------------------- -----------------
Class B Common Stock Ira L. Friedman 98,438 46.12%
$0.001 par value 10 Bingham Hill Circle
Rumson, New Jersey 07760
- ----------------------- ------------------------------------------ -------------------------------- -----------------
Class B Common Stock Canton Financial Services Corp. 115,000 53.88%
$0.001 par value 268 West 400 South, Suite 300
Salt Lake City, UT 84101
- ----------------------- ------------------------------------------ -------------------------------- -----------------
</TABLE>

<PAGE>

* Amounts of beneficial ownership will not collectively reflect the actual
number of shares outstanding and the percentages of class ownership will exceed
100% due to indirect & common beneficial ownership of certain shares.

(1) Includes 1,612,000 shares held by A-Z Professional Consultants, Inc., of
which Mr. Surber is the president and sole director. Mr. Surber disclaims
beneficial ownership of such shares. Also includes 1,487,531 shares owned by
Canton Financial Services Corp., wholly owned subsidiary of The Canton
Industrial Corporation of which Mr. Surber is a director and chief executive
officer. Mr. Surber disclaims beneficial ownership of such shares.

(2) Includes 18,740,796 shares held by ADS Group, a Belgium corporation whose
chief executive officer is Mr. Tilton. Mr. Tilton disclaims beneficial ownership
of such shares. This figure also includes 2,883,200 shares which were issued
pursuant to the stock exchange agreement dated December 1, 1995. See "Item 6 -
Management Discussion & Analysis" for more information on this stock exchange
agreement. In addition, the figure takes into consideration 40,000 shares
purchased by Tianrong Building Material Holding Ltd., of which James Tilton is
the President and a director. Mr. Tilton disclaims beneficial ownership of such
shares.

(3) Includes 40,000 shares owed by Tianrong Building Material Holding Ltd., of
which James Tilton is the Secretary and Treasurer and a director. Ms. Zheng
disclaims beneficial ownership of such shares.

(4) Includes 67,500 shares of Class A common stock which may be acquired
pursuant to options which are exercisable within 60 days.

(5) Includes 18,740,796 shares held by ADS Group, a Belgium corporation of which
Mr. De Schrijver is the majority shareholder and president. The number also
includes 40,000 shares owed by Tianrong Building Material Holding Ltd., of which
Mr. De Schrijver is Chairman of the Board and a director. Mr. De Schrijver
disclaims beneficial ownership of such shares.

(6) Only includes the 18,740,796 shares owned by ADS Group once, despite the
indirect beneficial ownership of both Mr. Tilton and Mr. De Schrijver.
Similarly, the figure only includes 40,000 shares owed by Tianrong Building
Material Holding Ltd. once, despite the indirect ownership of James Tilton,
Aster De Schrijver, and Jane Zheng. See above notes (2) and (5) for additional
information regarding the indirect beneficial ownership of these shares.
<PAGE>

Changes in Control

There are no other arrangements within the knowledge of the Company's
management that may result in a change in control of the Company.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

James Tilton, Jane Zheng, Aster De Schrijver & AltaChem

The legal and beneficial shareholders of AltaChem's common stock
"ACS," include James Tilton, the Company's current chief executive officer and
one of its directors, and ADS Group, Inc., a Belgian corporation, whose majority
shareholder and president is Aster De Schrijver and whose chief executive
officer is James Tilton. See "Item 9 - Directors, Executive Officers and Control
Persons" and "Item 11 - Security Ownership of Certain Beneficial Owners and
Management" for more information on Tilton, ADS Group and De Schrijver. These
shares were issued with the understanding that they will be retired in the event
the merger does not transpire. The net effect of this stock exchange (which has
been effected as a tax free reorganization pursuant to Section 368(1)(b) of the
Internal Revenue Code of 1986, as amended) is that ACS owns a 75% interest in
the Company and the Company owns 100% of AltaChem.

To encourage AltaChem to enter into the Stock Exchange Agreement, on
August 3, 1995, the Company's board of directors unanimously appointed James
Tilton, Jane Zheng and Aster De Schrijver to serve as directors of the Company.
See "Item 1 - Description of Business" for additional information regarding this
possible merger. James Tilton and Aster De Schrijver are officers and directors
of AltaChem, and, aside from these positions, are the beneficial owners,
directly or indirectly, of 100% of AltaChem's common stock. Jane Zheng is the
wife of James Tilton. See "Item 11 - Security Ownership of Certain Beneficial
Owners and Management" and "Item 12 - Certain Relationships and Related
Transactions" for more information on James Tilton, Jane Zheng and Aster De
Schrijver. Upon the resignation of Richard D. Surber, on August 5, 1995, from
the position as a director of the Company and as its secretary/treasurer, the
board of directors appointed Ms. Zheng to serve as Secretary/Treasurer, and also
appointed Mr. Tilton as the chief executive officer of the Company. Mr. Surber
resigned for personal reasons and with no disagreements or disputes with the
Company or its management. For more information on these officers and directors,
please see "Item 9 - Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act."
<PAGE>

Canton and A-Z

Since January 1993, the Company has completed several transactions, as
detailed below, with The Canton Industrial Corporation, a Nevada corporation
("Canton"), and A-Z Professional Consultants, Inc., a Utah corporation ("A-Z").
Richard D. Surber, the Company's former president, is the president and sole
director of A-Z and a director and chief executive officer of Canton. By virtue
of his positions with Canton and A-Z, Mr. Surber may be deemed to have had a
direct interest in transactions with Canton and A-Z.

Canton

On September 23, 1993, the Company signed a Stock Purchase Agreement
allowing Canton to exchange 11,823,006 restricted shares of Canton common stock
for 5,000,000 shares of the Company's restricted Class A common stock. The
Agreement required shareholder approval no later than December 3, 1993, which
was subsequently extended to December 10, 1993. No definitive contract was
signed and, on February 23, 1994, the Company withdrew the proxy it had filed
with the SEC regarding the reorganization with Canton.

Pursuant to the proposed stock exchange with Canton, the Company
issued options for approximately 5,587,000 shares, which were registered
pursuant to either the Company's 1993 Stock Option Plan or 1994 Stock Option
Plan. These options were granted to consultants who assisted the Company in
restructuring its business and helped locate suitable acquisition or merger
candidates. The consultants introduced the Company to several acquisition
candidates, none of which turned out to be suitable. As of March 31, 1994,
options worth 1,728,000 shares had been exercised and of June 1, 1994, all of
the options described above had been exercised. Richard D. Surber was granted
options worth a total of 690,000 options between September 1, 1993 and February
28, 1994 (290,000 from the 1993 Option Plan and 400,000 from the 1994 Option
Plan). Mr. Surber exercised options worth 290,000 shares on September 10, 1993,
options worth 100,000 shares on February 23, 1994, and the final options worth
300,000 shares on March 8, 1994. Mark Wolfson, at the time a consultant to
Canton, was granted options worth 650,000 shares from the 1993 Option Plan. Mark
Wolfson's brother is Allen Z. Wolfson, the sole shareholder of A-Z Professional
Consultants who also may be deemed to be a "control person" of Canton, as that
term is defined by rules and regulations promulgated by the SEC. See this "Item
12 - Certain Relationships and Related Transactions" for additional information
on A-Z Professional Consultants and Allen Wolfson. Mark Wolfson exercised
options worth 300,000 shares on September 10, 1993 and the final options worth
350,000 shares on February 8, 1994.

On September 30, 1993, the Company entered into a real estate sales
agreement with Canton whereby the Company agreed to purchase from Canton certain
real estate in West Virginia for $1,506,174. The form of payment wastwo $100,000
promissory notes signed by the Company, a promissory note in the amount of
$175,000 secured by a mortgage on the land, and 500,000 shares of the Company's
Class A common stock. A modifying addendum to the original agreement dated
February 7, 1994, allowed the Company to return the property if an independent
appraisal valued the real estate at less than $1,506,174. In the event the
property was returned, the Company was to receive shares of Canton's stock equal
in value to the $1,506,174. The addendum also modified the form of the Company's
payment of the purchase price to be equal to 1,142,000 shares of Metallurgical
stock plus a promissory note for $375,000. The Company subsequently notified
Canton that it was dissatisfied with the appraisal and elected not to take the
real estate or shares of Canton stock equivalent to $1,506,174 and thereby
terminated the September 30, 1993 real estate sales agreement and its February
7, 1994 addendum.
<PAGE>

On May 16, 1995, the Company entered into a Consulting Agreement with
Canton Financial Services Corporation ("CFSC"), a wholly-owned subsidiary of
Canton. Pursuant to the agreement, which has a one year term unless thirty days
written notice is provided and can be extended on a monthly basis, CFSC would
assist the Company in locating or forming a public company for a potential
merger or acquisition, assisting in a restructuring of the Company's common
stock, arranging for a public offering, and assisting the Company in the
preparation of agreements, documents, filings and other material necessary to
effectuate the above services. The Company agreed to pay CFSC a monthly
consulting fee which shall be the greater of: (a) $20,000 or (b) actual fee for
services provided by CFSC's professional staff. The Company has the option of
either pay cash or the Company's Class A common stock. This agreement also
provided for CFSC receiving a finders fee upon the presentation of a suitable
merger or acquisition candidate. Pursuant to this consulting agreement, on July
31, 1995, the Company issued 5% of its authorized but unissued Class A common
stock, or 1,144,600 restricted shares, to CFSC as a finders fee for introducing
the Company to AltaChem.

AZ Professional Consultants, Inc. ("A-Z")

Richard Surber, the president and sole director of A-Z, is a director
and the chief executive officer of Canton. He is also the nephew of Allen
Wolfson, the sole shareholder of A-Z. Allen Wolfson may be deemed to be a
"control person" of Canton, as that term is defined by S.E.C. regulations.

In September 1993, A-Z sold the Company a second mortgage on property
located in Lee County (Ft. Myers) Florida, which was valued at $47,411.50, in
exchange for 189,646 restricted Class A shares of the Company's stock. In May
1994, the Company discovered that the property in question had been foreclosed
on by the first mortgagor in August 1993. The Company advised A-Z of this and
A-Z agreed to void the transaction and return the shares to the Company. The
shares were returned in May 1994.

Settlement Agreements Among Canton, A-Z, and the Company

As a result of some of the aforementioned agreements not being
consummated or not being performed as envisioned, several disputes arose among
the Canton, A-Z, and the Company. To avoid legal proceedings and settle all
disputes, the Company, A-Z, Canton, together with Ira L. Friedman, former
president, chief executive officer, and a director of the Company ("Friedman")
and Richard T. Johnson, formerly the chief financial officer, vice president of
finance, and a director of the Company ("Johnson"), executed a Settlement
Agreement dated December 16, 1994 (the "Settlement Agreement"). See "Item 1
Description of Business, Business of Issuer" and "Item 6 - Management Discussion
and Analysis" for additional discussion of this agreement.
<PAGE>

In consideration for the release by Canton and A-Z of the Company,
Friedman and Johnson from any and all claims, causes of action, and obligations
relating to the agreements, Friedman and Johnson appointed Richard D. Surber as
president and director of the Company and agreed to appoint two other persons to
the Company's board that Canton would nominate. Canton nominated Bobby G. Welch,
II and Christopher Swaner as directors of the Company and both were in fact
appointed. The Settlement Agreement also called for Friedman and Johnson to
resign from their positions and request the Company's other officers and
directors also resign. Effective December 16, 1994, the Company's officers along
with directors Keith R. Garrity and Edward Mentzer resigned. The board of
directors appointed Mr. Surber to fill Mr. Garrity's term as a director.
Effective December 17, 1994, Friedman, Johnson and Lawrence S. Friedman resigned
from the board of directors, leaving Mr. Surber as the Company's sole director,
until the appointments of Mr. Welch and Mr. Swaner in January 1995. See "Item 6
- - Management Discussion and Analysis, Changes in Corporate Management" for
additional information on the change in control of the Company.

In addition, as payment for past services rendered, the Company agreed
to issue Friedman, Johnson, and Lawrence Friedman 10% of the issued and
outstanding Class A Common Stock after any reverse stock split excluding any
shares owned by Friedman, Johnson, and Lawrence Friedman. The Company shall
issue such shares as follows: 4.9% to Friedman, 4.9% to Johnson, and 0.2% to
Lawrence Friedman. The shares were issued on April 1, 1995 when the number of
issued and outstanding Class A Common Stock was 186,008 (excluding shares owned
by the three former officers and directors). Consequently, Friedman and Johnson
each received 91,144 shares and Lawrence Friedman received 3,720 shares.

Immediately after Mr. Surber's December 16, 1994 appointment as
president and director of the Company, the principal offices of the Company
moved from Tinton Falls, New Jersey, to 268 West 400 South, Suite 300, Salt Lake
City, Utah. The Settlement Agreement stipulated that Canton would be paid
1,612,000 restricted shares of the Company's Class A common stock for the
services it had rendered to that date and for services it would render in
completing the proxy statement for the Company's March 14, 1995 Special Meeting
of Shareholders. See "Item 4 - Submission of Matters to a Vote of Security
Holders" for more information regarding this proxy statement and the special
meeting.

After this shareholder meeting concluded, Canton continued to provide
consulting services to the Company via its wholly owned subsidiary, Canton
Financial Services Corporation, a Nevada corporation ("CFSC"). These services
were formally retained pursuant to a Consulting Agreement dated May 16, 1995, as
discussed above in "Item 12 - Certain Relationships and Related Transactions,
Canton." CFSC has provided the Company with office space as well as internal
record keeping, the preparation of reports required to be filed with SEC, the
negotiation of settlement of the Company's debts, and the search for a viable
merger or acquisition candidate.

On March 24, 1995, the Company issued 115,000 shares of its Class B
Common Stock to CFSC for substantial services Canton rendered in relation to the
shareholder meeting after the completion of the proxy statement on February 18,
1995, until March 24, 1995. On July 31, 1995, the Company issued 342,931 shares
of its Class A Common stock to CFSC for consulting fees owed. These two
issuances settled outstanding consulting fees from December 16, 1994, through
July 31, 1995, for the amount of $171,4665. When these 342,931 shares were
issued to CFSC, the Company overlooked the 1,612,000 shares of compensation CFSC
received for its services rendered from December 16, 1994, through February 18,
1995. Consequently, CFSC was compensated twice for its services rendered during
this period, which amounted to $64,7543. This credit amount has been applied to
the current balance owed to CFSC. As of November 30, 1995, CFSC incurred
$267,702 in consulting fees and miscellaneous expenses on behalf of the Company,
of which $31,483 is outstanding and due.
<PAGE>

By way of a Letter Agreement dated July 7, 1995, the parties to the
Settlement Agreement modified certain terms of December 1994 Settlement
Agreement to include, among other terms, the issuance of certain shares of the
Company's common stock to Messrs. Friedman and Johnson. The Company agreed to
use its best efforts to register said shares (as well as all shares issued to
Messrs. Ira Friedman, Lawrence Friedman and Richard Johnson pursuant to
paragraph 1(b)(v) of the Settlement Agreement) on Form S-8.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits. Exhibits required to be attached and filed by Item 601 of
Regulation S-B are listed in the Index to Exhibits on page 49 of this Form
10-KSB and are incorporated herein by this reference.

(b) Reports on Form 8-K. The Company filed the following four reports on Form
8-K during the period for which this report is being filed:

December 16, 1994 - Changes in Control of Registrant
January 16, 1995 - Changes in Registrant's Certifying Accountant
February 6, 1995 - Amendment of January 16, 1995 Form 8-K
March 8, 1995 - Amendment of February 6, 1995 Form 8-K

The above mentioned Current Reports on Form 8-K are hereby incorporated by this
reference.

[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]

<PAGE>

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, this 1st day of December 1995.

Bria Communications Corp.

/s/ Richard Lifschutz
Richard Lifschutz, President

In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

Signature Title Date

/s/ Richard Lifschutz President and Director December 27, 1995
Richard Lifschutz

/s/ Jane Zheng Director, Secretary December 27, 1995
Jane Zheng and Treasurer

/s/ James Tilton Chief Executive Officer, December 27, 1995
James Tilton Director

<PAGE>

INDEX TO EXHIBITS

EXHIBIT PAGE DESCRIPTION
NO. NO.

3a * Certificate of Incorporation of the Company.
(Incorporated herein by reference from exhibit of
like number with the Company's Form 10-KSB for the
year ended December 31, 1988.)

3b * By-Laws of the Company. (Incorporated herein by
reference from exhibit of like number with the
Company's Form 10-KSB for the year ended December
31, 1988.)

4a * Warrant issued December 31, 1986 by the Company
to Mid-Monmouth Realty Associates (Incorporated
herein by reference from exhibit of like number
with the Company's Form 10-KSB for the year ended
December 31, 1988.)

10(i) *Exhibits

MATERIAL CONTRACTS

10(i)(a) 50 Letter of Agreement dated March 1, 1995 between the
Company and Richard Lifschutz.

10(i)(b) * Settlement Agreement dated December 16, 1994
between the Company, Richard T. Johnson, Ira
Freidman, A-Z Professional Consultants and The
Canton Industrial Corporation. (Incorporated herein
by reference from Exhibit 10 to Current Report on
Form 8-K filed by the Company on December 30,
1994.)

10(i)(c) 56 Consulting Agreement dated August 4, 1995, but
made effective March 1, 1995, between the Company
and East-West Trading Corporation.

10(i)(d) 67 Consulting Agreement dated August 4, 1995, but
made effective March 1, 1995, between the Company
and Karston Electronics, Ltd.

10(i)(e) 78 Consulting Agreement dated May 16, 1995, between the
Company and Canton Financial Services Corporation.

10(i)(f) 91 Letter of Agreement and Settlement of All Claims
dated July 7, 1995, amending the Settlement agreement
dated December 16, 1994, between the Company, The
Canton Industrial Corporation, A-Z Professional
Consultants, Inc., Ira L. Friedman and Richard T.
Johnson.

10(i)(g) 93 Amendment to Letter of Agreement, Settlement of All
Claims, dated July 11, 1995, between the Company, The
Canton Industrial Corporation, A-Z Professional
Consultants, Inc., Ira L. Friedman and Richard T.
Johnson.

10(i)(h) * Binding Letter of Intent between the Company and
MAXMusic, Inc. dated February 14, 1994.
(Incorporated herein by reference from Exhibit 10
to Current Report on Form 8-K filed by the Company
on March 11, 1994.)

27 94 Financial Data Schedule

* These exhibits appear in the manually signed original Reports for the periods
indicated by each item and are hereby incorporated by this reference.

METALLURGICAL INDUSTRIES, INC.
268 West 400 South, Suite 300
Salt Lake City, Utah 84101

March 1, 1995

Mr. Richard Lifschutz
147-17 Newport Avenue
Neponsit, NY 11694

RE: Letter of Agreement

Dear Mr. Lifschutz:

Further to our very productive discussions, we are pleased to offer you the
positions of President and Director of Metallurgical Industries, Inc. on the
following terms:

This Agreement is made effective this 1st day of March, 1995, by and between
Metallurgical Industries, Inc., a New Jersey corporation ("Company") and Richard
Lifschutz, an individual ("Lifschutz").

1. Employment. The Company employs Lifschutz and Lifschutz accept
employment as President and Director of the Company upon the terms and
conditions set forth in this Agreement.

2. Term. The term of this Agreement shall commence February 28, 1995, and
shall continue for an initial term of three (3) months. This Agreement may be
renewed at the end of the term for an additional term upon the satisfactory
performance of Lifschutz and the written agreement of the parties. If there is
no written agreement for additional term then the employment will continue on a
month to month basis subject to termination by either party at will or upon
thirty (30) days written notice to the other party.

3. Compensation. Company agrees to compensate Lifschutz in the amount of
5000 restricted shares of the Common Stock of Company for each month that
Lifschutz serves as President of the Company. This compensation shall be paid a
year in advance. These shares ("Compensation Shares") will be valued at the
average of the ask and bid prices of the free-trading Common Stock of Company
for the ten (10) days preceding the issuance of such shares as quoted on the
National Association of Securities Dealers Automated Quotation System (NASDAQ),
or other reliable source if not listed on the NASDAQ. Company shall be entitled
to prorate the Compensation Shares paid if Lifschutz serves as President for
less than one full term of this Agreement or less than a full month if this
Agreement is extended on a month to month basis pursuant to Paragraph 2. Company
may, at its discretion, issue end of year bonuses to Lifschutz as it may deem
fit. The Company hereby grants Lifschutz an option to purchase a maximum of 5000
additional shares of restricted common stock per month at fifty cents per share.
This option shall expire one year from the date of execution of this agreement
unless otherwise agreed by the parties. The shares of Common Stock that are the
subject of Lifschutz's compensation shall, when issued, be validly issued, full
paid and nonassessable. A finders fee shall also be paid by Company to Lifschutz
for every transaction involving a business opportunity which Lifschutz
introduces to Company, which fee shall be in the amount of five percent (5%) in
kind of assets received by Company in connection with such transaction. Until
the Board directs otherwise, the Company agrees to pay the finders fee, at
Lifschutz' election, in shares of common stock of the Company. Provided however
that the total number of shares issued under this paragraph shall not exceed 9%
of the total shares of the Company issued and outstanding.

<PAGE>

4. Duties. During the term of this Agreement, Lifschutz shall initially
occupy the office of President of Company. Lifschutz shall perform the tasks and
have the rights, powers and obligations normally associated with the office of
President. Lifschutz agrees to serve in such officers of positions with Company
or any subsidiary of Company that Company's Board of Directors ("Board of
Directors") shall reasonably request. Lifschutz further agrees to server as a
member of the Board of Directors, and agrees to serve as Director of any
subsidiary of Company, for no additional compensation.

5. Extent of Services/Conduct. Lifschutz may perform services for other
organizations and volunteer for one or more charitable organizations provided
that, in the reasonable judgment of the Board of Directors, such services do not
interfere and are not inconsistent with Lifschutz's duties and obligations under
this Agreement. Lifschutz may invest his assets in such form or manner as will
not require his services in the operation of the affairs of the companies in
which such investments are made, provided said companies are not in competition
with the business of Company. Lifschutz pledges his careful avoidance of all
personal acts, habits, usages, and statements which might injure, in any way,
directly or indirectly, the personal or business reputation of the Company.
Company expressly retains the right to approve, in its sole discretion, each and
every transaction introduced by Lifschutz that involves Company as a party to
any agreement.

6. Covenant Not To Compete . During the term of this Agreement and for a
period of three (3) years after the termination of this Agreement, Lifschutz
shall not without the written consent of Company, directly or indirectly,
solicit or accept business from any customer of the Company or perform any of
the services included within the Company's business for any customer of the
Company and shall not directly or indirectly, serve as an officer, Director,
Company Director, or independent contractor of, to, or from any individual,
partnership, or corporation, or as an owner of any business which, in the
reasonable judgment of the Board of Directors, competes with the Company in its
business or business prospects. Lifschutz shall not without the written consent
of the Company be paid (by other parties) commissions or fees on any
transactions entered into by the Company and which he introduced to the Company.

7. Non-Disclosure of Information. In further consideration of employment
and the continuation of employment by Company, Lifschutz will not, directly or
indirectly, during or after the term of employment disclose to any person not
authorized by Company to receive or use such information, except, for the sole
benefit of Company, any of Company's confidential or proprietary data,
information, or techniques, or give to any person not authorized by Company to
receive it any information that is not generally known to anyone other than
Company or that is designated by Company as "Limited," "Private," or
"Confidential," or similarly designated.

<PAGE>

8. Expenses . Lifschutz may incur reasonable expenses for promoting the
Company's business, including reasonable expenses for entertainment, travel, and
similar items. The Company will reimburse Lifschutz for all such pre-approved
expenses upon Lifschutz's periodic presentation of any itemized account of such
expedites.

9. Disability. If Lifschutz is unable to perform his services by reason of
illness or incapacity, the base salary payable to him under Paragraph 3 of this
Agreement shall continue only in accordance with decisions unilaterally reached
by the Board of Directors or pursuant to any written policy of the company.

10.Fringe Benefits. In addition to the compensation to Lifschutz under
Paragraph 3, Lifschutz shall be entitled to participate in any benefit plans
adopted by the Company, including, without limitation, health, retirement,
disability, and life insurance benefit plans, but only to the extent that
Lifschutz has satisfied the eligibility requirements of the respective plans and
the benefits are offered to all other employees of Company.

11.Termination for Cause. The Company may terminate this Agreement at will
and/or for cause at any time. For purposes of this Agreement, the term "cause"
includes, without limitation, Lifschutz's (a) neglect or intentional disregard
of duties, (b) unauthorized disclosure of confidences of the Company, (C)
conviction of felony or any crime involving moral turpitude by a court of
competent jurisdiction, (d) willful misconduct, (e) excessive use of alcohol on
repeated occasions or addiction to narcotics, (f) breach of this Agreement, or
(g) dishonesty. All advance compensation shares issued but not earned shall be
returned to Company.

12.Termination Upon Sale of Business. Company may terminate this Agreement
upon thirty (30) days written notice to Lifschutz upon the happening of any of
the following events:

a) The sale, by the Company, of substantially all of its assets to a
single purchaser or group of associated purchasers;

b) The sale, exchange, or other disposition to a single entity or group
of entities under common control in one transaction or series of related
transactions of greater than fifty percent (50%) of the outstanding shares
of the Company's common stock;

c) A decision by Company to terminate its business and liquidate its
assets; or

d) The merger or consolidation of the Company in a transaction in which
the shareholders of the Company receive less than fifty percent (50%) of
the outstanding voting shares of the new or continuing corporation.

<PAGE>

13.Death During Employment. If Lifschutz dies during the term of this
Agreement, then the Company shall pay to the designated beneficiary of Lifschutz
the compensation which would otherwise be payable to Lifschutz up to the end of
the month in which such death occurs and this Agreement shall be terminated. If
no beneficiary designation has been made by Lifschutz, then the compensation due
hereunder shall be paid to Lifschutz's estate. All advance compensation shares
issued but not earned shall be returned to Company.

14.Lifschutz Not Restricted by Other Agreement. Lifschutz hereby expressly
represents, warrants, and covenants to the Company that he is not bound, in any
manner, by any agreement, whether written or oral, which would restrict him from
performing any duties under this Agreement.

15. Survival. The provisions of this Agreement including, specifically,
Lifschutz's representation, covenants, and agreements set forth in Paragraphs 7
and 8, shall survive the termination of this Agreement.

16. Entire Agreement. This Agreement constitutes the entire understanding
between the parities and there are no covenants, conditions, representations, or
agreements, oral or written, or any nature whatsoever, other than those herein
continued.

17. Amendments. No amendment, alteration, or modification of this Agreement
shall be binding upon the parties hereto unless said amendment, alteration, or
modification is in writing and signed by all parties hereto.

18. Waiver. The waiver of any term, condition, clause, or provision of this
Agreement shall in no way we deemed or considered a waiver of any other term,
condition, clause, or provision of this Agreement.

19. Severability. If any term, condition, clause, or provision of this
Agreement shall be deemed to be void or invalid then that term, condition,
clause, or provision shall be stricken from this Agreement to the extent it is
held to be void or invalid, to be void or invalid and in all other respects this
Agreement shall be valid and in full force and operation.

20. Notices. Any notice or other communication required or permitted
hereunder shall be sent by United States certified mail, postage prepaid,
addressed:

if to the Company: Metallurgical Industries, Inc.
268 West 400 South, Suite 300
Salt Lake City, UT 84101

and, if to Lifschutz: Richard Lifschutz
147-17 Newport Ave.
Neponsit, NY 11964
<PAGE>

or to such other person or address designated by the parties to receive notice.
The date of the notice shall be the date of the mailing.

21. Additional Documents. The parties hereto agree to execute any and all
additional papers and documents reasonably necessary or appropriate to
effectuate the terms of this Agreement.

22. Governing Law. This Agreement shall be subject to and governed by the
laws of the State of Utah. Any legal action hereunder shall be properly
commenced only in a federal or state court of competent jurisdiction in Salt
Lake County, Utah. The prevailing party in any such action shall be entitled to
recover, in addition to any relief or award ordered by the court, a reasonable
attorney fee and all costs of court.

23. Assignment. This Agreement shall not be assignable by any party to this
Agreement, except upon the written consent of all parties hereto. The Lifschutz
shall not have the right to pledge, encumber, or dispose of the right to receive
any payments under this Agreements, which payments and the right thereto are
expressly declared to be non-assignable and nontransferable and, in the event of
any attempted assignment or transfer, the Company shall have not further
liability hereunder.

24. Counterparts. This Agreement may be executed in two counterparts, each
of which shall be deemed an original but both of which together shall constitute
one and the same agreement.

25. Indemnification. Company and Lifschutz agree to indemnify, defend and
hold each other harmless from and against all demands, claims, actions, losses,
damages, liabilities, costs and expenses, including without limitation,
interest, penalties and attorneys fees and expenses asserted against or imposed
or incurred by either party by reason of or resulting from a breach of any
representation, warranty, covenant condition or agreement of the other party to
this Agreement.

26. No Third Party Beneficiary. Nothing is this Agreement, expressed or
implied, is intended to confer upon any person, other than the parties hereto
and their successors, any rights or remedies under or by reason of this
Agreement, unless this Agreement specifically states such intent.

27. Facsimile Counterparts. If a party signs this Agreement and transmits
an electronic facsimile of the signature page to the other party, the party who
receives the transmission may rely upon the electronic facsimile as a signed
original of this Agreement.

[THIS SPACE LEFT BLANK]

<PAGE>

If this letter of agreement meets with your approval, please append your
signature at the bottom right hand corner of this page.

Sincerely,

/s/ Richard Surber
for and on behalf of the Board

Agreed to and accepted:
/s/ Richard Lifschutz
Richard Lifschutz

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT ("Agreement") is entered into this 4th day of
August 1995, but made effective as of the 1st day of March 1995 by and between
BRIA Communications Corporation, a New Jersey corporation (and its designees)
(collectively referred to as "Client") with principal offices at 268 West 400
South, Suite 300, Salt Lake City, Utah 84101, and East-West Trading Corporation
("Consultant").

PREMISES

WHEREAS, Consultant is familiar with business conditions and contacts
in BRIA's industry in China and Europe.

WHEREAS, Client desires to secure the services of Consultant and to
protect its interest in obtaining comprehensive covenants from Consultant not to
compete with Client nor to divulge Client's confidential information.

WHEREAS, Consultant desires to enter into a written agreement to serve
as a consultant to Client for the purpose of introducing Client to persons and
entities for potential acquisitions, joint venture partnerships, or other
business alliances in China and Europe.

AGREEMENT

NOW, THEREFORE, based on the foregoing premises, which are incorporated
herein by this reference, and for and in consideration of the mutual covenants
and agreements contained herein, and in reliance on the representations and
warranties set forth in this Agreement, the benefits to be derived herein and
for other valuable consideration, the receipt and adequacy of which is hereby
expressly acknowledged, Client and Consultant agree as follows:

Section 1- Engagement of Consultant and Term of Agreement.

A. Client retains Consultant to assist Client in general business
consulting, including the introduction in China and Europe of
Client to persons and entities that will enhance the value of
Client's stock by establishing and maintaining the stock quote
on the bulletin board market system and developing a market
and market makers, as well locating potential acquisition
candidates in China or Europe and performing other services
that Client's board of directors reasonably requests from time
to time ("Consulting Services").

B. The term of this Agreement ("Term") shall, subject to earlier
termination as described herein, be one (1) year from the
execution of this Agreement, unless Consultant provides Client
at least 30 days or Client provides to Consultant at least 14
days written notice of its decision to terminate this
Agreement.
<PAGE>

Section 2 - Compensation

Client shall compensate Consultant in the following manner:

A. Client shall compensate Consultant one hundred twenty thousand
(120,000) post-reverse shares of Client's common stock, par
value $0.02 per share ("Common Stock") pursuant to Regulation
S of the Securities Act of 1933. Payment of shares shall be
made immediately with the formal of this Agreement.

B. Consultant shall be granted an option to purchase two hundred
fifty thousand (250,000) post-reverse shares of Client's
common stock at the exercise price $0.50 per share. The
options under this paragraph 2(B) are to be exercise, if at
all, within one (1) year of the execution of this Agreement
(Requisite Option Agreement and Notice of Exercise are
attached as Annex A hereto and incorporated herein by this
reference) and issued pursuant to Regulation S of the
Securities Act of 1933.

C. All shares of stock that are issued to Consultant under this
Agreement shall, when issued, be validly issued, fully paid
and nonassessable. Section 3 - Client's Representations

Section 3 - Client's Representations

Client represents, warrants and covenants to Consultant that each of
the following is true and complete as of the date of this Agreement:

A. Client's Authority for Agreement. The execution and
delivery of this Agreement and the consummation of the
transactions contemplated herein have been duly authorized by
the Client. This Agreement has been duly executed and
delivered by Client and constitutes the valid and legally
binding obligation of Client enforceable in accordance with
its terms, except to the extent that enforceability may be
subject to or limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors' rights generally. To the best of Client's
knowledge, after due inquiry, the execution and delivery of
this agreement and the consummation of the transaction
contemplated herein will not conflict with any mortgage,
indenture, lease, contract, commitment, agreement, or other
instrument, permit, concession, grant, franchise, license,
judgement, order, decree, statute, law, ordinance, rule or
regulation applicable to Client or any of its properties or
assets.

B. Consents and Authorizations. No consent, approval, order or
authorization of, or registration, declaration, compliance
with or filing with, any governmental or regulatory authority
is required in connection with the execution and delivery of
this Agreement to permit the consummation by Client of the
transactions contemplated herein or to prevent the termination
of any material right, privilege, license or agreement of
Client or to prevent any material loss to Client or the
Client's business, by reason of the transactions contemplated
herein.
<PAGE>

Section 4 - Non-Circumvention

Client agrees that Client will not enter into any merger with or
acquisition of a Target Company, raise any funds for which Consultant
provided services, or enter into any transaction involving a business
opportunity or asset introduced to Client by Consultant, without
compensating Consultant pursuant to this Agreement. Neither will Client
terminate this Agreement solely as a means to avoid paying Consultant
compensation earned or to be earned, or in any other way attempt to
circumvent Consultant.

Section 5 - Termination of Agreement by Consultant and by Client

Consultant may terminate this Agreement if the following occurs:

A. Payments due under this Agreement are not timely made.

B. Consultant makes a bona fide decision to terminate its
business and liquidate its assets.

C. An unanticipated material change in either the market, Client
or Consultant makes continued performance under this Agreement
unreasonable.

D. Breach of any provision of this Agreement.

E. Notwithstanding the termination of this Agreement, Consultant
shall be entitled to receipt of all compensation owed pursuant
to Sections 2(A)-2(D) up to the time of termination of this
Agreement.

Client may terminate this Agreement under the following conditions:

A. Consultant fails to follow Client's reasonable instructions.
Client must advise Consultant that his actions or inactions
are unacceptable and give Consultant thirty (30) days for
which to comply. If Consultant fails to comply within thirty
(30) days, Consultant may be terminated hereunder by Client's
service of notice of termination to Consultant.

B. If, in the judgment of the Board of Directors of Client,
Consultant's actions or conduct would make it unreasonable to
require Client to retain Consultant. Such acts include, and
are in the nature of, dishonesty, illegal activities,
activities harmful to the reputation of the Client, and
activities which create civil or criminal liability for the
Client.
<PAGE>

C. Notwithstanding the termination of this Agreement, Consultant
shall be entitled to receipt of all compensation owed pursuant
to Sections 2(A)-2(D) up to the time of termination of this
Agreement.

Section 6 -Nondisclosure of Confidential Information

In consideration for the Client entering into this Agreement,
Consultant agrees that the following items used in the Client's
business are secret, confidential, unique, and valuable, were developed
by Client at great cost and over a long period of time, and disclosure
of any of the items to anyone other than Client's officers, agents, or
authorized employees will cause Client irreparable injury.

A. Non-public financial information, accounting information,
plans of operations, possible mergers or acquisitions
prior to the public announcement.

B. Customer lists, call lists, and other confidential
customer data;

C. Memoranda, notes, records concerning the technical and
creative processes conducted by Client;

D. Sketches, plans, drawings and other confidential research
and development data or;

E. Manufacturing processes, chemical formulae, and the
composition of Client's products.

Consultant shall have no liability to the Client with respect to the
use or disclosure to others not party to this Agreement, of such
information as Consultant can establish to:

A. have been publicly known;

B. have become known, without fault on the part of
Consultant, subsequent to disclosure by Client of such
information to Consultant;

C. have been otherwise known by Consultant prior to
communication by the Client to Consultant of such
information, or

D. have been received by Consultant at any time from a source
other than Client lawfully having possession of such
information.

Section 7 - Best Efforts

Consultant agrees that it will at all times faithfully and to the best
of its experience, ability and talents, perform all the duties that may
be required of and from Consultant pursuant to the terms of this
Agreement. Consultant does not guarantee that its efforts will have any
impact on Client's business or that any subsequent financial
improvement will result from Consultant's efforts.
<PAGE>

Section 8 - Client's Right to Approve Transaction

Client expressly retains the right to approve, in its sole discretion,
each and every transaction introduced by Consultant that involves
Client as a party to any agreement. Consultant and Client mutually
agree that Consultant is not authorized to enter into agreements on
behalf of Client.

Section 9 - Client Under No Duty or Obligation to Accept or Close on any
Transactions

It is mutually understood and agreed that Client is not obligated to
accept or close any transaction submitted by Consultant.

Section 10 - All Prior Agreements Terminated

This Agreement comprises the entire agreement and understanding between
the parties hereto at the date of this Agreement as to the subject
matter hereof and supersedes and replaces all proposals, prior
negotiations and agreements, whether oral or written, between the
parties hereto in connection with the subject matter hereof. None of
the parties hereto shall be bound by any conditions, definitions,
warranties or representations with respect to the subject matter of
this Agreement other than as expressly provided in this Agreement
unless the parties hereto subsequently agree to vary this Agreement in
writing, duly signed by authorized representatives of the parties
hereto.

Section 11 - Consultant is not an Agent or Employee of Client

Consultant's obligations under this agreement consist solely of the
Consulting Services described herein. In no event shall Consultant be
considered to act as the employee or agent of Client or otherwise
represent or bind Client. For the purposes of this Agreement,
Consultant is an independent contractor. All final decisions with
respect to acts of Client or its affiliates, whether or not made
pursuant to or in reliance on information or advice furnished by
Consultant hereunder, shall be those of Client or such affiliates and
Consultant, its employees or agents shall under no circumstances be
liable for any expense incurred or loss suffered by Client as a
consequence of such action or decisions.

Section 12 - Miscellaneous

A. Authority. The execution and performance of this Agreement
have been duly authorized by all requisite corporate action.
This Agreement constitutes a valid and binding obligation of
the parties hereto.

B. Amendment. This Agreement may be amended or modified at any
time and in any manner only by an instrument in writing
executed by the parties hereto.
<PAGE>

C. Waiver. No term of this Agreement shall be considered waived
and no breach excused by either party unless made in writing.
No consent, waiver or excuse by either party, express or
implied, shall constitute a subsequent consent, waiver or
excuse.

D. Assignment:

(i) The rights and obligations of the Consultant under this
Agreement shall inure to the benefit of and shall be
binding upon its successors and assigns. There shall be no
rights of transfer or assignment of this Agreement by
Client except with the prior written consent of the
Consultant.

(ii)Nothing in this Agreement, expressed or implied, is
intended to confer upon any person, other than the parties
and their successors, any rights or remedies under this
Agreement.

E. Notices. Any notice or other communication required or
permitted by this Agreement must be in writing and shall be
deemed to be properly given when delivered in person to an
officer of the other party, when deposited in the Unites
States mails for transmittal by certified or registered mail,
postage prepaid, or when deposited with a public telegraph
company for transmittal or when sent by facsimile
transmission, charges prepaid provided that the communication
is addressed:

(i) In the case of Consultant to:

East-West Trading Corporation
National Bank Building, Memorial Square
Charleston, Nevis, West Indies

(ii) In the case of Client to:

BRIA Communications Corporation
ATTN: Richard Lifschutz
268 West 400 South, Suite 300
Salt Lake City, Utah 84101
(801) 575-8073

or to such other person or address designated by Client in
writing to receive notice.

F. Headings and Captions. The headings of paragraphs are included
solely for convenience. If a conflict exists between any
heading and the text of this Agreement, the text shall
control.

G. Entire Agreement. This instrument and the exhibits to this
instrument contain the entire Agreement between the parties
with respect to the transaction contemplated by the Agreement.
It may be executed in any number of counterparts but the
aggregate of the counterparts together constitute only one and
the same instrument.

H. Effect of Partial Invalidity. In the event that any one or
more of the provisions contained in this Agreement shall for
any reason be held to be invalid, illegal, or unenforceable in
any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, but
this Agreement shall be constructed as if it never contained
any such invalid, illegal or unenforceable provisions.

I. Controlling Law. The validity, interpretation, and performance
of this Agreement shall be governed by the laws of the State
of Utah, without regard to its law on the conflict of laws.
Any dispute arising out of this Agreement shall be brought in
a court of competent jurisdiction in Salt Lake County, Utah.
The parties exclude any and all statutes, laws and treaties
which would allow or require any dispute to be decided in
another forum or by other rules of decision than provided in
this Agreement.

J. Attorneys' Fees. If any action at law or in equity, including
an action for declaratory relief, is brought to enforce or
interpret the provisions of this Agreement, the prevailing
party shall be entitled to recover actual attorneys' fees,
court costs, and other costs incurred in proceeding with the
action from the other party. The attorney's fees, court costs
or other costs, may be ordered by the court in its decision of
any action described in this paragraph or may be enforced in a
separate action brought for determining attorneys' fees, court
costs, or other costs. Should either party be represented by
in-house counsel, all parties agree that that party may
recover attorneys' fees incurred by that in-house counsel in
an amount equal to that attorney's normal fees for similar
matters, or, should that attorney not normally charge a fee,
by the prevailing rate charged by attorneys with similar
background in that legal community.

K. Time is of the Essence. Time is of the essence of this
Agreement and of each and every provision hereof.

L. Mutual Cooperation. The parties hereto shall cooperate with
each other to achieve the purpose of this Agreement, and shall
execute such other and further documents and take such other
and further actions as may be necessary or convenient to
effect the transactions described herein.

M. Indemnification. Client and Consultant agree to indemnify,
hold harmless and, at the party seeking indemnification's sole
option, defend the other from and against all demands, claims,
actions, losses, damages, liabilities, costs and expenses,
including without limitation, interest, penalties, court fees,
and attorneys' fees and expenses asserted against or imposed
or incurred by either party by reason of or resulting from a
breach of any representation, warranty, covenant condition or
agreement of the other party to this Agreement. Neither party
shall be responsible to the other party for any consequential
or punitive damages.
<PAGE>

0. No Third Party Beneficiary. Nothing in this Agreement,
expressed or implied, is intended to confer upon any person,
other than the parties hereto and their successors, any rights
or remedies under or by reason of this Agreement, unless this
Agreement specifically states such intent.

P. Facsimile Counterparts. If a party signs this Agreement and
transmits an electronic facsimile of the signature page to the
other party, the party who receives the transmission may rely
upon the electronic facsimile as a signed original of this
Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement on the
date herein above written.

BRIA Communications Corporation East-West Trading Corporation

/s/ Richard Lifschutz /s/ Darren Colquitt
Richard Lifschutz, President First Directors, Limited, President
Represented by: Darren Colquitt
<PAGE>

EXHIBIT A

SUITABILITY LETTER

TO: BRIA Communications Corp.
c/o Richard Lifschutz
268 West 400 South, Suite 300
Salt Lake City, Utah 84101

East-West Trading Corporation ("East-West") makes the following
representations with the intent that they may be relied on by BRIA
Communications Corp. (the "Company"), in determining East West's suitability as
a purchaser of securities of the Company (the "Shares").

1. East-West has received and read the Company's quarterly report on
Form 10-QSB for September 30, 1994 and the annual report on Form 10-KSB for the
year ended December 31, 1993, and any amendments to such reports (the "Annual
and Quarterly reports") and East-West is familiar with all terms and provisions
thereof.

2. East-West has adequate means of providing for its current needs and
possible contingencies and have no need in the foreseeable future for liquidity
of any investment in the Company.

3. For Foreign Investors Only:

(a) Offshore Transaction. East-West confirms that the offer and
sale of the Shares occurred in an "offshore transaction" in that:

(i) East-West [ ]is [ ]is not a "person" in the United
States.
(ii) At the time the Subscription Agreements were entered
into, East-West was outside the United States. [ ] Yes [ ] No

(b) Non "U.S. Person." East-West is not a U.S. Person, as defined
below. For purposes of the above representation, "U.S. Person" means:

(i) any natural person resident in the United States;
(ii) any partnership or corporation organized or
incorporated under the laws of the United States;
(iii) any estate of which any executor or administrator is a
U.S. Person;
(iv) any trust of which any trustee is a U.S. Person;
(v) any agency or branch of a foreign entity located in the
United States;
<PAGE>

(vi) any non-discretionary account or similar account (other
than an estate or trust) held by a dealer or other fiduciary
organized, incorporated, or (if an individual) resident in the
United States; and
(vii) any partnership or corporation if: (A) organized or
incorporated under the laws of any foreign jurisdiction;and (B)
formed by a U.S. person principally for the purpose of investing
in securities not registered under the Securities Act, unless it
is organized or incorporated, and owned, by accredited investors
(as defined in Rule 501(a) under the Securities Act) who are not
natural persons, estates or trusts.

4. East-West has previously been advised that East-West would have an
opportunity to review all the pertinent facts concerning the Company, and to
obtain any additional information which East-West might request, to the extent
possible or obtainable, without unreasonable effort and expense, in order to
verify the accuracy of the information contained in the Annual and Quarterly
Reports.

5. East-West has personally communicated or been offered the
opportunity to communicate with executive officers of the Company to discuss the
business and financial affairs of the Company, its products and activities, and
its plans for the future. East-West acknowledges that if it would like to
further avail itself of the opportunity to ask additional questions of the
Company, the Company will make arrangements for such an opportunity on request.

6. East-West has been advised that no accountant or attorney engaged by
the Company is acting as East-West representative, accountant, or attorney.

7. East-West is a bona fide resident of Nevis, West Indies with its
principal offices in the National Bank Building, Memorial Square, Charleston,
Nevis, West Indies. The address below is the true and correct principal place of
business.

DATED this 4th day of August 1995.

East-West Trading Corporation

/s/ Darren Colquitt
First Directors Limited, President
Represented by Darren Colquitt

East-West Trading Corporation
National Bank Building, Memorial Square
Charleston, Nevis, West Indies

<PAGE>

NOTICE OF EXERCISE

[To be signed only upon exercise of Option]

TO: BRIA Communications Corp.

The undersigned, the owner of the Attached Option, hereby irrevocably
elects to exercise the rights to purchase thereunder ______________ shares of
Common Stock of BRIA Communications Corp. and herewith pays for the shares in
the manner specified in the Option. The undersigned requests that the
certificates for such shares be delivered as per instructions indicated below.
If such shares are not all of the shares available under the Option, the
undersigned further requests that a new option certificate be issued and
delivered to the undersigned for the remaining shares purchasable under the
Option.

DATED this 4th day of August 1995.

By: /s/ Darren Colquitt

Instructions for delivery:

CONSULTING AGREEMENT

PREMISES

WHEREAS, Consultant is familiar with business conditions and contacts
in BRIA's industry in China and Europe.

AGREEMENT

Section 1- Engagement of Consultant and Term of Agreement.

<PAGE>

Section 2 - Compensation

Client shall compensate Consultant in the following manner:

C. All shares of stock that are issued to Consultant under
this Agreement shall, when issued, be validly issued,
fully paid and nonassessable.

Section 3 - Client's Representations

Client represents, warrants and covenants to Consultant that each of
the following is true and complete as of the date of this Agreement:

<PAGE>

Section 4 - Non-Circumvention

Section 5 - Termination of Agreement by Consultant and by Client

Consultant may terminate this Agreement if the following occurs:

A. Payments due under this Agreement are not timely made.

B. Consultant makes a bona fide decision to terminate its busin-
ess and liquidate its assets.

C. An unanticipated material change in either the market, Client
or Consultant makes continued performance under this Agreement
unreasonable.

D. Breach of any provision of this Agreement.

E. Notwithstanding the termination of this Agreement, Consultant
shall be entitled to receipt of all compensation owed pursuant
to Sections 2(A)-2(D) up to the time of termination of this
Agreement.

Client may terminate this Agreement under the following conditions:

<PAGE>

C. Notwithstanding the termination of this Agreement, Consultant
shall be entitled to receipt of all compensation owed pursuant
to Sections 2(A)-2(D) up to the time of termination of this
Agreement.

Section 6 -Nondisclosure of Confidential Information

A. Non-public inancial information, accounting information,
plans of operations, possible mergers or acquisitions prior to
the public announcement.

B. Customer lists, call lists, and other confidential customer
data;

C. Memoranda, notes, records concerning the technical and
creative processes conducted by Client;

D. Sketches, plans, drawings and other confidential research and
development data or;

E. Manufacturing processes, chemical formulae, and the compos-
ition of Client's products.

Consultant shall have no liability to the Client with respect to the
use or disclosure to others not party to this Agreement, of such
information as Consultant can establish to:

A. have been publicly known;

B. have become known, without fault on the part of Consultant,
subsequent to disclosure by Client of such information to
Consultant;

C. have been otherwise known by Consultant prior to communication
by the Client to Consultant of such information, or

D. have been received by Consultant at any time from a source
other than Client lawfully having possession of such in-
formation.

Section 7 - Best Efforts

<PAGE>

Section 8 - Client's Right to Approve Transaction

Section 9 - Client Under No Duty or Obligation to Accept or Close on any
Transactions

It is mutually understood and agreed that Client is not obligated to
accept or close any transaction submitted by Consultant.

Section 10 - All Prior Agreements Terminated

Section 11 - Consultant is not an Agent or Employee of Client

Section 12 - Miscellaneous

A. Authority. The execution and performance of this Agreement have
been duly authorized by all requisite corporate action. This
Agreement constitutes a valid and binding obligation of the
parties hereto.

B. Amendment. This Agreement may be amended or modified at any time
and in any manner only by an instrument in writing executed by
the parties hereto.

<PAGE>

C. Waiver. No term of this Agreement shall be considered waived and
no breach excused by either party unless made in writing. No
consent, waiver or excuse by either party, express or implied,
shall constitute a subsequent consent, waiver or excuse.

D. Assignment:

(i) The rights and obligations of the Consultant under this
Agreement shall inure to the benefit of and shall be binding
upon its successors and assigns. There shall be no rights of
transfer or assignment of this Agreement by Client except with
the prior written consent of the Consultant.

(ii) Nothing in this Agreement, expressed or implied, is intended to
confer upon any person, other than the parties and their
successors, any rights or remedies under this Agreement.

E. Notices. Any notice or other communication required or permitted
by this Agreement must be in writing and shall be deemed to be
properly given when delivered in person to an officer of the
other party, when deposited in the Unites States mails for
transmittal by certified or registered mail, postage prepaid, or
when deposited with a public telegraph company for transmittal or
when sent by facsimile transmission, charges prepaid provided
that the communication is addressed:

(i) In the case of Consultant to:

Karston Electronics, Ltd.
Omar Hodge Building, Wickham Cay #1
Road Town, Tortola, British Virgin Islands

(ii) In the case of Client to:

BRIA Communications Corporation
ATTN: Richard Lifschutz
268 West 400 South, Suite 300
Salt Lake City, Utah 84101
(801) 575-8073

or to such other person or address designated by Client in
writing to receive notice.

F. Headings and Captions. The headings of paragraphs are included
solely for convenience. If a conflict exists between any heading
and the text of this Agreement, the text shall control.

G. Entire Agreement. This instrument and the exhibits to this
instrument contain the entire Agreement between the parties with
respect to the transaction contemplated by the Agreement. It may
be executed in any number of counterparts but the aggregate of
the counterparts together constitute only one and the same
instrument.

<PAGE>

H. Effect of Partial Invalidity. In the event that any one or more
of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality or unenforceability shall
not affect any other provisions of this Agreement, but this
Agreement shall be constructed as if it never contained any such
invalid, illegal or unenforceable provisions.

I. Controlling Law. The validity, interpretation, and performance of
this Agreement shall be governed by the laws of the State of
Utah, without regard to its law on the conflict of laws. Any
dispute arising out of this Agreement shall be brought in a court
of competent jurisdiction in Salt Lake County, Utah. The parties
exclude any and all statutes, laws and treaties which would allow
or require any dispute to be decided in another forum or by other
rules of decision than provided in this Agreement.

J. Attorneys' Fees. If any action at law or in equity, including an
action for declaratory relief, is brought to enforce or interpret
the provisions of this Agreement, the prevailing party shall be
entitled to recover actual attorneys' fees, court costs, and
other costs incurred in proceeding with the action from the other
party. The attorney's fees, court costs or other costs, may be
ordered by the court in its decision of any action described in
this paragraph or may be enforced in a separate action brought
for determining attorneys' fees, court costs, or other costs.
Should either party be represented by in-house counsel, all
parties agree that party may recover attorneys' fees incurred by
that in-house counsel in an amount equal to that attorney's
normal fees for similar matters, or, should that attorney not
normally charge a fee, by the prevailing rate charged by
attorneys with similar background in that legal community.

K. Time is of the Essence. Time is of the essence of this Agreement
and of each and every provision hereof.

L. Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute
such other and further documents and take such other and further
actions as may be necessary or convenient to effect the
transactions described herein.

M. Indemnification. Client and Consultant agree to indemnify, hold
harmless and, at the party seeking indemnification's sole option,
defend the other from and against all demands, claims, actions,
losses, damages, liabilities, costs and expenses, including
without limitation, interest, penalties, court fees, and
attorneys' fees and expenses asserted against or imposed or
incurred by either party by reason of or resulting from a breach
of any representation, warranty, covenant condition or agreement
of the other party to this Agreement. Neither party shall be
responsible to the other party for any consequential or punitive
damages.

<PAGE>

0. No Third Party Beneficiary. Nothing in this Agreement, expressed
or implied, is intended to confer upon any person, other than the
parties hereto and their successors, any rights or remedies under
or by reason of this Agreement, unless this Agreement
specifically states such intent.

IN WITNESS WHEREOF, the parties have executed this Agreement on the
date herein above written.

BRIA Communications Corporation Karston Electronics, Ltd.

/s/ Richard Lifschutz /s/Colin Foster
Richard Lifschutz, President First Directors, Inc., President
Represented by: Colin Foster

<PAGE>

EXHIBIT A

SUITABILITY LETTER

TO: BRIA Communications Corp.
c/o Richard Lifschutz
268 West 400 South, Suite 300
Salt Lake City, Utah 84101

Karston Electronics, Ltd. ("Karston") makes the following representations
with the intent that they may be relied on by BRIA Communications Corp. (the
"Company"), in determining Karston's suitability as a purchaser of securities of
the Company (the "Shares").

1. Karston has received and read the Company's quarterly report on Form
10-QSB for September 30, 1994 and the annual report on Form 10-KSB for the year
ended December 31, 1993, and any amendments to such reports (the "Annual and
Quarterly reports") and Karston is familiar with all terms and provisions
thereof.

2. Karston has adequate means of providing for its current needs and
possible contingencies and have no need in the foreseeable future for liquidity
of any investment in the Company.

3. For Foreign Investors Only:

(a) Offshore Transaction. Karston confirms that the offer and sale
of the Shares occurred in an "offshore transaction" in that:

(i) Karston [ ]is [ ]is not a "person" in the United States.

(ii)At the time the Subscription Agreements were entered into,
Karston was outside the United States.

[ ] Yes [ ] No

(b) Non "U.S. Person." Karston is not a U.S. Person, as defined
below. For purposes of the above representation, "U.S. Person"
means:

(i) any natural person resident in the United States;

(ii)any partnership or corporation organized or incorporated
under the laws of the United States;

(iii) any estate of which any executor or administrator is a U.S.
Person;

(iv) any trust of which any trustee is a U.S. Person;
(v) any agency or branch of a foreign entity located in the
United States;

<PAGE>

(vii) any partnership or corporation if: (A) organized or
incorporated under the laws of any foreign jurisdiction;and
(B) formed by a U.S. person principally for the purpose of
investing in securities not registered under the Securities
Act, unless it is organized or incorporated, and owned, by
accredited investors (as defined in Rule 501(a) under the
Securities Act) who are not natural persons, estates or
trusts.

4. Karston has previously been advised that Karston would have an
opportunity to review all the pertinent facts concerning the Company, and to
obtain any additional information which Karston might request, to the extent
possible or obtainable, without unreasonable effort and expense, in order to
verify the accuracy of the information contained in the Annual and Quarterly
Reports.

5. Karston has personally communicated or been offered the opportunity
to communicate with executive officers of the Company to discuss the business
and financial affairs of the Company, its products and activities, and its plans
for the future. Karston acknowledges that if it would like to further avail
itself of the opportunity to ask additional questions of the Company, the
Company will make arrangements for such an opportunity on request.

6. Karston has been advised that no accountant or attorney engaged by
the Company is acting as Karston's representative, accountant, or attorney.

7. Karston is a bona fide resident of Tortola, British Virgin Islands
with its principal offices in the Tortola, British Virgin Islands. The address
below is the true and correct principal place of business.

DATED this 1st day of March 1995.

Karston Electronics, Ltd.

/s/ Colin Foster
First Directors, Inc., President
Represented by Colin Foster

Karston Electronics, Ltd.
Omar Hodge Building, Wickham Cay #1,
Road Town, Tortola, British Virgin Islands

<PAGE>

NOTICE OF EXERCISE

[To be signed only upon exercise of Option]

TO: BRIA Communications Corp.

DATED this 1st day of March 1995.

By: /s/ Colin Foster

Instructions for delivery:

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT ("Agreement') is made effective this 16th day of May.
1995 by and between BRIA Communications Corp. a New Jersey corporation with
offices at 208 West 400 South, Suite 305, Salt Like City, UT 84101 ("Client")
and Canton Financial Services Corporation, a Nevada corporation with principal
offices at 268 West 400 South Suite 300, Salt Lake City, Utah 84101
("Consultant").

PREMISES

WHEREAS, Client wishes to obtain financial consulting services.

WHEREAS, Consultant, is in the business of providing consulting and other
services to firms who desire to make complex financial and structural changes to
their firms.

NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is hereby expressly acknowledged, Client and
Consultant agree as follows:

Section I- Engagement of Consultant and Term of Agreement.

A. Client retains Consultant to assist Client in general business
consulting, including locating or forming a public company for a potential
merger or acquisition ("Target Company"), assisting in a restructuring of
Client's common stock, if necessary, the issuance of new shares, and arranging
for a public offering, and assisting Client in the preparation of agreements,
documents, filings and other material necessary to effectuate the above services
("Consulting Services").

B. The term of this Agreement ("Term") shall, subject to earlier
termination as described herein, be one (i) year from the execution of this
Agreement and shall automatically and continually be extended thereafter on a
month-to-month basis, unless a party to this Agreement, in writing, services
notice of its decision to terminate this Agreement no later than thirty (30)
days before the expiration of the Term of this Agreement or expiration of any
extension hereof.

Section 2 - Compensation

Client shall compensate Consultant in the following manner:

A. Before each issuance of stock, or exchange of stock owed pursuant to
this Agreement, Consultant shall provide Client with a list of
designees ("List of Designees") specifying which designees will provide
or have provided service under this Agreement, and the amount of stock
each is to be compensated. All shares issued pursuant to this Agreement
shall be issued in compliance with either Form S-8 or Form 701,
whichever is applicable, if such exemptions:, are available. If Form S-
8' and Form 701 are not available as to any shares owed pursuant to
this Agreement, those shares shall be issued in compliance with Rule
144, with registration rights, as more specifically described herein.
<PAGE>

B. Client agrees to pay Consultant a monthly consulting fee which shall be
the greater of: (a) Twenty thousand dollars ($20,000) or (b) actual fee
for services provided by Consultant's professional staff, which fee
shall be calculated by multiplying the number of hours worked by
Consultant's professional staff with that hourly fee as Set forth in
Exhibit "A", attached hereto and incorporated herein by this reference,
and which may be amended from time to time by Consultant Consultant
shall bill Client on a monthly basis, and payment shall be due upon
receipt of the bill, payable in either, at client's option, cash or in
Client's Class A Common Stock ("Common Stock"). Upon execution of this
Agreement, Client shall deposit $20,000 in cash or Common Stock as a
retainer to be used against the first month's billing. For purposes of
this paragraph, Common Stock shall be valued at the average of the bid
and ask prices for the month during which services were provided. If
Client elects to pay in shares of its Class A common stock, Client and
Consultant agrees that such shares will be valued at $0.50 per share.

C. If Consultant~assists Client in merging with or acquiring a Target
Company, either by introducing the Target Company to Client or by
providing any other Services in connection with the merger and
acquisition, Consultant shall be compensated, in addition to the rights
and shares specified above, an amount of shares of Capital Stock
sufficient so that upon such issuance; Consultant owns nine and
nine-tenths percent (9.9%) of the total issued and outstanding shares
of the corporate entity created from the merger with or acquisition of
the Target Company by Client ("New Entity"). New Entity shares shall be
issued within five (5) days of Client's receipt of the List of
Designees. If New Entity is not a public company ("Public Company")
(defined as a company registered under section 12 of the Exchange Act
or a reporting company subject to the reporting requirements of Section
15(d) of the Exchange Act) then, at Consultant's option, in lieu of
receiving New Entity shares, an amount equal to nine and nine-tenths
percent (9.9%) of the total issued and outstanding shares of Client's
Capital Stock shall be issued to Consultant. Shares shall be issued
within five (5) days of Client's receipt of the List of Designees.
Consultant may introduce a company to Client in writing, verbally, by
facsimile or by telephone conversation or conference.

D. If Client, or any of its successors, utilizes Consultant's services to
conduct an initial public offering, secondary offering, private
placement, foreign offering, or obtain a loan, line or letters of
credit, or other funds, Consultant shall receive a finder's fee in the
amount of nine and nine-tenths percent (9.9%) of any funds raised.

E. Upon Client entering into a transaction involving a business
opportunity which Consultant introduces to Client, including but not
limited to a joint venture, licensing agreement, or other contract or
asset, Consultant shall receive a finder's fee in the amount of nine
and nine-tenth percent (9.9%) of the market value of the assets
received by Client in connection with such transaction. Unless
otherwise mutually agreed upon by Client and Consultant, compensation
shall be payable in either cash, or in "like kind", but only "like
kind" if Consultant determines that the "like kind" asset is easily
divisible and liquidable. Consultant may introduce a business
opportunity to Client in writing, verbally, by facsimile or by
telephone conversation or conference.

F Client shall reimburse Consultant for expenses incurred during and in
relation to Consultant's performance under this Agreement. Such
expenses include, but are not limited to, travel, lodging, filing fees,
printing, postage, delivery, shipping, copying, telephone calls,
overnight packages, facsimiles, and all other out-of-pocket expenses.
<PAGE>

G In addition to the foregoing, Consultant shall be compensated at a
variable rate for services provided by Consultant's professional staff
during the Term of this Agreement and all extensions thereto.
Consultant shall bill Client on a monthly basis, and payment shall be
due upon receipt of the bill, payable in either cash or in Consultant's
choice of Client's or New Entity's Capital Stock. If New Entity does
not exist, then all shares issued pursuant to this provision, upon the
creation of New Entity, shall be exchanged, at the option of
Consultant, on the same basis as shares of Client's Capital Stock are
exchanged, for shares of New Entity. The exchange shall occur upon the
merger or acquisition event which creates New Entity. Stock shall be
valued at book value, or if freely trading at one-half (1/2) the bid
price of the stock over the prior ten (10) trading days.

H. In the event that Client hires one of Consultant's personnel, Client
agrees to pay Consultant three (3) times that person's annual salary
within 30 days after the commencement of that employment.

I. All shares of stock that are issued to Consultant under this Agreement
shall, when issued, be validly issued, validly issued, fully paid and
nonassessable.

Section 3 - Registration Rights.

Client agrees to register all shares issued, exchanged or otherwise
transferred to Consultant pursuant to this Agreement ("Payment Shares") as
follows:

A. If, at any time commencing after the termination of this Agreement and
for a period of three (3) years thereafter, Client, New Entity, or any
of their successors, proposes to file a registration statement for the
public sale of shares of its common stock, written notice of such
proposal, will be given to Consultant at least 60 days prior to the
filing of such registration statement. The term "Registration
Statement" as used in this Section shall be deemed to include any form
which may be used to register a distribution of Securities to the
public, a post-effective amendment to a registration statement, or a
Notification and Offering Circular pursuant to a Regulation A Offering
when necessary to perfect an exemption thereunder. Client, New Entity,
or any of their successors, agree that on written notice received from
Consultant, within 20 days after Consultant's receipt of the notice to
file a registration statement, Client shall afford the holders of
Payment Shares the opportunity to have the Payment Shares included in
such Registration Statement. Notwithstanding the provision of this
section, Client shall have the right, at anytime after it shall give
written notice pursuant to this subsection to elect not to file any
proposed Registration Statement, or to withdraw the same after the
filing but prior to the effective date thereof. Notwithstanding any
provision to the contrary contained herein, Client Shall not be
required to include any of the Payment Shares transferred hereunder in
any Registration Statement with respect to shares offered in any
underwriting:

(i) unless Consultant agrees to offer such shares, on the same
terms and conditions as Client shares are being offered, and
to sign an underwriting agreement in the form to be signed by
the other offerors; or
<PAGE>

(ii) if in the good faith and reasonable opinion of the
managing underwriter of the offering, the sale of the Payment
Shares to be included would be materially detrimental to the
remainder of the offerors.

In such an event the amount of Payment Shares and the amount of shares
to be registered, if any, by the remainder of the offerors (other than Client),
shall be proportionally reduced to a level acceptable to the managing
underwriter of the Offering, who may reasonably refuse to have any shares
registered.

B. The shareholders desiring to sell shares of Common Stock pursuant to
the registration rights granted herein shall provide Client with all
reasonable information relating to such sale and on which Client shall
be entitled to rely and to include such information in any such
Registration Statement.

All sales pursuant to any such Registration Statement shall be made in
accordance with the provision of the Securities Act of 1933, as amended
(the "Securities Act") and the Securities Exchange Act of 1934, as
amended, (the "Exchange Act") and Client shall not be required to
include any such Payment Shares in any registration until it has
received written assurances reasonably satisfactory in form and
substance to Client from the shareholders offering such Payment Shares
that such sales shall be so conducted. All expenses incurred by Client
in complying with the registration requirements hereof (except fees and
disbursements of counsel for any shareholder and underwriting
discounts, commissions, or similar expenses to he incurred in
connection with the sale of Payment Shares) shall be borne by Client.
On notice to any shareholder offering Payment Shares covered by a
Registration Statement that such Registration Statement or prospectus
relating thereto requires revision, such holder will immediately cease
to make offers or sales pursuant to such Registration Statement and
return all such Registration Statements and prospectus to Client. All
registration rights granted herein may apply only to shares of Common
Stock issued by Client. Client is under no obligation to maintain the
effectiveness of any Registration Statement for more than an aggregate
of 90 days.

C. In connection with the filing of any Registration Statement or offering
statement under this section, Client covenants and agrees that it will
take all necessary action which may be required in qualifying or
registering the Payment Shares included in a Registration Statement or
offering statement for the offer and sale under the Securities or blue
sky laws of such states as may be reasonably requested by the holders
of the Payment Shares; provided, that Client shall not be obligated to
execute or file any general consent to service of process or to qualify
as a foreign corporation to do business under the laws of any such
jurisdiction.

D. In the event that the Payment Shares are the subject of or are included
in any Registration Statement or offering statement which is filed and
becomes effective, Client agrees to utilize its best efforts to keep
the same, including blue sky filings, for an effective period of not
less than 90 days. The holders of the Payment Shares shall cooperate
with Client and shall furnish such information as Client may reasonably
request in connection with any such registration or offering statement
hereunder, on which Client shall be entitled to rely.
<PAGE>

E. Client further agrees that in the event that counsel to Consultant is
of the reasonable opinion that the Payment Shares may be transferred
and/or sold in full compliance with the provisions of the Act, without
the need for filing a Registration Statement, Client will fully
cooperate in connection with such transfer and/or sale at Client's sole
expense.

F. Client further agrees and represents that while any of the Payment
Shares are outstanding and held by Consultant or Consultant's
affiliates, Client will timely file all reports and documents required
under the Exchange Act and the Securities Act as well as such
additional information as is necessary in order to allow the holder of
the Payment Shares to rely upon the provisions of Rule 144 promulgated
under the Securities Act with respect to the current public information
requirements contained in Rule 144(c).

In the event of any registration of any Client common stock under the
Securities Act pursuant to this Section 5, Client shall indemnify and
hold harmless Consultant or any subsequent transferee of the Payment
Shares against any losses, claims, damages or liabilities, joint or
several, to which such holder may become subject under the Securities
Act or any other statute or at common law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any alleged untrue statement of any material
fact contained, on the effective date thereof, in any Registration
Statement under which such securities were registered under the
Securities Act, any preliminary prospectus or final prospectus
contained therein, or any amendment required to be stated therein or
necessary to make the statements therein not misleading, and shall
reimburse such holder for any legal or any other expenses reasonably
incurred by such holder in connection with investigating or defending
any such loss, claim, damage, liability or action; provided. however,
that Client shall not be liable any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon
any alleged untrue statement or alleged omission made in such
Registration Statement, preliminary prospectus, prospectus or amendment
or supplement in reliance upon and in conformity with written
information furnished to Client by such holder specifically for use
therein. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such holder and
shall survive the transfer of such Securities by such holder and
consummation of the transactions contemplated by this Agreement.

Section 4 - Clients Representations

Client represents, warrants and covenants to Consultant that each of
the following are true and complete as of the date of this Agreement:

A. Corporate Existence. Client is a corporation duly organized, validly
existing, and in good standing under the laws of the State of New
Jersey, with full corporate power and authority and all necessary
governmental authorizations to own, lease and operate property and
carry on its business as it is now being conducted.

B. Disclosure Documents. Client has or will cause to be delivered,
concurrent with the execution of this Agreement, copies of its
certificate of incorporation and bylaws, each as amended and as in
effect on the date hereof, and any documents that may be required to
effectuate any transaction contemplated herein.
<PAGE>

C. Client's Capitalization. The authorized capitol stock of Client
consists of 200 million shares of common stock, par value $0.00l per
share, of which _________ shares are issued and outstanding. Client has
no treasury stock. All of the shares to be issued hereunder have been,
or will be at the time of issuance, duly authorized and validly issued,
are fully paid and nonassessable and will be issued to the Consultant
free and clear of any liens, charges, encumbrances, security interests,
options, rights or claims of others with respect thereto. There are no
preemptive or similar rights on the part of any holder of any class of
securities of Client. The shares are not subject to any contractual
restrictions relating to their disposition. All voting rights are
vested exclusively in the Common Stock of Client.

D. Subsidiaries. Client does not own, either beneficially or of record,
any material amounts of voting Securities of any corporation. Client
owns no interest in any other business entity.

E. Client's Authority for Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated herein
have been duly authorized by the Client. This Agreement has been duly
executed and delivered by Client and constitutes the valid and legally
binding obligation of Client enforceable in accordance with its terms,
except to the extent that enforceability may be subject to or limited
by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditor's rights generally. The execution and delivery
of this Agreement and the consummation the transactions contemplated
herein will not conflict with or result in any violation of any
provision of the Certificate of Incorporation or Bylaws of Client. To
the best of Client's knowledge, after due inquiry, the execution and
delivery of this agreement and the consummation of the transaction
contemplated herein will not conflict with any mortgage, indenture,
lease, contract, commitment, agreement, or other instrument, permit,
concession, grant, franchise, license, judgement, order, decree,
statute, law, ordinance, rule or regulation applicable to Client or any
of its properties or assets.

F Consents and Authorizations No consent, approval, order or
authorization of, or registration, declaration, compliance with or
filing with, any governmental or regulatory authority is required in
connection with the execution and delivery of this Agreement to permit
the consummation by Client of the transactions contemplated herein or
to prevent the termination of any material right, privilege, license or
agreement of Client or to prevent any material loss to Client or the
Clients business, by reason of the transactions contemplated herein.
<PAGE>

G. Compliance with Law. To the best of Client's knowledge, after due
inquiry, Client is not in violation of or default under any statute,
law, ordinance, rule, regulation, judgment, order, decree, permit,
concession, grant, franchise, license or other governmental
authorization or approval applicable to it or any of its properties or
business. There are no proceedings pending or threatened which may
result in the revocation, cancellation, suspension, or any adverse
modification of any permit, concession, grant, franchise, license or
other governmental authorization or approval necessary for the conduct
of Client's business or which question the validity of this Agreement
or of any action taken or to be taken in connection herewith or the
consummation of the transactions contemplated hereby. Client has all
franchise, licenses, permits and other governmental approvals necessary
to enable it to carry on its business as presently conducted, except
where the failure to have such franchises, licenses or permits or other
governmental approvals would not have, individually or in the
aggregate, a material and adverse affect on Client's business.

H. Litigation. There are no judicial or administrative actions, suits,
proceedings or investigations pending or, to the knowledge of Client,
threatened which may result in any liability on the part of Client ,
aside from which consultant has full knowledge.

I. Nature of Representations No representation or warranty made by Client
in this Agreement, nor any document or information furnished or to be
furnished by Client to the Consultant in connection with this
Agreement, contains or will contain any untrue statement of material
fact, or omits or will omit to state any material fact necessary to
make the Statements contained therein not misleading, or omits to state
any material fact relevant to the transactions contemplated by this
Agreement.

J Independent legal and Financial Advice. Consultant is not a law firm,
neither is it an accounting firm. Consultant does however employ
professionals in those capacities to better allow Consultant to provide
quality consulting services. Client represents that it has not nor will
it rely upon any legal or financial representation made by Consultant,
and that Client has and will continue to seek the independent advice of
legal and financial counsel regarding all material aspects of the
transactions contemplated by this Agreement, including the review of
all documents by Consultant to Client and all opportunities Consultant
introduces to Client. Client acknowledges that the attorneys,
accountants and other advisors employed by Consultant represent the
interests of Consultant solely, and that no representation or warranty
has been give to Client by Consultant as to any legal, tax, accounting,
financial or other aspect of the transactions contemplated by this
Agreement.

Section 5 - Non-Circumvention

Client agrees that Client will not enter into any merger with or
acquisition of a Target Company, raise any funds for which Consultant provided
services, or enter into any transaction involving a business opportunity or
asset introduced to Client by Consultant, without compensating Consultant
pursuant to this Agreement. Neither will Client terminate this Agreement solely
as a means to avoid paying Consultant compensation earned or to be earned, or in
any other way attempt to circumvent Consultant.

Section 6 - Termination of Agreement by Consultant and by Client

I. Consultant may terminate this Agreement if the following occurs:

A. Payments due under this 'Agreement are not timely made?

B. In the judgment of the board of directors of Consultant, Client's
actions or conduct make it unreasonable for Consultant to perform under
this Agreement. Such acts include, and are or may be perceived as being
in the nature of dishonesty, illegal activities, activities harmful to
the reputation of the Consultant and activities which may create civil
or criminal liability for the Consultant;
<PAGE>

C. Consultant makes a bona fide decision to terminate its business and
liquidate its assets:

D. Client misrepresents its corporate standing, power to enter and bind
itself to this Agreement, misrepresentation of its Section 3
guarantees, or any other concealed or misrepresented material fact
which would decrease the binding effect of this Agreement on Client;

E. If after conduct of a due diligence investigation, Consultant concludes
that an intended merger with or acquisition of a Target Company, public
offering, or other action contemplated under this Agreement (the
"Transaction"), is not viable, Consultant may give ten (10) days
written notice to Client, stating in particular why the Transaction is
not viable, and if after ten (10) days of receipt of the written
notice, Client insists that Consultant continue performance on the
Transaction, Consultant may then terminate the Agreement;

F. An unanticipated material change in either the market, Client or
Consultant makes continued. performance under this Agreement
unreasonable;

G. Breach of any provision of this Agreement; or

H. Notwithstanding the termination of this Agreement, Consultant shall be
entitled to receipt of all compensation owed pursuant to Sections
2(B)-2(G) up to the time of termination of this Agreement. Consultant
shall also be entitled to any fees owed pursuant to Sections 2(B), (D)
and (E) should Client, subsequent to the termination of this Agreement,
enter into any transaction contemplated pursuant to Sections 2(C), (D)
and (E). Pursuant to Sections 2(F) and (G), Consultant shall also be
entitled to reimbursement of any expenses incurred, up to the time of
termination of this Agreement along with any expenses incurred as a
result of the termination.

II. Client may terminate this Agreement under the following conditions:

A. Consultant fails to follow Client's reasonable instructions. Client
must advise Consultant that his actions or inactions are unacceptable
and give Consultant thirty (30) days for which to comply. If Consultant
fails to comply within thirty (30) days, Consultant may be terminated
hereunder by Client's service of notice of termination to Consulta0nt;

B. If, in the judgment of the board of directors of Client, Consultant's
actions or conduct would make it unreasonable to require Client to
retain Consultant. Such acts include, and are in the nature of,
dishonesty, illegal activities, activities harmful to the reputation of
the Client, and activities which create civil or criminal liability for
the Client; or

C. Notwithstanding the termination of this Agreement, Consultant shall be
entitled to receipt of all compensation owed pursuant to Sections
2(B)-2(G) up to the time of termination of this Agreement. Consultant
shall also be entitled to any fees owed pursuant to Sections 2(B), (D)
and (E) should Client, subsequently to the termination of this
Agreement, enter into any transaction contemplated pursuant to Sections
2(C), (D)and (E). Pursuant to Sections 2(F) and (G), Consultant shall
also be entitled to reimbursement of any expenses incurred, up to the
time of termination of this Agreement, along with any expenses incurred
as a result of the termination.
<PAGE>

Section 7 - Utilization of Attorneys

Consultant utilizes attorneys to assist it in preparing the
documentation required to effectuate the transactions contemplated by this
Agreement. The attorneys utilized by Consultant represent only Consultant, and
Consultant's interest in providing consulting services and do not in anyway
represent the interests of any party to this Agreement other than Consultant.
Client is advised, and has represented, that he will seek independent legal
counsel to review all documentation provided to Client by Consultant.

Section 8 - Nondisclosure of Confidential Information

I. In consideration for the Client entering into this Agreement, Consultant
agrees that the following items used in the Client's business are secret,
confidential, unique, and valuable, were developed by Client at great cost and
over a long period of time, and disclosure of any of the items to anyone other
than client's officers, agents, or authorized employees will cause Client
irreparable injury;

A. Non-public financial information, accounting information, plans of
operations, possible mergers or acquisitions prior to a public
announcement;

B. Customer lists, call lists, and other confidential customer data;

C. Memoranda, notes, records concerning the technical and creative
processes conducted by Client;

D. Sketches, plans, drawings and other confidential research and
development data; or

E. Manufacturing processes, chemical formulae, and the composition of
Client's products.

II. Consultant shall have no liability to the Client with respect to the use or
disclosure to others not party Agreement, of such information as Consultant can
establish to:

A. have been publicly known;

B. have become publicly known, without fault on the Part of Consultant,
subsequent to disclosure by Client of such information to Consultant;

C. have been otherwise known by Consultant prior to communication by the
Client to Consultant of such information; or

D. have been received by Consultant at any time from a source other than
Client lawfully having possession of such information.

Section 9 - Best Efforts

Consultant agrees that it will at all times faithfully and to the best
of its experience, ability and talents, perform all the duties that may be
required of and from Consultant pursuant to the terms of this Agreement.
Consultant does not guarantee that its efforts wilt have any impact on Client's
business or that any subsequent financial improvement will result from
Consultant's efforts.
<PAGE>

Section 10 - Client's Right to Approve Transaction

Client expressly retains the right to approve, in its sole discretion,
each and every transaction introduced by Consultant that involves Client as a
party to any agreement. Consultant and Client mutually agree that Consultant is
not authorized to enter into agreements on behalf of Client.

Section 11 - Client Under No Duty or Obligation to Accept or Close on any
Transactions.

It is mutually understood and agreed that Client is not obligated to
accept or close any transaction submitted by Consultant.

Section 12 - Place of Services.

The Consulting Services contemplated to be performed by Consultant will
be performed through Consultant's offices; however it is understood and expected
that Consultant may make contacts with persons and entities in any other place
deemed appropriate by Consultant.

Section 13 - Nonexclusive Services.

Client acknowledges that Consultant is currently providing services of
the same or similar nature to other parties and Client agrees that Consultant is
not prevented or barred from rendering services of the same nature or a similar
nature to any other individual or entity.

Section 14- All Prior Agreements Terminated

This Agreement comprises the entire agreement and understanding between
the parties hereto at the date of this Agreement as to the subject matter hereof
and supersedes and replaces all proposals, prior negotiations and agreements,
whether oral or written, between the parties hereto in connection with the
subject matter hereof. None of the parties hereto shall be bound by any
conditions, definitions, warranties or representations with respect to the
subject matter of this Agreement other than as expressly provided in this
Agreement unless the parties hereto subsequently agree to vary this Agreement in
writing, duly signed by authorized representatives of the parties hereto.

Section 15 - Consultant is not an Agent or Employee of Client

Consultant's obligations under this agreement consist solely of the
Consulting Services described herein. In no event shall Consultant be considered
to act as the employee or agent of Client or otherwise represent or bind Client.
For the purposes of this Agreement, Consultant is an independent contractor. All
final decisions with respect to acts of Client or its affiliates whether or not
made pursuant to or in reliance on information or advice furnished by Consultant
hereunder, shall be those of Client or such affiliates and Consultant, its
employees or agents shall under no circumstances be liable for any expense
incurred or loss suffered by Client as a consequence of such action or
decisions.
<PAGE>

Section 17 - Continue Operations in Substantially Same Manner

Client will not transfer, sell or hypothecate, assign or distribute any
of the assets currently in its possession except upon the written agreement of
the parties to this Agreement, and will continue operations in substantially the
same manner as it is presently functioning, until the closing of the
transactions mutually acceptable to the parties are entered into and this
agreement has been consummated.

Section 18 - Miscellaneous

A. Authority. The execution and performance of this Agreement have been
duly authorized by all requisite corporate action. This Agreement
constitutes a valid and binding obligation of the parties hereto.

B. Amendment. This Agreement may be amended or modified at any time and in
any manner only by an instrument in writing executed by the parties
hereto.

C. Waiver. No term of this Agreement shall be considered waived and no
breach excused by either party unless made in writing. No consent,
waiver or excuse by either party, express or implied, shall constitute
a subsequent consent, waiver or excuse.

D. Assignment

(i) The rights and obligations of the Consultant under this Agreement
shall inure to the benefit of and shall be binding upon its successors
and assigns. There shall be no rights of transfer or assignment of this
Agreement by Client except with the prior written consent of the
Consultant.

(ii) Nothing in this Agreement, expressed or implied, is intended to
confer upon any person, other than the parties and their successors,
any rights or remedies under this Agreement.

E. Notices. Any notice or other communication required or permitted by
this Agreement must be in writing and shall be deemed to be properly
given when delivered in person to an officer of the other party, when
deposited in the Unites States mails for transmittal by certified or
registered mail, postage prepaid, or when deposited with a public
telegraph company for transmittal or when sent by facsimile
transmission, charges prepaid provided that the communication is
addressed:

(I) In the case of Consultant to:

Canton Financial Services Corp.
Attn: Richard Surber
268 West 400 South, Suite 300
Salt Lake City, Utah 84101
(801)575-8311
(801) 575-8092 (fax)
<PAGE>

(ii) In the Case of Client to:

BRIA Communications Corp.
Attn: Richard Lifschutz
268 West 400 South, Suite 301
Salt Lake City, UT 84101
(801) 575-8073
(801) 575-8340 (fax)

or to such other person or address designated by Client in writing to receive
notice.

F. Headings and Captions. The headings of paragraphs are included solely
for convenience. If a conflict exists between any heading and the text
of this Agreement, the text shall control.

G. Entire Agreement. This instrument and the exhibits to this instrument
contain the entire Agreement between the parties with respect to the
transaction contemplated by the Agreement. It may be executed in any
number of counterparts but the aggregate of the counterpart together
constitute only one and the same instrument.

H. Effect of Partial Invalidity. In the event that any one or more of the
provisions contained in this Agreement shall for any reason be held to
be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality or un-enforceability shall not affect any other provisions
of this Agreement, but this Agreement shall be constructed as if it
never contained any such invalid, illegal or unenforceable provisions.

I. Controlling Law. The validity, interpretation, and performance of this
Agreement shall be governed by the laws of the State of Utah, without
regard to its law on the conflict of laws. Any dispute arising out of
this Agreement shall be brought in a court of competent jurisdiction in
Salt Lake County, Utah. The parties exclude any and all statutes, laws
and treaties which would allow or require any dispute to be decided in
another forum or by other rules of decision than provided in this
Agreement.

J. Attorney's Fees. if any action at law or in equity, including an action
for declaratory relief, is brought to enforce or interpret the
provisions of this Agreement, the prevailing party shall be entitled to
recover actual attorney's fees, court costs, and other costs incurred
in proceeding with the action from the other party The attorney's fees,
court costs or other costs, may be ordered by the court in its decision
of any action described in this paragraph or may be enforced in a
separate action brought for determining attorney's fees, court costs,
or other costs. Should either party be represented by in house counsel,
all parties agree that party may recover attorney's fees incurred by
that in-house counsel in an amount equal to that attorney's normal fees
for similar matters, or, should that attorney not normally charge a
fee, by the prevailing rate charged by attorneys with similar
background in that legal community.

K. Time is of the Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
<PAGE>

L. Mutual Cooperation. The parties hereto shall cooperate with each other
to achieve the purpose of this Agreements and shall execute such other
and further documents and take such other and further actions as may be
necessary or convenient to effect the transactions described herein.

M. Indemnification. Client and Consultant agree to indemnify, hold
harmless and, at the party seeking indemnification's sole option,
defend the other from and against all demands, claims, actions, losses,
damages, liabilities, costs and expenses, including without limitation,
interest, penalties, court fees, and attorneys' fees and expenses
asserted against or imposed or incurred by either party by reason of or
resulting from a breach of any representation, warranty, covenant
condition or agreement of the other party to this Agreement. Neither
party shall be responsible to the other party for any consequential or
punitive damages.

0. No Third Party Beneficiary. Nothing in this Agreement, expressed or
implied, is intended to confer upon any person, other than the parties
hereto and their successors, any rights or remedies under or by reason
of this Agreement, unless this Agreement specifically states such
intent.

P. Facsimile Counterparts. If a party signs this Agreement and transmits
an electronic facsimile of the signature page to the other party, the
party who receives the transmission may rely upon the electronic
facsimile as a signed original of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date herein
above written.

Canton Financial Services Corp.

/s/ Richard Surber
Richard Surber, President

BRIA Communications Corp.

/s/ Richard Lifschutz
Richard Lifschutz, President

BRIA COMMUNICATIONS CORP.
268 West 400 South, Suite 300
Salt Lake City, Utah 84101
Tel. (801) 575-8073
fax (801) 575-8340

July 7, 1995

Mr. Richard T. Johnson
Mr. Ira L. Friedman
Material Technology, Inc.
179 Avenue at the Commons - Suite 2
Shrewsbury, NJ 07702

RE: Settlement of All Claims and Debts

Gentlemen:

This Letter Agreement serves to modify and amend the Settlement Agreement dated
December 16, 1994, by and between Metallurgical Industries, Inc., n/k/a BRIA
Communications Corp. (the "Company"), Canton Industrial Corporation, A-Z
Professional Consultants, Inc., Ira L. Friedman ("Friedman"), and Richard T.
Johnson ("Johnson"). The Settlement Agreement required Johnson to deliver all of
the Company's corporate books, documents, files and any and all other records to
the Company's new office in Salt Lake City.

The Company was required, pursuant to the Settlement Agreement, to make a
$15,000 payment to Friedman for three months of services beginning December 31,
1994, a $11,700 payment to Johnson for three months of services beginning
December 31, 1994, a $10,000 payment to the IRS for part of the Company's
outstanding balance of payroll taxes, and finally required to honor its
commitment to the holders of options and warrants as identified in Exhibit B of
the Settlement Agreement.

The parties to the Settlement Agreement agree that upon Johnson's delivery to
the Company in Salt Lake City of the detailed trial balance for the fiscal year
ending December 31, 1994, and upon the agreement of Johnson and Friedman to
deliver any and all other records of the Company in their possession hereafter
discovered by the Company to be material and necessary to the Company, that
Johnson and Friedman will have performed all services required of them pursuant
to the Settlement Agreement and that the Company will then be obligated to
render the payments above as well as payments pursuant to Consulting Agreements
between Friedman and Johnson and the Company dated December 31, 1993, and issue
the shares identified in Exhibit B of the Settlement Agreement. These shares
will be registered by the Company under the terms of the Settlement Agreement.

As settlement of the amounts owing to Johnson and Friedman, the Company agrees
to issue, and Johnson and Friedman agree to accept, shares of the Company's
common stock at the rate of one (1) share for each $1.00 owed to Johnson and
Friedman pursuant to the December 31, 1993 Consulting Agreements (55,800 shares
apiece), and one (1) share for each $0.50 owed to Johnson and Friedman as
detailed above (30,000 shares to Friedman and 23,400 shares to Johnson), and one
(1) share for each $0.50 owed to the IRS for the payroll taxes (20,000 shares to
Friedman and Johnson jointly). The Company agrees to use its best efforts to
register all such shares pursuant to Form S-8 registration statement as soon as
possible. All parties herein acknowledge the Company's present incapability to
so register the shares due to its non-filing of periodic reports with the
Securities and Exchange Commission. The Company will instruct its transfer agent
to issue these shares without any restrictions but not release the shares until
the Form S-8 is effective.

The Company issued shares of its common stock to Johnson, Ira Friedman, and
Lawrence Friedman pursuant to Paragraph 1(b)(v) of the Settlement Agreement. The
Company hereby agrees to register these shares whenever it shall first register
Class A common stock under a public registration statement.

Upon the receipt of the detailed trial balance for the fiscal year ending
December 31, 1994, the Company will instruct its transfer agent to issue to
shares described in the preceding paragraphs and retain possession of all shares
except those being issued pursuant to Exhibit B of the Settlement Agreement. The
issuance of the shares described herein shall constitute the full satisfaction
of all obligations arising from the Settlement Agreement.

IN WITNESS WHEREOF, the signatures of the parties below evidence their execution
of this Letter Agreement on the date above written.

BRIA Communications Corp. Canton Industrial Corporation

/s/ Richard Lifschutz /s/ Richard Surber

A-Z Professional Consultants, Inc. Ira L. Friedman

/s/ Richard Surber /s/ Ira L. Friedman

Richard T. Johnson

/s/ Richard T. Johnson

July 11, 1995

ADDENDUM

All parties to the Letter Agreement dated July 7, 1995 (the "Parties"),
modifying and amending the Settlement Agreement dated December 16, 1994 (the
"Letter Agreement"), hereby agree that the former Metallurgical Industries,
Inc., n/k/a BRIA Communications Corp. ("BRIA") is not presently capable of
registering shares pursuant to Form S-8 Registration Statement as promulgated by
the Securities Act of 1933. This incapacity stems from BRIA's non-filing of
periodic reports as required by Section 13 or 15(d) of the Securities Exchange
Act of 1934.

The Parties agree that BRIA will register the shares discussed in the
Letter Agreement pursuant to Form S-8 as soon as it is legally entitled. Such
registration will be lawful and will occur upon BRIA's filing of all past due
periodic reports. The Parties acknowledge that such filings are contingent upon
BRIA's receipt of the detail trial balance for the period January 1, 1994
through December 31, 1994, from Richard T. Johnson.

IN WITNESS WHEREOF, the Parties have executed this Addendum to the
Letter Agreement on the above date.

Canton Industrial Corporation A-Z Professional Consultants, Inc.

/s/ Richard Surber /s/ Richard Surber
Richard Surber, President Richard Surber, President

BRIA Communications Corp. Ira L. Friedman

/s/ Richard Lifschutz /s/ Ira L. Friedman
Richard Lifschutz, President Ira L. Friedman

Richard T. Johnson

/s/ Richard T. Johnson
Richard T. Johnson

<ARTICLE> 5
<LEGEND>
THIS SCEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
UNAUDITED CONDENSED FINANCIAL STATEMENTS FILED WITH THE COMPANY'S DECEMBER 31,
1994 ANNUAL REPORT ON FORM 10-KSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<EXCHANGE-RATE> 1
<CASH> 166
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 41,879
<CURRENT-LIABILITIES> 1,243,597
<BONDS> 0
<COMMON> 839,824
0
0
<OTHER-SE> (2,041,542)
<TOTAL-LIABILITY-AND-EQUITY> 41,879
<SALES> 535,681
<TOTAL-REVENUES> 535,737
<CGS> 559,828
<TOTAL-COSTS> 1,603,410
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31,440
<INCOME-PRETAX> (1,099,113)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,099,113)
<DISCONTINUED> 0
<EXTRAORDINARY> (36,321)
<CHANGES> 0
<NET-INCOME> (1,135,434)
<EPS-PRIMARY> (0.16)
<EPS-DILUTED> (0.16)

</TABLE>