CYBERAMERICA CORP, 10KSB/A, 1999-04-23

CYBERAMERICA CORP
10KSB/A, 1999-04-23
MANAGEMENT CONSULTING SERVICES

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

FORM 10-KSB

(Mark One)

[X] Annual report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the fiscal year ended December 31, 1998

[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 (No fee required) for the transition period from to
--------- ---------
Commission file number: I-9418

CyberAmerica Corporation
--------------------------------------------
(Name of Small Business Issuer in Its Charter)

Nevada 87-0509512
------------------------------ ------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)

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

(801) 575-8073
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(Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:

Title of Each Class Name of each Exchange on Which Registered
- ------------------------------ -----------------------------------------
Common Stock ($0.001 Par Value) None

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

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 [X].

The issuer's total consolidated revenues for the year ended December 31, 1998,
were $4,189,634.

The aggregate market value of the registrant's Common Stock, $0.001 par value
(the only class of voting stock), held by non-affiliates was approximately
$1,120,289 based on the average closing bid and asked prices for the Common
Stock on April 14, 1999.

At April 14, 1999, the number of shares outstanding of the registrant's Common
Stock, $0.001 par value (the only class of voting stock), was 3,042,673.

<PAGE>

TABLE OF CONTENTS

PAGE
PART I

Item 1. Description of Business..........................................1

Item 2. Description of Property..........................................3

Item 3. Legal Proceedings...............................................12

Item 4. Submission of Matters to a Vote of Security-Holders.............14

PART II

Item 5. Market for Common Equity and Related Stockholder Matters........14

Item 6. Management's Discussion and Analysis or Plan of Operation.......15

Item 7. Financial Statements............................................20

Item 8. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure........................................21

PART III

Item 9. Directors and Executive Officers............................ ...21

Item 10. Executive Compensation..........................................23

Item 11. Security Ownership of Certain Beneficial Owners and Management..23

Item 12. Certain Relationships and Related Transactions..................24

Item 13. Exhibits, List and Reports on Form 8-K..........................26

<PAGE>

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Business Development
- --------------------

As used herein, the term "Company" refers to CyberAmerica Corporation, a
Nevada corporation, and its subsidiaries and predecessors, unless the context
indicates otherwise. Originally incorporated on July 10, 1984 in Ohio as The
Canton Corporation, the Company adopted its present name in June 1996. Current
management obtained controlling ownership of the Company in the second quarter
of 1992. The Company changed its domicile to Nevada on March 9, 1993 through a
merger with a Nevada corporation bearing the exact name as the Company. Under
the direction of prior management, the Company filed a voluntary petition for
relief under Chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court for the Central District of Illinois on February 22,
1988. Current management completed the Company's exit from bankruptcy on
November 7, 1994 pursuant to the Bankruptcy Court's order of the same date.

Since 1992, the Company has concentrated its operations primarily on the
acquisition, management, sale and lease of real estate holdings and on providing
financial consulting services. However, in 1996 the Company developed a new
division of operations related to the preparation, development and marketing of
Internet virtual malls. These operations were conducted through a wholly owned
subsidiary known as CyberMalls, Inc. ("CyberMalls"). The Company made
significant expenditures toward the development of CyberMalls including
purchasing considerable amounts of computer equipment and hiring a staff of
approximately 25 individuals. Unfortunately, CyberMalls failed to generate any
significant revenues and the Company lacked the ability to provide CyberMalls
with the cash infusion necessary to successfully operate. On February 25, 1997,
the Company discontinued substantially all of CyberMalls' operations.

On October 30, 1998, the Company decided to restructure its operation by
entering into an Acquisition Agreement with Innovative Property Development
Corporation, a Nevada corporation ("IPDC"), a majority owned subsidiary of the
Company. The Company owned 55% of IPDC's issued and outstanding shares of common
stock prior to the consummation of the Acquisition Agreement. Pursuant to the
terms of the Acquisition Agreement the Company transferred ownership of its
shares in several of its subsidiaries to IPDC in exchange for 1,382,528 shares
of restricted stock of IPDC. Specifically, the Company transferred all of its
shareholdings in: Canton Commercial Carpet Corporation, Canton Industrial
Corporation of Salt Lake City, Wasatch Capital Corporation, Oasis International
Hotel & Casino, Inc., Oasis International Corporation, West Jordan Real Estate
Holdings, Inc.,Canton Financial Services Corporation, Hudson Consulting Group,
Inc., and Canton's Wild Horse Ranch II, Inc. The purpose of this transaction was
to eventually create several real estate divisions that specialized in
particular segments of the real estate industry.

As a result of the consummation of the Acquisition Agreement, the Company
increased its ownership in IPDC to 78.5%. For more information on this
transaction, see "Item 2. Acqusition or Disposition of Assets" in the Company's
Form 8K filed on December 22, 1998.

Subsequently, IPDC was introduced to an Internet company, China Mall, Inc.
that was interested in being acquired by IPDC. Consequently, IPDC decided to
divest itself of all its subsidiaries in preparation for the acquisition of
China Mall, Inc., a Delaware corporation. China Mall, Inc. is an Internet
company that provides: Internet marketing, selling, information, and web leasing
designed in part to facilitate trade between the United States and China.

On April 2, 1999, IPDC signed an Acquisition Agreement with Diversified
Holdings, I, Inc. ("DHI"), a Nevada corporation, which was wholly owned by the
Company. Pursuant to the terms of this Acquisition Agreement, IPDC divested

<PAGE>

itself of all of its subsidiaries in exchange for 982,528 shares of IPDC common
stock which was previously owned by the Company, and 222,220 shares of DHI. The
effect of this transaction will be that the Company will own 90% of DHI and DHI
will own at least a majority interest in the following entities excepting
Wasatch Capital Corporation of which DHI will own a 20% interest: Canton
Commercial Carpet Corporation, Canton Industrial Corporation of Salt Lake City,
Wasatch Capital Corporation, Oasis International Hotel & Casino, Inc., Oasis
International Corporation, West Jordan Real Estate Holdings, Inc.,Canton
Financial Services Corporation, Hudson Consulting Group, Inc., Canton's Wild
Horse Ranch II, Inc.,CyberLacrosse, Inc., Cyberstudio, Inc., Diversified
Holdings XIX, Inc., Diversified Land & Cattle Company, Golden Opportunity
Corporation, Great Basin Water Corp., Lexington Three Mile East Terrace Mountain
Estates, Inc., Lexington, Four Mile East Terrace Mountain Estates, Inc.,
Lexington One Mile East Little Pigeon Mountain Estates, Inc. and Taylor's
Landing, Inc.

The Acquisition Agreement between IPDC and DHI is expected to be
consummated on April 15, 1999, and Acquisition of China Mall, Inc. by IPDC is
expected to be consummated by April 30, 1999. The Company's shareholder interest
in IPDC is expected to be reduced to approximately 453,550 shares or less than 5
% of IPDC's issued and outstanding shares of common stock after it acquires
China Mall, Inc.

Upon consummation of the Acquisition Agreement between DHI and IPDC, the
Company intends to create several real estate divisions based upon its current
holdings that specialize in particular segments of the real estate industry. The
Company is considering the benefits of spinning off some or all of these
subsidiaries and eliminating or selling its consulting companies.

Business of Issuer
- ------------------

The Company's operations primarily involve the acquisition, management,
lease and sale of real estate holdings. Over the past seven years, the Company
has acquired a wide variety of commercial and residential properties. The
Company owns several real estate holdings in Utah and also owns properties in
other parts of the United States. The Company seeks to locate and acquire
undervalued real estate (which is primarily commercial) with little or no cash
down. Once acquired, the Company's real estate holdings are leased. While the
Company seeks to generate and maximize rental income through the management and
lease of the property, the Company's primary goal is to acquire real estate
which will substantially appreciate in value and for which the Company can
realize a substantial gain upon disposition. For further information on the
Company's real estate holdings, see "Item 2. Description of Property" and "Item
6. Management's Discussion and Analysis of Financial Condition and Results of
Operations."

Through it subsidiaries Canton Financial Services Corporation and Hudson
Consulting Group, Inc., the Company also provides a variety of financial
consulting services to a wide range of clients. As used in this discussion, the
term Company will encompass one or both of these subsidiaries. The primary
service performed by the Company involves assisting clients in structuring
mergers and acquisitions. This includes locating entities suitable to be merged
with or acquired by the Company's clients, as well as providing general advice
related to the structuring of mergers or acquisitions. The Company also assists
clients in restructuring their capital formation and advises with respect to
general corporate problem solving.

Prospective clients for the Company's consulting services are located by
the Company through advertising and referrals. The Company also researches
various databases and identifies public companies potentially interested in the
Company's services. The Company also advertises its services to targeted
corporations. Referrals by current and previous clients have provided the
Company with additional clients.

The Company charges clients monthly or other fees which vary in both amount
and form. Acceptable payments include cash, securities of the client
corporation, other assets or some combination of the three. This payment
arrangement allows many organizations, especially start-up ventures and those
experiencing financial difficulties, to obtain the Company's services without
the use of valuable cash flows. However, accepting stock as compensation

<PAGE>

occasionally impairs the Company's cash flow. Acceptable payments and the size
of payments the Company charges for its services vary with the volatility of the
clients' securities, the amount and nature of work involved, and the expenses
related to the services being rendered.

Entities from many different industries employ the Company's consulting
services. The Company primarily targets distressed public companies and private
companies seeking to become publicly owned. The decision of accepting a
prospective client depends on its financial stability, the type of services
needed and the compensation format. A key to the Company's success is
management's ability to improve and maintain its client base and successfully
liquidate its compensation.

The Company had a total of 36 employees, 31 of whom were full time
employees, on March 31, 1999.

ITEM 2. DESCRIPTION OF PROPERTY

The Company owns or leases industrial, commercial, warehouse, office and
undeveloped commercial real estate. The acquisition of properties has not been
limited to any specific geographic area, but has been dictated by the perceived
appreciation potential and terms of financing. Regardless of the type of
property, future acquisitions will not be limited to any specific geographic
area. At the end of 1998, the Company owned, leased, or had interests in
properties in Utah, Louisiana, Illinois, Virginia, West Virginia, Arizona and
Nevada.

The Company's policy is to actively pursue the acquisition of real estate
for investment income and appreciation in property value. During the past year,
the Company has continued to place an emphasis on acquiring property which
management feels is undervalued. Rather than limiting itself to specific types
of real estate, the Company's policy has been to focus primarily on terms of
financing and potential return on capital. The Company generally looks for
properties that can be purchased by assuming the existing financing or by paying
the balance of the purchase price with a nominal cash expenditure and/or the
issuance of shares of the Company's common stock ("Common Stock"). The Company
has been successful in acquiring several properties in this fashion.

The Company currently has no limitations on the percentage of assets which
may be invested in any one investment, or type of investment. However, the board
of directors in its discretion may set policies without a vote of the Company's
securities holders regarding the percentage of assets which may be invested in
any one investment, or type of investment. The Company's current policy is to
evaluate each investment based upon its potential capital return to the Company
on a relatively short term basis. Furthermore, the Company does not plan to
enter into the business of originating, servicing or warehousing mortgages or
deeds of trust, except as may be incidental to its primary purpose of acquiring
real estate.

There is a risk that the Company may lose control of its properties
through foreclosure if enough funds are not derived from the rental income for
both the financing and operations. Currently, due to expanded acquisition
activity and deficiencies in rental income from the properties acquired, the
Company does not have sufficient rental revenues to cover the debt service and
operating costs of all properties. The Company currently has to use capital from
other sources to fund this deficit. Although management hopes to increase the
occupancy rates and thus increase the rental income so that such income will
cover both operations and debt service, no such assurances can be made.

Below is a list of the properties owned by the Company and/or its
consolidated subsidiaries as of December 31, 1998. Also included are any changes
in the ownership status of such properties which have occurred between the end
of 1998 and the filing of this Form 10-KSB. Of the Company's properties, the
Oasis, Nevada property and General Lafayette Motel in Baton Rouge, Louisiana
have a book value amounting to ten percent (10%) or more of the total assets of
the Company. All reference to current principal balances of encumbrances against
the properties are as of December 31, 1998 only.

<PAGE>

Oasis, Nevada Property
- ----------------------

Oasis International Corporation ("OIC"), a consolidated subsidiary of the
Company, owns approximately 1,076 acres of mostly raw land located in Elko
County, Nevada. Oasis International Hotel and Casino, Inc. ("OIHC"), a
consolidated subsidiary of the Company also owned approximately 30 acres of
mostly raw land located in Elko County, Nevada as of December 31, 1998. The
1,106 acres of land have water rights to over sixteen hundred acre feet of water
per year (the "Oasis Property").

On December 31, 1998, the 1,076 acres held by OIC was subject to a $900,000
note executed in favor of the seller and secured by a first deed of trust (the
"Note"). The 30 acres held by OIHC is not subject to any liens or mortgages.
Under the terms and conditions of the Note, OIC is required to make quarterly
payments of $31,475 which includes both interest payments and principal
reductions. The entire $343,942 in remaining unpaid principal and accrued
interest become due and payable on January 1, 2006. There are no pre-payment
penalties and the contract provides for the payoff and reconveyance of specific
tracts of land within the parcels covered by the deed. Other than property taxes
that will become due and payable, there are currently no other encumbrances on
the Oasis Property.

OIC currently operates a 48 unit mobile home park. The current occupancy
rate is 100%. The mobile home park generates $8,000 in monthly gross rental
revenues.

On May 11, 1998, OIHC sold 18.289 acres (OIHC originally held approximately
50 acres which was acquired on December 27, 1995) to Oasis Hotel, Resort &
Casino - III, Inc.("Oasis III") for $5,000,000 with the terms specified below.
The 18.289 acres of land, sold to Oasis III, included a truck stop facility
which consisted of a small Motel, a gas station, a small restaurant and office
space.

The terms of purchase included: (1) the payment of One Million (1,025,000)
shares of restricted stock in Oasis Resorts International, Inc., a publicly
traded company on the OTC bulletin board (OAIS); (2) the assumption of a
$550,000 first deed of trust; and (3) acceptance of a $3,425,000 second deed of
trust with a term of 30 years, bearing interest at 9% annually, with payments
due monthly.

OIHC originally held approximately 50 acres of land in Oasis, Nevada
subject to a $300,000 promissory note. As a result of the sale of 18.289 acres
to Oasis III, the promissory note holder agreed to release OIHC from the
$300,000 note in exchange for 100,000 shares of the Company's restricted common
stock and Oasis III's assumption of a $550,000 deed of trust on the 18.289
acres. One of the ancillary effects of the sale of the 18.289 acres to Oasis
III, was that OIHC obtained title to its remaining parcels of land free and
clear of all liens.

Although the Company believes that the sale of the 18.289 acres was in the
best interest of the Company, the Company is aware that Oasis III's ability to
pay pursuant to the terms of the second deed of trust is contingent upon Oasis
III's ability to generate revenues as a start up venture with no operating
history or present ability to pay based upon a lack of revenues. Consequently,
Oasis III is considered a high credit risk and there is a substantial
possibility that Oasis III could default.

On January 11, 1999, OIHC consummated the sale of a 1/2 interest in 1.450
acres of land to Pienne Chow Sau Har in exchange for: (1) 31,250 shares of Oasis
Hotel, Resort & Casino - I, Inc., (2) 31,250 shares of common stock of Oasis
Hotel, Resort & Casino - II, Inc. (3) a secured promissory note in the amount of
$160,000, dated February 1, 1996, held by Ms. Chow. The maker of the $160,000
promissory note China Food & Beverage Company has been in default since October
1, 1997. OIHC is in the process of enforcing its rights under the promissory
note to foreclose on the collateral to the note.

<PAGE>

January 11, 2000. The note is secured by the 2.145 acres. Oasis Fields, L.L.C.
was formed for the specific purpose of purchasing and improving the 2.145 acres.
Oasis Fields, L.L.C. is considered a high credit risk because it has no
operating history. Consequently, OIHC's probability of having to foreclose upon
the property is very high unless Oasis Fields, L.L.C.'s plans to improve the
2.145 acres are successful.

During the year the Company began its plans to subdivide a 58 acre parcel
of undeveloped land in Oasis, Nevada. On July 1, 1998, OIC entered into a
Contract for Engineering Services with High Desert Engineering ("Engineering").
Engineering has been engaged to provide professional engineering services for
the purpose of designing and preparing a tentative subdivision map for the 58
acre parcel. OIC plans to sell lots for approximately $38,000 each. OIC plans
will include a total of 217 lots. The cost to design and prepare the map is
estimated to be $17,000. The cost to actually subdivide is estimated at $15,000
a lot or $3,255,000 for the entire project. OIC's development of its plans are
contingent upon obtaining adequate financing. OIC is currently seeking financing
from banks and other sources. No guarantees can be given that OIC will be
successful in obtaining financing.

The federal tax basis of the Oasis Property is $1,018,435. The realty tax
rate is .024204 and the annual realty taxes for 1998 were $6,798. The Company is
of the opinion that this property is adequately covered by insurance.

The General Lafayette Motel - Baton Rouge, Louisiana
- ----------------------------------------------------

Innovative Property Development Corporation ("IPDC"), a consolidated
subsidiary of the Company, acquired, through a Stock Acquisition Agreement ( the
"Agreement"), 51% of the shares of common stock of a Louisiana Corporation known
as Golden Opportunity Development Corporation ("Golden"). Golden's sole asset is
the General Lafayette Inn, a 134 unit Motel and restaurant, and four adjacent
office/retail buildings, in Baton Rouge, Louisiana (the "Motel"). The Motel is
located next to the Mississippi River, three blocks from a river boat dock, at
427 Lafayette Street, Baton Rouge, Louisiana 70802.

IPDC initially advanced the sum of $15,810 to cover operating deficiencies
related to the Motel and transferred 118,520 shares of restricted stock of Oasis
Resorts International, Inc. (f.k.a. Flexweight Corporation) in exchange for the
transfer of the 51% interest in Golden from the Smith Trust and San Pedro
Securities, Ltd..

The Motel is subject to a mortgage in the principal amount of
$1,900,000.00. Principal and interest on the mortgage are payable in monthly
installments of $11,391.46 until July 1, 2027, when the remaining principal and
interest are due in full.

The Company has plans to either renovate or sell the Motel. Golden has
retained the services of an architectural firm in its effort to begin
renovations and thereby, comply with requirements of becoming a Days Inn
Franchise. On October 15, 1998, Golden signed a License Agreement with Days Inn.
Golden has not been able to successfully obtain financing as of the March 15,
1999. Consequently, the Days Inn franchise Licensing Agreement has been
rescinded. However, Days Inn has represented that it will enter into a new
Licensing Agreement upon Golden being able to obtain adequate financing to
comply with the renovation requirements as set forth by Days Inn. The estimated
cost of renovation is approximately $1.2 million. Upon completion of the
necessary renovations, the Motel will have an estimated value of $6.2 million
according to an MIA appraisal report prepared for various lending institutions
who may have an interest in financing the renovation. The completion of
renovations and the successful retention of the Days Inn franchise would
significantly increase the Motel's rental revenues.

During the year the Company expended approximately $230,211 in improvements
and other expenses relating to the operation of the Motel. The Motel is expected
to operate at a loss until the renovations can be completed. The Company's
prospects for increasing value and realizing a profit on the Motel are primarily
contingent upon Golden's ability to obtain adequate financing to renovate the
Motel. Upon completion of the renovations to the Motel, management believes that

<PAGE>

the Motel has the potential to operate at a substantial profit. However, there
is no guarantee that adequate financing will be secured or that the Motel will
obtain profitability.

The Motel currently has an occupancy rate of 55%. The Motel generates
monthly rental revenues of $29,863. The low occupancy rate is due in part to the
fact that 60 rooms are in need of substantial repairs and are unrentable. The
Company is of the opinion that this property is adequately covered by insurance.

The federal tax basis of the Motel is $2,599,846. The facilities are being
depreciated by straight line method over a period of 39 years. The realty tax
rate is .024204 and the annual realty taxes for 1998 were $16,298.

OTHER PROPERTIES

The New Brigham Apartment Complex - Ogden, Utah
- -----------------------------------------------

On July 23, 1998, Canton's Commercial Carpet Corporation ("CCCC"), a
consolidated subsidiary of the Company, acquired a two-story 18 unit apartment
building that includes 7,500 square feet of commercial space located at 2402
Wall Avenue in Ogden, Utah. The total purchase price was $850,000. CCCC put
$5,000 down and financed the purchase price by obtaining a first mortgage of
$125,000 at an annual interest rate of 13% for a 12-month period and a second
mortgage from the seller for $50,000 amortized over a 12-month period with an
annual interest rate of 10%. These two loans are secured by four units in the
apartment complex. The $670,000 balance is being financed by the seller with
payments that are based upon a 20-year amortization with an interest rate of 7%
for the first two years, which escalates to 9% for the remaining term with the
balance to be paid in full on or before 6 years from the date of inception with
no prepayment penalty. The $670,000 loan is secured by the entire apartment
complex excepting the four units mentioned above.

CCCC has obtained the necessary licenses to complete the conversion of the
apartments to condominiums. CCCC's plan is to sell the 18 condominiums at an
average price of approximately $60,000 per condominium. To date, no sales have
been consummated. Pending the sale of the units, CCCC is considering renting the
units on a short term basis. CCCC is also actively searching for a commercial
tenant to occupy the 7,500 square feet of commercial space. The Company is of
the opinion that this property is adequately covered by insurance.

The Wallace-Bennett Building - Salt Lake City, Utah

The Wallace-Bennett Building is located at 55-65 West 100 South, Salt Lake
City, Utah. The property was purchased by Wasatch Capital Corporation
("Wasatch") on November 29, 1994. The Company through its majority owned
subsidiary IPDC owns twenty percent (20%) of the capital stock of Wasatch. The
building is a 36,797 square foot, turn-of-the-century multi-story office
building. Currently, only a portion of the ground floor is rented. The rentable
ground space in the building is adequate for its current uses, but the
additional stories above the ground floor cannot be used until they have been
remodeled and rehabilitated.

The property is subject to a promissory note secured by a first trust deed
with a current principal balance of $427,999 and bearing 10% interest per annum.
Total monthly principal and interest payments are $7,930. The note matures in
November 1999, when the remaining $381,113 in principal and interest comes due.
Other than property taxes that will become due and payable, there are no other
encumbrances on this property.

Wasatch has tentative plans to remodel the second, third and fourth floors
as either offices or residential condominiums. The cost for either project is
estimated to be around $1,000,000 and no financing for this project has been
obtained.

<PAGE>

The current occupancy rate for the rentable ground level space is 100%. A
restaurant occupies 2,584 square feet of the building and a retail store
occupies 912 square feet of the building. The tenants are responsible for all of
their own utilities, except water and sewer. Tenants also pay their pro-rata
share of all other operating expenses as well as maintenance, janitorial
services, insurance and property taxes. The average annual effective rental for
the rentable ground level space is $10.87 per square foot.

The Company is of the opinion that this property is adequately covered by
insurance.

The Plandome Building - Salt Lake City, Utah
- --------------------------------------------

The Plandome Building is located at 69-75 East 400 South, Salt Lake City,
Utah. In October 1993, the building was acquired by Canton Industrial
Corporation of Salt Lake City ("CICSLC"), a consolidated subsidiary of the
Company, for $781,214. This historic three-story building constructed in 1904
contains 15,300 square feet of office and retail space and is eligible to be
listed on the National Register of Historic Places.

On December 23, 1998, CICSLC sold the Plandome Building to Starker
Services, Inc. and Vasilios Priskos ("Buyers") for $1,200,000. Pursuant to the
terms of sale, CICSLC accepted: (1) $324,000 in cash at closing; (2) a $576,000
all inclusive promissory note, secured by an all inclusive trust deed, with
interest accruing from December 23, 1998, on the unpaid portion of the note at
9% per annum with monthly payments of $4,762 until October 14, 1999 when the
remaining balance becomes due; and (3) a $300,000 note secured by a deed of
trust which accrues interest at a rate of 8% per annum. The principal with
accrued interest become due and payable on or before December 24, 2001.

CyberAmerica Corporate Office Building - Salt Lake City, Utah
- -------------------------------------------------------------

Canton's Commercial Carpet Corporation ("CCCC"), a consolidated subsidiary
of the Company, owns a building located at 268 West 400 South in Salt Lake City,
Utah which is currently used as the Company's headquarters and principal offices
("Office Property").The Office Property is a two story building with 14,347 net
rentable square feet of office space. CCCC purchased the building on March 6,
1998, by exercising its option to purchase the building through the payment of
$418,762. CCCC financed the purchase price and borrowed an additional sum of
$222,489 which is secured by the Office Property.

On December 30, 1998, CCCC refinanced the Office Property. CCCC obtained a
first mortgage from Southern Pacific Bank in the amount of $588,250. The first
mortgage is amortized over 30 years with an adjustable initial interest rate of
7.7% per annum with initial monthly payments of $4,194. The interest will not
exceed 12.7% over the term of the mortgage. In order to complete the refinance,
Southern Pacific Bank required a personal guarantor on the mortgage. Allen
Wolfson, a control person and employee of the Company, agreed to guarantee the
loan which allowed CCCC to maintain control of the Office Property. For more
information on the guarantee see "Item 12. Certain Relationships and Related
Transactions."

On December 30, 1998, CCCC also obtained a second mortgage on the Office
Property in the amount of $70,000. The second mortgage is amortized over 10
years with a fixed interest of 15% per annum with monthly payments of $1,130.
The balance of the loan is due payable on or before January 31, 2001.

The Company currently occupies approximately 50% of the building with the
remaining 50% subleased to an investment company, a mortgage company and a
telemarketing company. Total annual rents from the unrelated tenants equal
$68,175, or $12.11 per square foot. Improvements have been made to the property
including carpeting, painting and remodeling the second and third floors. The
Company is of the opinion that this property is adequately covered by insurance.

<PAGE>

Vale Terrace Property - Vista, California
- -----------------------------------------

Innovative Property Development Corporation ("IPDC"), a consolidated
subsidiary of the Company, held an indirect ownership interest in a 28,800
square foot two-story office building located at 956 Vale Terrace Drive in
Vista, California. Pursuant to the terms of purchase, the seller was to lease
the Vale Terrace building from September 1997 until July 1998 and continue
making monthly interest payments on the underlying $400,000 note secured by the
property. In February 1998, IPDC received notice from the holder of the first
deed of trust, that the monthly interest payments had not been paid and that the
note was in default. The seller's failure to make payments on the underlying
note constituted a breach of contract. The seller failed to cure its breach and
IPDC did not cure the default on the underlying note. Consequently, a forced
sale of the property occurred on May 13, 1998. The $400,000 note secured by a
first deed of trust was satisfied in full. The Company booked a loss of $272,220
during 1998 as result of the foreclosure. The Company may pursue the seller's
for damages resulting from the sellers breach under the purchase contract. For a
more detailed description of the property, see "Item 2. Description of Property"
in the Company's Form 10-KSB for the year ended December 31, 1997.

Nephi, Utah Properties
- ----------------------

Two consolidated subsidiaries of the Company own a total of three
commercial properties in Nephi, Utah. These subsidiaries will be collectively
referred to as the Company for purposes of this description. The first property
is a 4,696 square foot building located at 26 South Main Street, Nephi, Utah
which is designed for use as a small tavern. The Company acquired the building,
as well as furniture, inventory and supplies associated with the operation of
the tavern, in April 1997. The building is subject to a 7% note secured by a
deed of trust on the property. The note has a current principal balance of
$179,938 and requires monthly payments of $1,305 until May 2004, when the full
$161,206 in remaining principal and accrued interest are due in full. The entire
building is leased to one tenant who operates a tavern in the building. The
lease requires the tenant to pay annual rent of $18,000, or $3.83 per square
foot. The lease expired in February 1999, but the tenant has an option to extend
the term until February 2005.

The second piece of commercial property in Nephi, Utah is a 2,200 square
foot building located at 390 South Main in Nephi and which is designed for use
as a cafe (the "Tiara Cafe"). The Company acquired the Tiara Cafe, as well as
all equipment, furniture and supplies used in the operation of the cafe, in July
1997. The Tiara Cafe is subject to a 7% note secured by a deed of trust on the
property. The note came due in January 1, 1999; However, the Company has
received a verbal extension for an unspecified period of time. The full balance
of approximately $96,475 of remaining principal and interest must be paid by
April 13, 1999 or the property may be foreclosed upon. The Company is currently
seeking financing. In the event that the Company does not obtain financing, the
Company may purchase the property with cash.

The entire Tiara Cafe is leased to one tenant who operates a restaurant on
the premises. The lease requires the tenant to pay annual rent of $13,200, or
$6.00 per square foot. The lease expires in July 1999, but the tenant has the
option to extend the term until July 31, 2003.

The third piece of commercial property in Nephi, Utah is a 4,000 square
foot building located at 65 South Main in Nephi which is also designed for use
as a cafe (the "Celebrations Cafe"). The Company acquired the Celebrations Cafe,
along with all equipment, furniture and supplies used in the operation of the
cafe, in April 1997. The Celebrations Cafe is subject to a 15% note with a
principal amount of $56,000. Interest only payments on the note are payable in
monthly installments of $700 until August 1, 2002, when the $56,000 in principal
is due in full. The Celebrations Cafe is also subject to a second note of
$70,000 bearing an interest rate of 6% per annum. Interest only payments on the
second note are due in monthly instalments of $350 until August 1, 1999, when
the full $70,000 in remaining principal is due. The Celebrations Cafe is
currently leased to one tenant who operates a restaurant on the premises. The
lease requires the tenant to pay $1,300 per month or $3.90 per square foot. The
lease expires in September 1999 but the tenant has an option to extend the term
until September 2004. The Company is of the opinion that all of these properties
are adequately insured.

<PAGE>

Glendale Plaza - Salt Lake City, Utah
- -------------------------------------

The Glendale Plaza is located at 1100 South Glendale Drive, Salt Lake City,
Utah. West Jordan Real Estate Holdings, Inc., a consolidated subsidiary of the
Company, currently leases the retail shopping plaza and has an option to
purchase the property for $799,000. The option expires on August 31, 2001. The
monthly lease payments on the Glendale Plaza are $5,663 and the option price is
reduced each month by the lease payments. The property contains 76,831 square
feet of rentable retail space and approximately 100% is subleased to tenants. A
retail market occupies 13,200 square feet of the building and a merchant store
an additional 27,225 square feet. These are the only tenants of the Glendale
Plaza which occupy more than ten percent of the premises. The Glendale Plaza
generates approximately $168,997 in annual rental income, or $2.19 per square
foot. Present plans are to continue to operate the building as a retail shopping
plaza and to increase the rental rate. No major renovations, improvements or
development plans have been made for this property. Property taxes and
assessments have been paid in full on the property. The Company is of the
opinion that this property is adequately covered by insurance.

Brian Head Condominiums - Brian Head, Utah
- ------------------------------------------

Canton Financial Services Corporation ("CFSC"), a consolidated subsidiary
of the Company, owns three condominium units located in close proximity to Brian
Head Ski Resort and the surrounding resort town in Southern Utah. CFSC has
acquired the condominium units for investment purposes and has contracted with a
management firm who rents the units on a short-term basis. The first unit is
subject to a note with a current principal balance of $30,717 and bearing an
interest rate of 9.5% per annum. Monthly payments on the first unit are $363,
with the principal and interest amortized over a period of 17 years. The second
unit is subject to a note with a current principal balance of $33,313 and
bearing an interest rate of eight 8.25% per annum. Monthly payments on the
second unit are $302 until October 2001 when the remaining $30,677 comes due in
full. The third unit is subject to a note with a current principal balance of
$39,809 and bearing an interest rate of 8.75% per annum. Monthly payments on the
third unit are $362 until July 2002 when the remaining $36,570 comes due in
full. There are no prepayment penalties on any of the units.

CFSC has an option to purchase a fourth condominium in the Brian Head area
pursuant to a lease option agreement it executed with Richard Surber, the
Company's president, director and chief executive officer, in August 1997. Mr.
Surber owns the condominium subject to a note on the property secured by a deed
of trust. CFSC leases the condominium for $900 per month, almost all of which is
applied to the monthly obligations on the first note. CFSC has an option to
purchase the condominium through a payment of $82,100, which is reduced monthly
by the extent to which CFSC's monthly rental payments decrease the principal
balance due on the note. The lease option also contains an alternative option
price in the event the unit appreciates dramatically during the term of the
lease. CFSC is also required to pay all taxes, condominium fees, maintenance and
repair expenses and other charges on the property. CFSC has the ability to
manage, control and sell the condominium unit during the term of lease. The
Company is of the opinion that these properties are adequately covered by
insurance. For more information on this lease, see "Item 12. Certain
Relationships and Related Transactions."

The Parkersburg Terminal - Parkersburg, West Virginia
- -----------------------------------------------------

The Parkersburg Terminal is located at 516 Camden Street, Parkersburg, West
Virginia. The terminal is a former fuel transfer station. The property consists
of 4.5 acres on a tributary of the Ohio River and includes a former oil storage
facility and a warehouse with office space. The Parkersburg Terminal was
purchased by Canton Tire Recycling of West Virginia, Inc. on May 15, 1993. Other
than delinquent property taxes totaling $1,745, there are no encumbrances on the
property. The property has been vacant and unused since its acquisition. The
Company is subject to competition in finding tenants or buyers for the property,
and there is a substantial likelihood that the property will remain vacant for
some time. The Company is of the opinion that this property is adequately
covered by insurance.

The West Virginia Division of Environmental Protection (the "WVDEP") has
filed suit against the Company seeking the completion of environmental clean up
procedures. At one time, the above ground storage tanks and related hardware on
the property were leaking unidentified contents into the nearby river. Testing

<PAGE>

performed on the site indicates that all remaining storage tank contents are
crude oil remnants. The test results have been submitted to the WVDEP and the
WVDEP has demanded additional testing be conducted with respect to the
containment and removal of all waste materials remaining on the site. The
Company is in the process of obtaining additional tests to comply with the
WVDEP's demands. For more information on the suit filed against the Company see
"Item 3. Legal Proceedings."

The Canton Plant - Canton, Illinois
- -----------------------------------

The Canton Plant is located at 200 East Elm Street in Canton, Illinois. The
Canton Plant was acquired by the Company in 1984 and title to the property is
held in the name of Thistle Holdings, Inc., a wholly owned subsidiary of the
Company. Prior to August 1997, the facility consisted of brick, steel and glass
constructed buildings with over 1,290,366 feet of interior space, portions of
which were in disrepair.

On August 6, 1997, a fire engulfed the facility and destroyed over 800,000
square feet of the buildings located at the Canton Plant. The fire destroyed the
warehouse and office space comprising the largest portion of the square footage
of the Canton Plant. The remaining buildings at the Canton Plant consist
primarily of open-air manufacturing facilities, some of which sustained smoke
damage from the fire.

Preliminary testing indicated that asbestos containing materials were
included in the debris of the fire and the Company retained a qualified site
designer to test the site for asbestos contaminants and develop a plan for the
removal of asbestos containing materials. The Company has retained a local
contractor to remove debris from the site in compliance with the plan that has
been devised. Removal of the debris resulting from the fire has commenced. The
Company has been informed by federal authorities investigating the incident that
the cause of the fire was arson.

The Canton Plant had been previously used by the Company for tire recycling
operations, but had been almost entirely vacant for the past year and had
limited commercial use prior to the fire. The buildings which remain after the
fire are suitable only for limited manufacturing use and the Company will likely
need to substantially renovate or develop the property in order to make it
commercially viable including the removal of all asbestos containing materials.
The Company is currently researching potential future options with respect to
the property, but no future development plans have been made as of the filing of
this Form 10-KSB.

The Canton Plant is currently vacant. The only current encumbrances on the
property are accumulated property taxes, penalties, and assessments totaling
approximately $543,276 of which portions are delinquent as far back as 1988. The
property taxes, penalties and assessments must be paid by May 17, 1999 or the
property will be subject to tax sale by Fulton County. The Company is currently
in negotiations for the sale of this property. The Company hopes to satisfy all
liabilities relating to the Canton Plant, if it is successful in its
negotiations. If the Company's attempts to consummate a sale are not successful
within the statutory period of time allowable for redemption of the property,
the Company will allow the Canton Plant to be sold at the tax sale and has no
plans to attempt to redeem the property.

The Canton Plant is also the subject to two separate pending proceedings
with the State of Illinois. The first of these proceedings was filed in the
Ninth Judicial Circuit for the State of Illinois and was brought to enforce
environmental cleanup in compliance with federal and state required
environmental laws, rules and regulations. The second proceeding was filed with
the Illinois Pollution Control Board which involves reimbursement of expenses
incurred by the State of Illinois in the removal of waste tires from the Canton,
Illinois property. On March 5, 1998, the Company was ordered to pay $326,154 in
reimbursement costs. See "Item 3. Legal Proceedings" for more information on
these proceedings.

<PAGE>

KMC Plant - Cheriton, Virginia
- ------------------------------

The former KMC food plant and warehouse ("KMC Plant") is located in the
vicinity of Cheriton, Virginia. The property was purchased by Diversified
Holdings XIX, Inc., a wholly owned subsidiary of the Company on August 2, 1996.
The KMC Plant is located on approximately 65 acres and has railroad spur access
with the Penn Central Railroad. The property has structures for the manufacture,
storage and distribution of food products. The property is zoned for industrial
use. The KMC Plant has been vacant and unused since the property was acquired
and is in disrepair. The property is subject to an environmental impact
investigation by the Virginia State Water Control Board and related agencies.
For more information on KMC Plant, see "Item 3. Legal Proceedings - Possible
Actions by Governmental Authorities". Aside from potential environmental claims,
there are no known encumbrances on the property.

The Company does not plan to renovate, restore or improve the property and
intends to attempt to lease or sell the property as is. The Company is currently
in negotiations to sell the property. There appears to be limited market demand
for this property, so there is a substantial likelihood that the property will
remain vacant for some time. The Company is of the opinion that the property is
adequately insured.

Investments in Raw Land
- -----------------------

Through several subsidiaries, the Company owns a total of approximately
6,915 acres of raw, unimproved land located in undeveloped regions of Box Elder
County, Utah. These subsidiaries will be collectively referred to as the Company
for purposes of this description. The Company purchased this land through
several different transactions beginning in August 1996 and continuing
throughout 1997. Of the total acreage, approximately 1,975 acres are subject to
three separate notes with a combined principal balance of $42,093 and secured by
separate deeds of trust. The notes on these 1,975 acres each accrue interest at
a rate of 7% per annum and provide for monthly payments totaling $498. The notes
mature in November of 2004 when the remaining $20,515 in principal balance is
due in full.

The total acreage also includes an additional 1,280 acres which are subject
to two separate notes with a total current principal balance of $78,728 and
secured by two separate deeds of trust. The notes on these 1,280 acres accrue
interest at a rate of 8.25% per annum and provide for monthly payments totaling
$599. The notes mature in July of 2007 when the remaining $70,818 in collective
principal balance is due.

The Company also owns a separate parcel totaling 1,280 acres subject to a
note with a current principal balance of $89,620 and secured by a deed of trust.
The note on these 1,280 acres accrues interest at a variable rate (currently at
5% per annum) and provides for annual payments of $8,962. All principal and
interest on the note will be paid in December 2012. There are no balloon
payments due on the note.

An additional 2,240 acres of the total are subject to a note with a current
principal balance of $120,712 and secured by a deed of trust. The note on these
2,240 acres accrues interest at a rate of 8% per annum and provides for annual
payments of $12,708. The note matures in December of 2001 when the remaining
$113,694 in principal balance is due.

Finally, the total acreage includes 140 acres of raw land subject to a note
with a current principal balance of $4,785 and secured by a deed of trust. The
note on these 140 acres accrues interest at 6.5% and requires monthly payments
of $61. The note matures in August of 2004 when the remaining $2,028 in
principal balance is due.

Since August 1994, the Company has owned 13.22 acres of raw, unimproved
land located in Pima County, Arizona near the City of Tuscon. The property is
subject to a Deed of Trust with a current balance of $41,785, providing for
interest at an annual rate of 8%. Total monthly principal and interest payments
are $825. A balloon payment of approximately $40,689 plus accrued interest was
due in March 1999. However, the Company has negotiated an extension until 2003
when the remaining balance will be due. The only other encumbrances on the

<PAGE>

property are unpaid property taxes and mineral assessments of $8,172 and
restrictive covenants placed upon any future development of the land pertaining
to the number of dwellings and the style of the buildings.

The Company acquired its interests in the aforementioned raw land for
investment purposes and with the intention of developing the property or
reselling the property to a developer interested in improving the land or
extracting natural resources from the land. The Company believes that the
significant development of areas surrounding the Company's investment holdings
will ultimately increase the value of the Company's raw land. However, the
Company has no specific plan for developing these properties in the foreseeable
future and cannot reasonably estimate the extent of future development costs.
The Company is of the opinion that its investments in raw land are adequately
insured. There are no prepayment penalties regarding the financing on any of the
Company's investments in raw land.

ITEM 3. LEGAL PROCEEDINGS

The following are material pending cases involving the Company:

CyberAmerica Corporation vs. MJMC, Inc., Lanco International, Inc. and
Mi-Jack Products, Inc. - Suit was filed on January 10, 1997 in the Circuit Court
of Cook County, Law Division as file no. 97L 000369 seeking recovery of damages
suffered by Canton Tire Recycling Corporation based upon the company's belief
that tire shredding equipment did not perform according to warranties and
representations made by defendants. The company has filed a Second Amended
Complaint in the case. Discovery is ongoing with depositions to be scheduled
during this year. The Company has stated that the total damages for which it
seeks recovery is in an amount of not less than $1 million.

Key L.C. Corporation vs. Paragon Capital Corporation, Allen Z. Wolfson,
CyberAmerica Corporation and Robert J. D'Aleo - Key L.C. filed suit in Federal
District Court of Utah, Central Division on December 18, 1996, Case Number 2:96
CV 1054B, alleging that each of the named defendants violated the Securities
Exchange Act of 1934 in the sale of CyberAmerica stock to Key L.C.. The Company
filed an answer denying any liability for the claims of the Plaintiff and a
cross-claim as to the other named defendants in the event that Plaintiff is
found to be entitled to any recovery. In February 1998, all claims were settled
with mutual releases, the Company has paid an agreed sum to Key L.C. The Company
considered the amount paid reasonable in light of expected costs of litigation.

Canton Financial Service Corporation v. The Renno Group, Inc. - CFSC's
claim is pending before the United States District Court for the Middle District
of Florida, Tampa Division, Case Number 96-2367-CIV-T-24-E. The complaint seeks
payment of consulting fees and the delivery of shares, an obligation created in
the merger of a third party with an existing corporation and the services of
CFSC in bringing that event to pass. Cash in the amount of $15,000 is sought
plus delivery of 355,029 shares of the common stock of Network Systems
International, Inc. Shares of Network have traded at times at more than $5.00
per share in 1998. Renno filed a motion for summary judgment seeking to have the
court rule that Renno is not liable for the delivery of shares of Network to
CFSC, the Court denied this motion. Renno filed for Chapter 7 bankruptcy
protection prior to trial. An action against Network Systems is being pursued in
the state courts of Florida.

State of Illinois vs. The Canton Industrial Corporation - This action has
been pending in the Ninth Judicial Circuit, State of Illinois, County of Fulton,
Case Number 93MR45, since September 1993. The action seeks environmental cleanup
of the Canton Plant site located in Canton, Illinois. A hearing in this matter
had been set for the 6th day of February, 1998, before the Honorable Charles H.
Wilhelm, prior to the hearing the state and the Company agreed to continue the
matter to the end of May, 1998. Clean up and removal of the debris from the fire
that destroyed significant portions of the building, includes the removal of any
asbestos containing material on the site. Compliance with state and federal
regulations is being sought by cooperation with the Illinois Environmental

<PAGE>

Protection Agency and their attorneys. For more information on this matter, see
"Item 2. Description of Property."

State of Illinois vs. CyberAmerica Corporation - The State of Illinois
filed a separate action before the Illinois Pollution Control Board, Case Number
97-8, Enforcement, in July 1996. This action sought recovery of $325,398 in
costs that were allegedly incurred by the State to remove waste tires from the
Canton Plant site located in Canton, Illinois. In a decision adopted on March 5,
1998, the Board denied all punitive damages and ordered the Company to pay
$325,398 into the State's Used Tire Management Fund. This amount was determined
to be the amount expended by the state to remove tires from the Canton Plant
site. The State's motion requesting that the Board reconsider its denial of
punitive damages was rejected by the Board. On or about December 23, 1998 the
state filed a civil action in the Fulton County Circuit Court, Case No. 98-CH-57
seeking payment of the $325,398 award made by the Pollution Control Board.

Xeta Corporation vs. The Canton Industrial Corporation - Suit was filed in
the United States District Court, in the Central District of Utah, Case Number
95CV218G on March 8, 1995. Xeta alleged that $116,500 was fraudulently
transferred to the company by ATC, II, Inc. a Delaware corporation. Richard
Surber and Gerald Curtis were also named as defendants in the cause of action.
Xeta received a Summary Judgment as to the Company only, an appeal of that
decision has been sustained by the Tenth Circuit Court. Xeta, through service of
a writ of execution, seeks to compel the sale of shares of Innovative Property
Development Corp. held by the company. Sales of these shares are pending with a
broker of Xeta's selection. On April 14, 1999, the Company settled this
judgement by paying $116,000 to Xeta in exchange for a release, an assignment
of Xeta's judgement against ATC II, Inc. and the return of its Innovative
Property Development Corp. shares.

State of Delaware vs. KMC Foods, Inc. - The Division of Revenue of the
Department of Finance for the State of Delaware has made a claim in excess of
$300,000 for taxes allegedly due based upon the gross revenues of KMC, a
subsidiary of the Company, for the tax period of April 1, 1989 through March 31,
1992. This tax period is prior to the purchase of an interest in KMC by the
company. Prior management has assured the Company that the Delaware tax does not
apply as all sales of products were outside of the state of Delaware. The appeal
of this claim is still pending in the State of Delaware.

State of West Virginia vs. Canton Tire Recycling West Virginia, Inc.,
Canton Industrial Corporation and CyberAmerica Corporation - Suit was filed on
August 14, 1998 in the Circuit Court of Wood County, Parkersburg, West Virginia
as file no. 98 C 354 seeking the completion of clean up procedures for property
owned by Canton Tire Recycling West Virginia, located in the city of
Parkersburg. The state contends that certain waste material is still present on
the site and that any remaining material needs to be removed from tanks and an
oil/water separator located on the property. The Complaint requests that the
court award the state civil damages in an amount to be determined at the time of
trial. Local counsel has been retained, as well as environmental engineers in an
effort to work toward resolution of the claims asserted. Discussions and work on
such a resolution are ongoing with state officials at this time.

Possible Actions by Governmental Authorities

Virginia Property - Prior to its purchase by the Company, KMC Foods, Inc.
operated a food processing plant near Cheriton, Virginia. KMC had sold this
property prior to its acquisition by the company retaining a secured interest.
In August 1996, KMC foreclosed on the property and sold it to Diversified
Holdings XIX, Inc., a subsidiary of the Company. The Virginia State Water
Control Board has requested the preparation of a Site Characterization Report on
the site involving the extent of contamination from underground storage tanks.
Diversified has entered into negotiations with local governmental officials to
complete testing on the property and a potential sale is pending on the
property.

<PAGE>

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

During 1998, the Company did not submit any matters to a vote of security
holders through the solicitation of proxies or otherwise.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's Common Stock was traded on the Boston Stock Exchange
("Exchange") under the symbol "CYA" until the close of business on May 28, 1998,
when the Company was delisted for failure to meet the Exchange's minimum market
value float requirements of at least $500,000. For more information on this
transaction, see the Form 8-K filed by the Company on June 1, 1998. The
Company's stock is now traded on the OTC Bulletin Board under the symbol "CYAA."

The table below sets forth the high and low sales prices for the Company's
Common Stock for each quarter of 1997 and 1998. The quotations below reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions:

Quarter High Low
------- ---- ---
1997 First $0.41 $0.13
----
Second $0.32 $0.12

Third $0.20 $0.07

Fourth $2.00* $0.37*

Quarter High Low
------- ---- ---
1998 First $0.75 $0.19
----
Second $0.41 $0.06

Third $0.65 $0.35

Fourth $0.56 $0.28

Quarter High Low
------- ---- ---
1999 First $0.60 $0.36
----

- ------------------------------
*On October 31, 1997, the Company effected a 1-for-10 reverse split of its
Common Stock, par value $0.001. The reverse split affected both the outstanding
shares and the shares authorized for issuance by the Company, reducing the total
authorized shares of Common Stock to 20 million. All fractional shares resulting

<PAGE>

from the reverse split were rounded up to the nearest whole share. All
references to quantities of Common Stock throughout this Form 10-KSB have been
adjusted to reflect quantities remaining after the reverse stock split. However,
the high and low stock prices appearing in the table above have not been
adjusted to account for the reverse and the higher prices during the fourth
quarter of 1997 and first quarter of 1998 are attributable to the reverse stock
split and not an increase in share price.

Shareholders
- ------------

As of April 14, 1999 there were approximately 836 shareholders of record
holding a total of 3,042,673 shares of Common Stock.

Dividends
- ---------

The Company has not declared a cash dividend on its Common Stock in the
last two fiscal years and the Company does not anticipate the payment of future
dividends. There are no restrictions that currently limit the Company's ability
to pay dividends on its Common Stock other than those generally imposed by
applicable state law.

On June 14, 1996, the Company declared a property dividend consisting of
one share of the common stock of INFOTECH International, Inc., or the cash
equivalent of such stock, for every 100 shares of the Company's Common Stock
owned as of the June 24, 1996 record date. The Company has since revoked the
dividend as of December 31, 1998, because the cost associated with distributing
the dividend will exceed the benefit conferred upon the Company's shareholders.
However, in the event that any shareholder of June 24, 1996, demands payment of
such dividend the Company will pay $0.02 for every 100 shares that shareholder
held in the Company as of the record date.

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

The Company's operations consist primarily of two different areas of focus.
The Company's primary operations involve the acquisition, lease and sale of real
estate holdings. The Company also provides financial consulting services,
although the Company intends to sell or discontinue its consulting division.

Real Estate Operations
- ----------------------

The Company's objective with respect to its real estate operations is to
acquire, through its subsidiaries, properties throughout the country which the
Company's management believes to be undervalued and which the Company is able to
acquire through the expenditure of limited amounts of cash. The Company attempts
to acquire such properties by assuming existing favorable financing and paying
the balance of the price with nominal cash payments or through the issuance of
shares of the Company's Common Stock. Once such properties are acquired, the
Company leases them to primarily commercial tenants. The Company also makes
limited investments in improvements to the properties with the objective of
increasing occupancy and improving cash flows. The Company believes that with
minor improvements and effective management, properties can be liquidated at a
profit within a relatively short period of time.

Because of the expanded relative importance of the Company's real estate
operations and because the Company's real estate operations primarily involve
the acquisition and disposition of real estate holdings, the Company has
determined that its financial statements would more fairly represent the
financial position of the Company if proceeds from the sale of its real estate
holdings, as well as the costs associated with such sales, were included in the

<PAGE>

Company's operating revenue and costs of revenues, respectively. Accordingly,
two substantial sales of real estate holdings significantly impacted the
Company's results of operations for 1998.

The terms of purchase included: (1) the payment One Million (1,025,000)
shares of restricted stock in Oasis Resorts International, Inc., a publicly
traded company on the OTC bulletin board (OAIS); (2) the assumption of a
$550,000 first deed of trust; and (3) acceptance of a $3,425,000 second deed of
trust with term of 30 years bearing interest at 9% annually with payments made
monthly. The Company booked a gain of $728,434 as a result of this transaction.
For more information on this transaction, see "Item 2. Description of Property."

The Company recorded 1998 revenues totaling $2,462,450 as a result of the
sale of these properties, as compared to revenues of $2,285,000 for 1997, when
the Company realized revenue from the sale of two commercial buildings in Salt
Lake City. Costs attributed to the sale of the properties were $1,366,714 for
1998 as compared to $1,122,146 for 1997, resulting in respective gross profits
from real estate sales of $1,095,736 and $1,162,854. The Company sold these two
properties in 1998 because both had appreciated significantly since their
acquisition by the Company and the Company believed that the prices offered
represented the high end of the market value for each property. The proceeds of
these two sales account for a significant amount of the revenues realized by the
Company during 1998 and therefore affect the comparative revenues significantly.
The Company intends to sell further properties on a case by case basis provided
local market conditions make such sales in the best interest of the Company and
its subsidiaries. The Company can provide no assurances that it will be able to
continue to generate significant revenue through the sale of real estate
holdings. The ability to generate revenue in this manner will be largely
dependent on, among other factors, the condition of the real estate markets in
which the properties are located, the Company's continued ability to acquire
properties which can be resold and the Company's ability to improve properties
which it has acquired.

The Company recorded rental revenues of $730,737 for 1998 as compared to
$471,262 for 1997. This significant increase was largely attributable to the
acquisition of the General Lafayette Motel in April which generated $338,359 as
of December 31, 1998. During 1998, the Company took steps to decrease the
overall vacancy rate of its consolidated real estate holdings including
aggressively marketing its holdings to potential tenants through commissioned
real estate agents and making cost-effective improvements to the holdings to
increase occupancy.

Currently, the Company has negative cash flows from its real estate
operations due to principal and interest payments due on the Company's various
real estate holdings. This is attributable to both vacancies in the Company's
real estate holdings and substantial investments the Company has made in raw
land. The Company continues its real estate operations despite the negative cash
flow for two reasons. First, the Company is attempting to eliminate the losses
by increasing occupancy and rental income from those properties of the Company

<PAGE>

which have a high current vacancy rate. Second, the Company purchases real
estate primarily for appreciation purposes. Thus, while the Company seeks to
minimize and reverse its real estate cash flow deficit, its goal is that cash
sufficient to offset such deficit will be generated upon property disposition.

There are six balloon payments which come due during 1999 and which are
secured by the Company's consolidated real estate holdings. While the Company
intends to either fully satisfy or refinance the amounts which mature in the
next year, the $792,057 in debt which will come due will likely have a material
effect on the Company's liquidity, and there is a risk that the Company may lose
some of its properties to foreclosure if it is not able to meet these
obligations. In January, a $96,863 note secured by the Tiara Cafe property cames
due in full as well as a $41,786 note secured by the raw land located in Pima
County, Arizona. The note secured by the Tiara Cafe has been extended orally and
the note secured by the raw land in Arizona has been extended until the year
2003. In August, there are two separate balloon payments that come due secured
by the New Brigham Apartment Complex, the first is a $125,000 note and the
second is a $31,436 note. There is also a third balloon payment that comes due
in August, a $70,000 note secured by the Celebrations Cafe. Finally, in
November, a $415,864 note secured by the Wallace-Bennett Building comes due.

The Company, through its subsidiaries, continued to acquire additional
properties during 1998, including three properties, one located in Salt Lake
City, Utah; one in Ogden, Utah, which lies approximately 30 miles north of Salt
Lake City; and one property located in Baton Rouge, Louisiana. For more
information on these properties, see subheadings "CyberAmerica Corporate Office
Building - Salt Lake City, Utah," The Brigham Apartment Complex- Ogden, Utah,"
and The General Lafayette Motel" under "Item 2. Description of Properties.)

The Company is currently considering the feasibility of shifting its
emphasis in acquiring real estate to specific segments of the industry based
upon the types of real estate it currently holds; rather, than on the terms of
financing. For instance, the Company's majority owned subsidiary Golden
Opportunity Development Corporation ("GODC") currently holds a motel in Baton
Rouge, Louisiana. Accordingly, GODC would continue its efforts to acquire
additional hospitality properties. The same principle would follow for the
Company's other majority owned subsidiary like Canton's Commercial Carpet
Corporation ("CCCC") which currently owns an apartment complex and therefore,
would focus its efforts in acquiring additional residential complexes.

The Company is in the process of researching the benefits of acquiring
additional real estate based upon the type of real estate. If management decides
to shift its focus, the Company will consider spinning-off certain subsidiaries
in furtherance of its plans to acquire real estate based upon the types of
properties which would include finding new management whose specialization would
be in managing a particular type of property.

Financial Consulting Operations
- -------------------------------

During the fourth quarter of 1996, the Company determined that its
resources would be better utilized if applied toward real estate investment
activities. Accordingly, the Company reduced the scope and extent of the
financial consulting services. Although the Company continues to provide
financial consulting services, this is done on a significantly smaller scale
than in past years. During 1998, the Company has made an effort to limit the
types of consulting services it performs to those which have historically been
the most profitable and to reduce the number of clients retaining the Company's
services. Accordingly, the Company's focus has been on locating potential merger
or acquisition candidates and taking a fee for arranging and structuring such
transactions.

Revenues from financial consulting for 1998 increased to $996,447, as
compared to 1997 revenues of $209,856. Costs of consulting revenues also
increased significantly from $170,971 in 1997 to $545,174 in 1998. The increase
in costs is attributable to direct cost associated with increase in consulting
revenues.

The Company generates revenues through consulting fees payable in the
client's equity, cash, other assets or some combination of the three. The
primary form of compensation received by the Company has historically been the
equity securities of its clients. When payment is made in the form of equity,
the number of shares to be paid is dependent upon the price of the client's

<PAGE>

common stock and the consulting services to be provided, with discounts applied
to account for the resale restriction generally imposed upon such securities.
The Company accepts equity with the expectation that its services will assist in
the stock's appreciation, thus allowing the Company to be compensated and to
make a return on the payments for its services.

The Company generates a substantial portion of its cash flow by liquidating
non-cash assets received as fees for consulting services. As most fees are paid
in the form of equity, the revenues and cash flows realized by the Company are
closely tied to the price of its clients' securities. A decline in the market
price of a client's stock can greatly affect the total asset value of the
Company's balance sheet and can result in the Company incurring substantial
losses on its income statement. During 1998, the Company incurred losses
attributable to a market value decline in several investment securities
previously issued to the Company as consulting fees. The Company recorded
$421,753 as an expense to reflect permanent declines in the value of the
Company's investment securities. The Company has additional, unrealized losses
from investment securities available for sale of $24,747 which are reflected in
the Company's Shareholders' Equity.

Capital Resources and Liquidity
- -------------------------------

Due the Company's debt service on real estate holdings, willingness to
acquire properties with negative cash flows and acceptance of non-cash assets
for consulting services, the Company experiences occasional cash flow shortages.
To satisfy its cash requirements, including the debt service on its real estate
holdings, the Company must periodically raise funds from external sources. This
often involves the Company conducting exempt offerings of its equity securities.

During 1998, the Company sold a total of 272,000 shares of Common Stock
pursuant to Regulation S ("Regulation S") under the Securities Act of 1933, as
amended (the "Act") to Pienne Chow, an individual and resident of Hong Kong, in
exchange for an investment of $17,000 in the Company pursuant to an April 17,
1998 transaction. For more information on this transaction, see the Form 8-K
filed by the Company on April 17, 1998.

On September 17, 1996, the Company issued a 6.0% Convertible Debenture with
a face amount of $300,000 (the "Debenture") to Legong Investments, N.V., a
corporation organized under the laws of Curacao, Netherlands Antilles
("Legong"). The Debenture was issued pursuant to an Offshore Securities
Subscription Agreement. As consideration for issuing the Debenture, the Company
received a cash payment of $258,000 from Legong. The Debenture can be converted
into the Company's Common Stock at any time prior to maturity at the option of
Legong. The conversion price of the Debenture is seventy percent (70%) of the
average closing bid prices for the Common Stock during the five days immediately
preceding conversion. The Debenture was scheduled to mature on September 16,
1997.

At maturity, the Company had the option of paying the face amount of the
Debenture plus accrued interest in either cash or shares of Common Stock in
accordance with the conversion price set forth above. Interest is payable only
at maturity or upon conversion. Interest paid upon conversion only accrues as to
the face amount being converted. All Common Stock to be issued either upon
conversion or maturity is to be issued pursuant to Regulation S.

As of December 31, 1998, $60,000 of the Debenture's face amount has been
converted into Common Stock. The remaining $240,000 face amount of the Debenture
is convertible into shares of Common Stock. Legong is deemed to have a
beneficial ownership interest in the Company. However, the Company is unsure as
to the number of shares the debenture would be convertible into as of April 14,
1999. Accordingly, the Company is currently in negotiations to reacquire the
Debenture or otherwise settle the outstanding obligation on the Debenture
without issuing a larger percentage of the Company's Common Stock to the holder.
However, there is a significant risk that the Company will be required to either
issue a substantial amount of Common Stock or pay a significant percentage of
the principal in order to settle this liability. This risk could greatly affect
the Company's future liquidity and capital structure.

<PAGE>

During the 1998 fiscal year, the Company also continued issuing shares of
its Common Stock pursuant to Section 4(2) of the Act and restricted pursuant to
Rule 144 promulgated under the Act. Shares of Common Stock were sold to various
investors at prices discounted from prevailing market prices to account for
resale restrictions. The proceeds of such sales were utilized to help the
Company meet short-term financial obligations. The Company issued 483,364
restricted shares of its Common Stock during 1998 for cash payments totaling
$39,500. The Company also issued 107,393 restricted shares of its Common Stock
during 1998 in exchange for services rendered. By comparison, during 1997 the
Company issued 284,947 restricted shares in exchange for cash payments totaling
$35,000 and issued 730,727 restricted shares in exchange for services.

Results of Operations
- ---------------------

The Company recorded gross revenues of $4,189,634 for 1998 as compared to
$2,969,519 for 1997. This is due to a $786,000 increase in financial consulting
and a $258,000 increase in rental revenues in 1998 as compared to 1997. The
Company recorded an operating profit of $3,101 for 1998 as compared to an
operating loss of $1,410,951 for 1997, and a net profit of $408,984 for 1998 as
compared to a net loss of $2,246,274 for 1997. The Company's improvement in
profitability is largely attributable to a $545,000 decrease in selling, general
and administrative primarily as result of a decrease in outside consulting fees.
Additionally, the Company realized a gain from the sale of investment securities
of $375,323 in 1998 as compared to a loss on the sale of invesmtnet securities
of $890,770 in 1997.

Year 2000 Compliance
- --------------------

The Year 2000 problem is a result of computer programs being written using
two digits to define the applicable year. If not corrected, any programs or
equipment that have time sensitive components could fail or create erroneous
results. The Company has completed a review of its existing systems and has
upgraded approximately 25% of its existing system with hardware and software
that purports to be Year 2000 compliant.

The majority of the Company's other software and hardware is not believed
to be Year 2000 compliant. However, the Company has already ordered the
necessary software and hardware to fully upgrade its computer systems to be Year
2000 compliant. The Company is expected to be fully compliant by June 30, 1999.
The cost associated with completion of updating the Company's computer systems
is not expected to have a material impact on the financial condition of the
Company. Nonetheless, there can be no assurance that this will be the case.

The Company currently has limited information concerning the Year 2000
compliance status of its clients and associates. However, even if the Company's
clients are not Year 2000 compliant the Company does not anticipate that such
noncompliance will have a material adverse effect on the Company's business,
financial condition, results of operations or cash flows.

Forward Looking Statements
- --------------------------

The forward looking statements contained in this Item 6 and elsewhere in
this Form 10KSB are subject to various risks, uncertainties and other factors
that could cause actual results to differ materially from the results
anticipated in such forward looking statements.

Events Subsequent to End of Fiscal Year
- ---------------------------------------

<PAGE>

On January 11, 1999, OIHC consummated the sale of 2.145 acres to Oasis
Fields, L.L.C. for $120,000 cash and the execution of a promissory note in the
amount of $480,000. The terms of the promissory note call for the payment of
$480,000 plus accrued interest at a rate of 7% annually due and payable on
January 11, 2000. The note is secured by the 2.145 acres. Oasis Fields, L.L.C.
was formed for the specific purpose of purchasing and improving the 2.145 acres.
Oasis Fields, L.L.C. is considered a high credit risk because it has no
operating history. Consequently, OIHC's probability of having to foreclose upon
the property is very high unless Oasis Fields, L.L.C.'s plans to improve the
2.145 acres are successful.

On April 2, 1999, IPDC signed an Acquisition Agreement with Diversified
Holdings, I, Inc., a Nevada corporation, which was wholly owned by the Company
("DHI"). Pursuant to the terms of this Acquisition Agreement, IPDC divested
itself of all of its subsidiaries in exchange for 982,528 shares of IPDC common
stock which was previously owned by the Company, and 222,220 shares of DHI. The
effect of this transaction will be that the Company will own 90% of DHI and DHI
will own at least a majority interest in the following entities excepting
Wasatch Capital Corporation of which DHI will own a 20% interest: Canton
Commercial Carpet Corporation, Canton Industrial Corporation of Salt Lake City,
Wasatch Capital Corporation, Oasis International Hotel & Casino, Inc., Oasis
International Corporation, West Jordan Real Estate Holdings, Inc.,Canton
Financial Services Corporation, Hudson Consulting Group, Inc., Canton's Wild
Horse Ranch II, Inc.,CyberLacrosse, Inc., Cyberstudio, Inc., Diversified
Holdings XIX, Inc., Diversified Land & Cattle Company, Golden Opportunity
Corporation, Great Basin Water Corp., Lexington Three Mile East Terrace Mountain
Estates, Inc., Lexington, Four Mile East Terrace Mountain Estates, Inc.,
Lexington One Mile East Little Pigeon Mountain Estates, Inc. and Taylor's
Landing, Inc.

The Acquisition Agreement between IPDC and DHI is expected to be
consummated on April 15, 1999, and Acquisition of China Mall, Inc. by IPDC is
expected to be consummated by April 31, 1999. The Company's shareholder interest
in IPDC is expected to be reduced to approximately 453,550 shares or less than 5
% of IPDC's issued and outstanding shares of common stock after it acquires
China Mall, Inc.

ITEM 7. FINANCIAL STATEMENTS

The Company's financial statements for the fiscal year ended December 31,
1998 are attached hereto as pages F-1 through F-19.

[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]

<PAGE>
Crouch, Bierwolf & Chisholm
Salt Lake City, Utah
April 14, 1999

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholder
CyberAmerica Corporation
Salt Lake City, Utah

We have audited the accompanying consolidated balance sheet of CyberAmerica
Corporation and subsidiaries as of December 31, 1998 and the related statement
of operation, stockholders' equity and cash flows for the year ended December
31, 1998 and 1997. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. 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 CyberAmerica
Corporation and subsidiaries as of December 31, 1998 and the results of its
operations and cash flows for the years ended December 31, 1998 and 1997 in
conformity with generally accepted accounting principles.

<PAGE>

CYBERAMERICA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
December 31, 1998

ASSETS

CURRENT ASSETS
Cash $ 146,744
Accounts receivable -trade (net of allowance of 100,000) 446,325
Accounts receivable -related parties 371,293
Notes receivable - current portion 664,645
Prepaid expenses 11,153
Securities available for sale 937,282
-------------

TOTAL CURRENT ASSETS 2,577,442

PROPERTY AND EQUIPMENT 9,313,191

OTHER ASSETS
Investment securities at cost 82,856
Notes receivable- net of current portion 312,000
Investments- other 309,166
-------------

TOTAL OTHER ASSETS 704,022

TOTAL ASSETS $ 12,594,655
===========
See notes to consolidated finacial statement
F-1
<PAGE>

CYBERAMERICA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (Continued)
December 31, 1998

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable- trade $ 505,391
Accounts payable- related parties 86,191
Accrued expenses:
Interest 81,139
Real estate taxes and assessments 665,284
Payroll and related taxes payable 189,035
EPA liabilities 325,398
Refundable deposits 148,453
Refund to investors 47,986
Other 154,463
Debenture payable 260,000
Current maturities of long-term debt 1,524,258
----------

TOTAL CURRENT LIABILITIES 3,987,598
----------
LONG-TERM LIABILITIES
Long-term debt, less current portion 4,733,605
----------
MINORITY INTEREST 492,268
----------
SHAREHOLDERS' EQUITY
Preferred stock par value $.001; 20,000,000
shares authorized; No shares issued
Common stock par value $.001; 200,000,000
shares authorized; 2,686,571 shares issued 2,867
Additional paid-in capital 15,341,812
Accumulated deficit (11,938,748)
Unrealized loss on securities available for sale (24,747)
------------

TOTAL SHAREHOLDERS' EQUITY 3,381,184
----------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 12,594,655
===========

See notes to consolidated financial statements
F-2

<PAGE>
CYBERAMERICA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOMES
Years Ended December 31, 1998 and 1997

REVENUE 1998 1997
Sale of building 5,675,000 2,285,000
Revenue deferred (3,312,316) -
Additional gain recognition 99,766 -
Consulting revenue 996,447 209,856
Rental revenue 730,737 471,262
Other revenue
----------- -----------
TOTAL REVENUE 4,189,634 2,969,519

COSTS OF REVENUE
Costs of sale of building 1,366,714 1,122,146
Costs associated with consulting revenue 545,626 170,971
Costs associated with rental revenue 544,174 241,500
Interest expenses associated with rental revenue 275,473 162,554
--------- ----------

TOTAL COSTS OF REVENUE 2,731,987 1,697,171

GROSS PROFIT (LOSS) 1,457,647 1,272,348

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 1,454,546 2,683,299
---------- ----------

OPERATING PROFIT (LOSS) 3,101 (1,410,951)

OTHER INCOME (EXPENSE):
Interest income 244,095 71,519
Interest expense (374,501) (296,802)
Gain (loss) from sale of investment securities 375,323 (890,770)
Gain (loss) from issuance of shares by subsidiary - 196,251
Other income (expense) 47,397 44,657
Loss on Foreclosure (272,220) -
--------- ---------

TOTAL OTHER INCOME (EXPENSES) 20,094 (875,145)
------- ---------

INCOME (LOSS) BEFORE MINORITY INTEREST 23,195 (2,286,096)

MINORITY INTEREST IN LOSS 385,789 39,822
------- -----------

NET PROFIT (LOSS) $ 408,984 $(2,246,274)
------- -----------

OTHER COMPREHENSIVE INCOME
Change in unrealized losses on
securities available for sale $ 421,753 $ 159,734
-------- --------

COMPREHENSIVE INCOME (LOSS) $ 830,737 $(2,086,540)
======= ===========

See notes to consolidated financial statements
F-3

<PAGE>

CYBERAMERICA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOMES
Years Ended December 31, 1998 and 1997
(continued)

Income (Loss) Per Common Share
Income (Loss) Before Minority Interest $ 0.01 $ (1.80)
Minority Interest in Loss 0.14 0.03
------- -------
Net income (loss) per weighted average common
share outstanding $ 0.15 $ (1.77)
======= =======
Weighted average number of common shares
outstanding 2,689,767 1,266,828
========= ==========

Se notes to consolidated financial statement
F-4

<PAGE>
CYBERAMERICA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years December 31, 1998 and 1997

CASH FLOWS FROM OPERATING ACTIVITIES 1998 1997
---------- ------------
Net income (loss) $ 408,984 $(2,246,274)
Adjustments to reconcile net income (loss) to net cash provided:
Gain from debt settlements
(Gain) loss from sale of investments (27,305)
Permanent decline in investments (375,323) 890,770
(Gain) from sale of assets 11,214
(Gain) from sale of subsidiary (90,681)
(Gain) from issuance of shares of subsidiary (196,251)
Minority interest (385,789) (39,822)
Depreciation and amortization 348,569 286,326
Services paid with common stock 14,389 619,378
Common stock issued for assets and debt 17,647 200,841
Bad debt provisions 177,078
Loss on foreclosure 272,220
Decrease (increase) in assets:
Receivables (198,371) (233,975)
Prepaid expenses and other 28,047 16,454
Increase (decrease) in liabilities:
Accounts and notes payable 52,980 (6,390)
Accrued liabilities 230,922 (133,250)
-------- ---------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 814,275 (771,887)

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (3,091,768) (1,676,750)
Proceeds from sales of investments 1,593,109 517,895
Purchase of security investment (85,761) (60,721)
----------- -----------
NET CASH FLOWS (USED) IN INVESTING ACTIVITIES (1,584,420) (1,219,576)

CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock for cash 39,500 159,734
Increase in long-term debt 3,198,250 2,171,120
Reduction of long-term debt (2,326,767) (411,853)
------------ ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 910,983 1,919,001

INCREASE (DECREASE) IN CASH 140,838 (72,462)

CASH AT BEGINNING OF YEAR 5,906 78,368
------------ ----------

CASH AT END OF YEAR $ 146,744 $ 5,906
======= ========

See notes to consolidated financial statements
F-5
<PAGE>

<TABLE>
<CAPTION>
CYBERAMERICA CORPORATION
(FORMERLY KNOWN AS THE CANTON INDUSTRIAL CORPORATION)
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
For The Years ended December 31, 1998 and 1997
<S> <C> <C> <C> <C> <C> <C>

Net Unrealized Total
Common Stock Paid Loss of Securities Shareholders
Shares Amount Capital Deficit Available for Sale Equity
--------- ------- --------- ------------- ------------------- ------------

BALANCES AT DECEMBER 31, 1996 948,822 $ 948 $ 14,066,792 $(10,113,160) $ (606,234) $ 3,348,347
Cpmmon Stock Activity
Issued for debt 157,068 157 161,009 161,166
Issued for assets 54,250 54 39,621 39,675
Issued for services 730,727 731 618,647 619,378
Issued for cash 284,947 286 103,764 104,050
Change in Unrealized loss on securities -
available for sale 159,734 159,734
Net loss for Year (2,246,274) (2,246,274)
Prior Period Loss on Subsidiary Discontinued - - - 11,702 - -
-------- ------- --------- ------------- ------------------- ------------

BALANCES, DECEMBER 31, 1997 2,175,814 $ 2,176 $ 14,989,833 $(12,347,732) $(446,500) $ 2,197,778

Common Stock Activity:
Issued for assets 100,000 100 17,547 17,647
Issued for services 107,393 108 18,290 18,398
Issued for cash 483,364 483 39,017 39,500
Change in Unrealized loss on securities
available for sale 421,753 421,753
Increase from issuance of subsidiary stock 277,125 277,125
Net profit for year - - - 408,948 - 408,948
-------- ------- ----------- ------------ ------------------- ------------

BALANCES, DECEMBER 31, 1998 2,866,571 $ 2,867 $ 15,341,812 $(11,938,748) (24,747) 3,381,184
========= ======= ========== ============ ======== ==========
</TABLE>

See notes to consolidated financial statements
F-6

<PAGE>
CYBERAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997

NOTE 1: ORGANIZATION AND OPERATIONS

Organization
- ------------
CyberAmerica Corporation (the "Company") was incorporated in the State of Ohio
on July 10, 1984 as The Canton Industrial Corporation and adopted its present
name in June 1996. Effective May 3, 1993, the Company's domicile was changed to
Nevada.

Operations
- ----------
The Company provides financial consulting services and invests in undervalued
property. The Company provides services and support functions to its clients
including advice relating to regulatory compliance, document preparation,
capital formation, financial analysis, promotional campaigns, debt settlement,
and general corporate problem solving. Part of the Company's business operations
includes the acquisition, management, leasing and sale of real estate.

During the second and third quarter of 1996, CyberConnect, Inc.("CC") and Cyber
Dimensions, Inc. ("CD"), both majority-owned subsidiaries of the Company,
conducted offerings pursuant to Rule 504 of the Regulation D of the Securities
Act of 1933 ("504 exemption") in the amount of $269,704. The Company later
became aware that these offerings might have been conducted outside the
requirements of Rule 504. As a result, CC and CD began to rescind the offerings
starting in the fourth quarter of 1996 and agreed to refund the investments made
by the shareholders by January 15, 1997. However, due to cash shortages, CC and
CD were unable to repay individual investors in full. CC and CD then agreed to
refund 10% of the investments plus accrued interest to each investor every 45
days until the debts are paid in full. As of December 31, 1998, CC and CD were
indebted to their investors in the amount of $47,986.

Reorganization
- --------------
On February 22, 1988, the Company filed a voluntary petition for reorganization
under Chapter 11 of the United States Bankruptcy Code. On November 7, 1994, the
bankruptcy was discharged.

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 the satisfaction
of liabilities in the normal course of business (See note 19).

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company's accounting policies reflect current accounting practices and
conform to generally accepted accounting principles. The policies considered to
be significant are as follows:

Principles of Consolidation
- ---------------------------

The accompanying consolidated financial statements include the accounts of
CyberAmerica Corporation and its subsidiaries as summarized in Note 4.

All significant intercompany accounts and transactions have been eliminated in
the consolidation.

Accounting Method

The accompanying financial statements have been prepared on the accrual method
using generally accepted accounting principles applicable to a going concern
which contemplates the realization of assets and the liquidation of liabilities
in the normal course of business.

<PAGE>

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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

The Company reports income and losses for financial reporting and income tax
purposes on the accrual method of accounting in accordance with Financial
Accounting Standards ("FAS") No. 109 with the cumulative effects reflected in
the year ended December 31, 1993. FAS 109 requires deferred tax balances to be
adjusted to reflect the tax rates in effect when those amounts are expected to
become payable or refundable.

Use of Estimates
- ----------------

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

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

Property and equipment are recorded at cost. Depreciation is provided using the
straight-line method over the estimated useful lives of the assets, generally
estimated as follows: buildings, 20 to 39 years, equipment, 5 to 10 years, and
computers, 3 years. Depreciation expenses for 1998 and 1997 were $348,569 and
$286,326, respectively. The cost of assets sold or retired and the related
amounts of accumulated depreciation are removed from the accounts in the year of
disposal. Any resulting gain or loss is reflected in current operations.

Expenditures for maintenance and repairs are expended as incurred; additions and
improvements are capitalized.

Sales of Real Estate
- --------------------

The Company uses the deposit method or the installment method for reporting
sales of certain real estate. Under the deposit method the effective date of
sale is deferred until substantial cash is collected. Until that time all cash
received is accounted for as a deposit. Under the installment method cross
profit on sales are reported as a percentage of the sales profit as they are
received.

Investment Securities
- ---------------------

Marketable equity securities are stated at market value in accordance with
Financial Accounting Standards ("FAS") No. 115. Valuation of other security
investments is based on acquisition costs. Markdowns are made to reflect
significant (permanent) impairment in values. Gains and losses on sale of
securities available for sale are determined using a first-in first-out method.

Common Shares and Income (Loss) Per Common Share
- ------------------------------------------------
Income (loss) per common share is computed using the weighted average number of
common shares outstanding (shares in 1998 and shares in 1997).

F-8
<PAGE>

CYBERAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income or Loss Per Share
- ------------------------

Income or loss per share of common stock is computed based on the weighted
average number of common shares outstanding during the periods shown. The
Company had common stock equivalents (CSEs) outstanding at December 31, 1998 and
1997 in the form of stock purchase options. The options are held by present and
former employees. The inclusion of the outstanding options would not affect the
income or loss per share in 1998 or 1997 and therefore such options have not
been included in the weighted average number of common shares. If all
outstanding options were exercised, the total proceeds would be approximately
$493,856. The Company's outstanding common stock purchase options during 1998
are summarized as follows:

Expiration Exercise No. of Shares
Issue Date Date Price Subject to Options
---------- ---------- -------- ------------------
10/21/93 10/30/98 $4.44 9,847
09/08/93 09/30/98 $4.44 600
11/19/96 11/19/06 $0.60 5,000
-------

Total 15,447

Issuance of Common Stock
- ------------------------

The Company frequently issues shares of its common stock to acquire assets,
retire debt and pay for services. When stock is issued for services, the value
of the stock and related services is determined by the Board of Directors. In
the case of settling debt, the market value of the stock, the type and age of
the debt and any other related factors are considered. In the case of assets
acquired, the value is negotiated based on a combination of factors including,
but not limited to:
The significance of the assets to the Company;
The liquidity of the assets;
The trading price and volume of the assets (if a security).

Final approval of the basis for issuance of capital stock is made by the Board
of Directors.

Environmental Compliance and Remediation
- ----------------------------------------

Environmental expenditures are expensed or capitalized as appropriate.
Expenditures that relate to an existing condition caused by past operations and
that do not have future economic benefit are expensed. Expenditures which extend
the life of the related property or mitigate or prevent future environmental
contamination are capitalized. The Company determines its liability on a site by
site basis and records a liability at the time when it is probable and can be
reasonably estimated.

Research and Development Costs
- ------------------------------

The Company expenses research and development costs related to software
development that has not reached technological feasibility and started
production for sale. Capitalized costs are amortized over a maximum of five
years or expected life of the product, whichever is less. Computer research and
development costs for 1998 and 1997 of $0 and $121,720 respectively, have been
expensed.

F-9
<PAGE>

CYBERAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Advertising
- -----------

The Company follows the policy of charging the costs of advertising to expense
as incurred. Advertising expense was $5,794 and $6,977 for the years ended
December 31, 1998 and 1997 respectively.

Concentration of Business and Credit Risk
- -----------------------------------------

Financial instruments which potentially subject the Company to concentration of
credit risk consist primarily of cash, receivables and investments. The Company
places its cash with high quality institutions. The Company monitors its
exposure for credit losses and maintains allowances for anticipated losses on
receivables. Collateral is not generally required to support customer
receivables. The Company's six largest clients accounts for approximately 72% of
consulting revenue in 1998 and approximately 96% of accounts receivable at
December 31, 1998. The Company follows Statement of Financial Accounting
Standards No. 115 as it applies to investments in equity securities.

All references to common shares are reflected as adjusted for the 1 for 10
reverse stock split approved on October 31, 1997. Certain accounts have been
reclassified for comparison purposes.

NOTE 3: SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

The following are supplemental disclosures of cash flow information:

1. Cash paid for interest was $649,974 in 1998 and $459,356 in 1997.
2. Common stock was issued for the following purposes:

1997 1998
-------------------- --------------------
Shares Amount Shares Amount
Issued for debt 157,068 $ 161,166 -0- $ -0-
Issued for other assets 428,328 143,725 583,364 18,398
Issued for services 730,727 619,378 107,393 57,147
--------- --------- ------- ---------

1,226,992 $ 924,269 690,757 $ 755,545

The Company acquired the following assets during: 1997 1998
------------ --------------

Real estate purchased $ 1,676,450 $ 4,050,279
Debts incurred (1,587,319) (3,407,261)
-------------- ------------
Total cash paid $ 89,131 $ 643,018

NOTE 4: SUBSIDIARIES

Canton Financial Services Corporation
- -------------------------------------

Canton Financial Services Corporation, a Utah corporation, ("CFS"), was formed
by the Company on June 8, 1994. CFS, a subsidiary of the Company, provides a
wide range of consulting services, primarily for public companies.

Canton Personnel, Inc.
- ----------------------

Canton Personnel, Inc., a Utah corporation ("CPI"), was incorporated by the
Company on January 21, 1994 for the purpose of managing the various personnel
and payroll operations of the Company and its subsidiaries. CPI, a wholly-owned
subsidiary, does not currently have any tangible assets.

F-10
<PAGE>

CYBERAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997

NOTE 4: SUBSIDIARIES (continued)

Canton Tire Recycling of West Virginia
- --------------------------------------

Canton Tire Recycling of West Virginia, Inc. ("CTRWV") was incorporated by the
Company on February 25, 1993 for the purpose of acquiring, owning and managing
the Parkersburg Terminal. CTRWV, a owned subsidiary of the Company, purchased
the Parkersburg Terminal on May 15, 1993.

Canton's Wild Horse Ranch, II
- -----------------------------

Canton's Wild Horse Ranch, II, an Arizona corporation ("CWHRII"), was
incorporated by the Company on February 3, 1994, for the purpose of expanding
Canton's Wild Horse Ranch. On February 16, 1994 CWHRII, a consolidated
subsidiary of the Company, acquired thirteen acres of raw, unimproved land
adjacent to the Ranch suitable for expansion of the Ranch.

West Jordan Real Estate Holdings, Inc.
- --------------------------------------

West Jordan Real Estate Holding, Inc., a Utah corporation ("WJREH"), was
incorporated by the Company on June 7, 1994 for the purpose of acquiring, owning
and managing a specific property. On August 31, 1995, WJREH, a d subsidiary of
the Company, entered into a lease with an option to purchase a retail shopping
plaza in Salt Lake City, Utah.

Oasis International, Inc.
- -------------------------

Oasis International, Inc., a Nevada corporation ("Oasis"), was incorporated by
the Company on November 20, 1995 for the purpose of acquiring, owning and
managing a specific property. On December 27, 1995, Oasis, a subsidiary of the
Company, purchased 1,126 acres of land in Elko County, Nevada.

Oasis International Hotel & Casino, Inc.
- ----------------------------------------

Oasis International Hotel & Casino, Inc., a Nevada corporation ("OIHC"), was
incorporated by the Company on November 20, 1995 for the purpose of acquiring,
owning and managing a specific property. On December 27, OIHC, a consolidated
subsidiary of the Company, purchased land in Elko County, Nevada. Oasis sold
approximately 20 acres of property during 1998 and still owns approximately 30
acres.

Canton Industrial Corporation of Salt Lake City

Canton Industrial Corporation of Salt Lake City, a Utah corporation ("CICSLC"),
was incorporated by the Company on September 29, 1993 for the purpose of
acquiring, owning and managing the Plandome Building. On September 30, 1993,
CICSLC acquired the Plandome Building located at 69-75 East 400 South, Salt Lake
City, Utah. CICSLC was a wholly-owned subsidiary of the Company until the fourth
quarter of 1995 when the subsidiary sold shares to accredited investors and
issued shares to employees and consultants in a private placement offering
pursuant to a Regulation D, 504 Offering. During the first quarter of 1997, the
Company reacquired a majority of the shares sold. The building was sold during
the fourth quarter of 1998.

Canton Commercial Carpet Corporation
- ------------------------------------

Canton Commercial Carpet Corporation, a Utah corporation ("CCCC"), was
incorporated by the Company on January 21, 1994 for the purposes of distributing
and wholesaling commercial carpet. On May 23, 1994, CCCC entered into a lease
with an option to purchase real property located at 268 West 400 South in Salt
Lake City, Utah. On February 1, 1995, the Company relocated its corporate
headquarters to this Building. CCCC was a wholly-owned subsidiary of the Company
until the fourth quarter of 1995 when the subsidiary sold shares to accredited
investors and issued shares to employees and consultants in a private placement
offering pursuant to a Regulation D, 504 Offering. During the first quarter of
1997, the Company reacquired a majority of the shares sold.
During 1998, CCCC purchased the New Brigham Building in Ogden, Utah.

F-11
<PAGE>

CYBERAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997

NOTE 4: SUBSIDIARIES (continued)

Innovative Properties Development Corporation (formerly TAC, Inc.)
- ------------------------------------------------------------------

Innovative Properties Development Corporation (formerly TAC, Inc.) a Utah
corporation ("IPDC"), was formed by Logos International, Inc. ("Logos"), an
affiliate of the Company, on August 27, 1992. IPDC was acquired from Logos on
December 30, 1994 pursuant to a Settlement Agreement. IPDC was a wholly-owned
subsidiary of the Company until the fourth quarter of 1995 when the subsidiary
sold additional shares in a private placement offering pursuant to a Regulation
D, 504 Offering and diluted the Company's ownership to just over fifty percent.
During 1997, additional common stock of IPDC was issued in conjunction with the
acquisition of property and reduced the Company's ownership to approximately 55%
as of December 31, 1997. In December 1998, IPDC acquired several of the
Company's subsidiaries for 1,382,528 shares of IPDC Stock.

Wasatch Capital Corporation
- ---------------------------

Wasatch Capital Corporation, a Utah corporation ("Wasatch") was incorporated on
June 10, 1991. The Company acquired a 20% interest in Wasatch on December 30,
1994 in exchange for the Company advancing monies to exercise an option to
purchase real estate located at 55-57, 61-65 West 100 South, Salt Lake City,
Utah (the "Bennett Building"). Wasatch is consolidated because the Company,
through its officers, directors and affiliates, exercises significant control
over the decisions and operations of Wasatch. The Company's investment is
secured by the Bennett Building and Wasatch is not allowed to dilute the
Company's interest in Wasatch or lease, sell, exchange, or encumber the property
in any way unless the Company approves.

Thistle Properties, Inc.
- ------------------------

Thistle Properties, Inc., an Illinois corporation ("Thistle") was acquired by
the Company on May 12, 1995 as a result of a Mutual Release Agreement between
the Company, ATC II and Thistle (Please see Note 10 for additional information
on this transaction).

CyberConnect, Inc.
- ------------------

CyberConnect, Inc., a Nevada corporation, was incorporated by the Company on
February 15, 1996, for the purpose of developing and marketing an Internet
virtual mall.

Cyber Dimensions, Inc.
- ----------------------

CyberDimensions, Inc., a Nevada corporation, was incorporated by the Company on
February 15, 1996, for the purpose of developing and marketing an Internet
virtual mall.

Hudson Consulting Group, Inc. (formerly Diversified Holdings XIII, Inc.)
- ------------------------------------------------------------------------

Diversified Holdings XIII, Inc., a Nevada corporation, was incorporated by the
Company on April 16, 1996, for the purpose of providing business consulting
services. On March 5, 1997, Diversified Holdings XIII, Inc. changed its name to
Hudson Consulting Group, Inc.

Diversified Holdings XIX, Inc.
- ------------------------------

Diversified Holdings XIX, Inc., a Nevada corporation, was incorporated by the
Company on April 29, 1996, for the purpose of acquiring, owning, and managing
certain real estate property. On August 2, 1996, Diversified Holdings XIX
purchased land located in Cheriton, Virginia in a foreclosure sale. For more
information on this property, see "Item 2 - Description of Properties." In July
1997 this Subsidiary was transferred to IPDC, Inc.

NetInvesting.com, Inc.
- ----------------------

Cyber Vein, Inc. was incorporated by the Company in Nevada on February 15, 1996
for the purpose of developing promotional services for undervalued companies
including websites and print media. On January 21, 1997, Cyber Vein changed its
name to NetInvesting.com, Inc. ("NI"). The Company is no longer active.

Diversified Land and Cattle Co.
- -------------------------------

A consolidated subsidiary which owns undeveloped land in Box Elder County, Utah.

F-12
<PAGE>
CYBERAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997

NOTE 4: SUBSIDIARIES (continued)

Taylor's Landing, Inc.
- ----------------------

A consolidated subsidiary which owns property in Nephi, Utah.

Cyber LaCross, Inc.
- -------------------

A consolidated subsidiary which owns property in Nephi, Utah.

Great Basin Water Corporation
- -----------------------------

A consolidated subsidiary which owns undeveloped land in Box Elder County, Utah.

Lexington 3 mile East Terrace Mountain Estates, Inc.
- ----------------------------------------------------

A consolidated subsidiary which owns undeveloped land in Box Elder County, Utah.

Lexington 4 mile East Terrace Mountain Estates, Inc.
- ----------------------------------------------------

A consolidated subsidiary which owns undeveloped land in Box Elder County, Utah.

Lexington One mile East Little Pigeon Mountain Estates, Inc.
- ------------------------------------------------------------

A consolidated subsidiary which owns undeveloped land in Box Elder County, Utah.

Cyber Studio, Inc.
- ------------------

A consolidated subsidiary which leases property with an option to buy in Kearns,
Utah.

Diversified Holdings I, Inc.
- ----------------------------

A consolidated subsidiary incorporated in 1996 in Nevada, which currently has no
operations.

NOTE 5: LONG-TERM DEBT

Long-term debt consists of the following at December 31, 1998:

Mortgage payable to BP&G (10%), monthly payments of $7,929, due
11/99, secured by first trust deed on land and building. $ 415,864

Mortgage payable to Rich Bennion (9%), monthly payments of $4,780,
due 10/99, secured by first trust deed on land and building. 576,261

Note payable to Paul R. Rubey (5%), due 10/98. 112,514

Mortgage payable to Solar Logos Foundation (7%), quarterly payments
of 31,475 commencing 1/99, due 7/06, secured by first trust deed
on land. 900,000

Mortgage payable to Zions Mortgage (9.5%), monthly payments
of $309, due 4/15, secured by first trust deed on building. 30,717

Mortgage payable to First American Title (8.25%), monthly payments
of $298, due 10/01, secured by first trust deed on building. 33,225

Mortgage payable to Franklin Financial (15%) monthly payment $1130,
due 10/01, secured by second trust deed on land and building. 70,000

Mortgage payable to Tucker (10%), monthly payments of $471, due 11/04,
secured by first trust deed on land. 47,551

Mortgage payable to Escrow Specialists (6%), monthly interest
payments of $350, due 8/99, secured by first trust deed on land. 70,000

F-13

<PAGE>
CYBERAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997

NOTE 5: LONG-TERM DEBT (continued)

Mortgage payable to Steven D. Crowther (0% first 6 months,
3% second six months, 5% for years 2 and 3, and 7% thereafter),
annual interest payment of at least $8,961, due 12/08 secured
by first trust deed on land. 89,612

Mortgage payable to Chester F. Blanthorn (8.25%), monthly payments
of $299, due 7/07, secured by first trust deed on land. 39,493

Mortgage payable to Wanda Charlotte Blanthorn (8.25%), monthly
payments of $299, due 7/07, secured by first trust deed on land. 39,493

Mortgage payable to Andworth (0% first year, variable thereafter,
not to exceed 8%), annual payments of at least $12,708 and
quarterly interest payments, due 12/01, secured by first trust
deed on land. 115,219

Mortgage payable to Jensen Realty and Investment (0% first year,
variable thereafter, not to exceed 8%), annual payments of at
lease $706 and quarterly interest payments, due 12/01, secured
by first trust deed on land. 6,324

Mortgage payable to Powell Real Estate (0% first year, variable
thereafter, not to exceed 8%), annual payments of at least $706
and quarterly interest payments, due 12/01, secured by first
trust deed on land. 6,324

Mortgage payable to Escrow Specialists (7%), monthly payments
of $899, due 1/99, secured by first trust deed on land. 96,863

Mortgage payable to James D. Hansen (7%), monthly payments
of $1,304, due 5/04, secured by first trust deed on land. 179,225

Mortgage payable to Christopher M. Curran (6.5%), monthly
payments of $60, due 8/04, secured by first trust deed on land. 4,701

Mortgage payable to Melvin D. Call (8.75%), monthly payments of $362,
due 7/02, secured by first trust deed on land. 39,809

Mortgage payable to Title Security (8%), monthly payments of $825,
due 2/99, secured by first trust deed on land. 41,664

Mortgage payable to Lucas Trust (15%), monthly payments of $700,
due 8/02, secured by a second trust deed on land and building. 56,000

Mortgage payable to Southern Pacific Bank (7.70%), monthly payments
of $4,194, due 1/29, secured by first trust deed on land and
building. 588,250

Mortgage payable to James Kearns, Trustee (13%), monthly payments
of $1,374, due 8/99, secured by first trust deed on four
condominiums. 125,000

Mortgage payable to New Brigham partners (7%), monthly payments
of $5,582, due 8/00, secured by first trust deed on land
and building. 663,246

Mortgage payable to New Brigham partners (10%), monthly payments
of $5,000, due 8/99, secured by first trust deed on land
and building. 31,436
---------

Total debt 6,257,863

Current portion (1,524,258)
-----------

Long-term portion $ 4,733,605

F14
<PAGE>

CYBERAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997

NOTE 5: LONG-TERM DEBT (continued)

Scheduled principal reductions are as follows:

December 31, 1998 $ 1,524,258
December 31, 1999 843,424
December 31, 2000 338,308
December 31, 2001 236,462
December 31, 2002 152,462
Thereafter 3,162,454
--------------
$ 6,257,863

NOTE 6: FEDERAL INCOME TAXES

At December 31, 1998, the Company had net operating loss carryovers of
approximately $6,690,000. The net operating loss carryovers expire as follows:
Expiration
Loss Year Date Amount

12/31/91 12/31/2006 $ 562,000
12/31/92 12/31/2007 229,000
12/31/93 12/31/2008 1,616,000
12/31/94 12/31/2009 71,000
12/31/95 12/31/2010 256,000
12/31/96 12/31/2011 1,870,000
12/31/97 12/31/2012 2,086,000
-------------
$ 6,690,000

No benefit resulting from loss carry forwards have been reported in the
financial statements because the Company believes there is at least a fifty
percent (50%) chance that the carry forwards will expire unused. Accordingly,
the tax benefit of the loss carry forward has been offset by a valuation
allowance of the same amount. The expected tax benefit resulting from applying
federal statutory tax rate 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 and capital loss
carryovers in the event of a significant change in ownership of the Company.

NOTE 7: REAL ESTATE TAXES PAYABLE

The Company owes real estate taxes and assessments of approximately $408,173
(including penalties and interest) as of December 31, 1998.

Unpaid property taxes and assessments consist of the following:

Canton Plant - Canton, Illinois $ 543,276
Pima County Property - Tuscon, Arizona 6,987
Glendale Plaza - Salt Lake City, Utah 28,604
Parkersburg Terminal - Parkersburg, West Virginia 3,490
-----------------

Wallace Bennett Building 8,410
Other 74,517
----------------

Total $ 665,284

F-15
<PAGE>
CYBERAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997

NOTE 8: DEBENTURES PAYABLE

On September 17, 1996, the Company issued a 6.0% Convertible Debenture with a
face amount of $300,000 (the "Debenture") to Legong Investments, N.V., a
corporation organized under the laws of Curacao, Netherlands Antilles
("Legong"). The Debenture matured on September 17, 1997 and the Company is in
the process of negotiating an extension. The Debenture can be converted into the
Company's Common Stock at any time prior to maturity at the option of Legong.
The conversion price of the Debenture is 70% of the closing bid prices for the
Common Stock during the five days immediately preceding conversion. At maturity,
the Company has the option of paying the face amount of the Debenture plus
accrued interest in either cash or shares of Common Stock in accordance with the
conversion price set forth above. On December 17, 1996, Legong converted $10,000
of the principal plus accrued interest into 87,220 shares of the Company's
Common Stock. In 1997 Legong converted $30,000 of the principal plus accrued
interest into 112,206 shares of the Company's common stock.

NOTE 9: RELATED PARTY TRANSACTIONS

1. A-Z Professional Consultants, Inc.
----------------------------------
During 1996 and 1997, the Company completed several transactions with A-Z
Professional Consultants, Inc. ("A-Z"), a beneficial owner of more than 5%
of the Company's common stock. A-Z's sole owner is Allen Wolfson, a control
person of the Company.

During 1997, the Company issued a convertible 8% Demand Note to A-Z in the
amount of $134,844. The note is convertible into common stock at $0.125 per
share at the option of the Company. The services performed by A-Z assisted
the Company in the purchase of their office building. the $134,844 was
capitalized to that building.

4. Transfer of ownership
---------------------
In October 1998, The Company agreed to transfer its ownership in Nine
consolidated subsidiaries to Innovative Property Development Corporation
(IPDC), in exchange for Common Stock of IPDC. The transfer was completed in
December 1998 and The Company received 1,382,528 shares of IPDC, thereby
increasing ownership in IPDC from 55% to 78.5%.

The Companies are as follows:

Canton's Commercial Carpet Corporation
Canton Industrial Corporation of Salt Lake City
Wasatch Capital Corporation
Oasis International Hotel & Casino, Inc.
Oasis International Corporation
West Jordan Real Estate Holdings, Inc.
Canton Financial Services Corporation
Hudson Consulting Group, Inc.
Canton's Wild Horse Ranch II, Inc.

NOTE 10: MARKETABLE SECURITIES

The cost and approximate market value of securities available for sale at
December 31, 1998 are as follows:

Gross Unrealized Market
---------------------
Cost Gains Losses Value
------ ------- -------- -------
Marketable equity - - - -
Securities $ 962,026 $ 198,874 $ 223,500 $ 937,282

Other equities securities in the amount of $82,856 are carried at cost. There is
no readily available market for these securities or they are restricted.
Securities carried at cost are marked down to reflect impairment in values.
During 1998 impairment mark-downs were $6,467.

During 1998 proceeds from sales of securities were $1,553,469. Gross gains of
$889,572 were realized on those sales. Gross losses realized were $514,249.

F-16
<PAGE>

CYBERAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997

NOTE 11: NOTES RECEIVABLE

The above receivable is included in the financial statements as follows:

Notes receivable:
Sale of building 876,000
Other 76,645
Associated Technologies 24,000
------------

Total $ 976,645

Less current portion 664,645
------------

Long-term portion $ 312,000

NOTE 12: CONTINGENT LIABILITIES

1. Canton, Illinois Property - environmental cleanup
-------------------------------------------------

A legal action was filed in September 1993 against the Company seeking the
cleanup of tires and toxic paint drums at the plant in Canton, Illinois. On
September 28, 1995, Illinois Environmental Protection Agency informed the
Company it was rejecting the proposed plan of the Company for tire cleanup
and would send its own contractor to remove the remaining waste tires. The
Company sought relief from this decision from the Circuit Court in Fulton
County. After a hearing on October 10, 1995, the District Court denied any
relief to the Company. Both the Company and the IEPA contractors removed
tires. The State has filed an action before the Illinois Pollution Control
Board seeking to recover $325,398 as the costs incurred to remove the
tires, plus an equal amount as punitive damages. The Company's balance
sheet at December 31, 1997 included an accrued liability in the amount of
$325,398 representing the potential liability associated with this lawsuit.
The Company does not believe that it will be liable for the punitive
damages.

2. Xeta Corporation
----------------

Xeta is seeking recovery of funds alleged to have been improperly
transferred to the Company by ATC II, Inc. ("ATC") The amount sought by
Xeta is $116,500, an amount equal to the funds transferred by ATC to the
Company for consulting services and other expenses incurred for the benefit
of ATC. Xeta's Motion for Summary Judgment has been granted and the Company
is required to pay Xeta $116,500, which has been accrued on the Company's
Balance Sheet as of December 31, 1998. This liability was paid in April 14,
1998.

3. Key L.C. Corporation
--------------------

Key L.C. Corporation ("Key") alleges that the Company violated the Exchange
Act of 1934 in the sale of the Company's Common Stock to Key. Damages are
sought in the amount of $291,682, the purchase price of 214,900 shares of
the Company's Common Stock. The Company has filed a Motion to Dismiss the
Complaint for failure to state a cause of action under the Exchange Act of
1934 and the Private Securities Litigation Reform Act. The Company settled
this during 1998.

NOTE 13: OPERATING LEASE COMMITMENTS

The Company is obligated under an operating lease to pay $5,663 per month on the
one building it rents. The lease expires August 2001. The Company has an option
to purchase the building at the end of the lease term. Scheduled rent payments
are as follows:

December 31, 1999 67,956
December 31, 2000 69,956
December 31, 2001 45,304

The Company incurred rent expense under operating leases of $100,956 in 1998
and $105,335 in 1997.

F-17
<PAGE>

CYBERAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997

NOTE 13: OPERATING LEASE COMMITMENTS (continued)

The Company receives rents on lease of buildings under operating leases.
Additional information is included as follows:

Cost of real estate under lease $ 1,650,000
Accumulated depreciation (69,230)
------------
Net carrying amount $ 1,580,770

Future minimum rentals on noncancellable leases are as follows:

1999 $ 346,742
2000 156,096
2001 98,508
2002 92,374
2003 92,374
Thereafter 69,372
--------
$ 763,092

NOTE 14: STOCK OPTION PLANS AND AGREEMENTS

A summary of the status of the Company's Stock Option Plan as of December 31,
1998 and the changes due the year ending December 31, 1997 as presented below:

Options Shares Weighted Average Exercise Plan
------------------ ----------- ----------------------------------------
January 1, 1997 15,447 $ 3.20
Granted, 1/1/97 3,650 $ 15.00
Exercised, 11/7/97 193,340 $ 1.50
Canceled (212,437) $ 3.20
-------------------------------------
-0-

All options have expired as of December 31, 1998.

If the Company had used the fair value based method of accounting for its stock
option plan, as prescribed by Statement of Financial Accounting Standards No.
123, compensation cost in net income for the year ended December 31, 1997would
have decreased by $9,000 resulting in a net profit of $2,255,274.

NOTE 15: BUSINESS ACQUISITIONS

On September 19, 1997 IPDC acquired 100% of the outstanding stock of Vale
Terrace Corporation in exchange for 1,000,000 shares of common stock valued at
$140,000. The purchase price was allocated to net assets acquired based on their
estimated fair value. The consolidated statements of operations reflect the
operating results of Vale Terrace Corporation since the date of acquisition to
May 1998, when the property was foreclosed.

On April 30, 1998, The Company acquired 51% of Golden Opportunity Development
Corporation, a company that owns and operates a Hotel in Baton Rouge, LA. The
results of operations from May 1, 1998 are included in the companies financial
statements.

NOTE 16: FAIR VALUES OF FINANCIAL INSTRUMENTS

The Company estimates that the fair value of all financial instruments at
December 31, 1998 does not differ materially from the aggregate carrying values
of its financial instruments recorded in the accompanying balance sheet. The
estimated fair value amounts have been determined by the Company using available
market information and appropriate valuation methodologies. Considerable
judgement is necessarily required in interpreting market date to develop the
estimates of fair value and accordingly, the estimates are not necessarily
indicative of the amounts that the Company could realize in a current market
exchange.

F-18
<PAGE>
CYBERAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997

NOTE 17: YEAR 2000 COMPLIANCE

The Year 2000 problem is a result of computer programs being written using two
digits to define the applicable year. If not corrected, any program or equipment
that have time sensitive components could fail or create erroneous results. The
Company has completed a review of its existing systems and has upgraded
approximately 25% of its existing system with hardware and software that
purports to be Year 2000 compliant.

The majority of the Company's other software and hardware is not believed to be
Year 2000 compliant. However, the Company has already ordered the necessary
software and hardware to fully upgrade its computer systems to be Year 2000
compliant. The Company is expected to be fully compliant by June 30, 1999. The
cost associated with completion of updating the Company's computer systems is
not expected to have a material impact on the financial condition of the
Company. Nonetheless, there can be no assurance that this will be the case.

The Company currently has limited information concerning the Year 2000
compliance status of its clients and associates. However, even if the Company's
clients are not Year 2000 compliant, the Company does not anticipate that such
noncompliance will have a material adverse effect on the Company's business,
financial condition, results of operations or cash flow.

<PAGE>

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

On March 31, 1998, CyberAmerica Corporation (the "Company") received a
resignation notice of its independent auditor Andersen, Andersen & Strong, L.C.

Neither of Andersen, Andersen & Strong's reports on the financial
statements for the past two years contained an adverse opinion or disclaimer of
opinion, or was modified as to uncertainty, audit scope or accounting
principles.

There were no disagreements between Andersen, Andersen & Strong 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 addition, there were no instances that are reportable
under Item 304(a)(1)(iv) of Regulation S-B.

On April 1, 1998, the Company's Board engaged Crouch, Bierwolf & Chisholm
to serve as the Company's new independent auditors. Crouch, Bierwolf & Chisholm
are located at:

Crouch, Bierwolf & Chisholm
Certified Public Accountants
50 W. Broadway, Suite 1130
Salt Lake City, UT 84101

There were no consultations with the newly engaged accountant during the
last two fiscal years or subsequent interim period regarding any of the
information in Item 304(a)(2)(i) or 304(a)(2)(ii).

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS 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 Surber 26 President, Chief Executive Officer and Director
Gerald Einhorn 59 Vice-President, Secretary and Director
Adrienne Bernstein 53 Director
Allen Wolfson 52 Control Person

Richard Surber was appointed to the Company's board of directors in June
1992 and was appointed as its chief executive officer in March 1994. He was
appointed as the Company's president on May 6, 1996 and served a prior term as
the Company's president from March 1994 to August 1995. Mr. Surber was the
Company's secretary from June 1992 to March 1994. Since 1991, Mr. Surber has
been a professional consultant for various public and private companies. Mr.
Surber is a graduate of the University of Utah College of Law where he obtained
his juris doctorate. Mr.Surber also obtained a Bachelors of Science degree in
Finance from the University of Utah School of Business. Mr. Surber is also a
director of several other public and private corporations. For more information
on Mr. Surber, see "Item 12. Certain Relationships and Related Transactions."

Gerald Einhorn was appointed in October 1998 as a Director, Vice-President
and Secretary of the Company. He has been employed by the Company in its Legal
department since February 1996 as an attorney, working in the areas of real

<PAGE>

estate, corporate and securities matters. Prior to that time Mr. Einhorn was
self employed for more than 20 years in Long Island, New York as a wholesale
distributor of fresh produce and frozen foods to retail and institutional end
users. He is a member of the New York Bar and practiced law in New York State
for a period of 10 years before entering the food distribution business.

Adrienne Bernstein was appointed to the board of directors in September
1996. Ms. Bernstein is also an employee of the Company who has been responsible
for managing the Company's East Coast real estate holdings for the past two
years. From 1988 to 1994, Ms. Bernstein was the assistant director of the human
resources department for the Love Stores, a chain of retail health and beauty
stores. In this capacity, Ms. Bernstein was responsible for hiring and training
all employees and for preparing management and employee seminars. Prior to her
position with the Love Stores, Ms. Bernstein served as a vice president for
Leucadia National Corporation, a publicly traded company specializing in
finance, insurance, and manufacturing. In this capacity, Ms. Bernstein's primary
emphasis involved real estate management and sales activities.

Allen Wolfson has never been named as an officer or director of the
Company. He does, however, have significant influence and "control" (as defined
in Rule 12b-2 of the Securities Exchange Act of 1934) over the affairs of the
Company by virtue of Mr. Wolfson's beneficial ownership of over 5% of the
Company's Common Stock and the potential influence Mr. Wolfson has with respect
to the Company's day to day operations in his role as the primary finder of
potential transactions for the Company and primary business consultant to the
Company. For more information on Mr. Wolfson, see "Item 12. Certain
Relationships and Related Transactions."

Mr. Wolfson is the uncle of Richard Surber, the Company's chief executive
officer, president and director. Mr. Wolfson obtained a B.S. in Marketing from
the University of Southern Florida in 1968 and in 1970 he graduated with an M.A.
in Distributive Vocational Education. Mr. Wolfson has worked 59 credit hours
toward an M.B.A. from Troy State University in Montgomery, Alabama. He has also
been a licensed general contractor and a real estate agent and developer. Mr.
Wolfson has been the sole owner of A-Z Professional Consultants, Inc. since
April 11, 1990 and has been a professional consultant for various public and
private companies for 20 years. A-Z has been a consultant to the Company since
1992 and has been a significant beneficial owner of the Company's Common Stock
since that time. A-Z locates potential business opportunities, primarily related
to real estate transactions, on behalf of the Company and advises the Company's
board of directors with respect to corporate objectives. A-Z also advises the
Company with respect to its day to day operations including issues involving
personnel, financing, corporate structure and management. While Mr. Wolfson has
no formal authority to act on behalf of the Company, the influence he exerts on
the Company through this consulting arrangement gives Mr. Wolfson potential
control over the Company's operations. For more information on Mr. Wolfson, see
"Item 12. Certain Relationships and Related Transactions."

In 1986, Mr. Wolfson was convicted of violating 18 U.S.C. ss.371; 18 U.S.C.
ss.ss.1001 and 1002; and 18 U.S.C. ss.ss.1014 and 1002 in the U.S. District
Court for the Middle District of Florida, Tampa Division (the "Florida Court").
Mr. Wolfson was on probation for these offenses until January 23, 1999. For more
information about these offenses, see "Item 9. Directors, Executive Officers,
Promoters and Control Persons; Compliance with Section 16(a) of the Exchange
Act" in the Company's 1997 Form 10-KSB.

On October 9, 1996, the Securities and Exchange Commission initiated
administrative proceedings against Mr. Wolfson based upon allegations that he
violating Section 10b of the Securities Exchange Act of 1934 in the Southern
District of New York. The allegations involved a payment allegedly made to an
undercover agent of the Federal Bureau of Investigation, who was posing as a
broker, for the purchase of stock in an unaffiliated corporation. The
administrative matter is still pending, but no material developments have
occurred since it was filed in October 1996.

<PAGE>

Compliance with Section 16(a) of the Exchange Act
- -------------------------------------------------

Based solely upon a review of Forms 3, 4 and 5 furnished to the Company,
the Company is not aware of any person who at any time during the fiscal year
ended December 31, 1998 was a director, officer, or beneficial owner of more
than ten percent of the Common Stock of the Company, and who failed to file, on
a timely basis, reports required by Section 16(a) of the Securities Exchange Act
of 1934 during such fiscal year.

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 years 1996 to 1998. The
following table and the accompanying notes provide summary information for each
of the last three fiscal years concerning cash and non-cash compensation paid or
accrued by Richard Surber, the Company's chief executive officer for the past
three years.

SUMMARY COMPENSATION TABLE

Annual Compensation Long Term Compensation
Awards Payouts
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Restricted Securities
Name and Other Annual Stock Underlying LTIP All Other
Principal Year Salary Bonus Compensation Award(s) Options payouts Compensation
Position ($) ($) ($) ($) SARs(#) ($) ($)
Richard Surber 1998 45,008 500 -- -- -- -- --
Chief 1997 38,000 1,787 -- -- -- -- --
Executive 1996 36,923 -- -- -- -- -- --
Officer
</TABLE>

Compensation of Directors
- -------------------------

The Company's directors are each compensated through the payment of $300
for each meeting the board of directors which they attend. This constitutes the
sole consideration paid to the Company's directors for their services as
directors.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information concerning the ownership
of the Company's Common Stock as of April 14, 1999, with respect to: (i) each
person known to the Company to be the beneficial owner of more than five percent
of the Company's Common Stock; (ii) all directors; and (iii) directors and
executive officers of the Company as a group. The notes accompanying the
information in the table below are necessary for a complete understanding of the
figures provided below. As of April 14, 1999, there were 3,042,673 shares of
Common Stock issued and outstanding.

Name and Address of Beneficial Amount and Nature of
Title of Class Owner BeneficialPercent of class Percent of Class
-------------- ------------------------------ -------------------------- ----------------

Common Stock Allen Wolfson 173,250** 5.7%
($0.001 par value) 268 West 400 South, Suite 306
Salt Lake City, Utah 84101

23
<PAGE>

Common Stock Gerald Einhorn, Director 0 *
($0.001) par value 268 West 400 South, Suite 300
Salt Lake City, Utah 84101

Common Stock Adrienne Bernstein, Director 3,704 *
($0.001) par value 268 West 400 South, Suite 300
Salt Lake City, Utah 84101

Common Stock Richard D. Surber, Director 198,364 6.5%
($0.001) par value 268 West 400 South, Suite 300
Salt Lake City, Utah 84101
Common Stock Directors and Executive Officers 202,068 6.6%
($0.001) par value as a Group (3 individuals)
</TABLE>

* Ownership represents less than 0.1% of the Common Stock.

** This amount includes shares owned by A-Z Professional Consultants, Inc., a
Utah corporation whose sole shareholder is Allen Wolfson.

On September 17, 1996, the Company issued a 6.0% Convertible Debenture with
a face amount of $300,000 (the "Debenture") to Legong Investments pursuant to an
Offshore Securities Subscription Agreement. The Debenture may be converted into
the Company's Common Stock. The conversion price of the Debenture is seventy
percent (70%) of the average closing bid prices for the Common Stock during the
five days immediately proceeding conversion. The Debenture matured on September
16, 1997. At maturity, the Company had the option of paying the face amount of
the Debenture, plus accrued interest, in either cash or by issuing shares of
Common Stock in accordance with the conversion price set forth above. As of
April 14, 1999, Legong had converted $40,000 of the face amount of the debenture
into 199,426 shares of Common Stock. If Legong fully converted the Debenture on
April 14, 1999 and the conversion price was based upon the closing bid price on
that day Legong would be entitled to approximately 977,443 shares excluding
accrued interest. Consequently, Legong would own approximately 24.3% of the
total number of shares which would be outstanding if the Debenture were fully
converted. Nonetheless, the Company is taking the position that its owes
$260,000 plus accrued interest in cash until such time as the Company and Legong
come to a mutual agreement on the amount owed to Legong. The Company intends to
reject any notice to convert the Debenture into shares of the Company until a
final settlement number can be reached.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions with Allen Wolfson

During the last two years, the Company has had an ongoing business
relationship with A-Z Professional Consultants, Inc., a Utah corporation ("A-Z")
whose sole shareholder is Allen Wolfson. Mr. Wolfson may be deemed to be a
"control person" of the Company (as that term is defined in Rule 12b-2
promulgated under the Securities Exchange Act of 1934) by virtue of Mr.
Wolfson's beneficial ownership of over 5% of the Company's Common Stock and the
potential influence Mr. Wolfson has with respect to the Company's day to day
operations in his role as the primary finder of potential transactions for the
Company and primary business consultant to the Company. Mr. Wolfson is also the
uncle of Richard Surber, the Company's president, chief executive officer and
director. Because of the nature of Mr. Wolfson's relationship with the Company,
the following transactions may be considered related party transactions. For
more information on Mr. Wolfson, see "Item 9. Directors, Executive Officers,
Promoters and Control Persons; Compliance with Section 16(a) of the Exchange
Act."

A-Z works as an independent consultant to the Company whose primary function
is to locate potential transactions on the Company's behalf and to present them
to the Company's management. A-Z has served the Company in this capacity since
1992. During 1998, A-Z performed services on the Company's behalf primarily
involving locating potential transactions for the purchase and sale of the
Company's real estate holdings.

The Company does not currently have any formal consulting arrangement with
A-Z, aside from providing A-Z with office space. The Company has, instead,
agreed to further compensate A-Z on a transaction by transaction basis. During

24
<PAGE>

1998, A-Z was instrumental in several transactions involving the purchase, sale
and financing of real estate holdings by the Company and its subsidiaries.
However, A-Z waived any fees owed to it by the Company.

In 1997, the Company executed a promissory note in favor of A-Z to evidence
$134,844 in accrued liability owed to A-Z. This note was convertible, at the
Company's option, into shares of the Company's Common Stock at $0.125 per share,
for a total of 1,200,000 shares of Common Stock. However, the Company chose to
pay the note in cash. As of December 31, 1998, the Company had paid the note in
full. Additionally, the Company lent A-Z an additional $326,079 in an effort to
assist A-Z in procuring additional consulting business for the Company.

In addition to services performed on behalf of the Company, A-Z provides
consulting services to other clients, some of whom are also financial consulting
clients of the Company. The Company has allowed this arrangement to occur
because the Company has generated much of its business as a result of clients
introduced to it by A-Z and because the services performed by A-Z are often
different from and supplementary to the financial consulting services performed
by the Company. During 1998, A-Z generated substantial revenues from the
Company's clients. The transactions pursuant to which A-Z generated such
revenues were either authorized or ratified by a disinterested majority of the
Company's board of directors.

Cyberstate, Inc., a consolidated subsidiary, executed a contract to sell a
condominium unit to Allen Wolfson for a price of $65,000 on October 10, 1997.
The parties subsequently agreed to rescind the purchase. A disinterested
majority of the Company's board of directors authorized this transaction with
Mr. Wolfson based upon its belief that this was the only manner pursuant to
which the acquisition of the New Brigham Building could be effected. However,
Cyberstate was able to acquire the New Brigham Building without the proceeds
from the sale to Mr. Wolfson. Consequently, a majority of the Company's
disinterested board of directors authorized the recission of the purchase
contract. For more information on this transaction, see "Item 2. Description of
Property" in this report and for additional information see "Item 12. Certain
Relationships and Related Transactions" in the Company's Form 10-KSB for the
year ended December 31, 1997.

On February 1, 1999, Allen Z. Wolfson entered into a Consulting Agreement
with AmeriResource Technologies, Inc.("ARET") to provide various consulting
services. ARET is also a client of Hudson Consulting Group, Inc., a consolidated
subsidiary of the Company. Pursuant to the Consulting Agreement, Mr. Wolfson
received 20,000,000 shares of ARET common stock valued at approximately $0.005 a
share or $100,000. Mr. Wolfson disclosed this transaction to the disinterested
members of the board and obtained their prior approval.

Transactions involving Richard Surber

Effective August 1997, Canton Financial Services Corporation, a consolidated
subsidiary of the Company, executed a lease agreement with Mr. Surber pursuant
to which Mr. Surber is leasing an interest in a condominium project to the
Company. The condominium is located in Brian Head, Utah, in close proximity to
other condominiums owned by the Company's subsidiaries. The lease has a term of
five years which expires on August 29, 2003. Mr. Surber purchased the
condominium in August 1997 by assuming existing financing on the building with a
then-current principal balance of $74,814. The lease provides for monthly rental
and related payments of $900, of which $857 are paid directly on the note
assumed by Mr. Surber. CFSC has an option to purchase the condominium for a
price of $84,814 which is reduced monthly to the extent that lease payments made
by CFSC have reduced the total principal due on the note assumed by Mr. Surber.
However, in the event that the value of the condominium appreciates and CFSC has
arranged a sale of the condominium prior to exercise of the option, then the
option price shall be the greater of $84,814 or 10% of the total sales price for
the transaction CFSC has arranged.

CFSC entered this lease-option arrangement because it was unable to obtain
sufficient financing to acquire the condominium at the time the unit was
available. This arrangement allowed CFSC to obtain beneficial ownership of the
condominium through a capital lease. CFSC provided Mr. Surber with financial

25
<PAGE>

incentives to enter this arrangement in order to compensate him for assuming
personal liability on the financing. Mr. Surber's interest in this transaction
is two-fold. First, Mr. Surber receives a monthly fee of $43, which equals the
amount by which monthly payments due to Mr. Surber exceed the amounts due under
the note on the property. Second, Mr. Surber will receive a lump sum of not less
than $10,000 in the event that the option on the condominium is exercised by
CFSC. Because Mr. Surber is the only officer and director of CFSC, a
disinterested majority of the Company's board of directors authorized the
formation and execution of this lease agreement.

Cyberstate also executed a contract to sell a condominium unit to Richard
Surber for a price of $75,000 on October 10, 1997. The parties subsequently
agreed to rescind the purchase. A disinterested majority of the Company's board
of directors authorized this transaction with Mr. Surber based upon its belief
that this was the only manner pursuant to which the acquisition of the New
Brigham Building could be effected. However, Cyberstate was able to acquire the
New Brigham Building without the proceeds from the sale to Mr. Surber.
Consequently, a majority of the Company's disinterested board of directors
authorized the recission of the purchase contract. For more information on this
transaction, see "Item 2. Description of Property" in this report and for
additional information see "Item 12. Certain Relationships and Related
Transactions" in the Company's Form 10-KSB for the year ended December 31, 1997.

Over the course of several years Mr. Surber has made periodic cash advances
to the Company. On March 31, 1998, the Company executed a promissory note for
$47,294.55 for balance owing to Mr, Surber at that time. The note bore simple
interest at the rate of 22% per annum. The entire unpaid principal balance and
accrued interest was payable on demand but no later than March 31, 2003. As of
December 31, 1998, the Company paid the note down to $1,968 .

On February 1, 1999, Richard Surber entered into a Consulting Agreement with
AmeriResource Technologies, Inc.("ARET") to provide various consulting services.
ARET is also a client of Hudson Consulting Group, Inc., a consolidated
subsidiary of the Company. Pursuant to the Consulting Agreement, Mr. Surber
received 20,000,000 shares ARET valued at approximately $0.005 a share or
$100,000. Mr. Surber disclosed this transaction to the disinterested members of
the board and obtained the board of directors prior approval.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits. Exhibits required to be attached by Item 601 of Regulation S-B are
listed in the Index to Exhibits beginning on page 29 of this Form 10-KSB,
which is incorporated herein by reference.

(b) Reports on Form 8-K. On January 15, 1998 the Company filed a Form 8-K
disclosing the issuance of 111,113 shares of Common Stock pursuant to
Regulation S. On April 6, 1998 the Company filed a Form 8-K disclosing the
resignation of its independent auditor Andersen, Andersen & Strong, L.C.,
disclosed on the same Form 8-K was the engagement of Crouch, Bierworf &
Chishom as the Company's new independent auditor. On May 11, 1998, the
Company filed a report on Form 8-K disclosing the issuance of 272,000 shares
of Common Stock pursuant to Regulation S. On June 1, 1998, the Company filed
a report on Form 8-K disclosing the Company's suspension from trading on the
Boston Stock Exchange for failure to meet the minimum market value float
requirements. On December 23, 1998, the Company filed a Form 8-K disclosing
the execution of an Aquisition Agreement with Innovative Property
Development Corporation ("IPDC") resulting in an internal reorganization and
transfer of shares in nine corporations to IPDC. On April 15, 1999, the
Company filed an amendment to the Form 8K filed on December 23, 1998.

[THIS SPACE LEFT INTENTIONALLY BLANK]

26
<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 15th day of April 1999.

CyberAmerica Corporation

/s/ Richard Surber
-----------------------------------------------------
Richard Surber, President and Chief Executive Officer

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 Surber President, Chief Executive fficer April 15, 1999
- ------------------ and Director
Richard Surber

/s/ Wayne Newton Controller April 15, 1999
- ----------------
Wayne Newton

/s/ Gerald Einhorn Vice-President, Director April 15, 1999
- ------------------
Gerald Einhorn

/s/ Adrienne Bernstein Director April 15, 1999
- ----------------------
Adrienne Bernstein

27
<PAGE>

INDEX TO EXHIBITS

EXHIBIT PAGE
NO. NO. DESCRIPTION

2 * Articles of Merger of The Canton Industrial
Corporation (an Ohio corporation) into The
Canton Industrial Corporation (a Nevada
corporation), filed in Nevada on May 3, 1993
(incorporated by reference from Exhibit No. 2
of the Company's Form 10-KSB for the year ended
December 31, 1993).

3(i) * Articles of Incorporation of the Company (note
that these were amended by the Articles of
Merger constituting Exhibit 2 to this Form
10-KSB) (incorporated herein by reference from
Exhibit No. 3(i) to the Company's Form 10-KSB
for the year ended December 31, 1993).

3(ii) * Bylaws of the Company, as amended (incorporated
herein by reference from Exhibit 3(ii) of the
Company's Form 10 KSB for the year ended
December 31, 1995).

4(a) * Form of certificate evidencing shares of
"Common Stock" in the Company (incorporated
from Exhibit 4(a) to the Company's Annual
Report on Form 10-KSB for the year ended
December 31, 1994).

4(b) * Form of certificate evidencing shares of
"Preferred Stock" in the Company (incorporated
herein by reference from Exhibit No. 4(b) to
the Company's Form 10-KSB for the year ended
December 31, 1993).

MATERIAL CONTRACTS

10(i)(a) 30 Acquisition Agreement between the Company's
majority owned subusidiary Innovative Property
Development Corp. And Diversified Holdings - I,
Inc., dated April 2, 1999.

10(i)(b) 43 Real Estate Purchase Agreement between Oasis
International Hotel & Casino, Inc., a
consolidated subsidiary of the Company, and
Pienne Chow Sau Har, dated December 21, 1998,
regarding the sale of a one-half interest in
1.45 acres in Oasis, Nevada.

10(i)(c) 48 Real Estate Purchase Agreement between Oasis
International Hotel & Casino, Inc., a
consolidated subsidiary of the Company, and
Oasis Fields, L.L.C. regarding the sale of 2.45
acres in Oasis, Nevada.

10(i)(d) 53 Acquisition Agreement between the Company and
Innovative Property Development Corp., dated
October 30, 1998.

10(i)(e) 66 Assignment of Real Estate Purchase Contract
between CyberState, Inc., a consolidated
subsidiary of the Company, and Canton's
Commercial Carpet Corporation, a consolidated
subsidiary of the Company, regarding the
acquisition of the New Brigham Apartment
Complex in Ogden, Utah.

10(i)(f) 67 Consulting Agreement between Allen Wolfson and
AmeriResource Technologies, Inc.

<PAGE>

10(i)(g) 84 Consulting Agreement between Richard Surber and
AmeriResource Technologies, Inc.

10(i)(h) * Stock Acquisition Agreement between TAC, Inc.,
a consolidated subsidiary of the Company, and
Golden Opportunity Development Corporation
regarding the acquisition of the General
Lafayette Inn in Baton Rouge, Louisiana
(incorporated herein by reference from Exhibit
No. 10(i)(a) to the Company's Form 10-QSB for
the period ended March 31, 1998).

10(i)(i) * Real Estate Purchase Agreement between Oasis
International Hotel & Casino, Inc., a
consolidated subsidiary of the Company, and
Oasis Hotel, Resort & Casino - III, Inc.
regarding the sale of 18.289 acres in Oasis,
Nevada (incorporated herein by reference from
Exhibit No. 10(i)(b) to the Company's Form
10-QSB for the period ended March 31, 1998).

10(i)(j) * Lease Agreement between the Company's
consolidated subsidiary, Canton Financial
Services Corporation, and Richard Surber, dated
August 29, 1997, pursuant to which the
Company's subsidiary has leased a condominium
unit from Mr. Surber (incorporated herein by
reference from Exhibit Number 10(i)(a) of the
Company's Form 10-KSB for the period ended
December 31, 1997).

10(i)(k) * Real Estate Purchase Contract between the
Company's wholly owned subsidiary, Cyberstate,
Inc., and Richard Surber, dated October 10,
1997, pursuant to which Cyberstate will sell a
condominium unit in the New Brigham Building
subject to closing of Cyberstate's purchase and
successful application to convert the New
Brigham Building into condominium units
(incorporated herein by reference from Exhibit
Number 10(i)(c) of the Company's Form 10-KSB
for the period ended December 31, 1997).

10(i)(l) * Promissory Note executed by the Company in
favor of Richard Surber, dated March 25, 1998
(incorporated herein by reference from Exhibit
Number 10(i)(c) of the Company's Form 10-KSB
for the period ended December 31, 1997).

10(i)(m) * Offshore Securities Subscription Agreement for
a 6.0% Convertible Debenture sold to Legong
Investments on September 16, 1996 (incorporated
herein by reference from Exhibit No. 10(i)(a)
to the Company's Form 10-QSB for the period
ended September 30, 1996).

27 101 Financial Data Schedule.

* Previously filed as indicated and incorporated herein by reference from the
referenced filings previously made by the Company.

ACQUISITION AGREEMENT

BETWEEN

Diversified Holdings I, Inc.

AND

INNOVATIVE PROPERTY DEVELOPMENT CORP.

<PAGE>

ACQUISITION AGREEMENT
TABLE OF CONTENTS

Purchase and Sale..............................................................2

Purchase Price ................................................................2

Warranties and Representations of IPDC and Sellers.............................2

Warranties and Representations of DHI .........................................5

Term ..........................................................................7

The DHI Shares ................................................................8

Conditions Precedent to Closing ...............................................8

Termination ...................................................................9

Exhibits.......................................................................9

Miscellaneous Provisions ......................................................9

Closing .......................................................................9

Governing Law ................................................................10

Counterparts .................................................................10

<PAGE>

ACQUISITION AGREEMENT
---------------------

THIS ACQUISITION AGREEMENT dated April 2, 1999, by, between and among
Diversified Holdings I, Inc., a Nevada Corporation ("DHI"), and Innovative
Property Development Corp, a Utah corporation, ("IPDC").

WHEREAS, IPDC owns an interest in several corporations through its
holdings in the common stock of such corporations, several are 100% owned by
IPDC and in others a less than 100% interest is held; and

WHEREAS, IPDC desires to sell and DHI desires to purchase one hundred
(100%) percent of such shares;

NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties hereby agree as
follows:

I. Purchase and Sale. IPDC hereby agree to sell, transfer, assign and
convey to DHI and DHI hereby agrees to purchase and acquire from IPDC,
one hundred (100%) percent of IPDC's issued and outstanding common
stock in each of the named corporations set forth in Exhibit "A" as
attached hereto (the "IPDC Transfer Shares"), in a reorganization that
is intended to be a tax-free exchange of shares of stock.

II. Purchase Price. The aggregate purchase price to be paid by DHI for the
IPDC Common Shares shall be 982,528 shares of IPDC voting common stock
and 222,220 shares of DHI voting common stock (the "DHI Purchase
Shares"). DHI is aware and agrees to allow Oasis International Hotel &
Casino Inc., a corporation listed on Exhibit "A" hereto, to assign and
transfer the promissory note, and related security, it holds from Oasis
Hotel, Resort & Casino III, Inc. in the original amount of $3,425,000
and dated May 11, 1998 to IPDC. IPDC further agrees to transfer to DHI
1,000,000 shares of its Preferred Stock.

III. Warranties and Representations of IPDC. In order to induce DHI to enter
into the Agreement and to complete the transaction contemplated hereby,
IPDC warrants and represents to DHI that:

A. Organization and Standing. IPDC is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Utah, is qualified to do business as a
foreign corporation in every other state or jurisdiction in
which it operates to the extent required by the laws of such
states and jurisdictions, and has full power and authority to
carry on its business as now conducted and to own and operate
its assets, properties and business. Attached hereto as
Exhibit "C" are true and correct copies of IPDC's Certificate
of Incorporation, amendments thereto and all current By laws
of IPDC. No changes thereto will be made in any of the Exhibit
"C" documents before the Closing.

<PAGE>

B. Capitalization. As of April 1, 1999, the IPDC Transfer Shares
constitute one hundred (100%) percent of the equity capital of
IPDC in each of the corporations listed on Exhibit "A", which
includes, inter alia, one hundred (100%) percent of IPDC's
voting power, right to receive dividends, when, as and if
declared and paid, and the right to receive the proceeds of
liquidation attributable to common stock, if any.

C. Ownership of the IPDC Transfer Shares. As of the Date hereof,
IPDC is the sole owner of the IPDC Transfer Shares, free and
clear of all liens, encumbrances and restrictions of any
nature whatsoever, except by reason of the fact that the IPDC
Transfer Shares will not have been registered under the `'33
Act, or any applicable State Securities laws.

D. Taxes. IPDC has filed all federal, state and local income or
other tax returns and reports that it is required to file with
all governmental agencies, wherever situate, and has paid or
accrued for payment all taxes as shown on such returns, such
that a failure to file, pay or accrue will not have a material
adverse effect on IPDC or the corporations listed in Exhibit
A.

E. Pending Actions. There are no material legal actions,
lawsuits, proceedings or investigations, either administrative
or judicial, pending or threatened, against or affecting IPDC
and the corporations that are the subject of this agreement as
listed in Exhibit A, or that arise out of the operation of
those corporations, except as described in Exhibit "D"
attached hereto. IPDC is not in violation of any law, material
ordinance or regulation of any kind whatever, including, but
not limited to laws, rules and regulations governing the sale
of its products, the `33 Act, the Securities Exchange Act of
1934, as amended (the "34 Act") the Rules and Regulations of
the U.S. Securities and Exchange Commission ("SEC"), or the
Securities Laws and Regulations of any state.

F. Governmental Regulation. The Corporations listed in Exhibit
"A" hold the licenses and registrations set forth on Exhibit
"E" hereto from the jurisdictions set forth therein, which
licenses and registrations are all of the licenses and
registrations necessary to permit those Corporations to
conduct their current business. All of such licenses and
registrations are in full force and effect, and there are no
proceedings, hearings or other actions pending that may affect
the validity or continuation of any of them. No approval of
any other trade or professional association or agency of
government other than as set forth on Exhibit "E" is required
for any of the transactions effected by this Agreement, and
the completion of the transactions contemplated by the
Agreement will not, in and of themselves, affect or jeopardize
the validity or continuation of any of them.

G. Ownership of Assets. Except as set forth in Exhibit "F", IPDC
has good, marketable title, without any liens or encumbrances
of any nature whatever, to all of the shares listed in Exhibit
"A".

<PAGE>

H. No Interest in Suppliers, Customers, Landlords or Competitors.
Neither the Shareholders nor any member of their families have
any interest of any nature whatever in any supplier, customer,
landlord or competitor of IPDC or the Corporations listed in
Exhibit "A".

I. No Debt Owed by IPDC to Shareholders. Except as set forth in
Exhibit "G" IPDC does not owe any money, securities, or
property to either the Shareholders or any member of the
families or to any company controlled by such a person,
directly or indirectly. To the extent that IPDC may have any
undisclosed liability to pay any sum or property to any such
person or entity or any member of their families such
liability is hereby forever irrevocably released and
discharged.

J. Corporate Records. All of IPDC's books and records, including,
without limitation, its books of account, corporate records,
minute book, stock certificate books and other records of IPDC
are up-to-date, complete and reflect accurately and fairly the
conduct of its business in all material respects since its
date of incorporation.

K. No Misleading Statements or Omissions. Neither the Agreement
nor any financial statement, exhibit, schedule or document
attached hereto or presented to DHI in connection herewith,
contains any materially misleading statement, or omits any
fact or statement necessary to make the other statements or
facts therein set forth not materially misleading.

L. Validity of the Agreement. All corporate and other proceedings
required to be taken by IPDC in order to enter into and to
carry out the Agreement have been duly and properly taken. The
Agreement has been duly executed by IPDC, and constitutes the
valid and binding obligation of IPDC, except to the extent
limited by applicable bankruptcy, reorganization, insolvency,
moratorium or other laws relating to or affecting generally
the enforcement of creditors rights. The execution and
delivery of the Agreement and the carrying out of its purposes
will not result in the breach of any of the terms or
conditions of, or constitute a default under or violate IPDC's
Certificate of Incorporation or document of undertaking, oral
or written, to which IPDC is a party or is bound or may be
affected, nor will such execution, delivery and carrying out
violate any order, writ, injunction, decree, law, rule or
regulation of any court, regulatory agency or other
governmental body; and the business now conducted by IPDC
and/or those corporations listed in Exhibit A can continue to
be so conducted after completion of the transaction
contemplated hereby.

M. Enforceability of the Agreement. When duly executed and
delivered, the Agreement and the Exhibits hereto which are
incorporated herein and made a part hereof are legal, valid,
and enforceable by DHI according to their terms, except to the
extent limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other laws relating to or affecting
generally the enforcement of creditors rights and that at the

<PAGE>

time of such execution and delivery, DHI will have acquired
title in and to the Transfer Shares listed in Exhibit "A" free
and clear of all claims, liens and encumbrances.

N. Access to Books and Records. DHI will have full and free
access to the books of those corporations listed in Exhibit
"A" during the course of this transaction prior to Closing,
during regular business hours.

O. IPDC's Financial Statements. IPDC's Balance Sheet and Profit
and Loss statement for the year ended December 31, 1998,
attached hereto as Exhibit "H", accurately describe IPDC's
financial position as of the dates thereof. Within 30 days
after the Closing. IPDC will provide DHI with certified
financial statements for the necessary periods to file a Form
10 or Form 10SB, if required. These financial statements shall
be prepared in accordance with generally accepted accounting
principles in the United States ("GAAP") (or as permitted by
regulation S-X, S-B and/or the rules promulgated under the
`33' act and the 34' act and certified by independent
certified public accountants with substantial SEC experience.)

IV. Warranties and Representations of DHI. In order to induce IPDC to enter
into the Agreement and to complete the transaction contemplated hereby,
DHI warrants and represents to IPDC and Sellers that:

A. Organization and Standing. DHI is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Nevada, is qualified to do business as a
foreign corporation in every other state in which it operates
to the extent required by the laws of such states, and has
full power and authority to carry on its business as now
conducted and to own and operate its assets, properties and
business.

B. Capitalization DHI's entire authorized equity capital consists
of shares of voting common stock, $.001 par value. As of the
Closing, DHI will have 20,000,000 shares Common Stock, $.001
par value, authorized, of which 2,000,000 shares of voting
common stock of DHI will be issued and outstanding, which does
not include the 222,220 shares being issued to IPDC hereunder
pursuant to Section 4(2) of the `33 Act of the issuance at
closing. Upon issuance, all of the DHI Common Stock will be
validly issued fully paid and non-assessable. The relative
rights and preferences of DHI's equity securities are set
forth in the Articles of Incorporation, as amended and DHI's
By-Laws (Exhibit "I" hereto). Except as set forth above, there
are no voting or equity securities convertible into voting
stock, and no outstanding subscriptions, warrants, calls,
options, rights, commitments or agreements by which DHI is
bound, calling for the issuance of any additional shares of
common stock or any other voting or equity security. The
By-Laws of DHI provide that a simple majority of the shares
voting at a stockholders' meeting at which a quorum is present
may elect all of the directors of DHI. Cumulative voting is
not provided for by the By-Laws or Articles of Incorporation

<PAGE>

of DHI. Accordingly, as of the Closing the 222,220 shares
being issued to and acquired by IPDC will constitute
approximately nine and 9/10 percent (9.9%) of the Common
Shares of DHI which will then be issued and outstanding, which
includes inter alia, that same percentage of DHI's voting
power, right to receive dividends, ---------- when, as and if
declared and paid, and the right to receive the proceeds of
liquidation attributable to common stock, if any.

C. Ownership of Shares. By DHI's issuance of the DHI Common
Shares to IPDC pursuant to the Agreement, the Shareholders
will thereby acquire good absolute marketable title thereto,
free and clear of all liens, encumbrances and restrictions of
any nature whatsoever, except by reason of the fact that such
DHI shares will not have been registered under the `33 Act.

D. Significant Agreements. DHI is not and will not at Closing be
bound by any of the following, unless specifically listed in
Exhibit "J" hereto:

1. Employment, advisory, or consulting contract;

2. Plan providing for employee benefits of any nature;

3. Lease with respect to any property or equipment;

4. Contract of commitment for any future expenditure in
excess of $100.

5. Contract or commitment pursuant to which it has
assumed, guaranteed, endorsed, or otherwise become
liable for any obligation of any other person, firm or
organization;

6. Contract, agreement, understanding, commitment or
arrangement, other than in the normal course of
business, not fully disclosed or set forth in the
Agreement;

7. Agreement with any person relating to the dividend,
purchase or sale of securities, that has not been
settled by the delivery of payment of securities when
due, and which remains unsettled upon the date of the
Agreement.

E. Taxes. DHI has filed all federal, state and local income or
other tax returns and reports that it is required to file with
all governmental agencies, wherever situate. All of such
returns are true and complete.

F. Liabilities. At and as of the Closing Date, DHI will have a
total of approximately $1,000 in current and long-term
liabilities, exclusive of the costs, including legal and
accounting fees and other expenses, in connection with this
transaction.

<PAGE>

G. No Pending Actions. There are no legal actions, lawsuits,
proceedings or investigations, either administrative or
judicial, pending or threatened, against or affecting DHI, or
against any of DHI's officers or directors and arising out of
their operation of DHI. DHI has been in compliance with, and
has not received notice of violation of any law, ordinance or
regulation of any kind whatever, including, but not limited
to, the `33 Act, the `34 Act, the Rules and Regulations of the
SEC or the Securities Laws and Regulations of any state. DHI
is not now and never has been required to file reports under
the `33 Act or the `34 Act.

H. Corporate Records. All of DHI's books and records, including
without limitation, its book of account, corporate records,
minute book, stock certificate books and other records are
up-to-date, complete and reflect accurately and fairly the
conduct of its business in all respects since its date of
incorporation.

I. No Misleading Statements or Omissions. Neither the Agreement
nor any financial statement, exhibit, schedule or document
attached hereto or presented to IPDC in connection herewith
contains any materially misleading statement, or omits any
fact or statement necessary to make the other statements of
facts therein set forth not materially misleading.

J. Validity of the Agreement. All corporate action and
proceedings required to be taken by DHI in order to enter into
and to carry out the Agreement have been duly and properly
taken. The Agreement has been duly executed by DHI, and
constitutes a valid and binding obligation of DHI. The
execution and delivery of the Agreement and the carrying out
of its purposes will not result in the breach of any of the
terms or conditions of, or constitute a default under or
violate, DHI's Certificate of Incorporation or By-Laws, or any
agreement, lease, mortgage, bond, indenture, license or other
document or undertaking, oral or written, to which DHI is a
party or is bound or may be affected, nor will such execution,
delivery and carrying out violate any order, writ, injunction,
decree, law, rule or regulation of any court regulatory agency
or other governmental body.

K. Enforceability of the Agreement. When duly executed and
delivered, the Agreement and the Exhibits hereto which are
incorporated herein and made a part hereof are legal, valid,
and enforceable by IPDC according to their terms, and that at
the time of such execution and delivery, IPDC will have
acquired good, marketable title in and to the DHI Common
Shares acquired pursuant hereto, free and clear of all liens
and encumbrances.

L. Access to Books and Records. IPDC will have full and free
access to DHI's books and records during the course of this
transaction prior to and at the Closing.

M. DHI Financial Condition. Prior to the Closing, DHI will have
$1,000 in assets and $1,000 of liabilities.

<PAGE>

N. Stockholder Approval. Immediately upon the signing of the
Agreement, DHI will submit to its stockholders by meeting or
consent the matters described in section VII(B)(1) herein, if
required to do so under Nevada Corporate Law. IPDC agrees that
it will vote all of its DHI shares in favor of all items
submitted to DHI stockholders in accordance with the
Agreement.

V. Term. All representations, warranties, covenants and agreements made
herein and in the exhibits attached hereto shall survive the execution
and delivery of the Agreement and payment pursuant thereto.

VI. The DHI Shares. All o f the DHI Common Shares shall be validly issued,
fully-paid and non-assessable shares of DHI Common Stock, with full
voting rights, dividend rights, and the right to receive the proceeds
of liquidation, if any, as set forth in the respective Articles of
Incorporation.

VII. Conditions Precedent to Closing.

A. The obligations of IPDC under the Agreement shall be and are
subject to fulfillment, prior to or at the Closing of each of
the following conditions:

1. That DHI and its management representations and
warranties contained herein shall be true and
correct at the time of closing date as if such
representations and warranties were made at such
time;

2. That DHI and its management shall have performed or
complied with all agreements, terms and conditions
required by the Agreement to be performed or
complied with by them prior to or at the time of
Closing;

3. That DHI's stockholders, by proper and sufficient
vote, shall have properly approved all of the
matters described in Section VII(B)(1) herein, if
required to do so under Utah Corporate Law; and

B. The obligations of DHI under the Agreement shall be and are
subject to fulfillment, prior to, at the Closing or subsequent
to the Closing of each of the following conditions:

1. That DHI stockholders, if necessary by proper and
sufficient vote of its stockholders, shall have
approved the Agreement and the transactions
contemplated hereby and will have approved such
other changes as are consistent with the Agreement
for submission to DHI stockholders, if required to
do so under Utah Corporate Law;

2. That IPDC's representations and warranties
contained herein shall be true and correct at the

<PAGE>

time of Closing as if such representations and
warranties were made at such time; and

3. That IPDC shall have performed or complied with all
agreements, terms and conditions required by the
Agreement to be performed or complied with by it
prior to or at the time of Closing.

4. That the parties jointly and severally indemnify
and hold harmless DHI's former officers, directors,
agents and affiliates against any claims or
liabilities, including reasonable attorney's fees
and other reasonable defense costs incurred in
defending such claims or liabilities, resulting
from any claims or liabilities asserted against
them as to any material misrepresentation or
omissions in the Agreement made by any party
hereto.

VIII. Termination. The Agreement may be terminated at any time before or; at
Closing, by:

A. The mutual agreement of the parties;

B. Any party if:

1. Any provision of the Agreement applicable to a
party shall be materially
untrue or fail to be accomplished.

2. Any legal proceeding shall have been instituted or
shall be imminently threatening to delay, restrain
or prevent the consummation of the Agreement.

Upon termination of the Agreement for any reason, in accordance with the terms
and conditions set forth in this paragraph, each said party shall bear all costs
and expenses as each party has incurred and no party shall be liable to the
other.

IX. Exhibits. All Exhibits attached hereto are incorporated herein by this
reference as if they were set forth in entirety.

X. Miscellaneous Provisions. This Agreement is the entire agreement
between the parties in respect of the subject matter hereof, and there
are no other agreements, written or oral, nor may the Agreement be
modified except in writing and executed by all of the parties hereto.
The failure to insist upon strict compliance with any of the terms,
covenants or conditions of the Agreement shall not be deemed a waiver
or relinquishment of such right or power at any other time or times.

XI. Closing. The Closing of the transactions contemplated by the Agreement
("Closing") shall take place at 1:00 P.M. on the first business day
after the stockholders of DHI approve this transaction, if approval is
required or on April 15, 1999, whichever is sooner, if shareholder

9
<PAGE>

approval is not required or can be obtained subsequent to closing by
shareholder ratification. The Closing shall occur at the offices of
IPDC located at 268 West 400 South, Salt Lake City, Utah 84101 or such
other date and place as the parties hereto shall agree upon. At the
Closing, all of the documents and items referred to herein shall be
exchanged.

XII. Governing Law. The Agreement shall be governed by and construed in
accordance with the internal laws of the State of Utah.

XIII. Counterparts. The Agreement may be executed in duplicate facsimile
counterparts, each of which shall be deemed an original and together
shall constitute one and the same binding Agreement, with one
counterpart being delivered to each party hereto.

IN WITNESS WHEREOF, the parties hereto have set their hands and seals
as of the date and year above first written.

Innovative Property Development Corp.

By: /s/ Richard D. Surber
-----------------------
Richard D. Surber

Its: President

Diversified Holdings I, Inc.

By: /s/ Gerald Einhorn
-------------------
Gerald Einhorn

Its: Vice-President

<PAGE>

INDEX TO EXHIBITS

Exhibit No. Description

A List of shares to be transferred by IPDC to DHI

B List of IPDC's stockholders

C IPDC's Certificate of Incorporation, as amended and
By-laws

D Pending Actions

E Licenses and registrations of IPDC

F Liens and encumbrances on IPDC's assets or property

G IPDC's liabilities

H IPDC's unaudited Financial Statements

I IPDC's Corporate Summary

J DHI's By-Laws

K Significant Agreements

REAL ESTATE PURCHASE AGREEMENT

PARTIES: Pienne Chow Sau Har - Buyer, an individual resident of Hong Kong,
China.

Oasis International Hotel & Casino, Inc. - Seller, a Nevada Corporation
with its offices located at 268 West 400 South, Suite 300, Salt Lake
City, Utah 84101.

PROPERTY: A one-half interest in 1.45 acres, designated as Parcel No. 1 as
shown on the Parcel Map for Oasis International Hotel and Casino,
Inc., filed in the office of the Elko County Recorder, Elko,
Nevada, at file no. 433771, located in a portion of Sections 2
and 3, Township 38 North, Range 66 East, M.D.B.&M., see Exhibit A
attached hereto.

Seller agrees to sell to Buyer and Buyer agrees to buy from Seller a
one-half interest in the property as set forth above upon the following terms
and conditions:

Price: Total purchase price shall be $300,000 for the
property as described herein above, the purchase price
to be paid as provided for at the time of closing.

Payment: The purchase price of $300,000 is to paid at closing
in cash or through the transfer of assignment of the
following: a) 31,250 shares of the common stock of
Oasis Hotel, Resort & Casino - I, Inc., a Nevada
corporation; b) 31,250 shares of the common stock of
Oasis Hotel, Resort & Casino - II, Inc., a Nevada
corporation and c) Secured Promissory Note, dated
February 1, 1996 in the amount of $160,000, maker
China Food & Beverage Company with Pienne Chow as
holder, the entire principal and interest remains due
and outstanding since October 1, 1997 the due date of
the note..

DEPOSIT: Within 10 calendar days of this agreement, both parties shall deposit
with an agreed and designated Escrow Holder, all funds and instruments necessary
to complete the sale in accordance with the terms hereof.

CLOSING: This transaction shall be closed on or before ten days from the date
hereof, or thereafter if extended by the agreement of both parties hereto.
Closing shall occur when: (a) Buyer and Seller have signed and delivered to an
escrow/title company all documents required by this Contract, by written escrow
instructions and by applicable law; and (b) the monies required to be paid under
these documents, have been delivered to the escrow/title company in the form of
cashier's check, collected or cleared funds. Seller and Buyer shall each pay
one-half (1/2) of the escrow Closing fees. Taxes and assessments for the current
year, rents, and interest on assumed obligations shall be prorated as set forth
in this Section. Prorations set forth in this Section shall be made as of the
date of Closing.

POSSESSION: Seller and Buyer shall have equal rights to possession upon closing.

Page 1 of 5
<PAGE>

BROKER & AGENTS: The parties hereby agree and acknowledge that each party is
liable for any payments to each parties respective brokers or agents.

EVIDENCE OF TITLE: Seller has, or shall have at Closing, fee title to the
Property and agrees to convey a one-half interest in such title to Buyer by
deed, free of financial encumbrances as warranted herein.

SELLER'S DISCLOSURES: Seller will deliver to Buyer the following Seller
Disclosures; (a) a copy of all loan documents relating to any loan now existing
which will encumber the Property after Closing; and (b) a copy of all leases
affecting the Property not expiring prior to Closing. Seller agrees to pay any
title commitment cancellation charges.

GENERAL CONTINGENCIES: Buyer's approval of the content of items referenced in
Seller's Disclosures and Buyer's inspection of the Property. Any inspection
shall be paid for by Buyer and shall be conducted by an individual/company of
Buyer's choice. Seller agrees to fully cooperate with such inspection and a
walk-though inspection of the Property as reasonably requested by the Buyer.
Buyer shall have 5 days after receipt of the content of Seller's
Disclosures to determine, if, in Buyer's sole discretion, the content of all
Seller Disclosures is acceptable.
If Buyer does not deliver a written objection to Seller regarding a
Seller Disclosure or the Property Inspection within the time provided above,
that document or inspection will be deemed approved or waived by Buyer.
If Buyer objects, Buyer and Seller shall have 10 calendar days after
receipt of the objections to resolve Buyer's objections. Seller may, but shall
not be required to, resolve Buyer's objections. If Buyer's objections are not
resolved within the 10 calendar days, Buyer may void this Contract by providing
written notice to Seller within the same 10 calendar days. If this contract is
not voided by Buyer, Buyer's objection is deemed to have been waived. However,
this waiver does not affect any other matters warranted by Seller.

CHANGES DURING TRANSACTION: Seller agrees that no changes in any existing leases
shall be made, no new leases entered into, and no substantial alterations or
improvements to the Property shall be made or undertaken without the written
consent of the Buyer.

AUTHORITY OF SIGNERS: The persons executing this Contact on behalf of the Buyer
and the Seller warrant that each has the authority to do so and to bind the
named Buyer and Seller corporations.

COMPLETE CONTRACT: This instrument together with its addenda, any attached
exhibits, and Disclosures constitute the entire Contract between the parties and
supersedes and replaces any and all prior negotiations, representations,
warranties, understandings, term sheets or contracts between the parties. This
Contract cannot be changed except by written agreement of the parties.

Page 2 of 5
<PAGE>

DISPUTE RESOLUTION: The parties agree that any dispute or claim relating to this
Contract, including but not limited to the breach or termination of this
Contract, or the services related to this transaction, shall first be submitted
to mediation in accordance with the Rules of the American Arbitration
Association. Disputes shall include representations made by the parties, any
broker or other person or entity in connection with the sale, purchase,
financing, condition or other aspect of the Property to which this Contract
pertains, including without limitation, allegations of concealment,
misrepresentation, negligence and/or fraud. Each party agrees to bear its own
costs of mediation. Any agreement signed by the parties pursuant to the
mediation shall be binding. If mediation fails, the procedures applicable and
remedies available under this Contract shall apply. Nothing in this paragraph
shall prohibit any party from seeking emergency equitable relief pending
mediation. The parties agree that mediation under this paragraph is not
mandatory, but is optional upon agreement of all parties.

DEFAULT: If Buyer defaults, Seller may elect to either retain any payments made
as liquidated damages or to return the Deposit and sue Buyer to enforce Seller's
rights. If Seller defaults, Buyer is entitled to the return of any payments or
to sue Seller to enforce Buyer's rights. Where a section of this Contract
provides a specific remedy, the parties intend that the remedy shall be
exclusive regardless of rights which might otherwise be available under common
law.

ATTORNEY'S FEES: In any action arising out of this Contract, the prevailing
party shall be entitled to costs and reasonable attorney's fees.

APPLICABLE LAW AND VENUE DESIGNATION: The parties agree that the Law of the
State of Nevada shall apply to any issue arising under this Agreement and the
parties further agree and stipulate that the Courts located in the County of
Elko, Nevada have jurisdiction to hear and rule upon any dispute arising under
this Agreement.

ABROGATION: Except for express warranties made in this Contract, the provisions
of this Contract shall not apply after Closing.

RISK OF LOSS: All risk of loss or damage to the Property shall be borne by
Seller until Closing.

TIME IS OF THE ESSENCE: Time is of the essence regarding the dates set forth in
this transaction. Extensions must be agreed to in writing and by all parties.
Performance under each section and paragraph of this Contract which references a
date shall be required absolutely by 5:00 p.m. Pacific Time on the stated date.

ZONING: The parties agree to cooperate in the zoning of any of the property,
including the development of a master plan for the area in support of any
application by either party for zoning change applications.

Page 3 of 5
<PAGE>

HEADINGS AND CAPTIONS: The headings or captions of paragraphs are included
solely for convenience. If a conflict exists between any heading or caption and
the text of this Agreement, the text shall control.

SEVERABILITY: If any of the terms or provisions of this Agreement are determined
to be invalid, such invalid term or provision shall not affect or impair the
remainder of this Agreement, but such remainder shall continue in full force and
effect to the same extent as though the invalid term or provision were not
contained herein.

EXECUTION IN COUNTERPARTS: This Agreement may be executed in two or more
counterparts, each of which may be executed by one of the parties, with the same
force and effect as though all of the parties executing such counterparts have
executed but one instrument.

FACSIMILE (FAX) DOCUMENTS: Facsimile transmission of any signed original
document, and retransmission of any signed facsimile transmission, shall be the
same as delivery of an original.

SUCCESSORS AND ASSIGNS: This Agreement shall be binding upon and inure to the
benefit of the parties and their respective heirs, legal representatives,
successors and permitted assigns.

ACCEPTANCE: Acceptance occurs when Seller or Buyer, responding to any offer or
counteroffer, (if any) (a) signs the offer or counter where noted to indicate
acceptance; and (b) communicates to the other party or the other party's agent
that the offer or counteroffer has been signed as required.

Pienne Chow Sau Har
BUYER'S SIGNATURE: /s/ Pienne Chow 11/25/98
-----------------
By: Pienne Chow Date
Print name and Title if any

OASIS INTERNATIONAL HOTEL & CASINO, INC.
SELLER'S SIGNATURE: /s/ Richard Surber 11/25/98
-------------------
By: Richard Surber Date
Print name and Tile

Page 4 of 5

<PAGE>

EXHIBIT "A"

REAL PROPERTY DESCRIPTION

Real property located in the County of Elko, State of Nevada, to be
designated by survey from the following parcel described as follows:

TRACT:

Parcel No. 1, as shown on Parcel Map for OASIS INTERNATIONAL HOTEL and
CASINO, INC., filed in the office of the County Recorder of Elko County
on October 15, 1998, as File NO. 433771, located in a portion of
Section 2, Township 38 North, Range 66 East, M.D.B. & M.

EXCEPTING THEREFROM that portion of said land, as reserved by the State
of Nevada, in deed recorded July 18, 1950, in Book 58, Page 287, Deed
Records, Elko County, Nevada.

FURTHER EXCEPTING THEREFROM all oil and gas, in the land so patented,
and to it or person authorized by it, the right to prospect for, mine
and remove deposits from the same upon compliance with the conditions
and subject to the provisions and limitations of the Act of July 17,
1914, (38 Stat. 509), as reserved by the UNITED STATES OF AMERICA, in
deed recorded December 13, 1966, in Book 76, Page 684, Official
Records, Elko County, Nevada.

Page 5 of 5

REAL ESTATE PURCHASE AGREEMENT

PARTIES: Oasis Fields, L.L.C. - Buyer, a Nevada limited liability corporation,
with a mailing address of P. O. Box 4127 Ormond Beach, Florida 32175.

Oasis International Hotel & Casino, Inc. - Seller, a Nevada Corporation
with its offices located at 268 West 400 South, Suite 300, Salt Lake
City, Utah 84101.

PROPERTY: 2.145 acres, designated as Parcel No. 2 as shown on the Parcel
Map for Oasis International Hotel and Casino, Inc., filed in the
office of the Elko County Recorder, Elko, Nevada, at file no.
433771, located in a portion of Sections 2 and 3, Township 38
North, Range 66 East, M.D.B.&M. and as more specifically set
forth in Exhibit "A" as attached hereto.

Seller agrees to sell to Buyer and Buyer agrees to buy from Seller the
property as set forth above upon the following terms and conditions:

Price: Total purchase price shall be $600,000 for the
property as described herein above, the purchase price
to be paid as provided for at the time of closing.

Payment: The purchase price of $600,000 is to paid at closing,
cash payment of $120,000, the balance to be seller
financed for one year bearing an interest rate of 7%
per annum.

POSSESSION: Seller shall have right to possession upon closing.

BROKER & AGENTS: The parties hereby agree and acknowledge that each party is
liable for any payments to each parties respective brokers or agents.

EVIDENCE OF TITLE: Seller has, or shall have at Closing, fee title to the

Page 1 of 5
<PAGE>

Property and agrees to convey such title to Buyer by deed, free of financial
encumbrances as warranted herein.

AUTHORITY OF SIGNERS: The persons executing this Contact on behalf of the Buyer
and the Seller warrant that each has the authority to do so and to bind the
named Buyer and Seller corporations.

Page 2 of 5
<PAGE>

remedies available under this Contract shall apply. Nothing in this paragraph
shall prohibit any party from seeking emergency equitable relief pending
mediation. The parties agree that mediation under this paragraph is not
mandatory, but is optional upon agreement of all parties.

ATTORNEY'S FEES: In any action arising out of this Contract, the prevailing
party shall be entitled to costs and reasonable attorney's fees.

ABROGATION: Except for express warranties made in this Contract, the provisions
of this Contract shall not apply after Closing.

RISK OF LOSS: All risk of loss or damage to the Property shall be borne by
Seller until Closing.

EXECUTION IN COUNTERPARTS: This Agreement may be executed in two or more

Page 3 of 5
<PAGE>

counterparts, each of which may be executed by one of the parties, with the same
force and effect as though all of the parties executing such counterparts have
executed but one instrument.

FACSIMILE (FAX) DOCUMENTS: Facsimile transmission of any signed original
document, and retransmission of any signed facsimile transmission, shall be the
same as delivery of an original.

SUCCESSORS AND ASSIGNS: This Agreement shall be binding upon and inure to the
benefit of the parties and their respective heirs, legal representatives,
successors and permitted assigns.

OASIS FIELDS L.L.C.
BUYER'S SIGNATURE: /s/ Melvin Fields 3/24/99
-------------------
By: Melvin Fields Date
Print name and Title

OASIS INTERNATIONAL HOTEL & CASINO, INC.
SELLER'S SIGNATURE: /s/ Richard Surber 3/24/99
-------------------
By: Richard Surber Date
Print name and Title

page 4 of 5

<PAGE>

EXHIBIT "A"

REAL PROPERTY DESCRIPTION

Real property located in the County of Elko, State of Nevada, described
as follows:

TRACT:

Parcel No. 2, as shown on Parcel Map for OASIS INTERNATIONAL HOTEL and
CASINO, INC., filed in the office of the County Recorder of Elko County
on October 15, 1998, as File NO. 433771, located in a portion of
Section 2, Township 38 North, Range 66 East, M.D.B. & M.

EXCEPTING THEREFROM that portion of said land, as reserved by the State
of Nevada, in deed recorded July 18, 1950, in Book 58, Page 287, Deed
Records, Elko County, Nevada.

Page 5 of 5

<PAGE>

ACQUISITION AGREEMENT

BETWEEN

CYBERAMERICA CORPORATION

AND

INNOVATIVE PROPERTY DEVELOPMENT CORP.

<PAGE>

ACQUISITION AGREEMENT
TABLE OF CONTENTS

Purchase and Sale..............................................................2

Purchase Price.................................................................2

Warranties and Representations of CYAA and Sellers.............................2

Warranties and Representations of IPD..........................................5

Term...........................................................................8

The IPD Shares.................................................................8

Conditions Precedent to Closing................................................8

Termination....................................................................9

Exhibits......................................................................10

Miscellaneous Provisions......................................................10

Closing.......................................................................10

Post-Closing: Form 10 or Form 10-SB...........................................10

Governing Law.................................................................10

Counterparts..................................................................10

<PAGE>

ACQUISITION AGREEMENT

THIS ACQUISITION AGREEMENT dated October 30, 1998, by, between and
among Innovative Property Development Corp, a Utah corporation ("IPD"), and
CyberAmerica Corporation, a Nevada Corporation ("CYAA").

WHEREAS, CYAA owns an interest in several corporations through its
holdings in the common stock of such corporations, several are 100% owned by
CYAA and in others a less than 100% interest is held; and

WHEREAS, CYAA desires to sell and IPD desires to purchase one hundred
(100%) percent of such shares;

NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties hereby agree as
follows:

I. Purchase and Sale. The Sellers hereby agree to sell, transfer, assign
and convey to IPD and IPD hereby agrees to purchase and acquire from
the Sellers, one hundred (100%) percent of CYAA's issued and
outstanding common stock in each of the named corporations set forth in
Exhibit "A" as attached hereto (the "CYAA Common Shares"), in a
reorganization that is intended to be a tax-free exchange of shares of
stock.

II. Purchase Price. The aggregate purchase price to be paid by IPD for the
CYAA Common Shares shall be 1,382,528 shares of IPD voting common
stock, (the "IPD Common Shares"). The IPD Common Shares will be issued
to the individual Shareholders of CYAA as of the stated record date in
accordance with Exhibit "B" attached hereto. No fractional shares of
IPD Common Stock will be issued; in lieu thereof, the number of shares
of IPD Common Stock to be issued to each Seller will be rounded up to
the next whole share.

III. Warranties and Representations of CYAA and Sellers. In order to induce
IPD to enter into the Agreement and to complete the transaction
contemplated hereby, CYAA warrants and represents to IPD that:

A. Organization and Standing. CYAA is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Nevada, is qualified to do business as a
foreign corporation in every other state or jurisdiction in
which it operates to the extent required by the laws of such
states and jurisdictions, and has full power and authority to
carry on its business as now conducted and to own and operate
its assets, properties and business. Attached hereto as
Exhibit "C" are true and correct copies of CYAA's Certificate
of Incorporation, amendments thereto and all current By laws
of CYAA. No changes thereto will be made in any of the Exhibit
"C" documents before the Closing.

B. Capitalization. As of the November 1, 1998, CYAA's entire
authorized equity capital consists of 20,000,000 shares of
Common Stock, of which 2,832,064 shares of Common Stock were
outstanding. As of the Closing Date, there will be no other
voting or equity securities authorized or issued, nor any

2
<PAGE>

authorized or issued securities convertible into voting stock,
and no outstanding subscriptions, warrants, calls, options,
rights, commitments or agreements by which any of the Sellers
are bound, calling for the issuance of any additional shares
of common stock or any other voting or equity security. The
CYAA Common Shares constitute one hundred (100%) percent of
the equity capital of CYAA in each of the corporations listed
on Exhibit "A", which includes, inter alia, one hundred (100%)
percent of CYAA's voting ----------- power, right to receive
dividends, when, as and if declared and paid, and the right to
receive the proceeds of liquidation attributable to common
stock, if any.

C. Ownership of the CYAA Shares As of the Date hereof, the
Sellers are the sole owners of the CYAA Common Shares, free
and clear of all liens, encumbrances and restrictions of any
nature whatsoever, except by reason of the fact that the CYAA
Common Shares will not have been registered under the `'33
Act, or any applicable State Securities laws.

D. Taxes. CYAA has filed all federal, state and local income or
other tax returns and reports that it is required to file with
all governmental agencies, wherever situate, and has paid or
accrued for payment all taxes as shown on such returns, such
that a failure to file, pay or accrue will not have a material
adverse effect on CYAA or the corporations listed in Exhibit
A.

E. Pending Actions. There are no material legal actions,
lawsuits, proceedings or investigations, either administrative
or judicial, pending or threatened, against or affecting CYAA
and the corporations that are the subject of this agreement as
listed in Exhibit A, or that arise out of the operation of
those corporations, except as described in Exhibit "D"
attached hereto. CYAA is not in violation of any law, material
ordinance or regulation of any kind whatever, including, but
not limited to laws, rules and regulations governing the sale
of its products, the `33 Act, the Securities Exchange Act of
1934, as amended (the "34 Act") the Rules and Regulations of
the U.S. Securities and Exchange Commission ("SEC"), or the
Securities Laws and Regulations of any state.

F. Governmental Regulation. CYAA holds the licenses and
registrations set forth on Exhibit "E" hereto from the
jurisdictions set forth therein, which licenses and
registrations are all of the licenses and registrations
necessary to permit CYAA to conduct its current business. All
of such licenses and registrations are in full force and
effect, and there are no proceedings, hearings or other
actions pending that may affect the validity or continuation
of any of them. No approval of any other trade or professional
association or agency of government other than as set forth on
Exhibit "E" is required for any of the transactions effected
by this Agreement, and the completion of the transactions
contemplated by the Agreement will not, in and of themselves,
affect or jeopardize the validity or continuation of any of
them.

<PAGE>

G. Ownership of Assets. Except as set forth in Exhibit "F", CYAA
has good, marketable title, without any liens or encumbrances
of any nature whatever, to all of the shares listed in Exhibit
A.

I. No Debt Owed by CYAA to Shareholders. Except as set forth in
Exhibit "G" CYAA does not owe any money, securities, or
property to either the Shareholders or any member of the
families or to any company controlled by such a person,
directly or indirectly. To the extent that CYAA may have any
undisclosed liability to pay any sum or property to any such
person or entity or any member of their families such
liability is hereby forever irrevocably released and
discharged.

J. Corporate Records. All of CYAA's books and records, including,
without limitation, its books of account, corporate records,
minute book, stock certificate books and other records of CYAA
are up-to-date, complete and reflect accurately and fairly the
conduct of its business in all material respects since its
date of incorporation.

K. No Misleading Statements or Omissions. Neither the Agreement
nor any financial statement, exhibit, schedule or document
attached hereto or presented to IPD in connection herewith,
contains any materially misleading statement, or omits any
fact or statement necessary to make the other statements or
facts therein set forth not materially misleading.

L. Validity of the Agreement. All corporate and other proceedings
required to be taken by CYAA in order to enter into and to
carry out the Agreement have been duly and properly taken. The
Agreement has been duly executed by CYAA, and constitutes the
valid and binding obligation of CYAA, except to the extent
limited by applicable bankruptcy, reorganization, insolvency,
moratorium or other laws relating to or affecting generally
the enforcement of creditors rights. The execution and
delivery of the Agreement and the carrying out of its purposes
will not result in the breach of any of the terms or
conditions of, or constitute a default under or violate CYAA's
Certificate of Incorporation or document of undertaking, oral
or written, to which CYAA is a party or is bound or may be
affected, nor will such execution, delivery and carrying out
violate any order, writ, injunction, decree, law, rule or
regulation of any court, regulatory agency or other
governmental body; and the business now conducted by CYAA
and/or those corporations listed in Exhibit A can continue to
be so conducted after completion of the transaction
contemplated hereby.

<PAGE>

extent limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other laws relating to or affecting
generally the enforcement of creditors rights and that at the
time of such execution and delivery, IPD will have acquired
title in and to the Common Shares listed in Exhibit A free and
clear of all claims, liens and encumbrances.

N. Access to Books and Records. IPD will have full and free
access to the books of those corporations listed in Exhibit A
during the course of this transaction prior to Closing, during
regular business hours.

O. CYAA's Financial Statements. CYAA's Balance Sheet and Profit
and Loss statement for the quarter ended June 30, 1998,
attached hereto as Exhibit "H", accurately describe CYAA's
financial position as of the dates thereof. Within 90 days
after the Closing. CYAA will provide IPD with certified
financial statements for the necessary periods to file a Form
10 or Form 10SB, if required. These financial statements shall
be prepared in accordance with generally accepted accounting
principles in the United States ("GAAP") (or as permitted by
regulation S-X, S-B and/or the rules promulgated under the
`33' act and the 34' act and certified by independent
certified public accountants with substantial SEC experience.)

IV. Warranties and Representations of IPD. In order to induce CYAA to enter
into the Agreement and to complete the transaction contemplated hereby,
IPD warrants and represents to CYAA and Sellers that:

A. Organization and Standing. IPD is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Utah, is qualified to do business as a
foreign corporation in every other state in which it operates
to the extent required by the laws of such states, and has
full power and authority to carry on its business as now
conducted and to own and operate its assets, properties and
business.

B. Capitalization IPD's entire authorized equity capital consists
of shares of voting common stock, $.001 par value. As of the
Closing, IPD will have 50,000,000 shares Common Stock, $.001
par value, authorized, of which 304,275 shares of voting
common stock of IPD will be issued and outstanding, which does
not include the 1,382,528 shares being issued to CYAA
Shareholders hereunder pursuant to Section 4(2) of the `33 Act
of the issuance at closing. Upon issuance, all of the IPD
Common Stock will be validly issued fully paid and
non-assessable. The relative rights and preferences of IPD's
equity securities are set forth in the Articles of
Incorporation, as amended and IPD's By-Laws (Exhibit "I"
hereto). Except as set forth above, there are no voting or
equity securities convertible into voting stock, and no
outstanding subscriptions, warrants, calls, options, rights,
commitments or agreements by which IPD is bound, calling for
the issuance of any additional shares of common stock or any
other voting or equity security. The By-Laws of IPD provide

<PAGE>

that a simple majority of the shares voting at a stockholders'
meeting at which a quorum is present may elect all of the
directors of IPD. Cumulative voting is not provided for by the
By-Laws or Articles of Incorporation of IPD. Accordingly, as
of the Closing the 1,382,528 shares being issued to and
acquired by the Shareholders will constitute approximately
eighty-two (82%) percent of the Common Shares of IPD which
will then be issued and outstanding, which includes inter
alia, that same percentage of IPD's voting power, right to
receive ---------- dividends, when, as and if declared and
paid, and the right to receive the proceeds of liquidation
attributable to common stock, if any.

C. Ownership of Shares. By IPD's issuance of the IPD Common
Shares to the CYAA Shareholders pursuant to the Agreement, the
Shareholders will thereby acquire good absolute marketable
title thereto, free and clear of all liens, encumbrances and
restrictions of any nature whatsoever, except by reason of the
fact that such IPD shares will not have been registered under
the `33 Act.

D. Significant Agreements. IPD is not and will not at Closing be
bound by any of the following, unless specifically listed in
Exhibit "J" hereto:

1. Employment advisory or consulting contract;

2. Plan providing for employee benefits of any nature;

3. Lease with respect to any property or equipment;

4. Contract of commitment for any future expenditure in
excess of $100.

5. Contract or commitment pursuant to which it has
assumed, guaranteed, endorsed, or otherwise become
liable for any obligation of any other person, firm
or organization;

6. Contract, agreement, understanding, commitment or
arrangement, other than in the normal course of
business, not fully disclosed or set forth in the
Agreement;

7. Agreement with any person relating to the dividend,
purchase or sale of securities, that has not been
settled by the delivery of payment of securities
when due, and which remains unsettled upon the date
of the Agreement.

E. Taxes. IPD has filed all federal, state and local income or
other tax returns and reports that it is required to file with
all governmental agencies, wherever situate. All of such
returns are true and complete.

<PAGE>

F. Liabilities. At and as of the Closing Date, IPD will have a
total of approximately $3,476,467 in current and long-term
liabilities, exclusive of the costs, including legal and
accounting fees and other expenses, in connection with this
transaction.

G. No Pending Actions. There are no legal actions, lawsuits,
proceedings or investigations, either administrative or
judicial, pending or threatened, against or affecting IPD, or
against any of IPD's officers or directors and arising out of
their operation of IPD. IPD has been in compliance with, and
has not received notice of violation of any law, ordinance or
regulation of any kind whatever, including, but not limited
to, the `33 Act, the `34 Act, the Rules and Regulations of the
SEC or the Securities Laws and Regulations of any state. IPD
is not now and never has been required to file reports under
the `33 Act or the `34 Act.

H. Corporate Records. All of IPD's books and records, including
without limitation, its book of account, corporate records,
minute book, stock certificate books and other records are
up-to-date, complete and reflect accurately and fairly the
conduct of its business in all respects since its date of
incorporation: all of said books and records will be delivered
to IPD's new management at the Closing.

I. No Misleading Statements or Omissions. Neither the Agreement
nor any financial statement, exhibit, schedule or document
attached hereto or presented to CYAA's counsel in connection
herewith contains any materially misleading statement, or
omits any fact or statement necessary to make the other
statements of facts therein set forth not materially
misleading.

J. Validity of the Agreement. All corporate action and
proceedings required to be taken by IPD in order to enter into
and to carry out the Agreement have been duly and properly
taken. The Agreement has been duly executed by IPD, and
constitutes a valid and binding obligation of IPD. The
execution and delivery of the Agreement and the carrying out
of its purposes will not result in the breach of any of the
terms or conditions of, or constitute a default under or
violate, IPD's Certificate of Incorporation or By-Laws, or any
agreement, lease, mortgage, bond, indenture, license or other
document or undertaking, oral or written, to which IPD is a
party or is bound or may be affected, nor will such execution,
delivery and carrying out violate any order, writ, injunction,
decree, law, rule or regulation of any court regulatory agency
or other governmental body.

K. Enforceability of the Agreement. When duly executed and
delivered, the Agreement and the Exhibits hereto which are
incorporated herein and made a part hereof are legal, valid,
and enforceable by CYAA according to their terms, and that at
the time of such execution and delivery, the CYAA Shareholders
will have acquired good, marketable title in and to the IPD
Common Shares acquired pursuant hereto, free and clear of all
liens and encumbrances.

<PAGE>

L. Access to Books and Records. CYAA will have full and free
access to IPD's books and records during the course of this
transaction prior to and at the Closing.

M. IPD Financial Statements. At or before the Closing, IPD will
provide CYAA with recent audited financial statements, which
will be certified in accordance with GAAP by independent
certified public accountants with substantial SEC experience.

N. IPD Financial Condition. Prior to the Closing, IPD will have
$4,445,331 in assets and $3,476,467 of liabilities.

O. Stockholder Approval. Immediately upon the signing of the
Agreement, IPD will submit to its stockholders by meeting or
consent the matters described in section VII(B)(1) herein, if
required to do so under Utah Corporate Law. CYAA agrees that
it will vote all of its IPD shares in favor of all items
submitted to IPD stockholders in accordance with the
Agreement.

VI. The IPD Shares. All o f the IPD Common Shares shall be validly issued,
fully-paid and non-assessable shares of IPD Common Stock, with full
voting rights, dividend rights, and the right to receive the proceeds
of liquidation, if any, as set forth in the respective Articles of
Incorporation.

VII. Conditions Precedent to Closing.

A. The obligations of CYAA under the Agreement shall be and are
subject to fulfillment, prior to or at the Closing of each of
the following conditions:

1. That IPD and its management representations and
warranties contained herein shall be true and
correct at the time of closing date as if such
representations and warranties were made at such
time;

2. That IPD and its management shall have performed or
complied with all agreements, terms and conditions
required by the Agreement to be performed or
complied with by them prior to or at the time of
Closing;

3. That IPD's stockholders, by proper and sufficient
vote, shall have properly approved all of the
matters described in Section VII(B)(1) herein, if
required to do so under Utah Corporate Law; and

<PAGE>

B. The obligations of IPD under the Agreement shall be and are
subject to fulfillment, prior to, at the Closing or subsequent
to the Closing of each of the following conditions:

1. That IPD stockholders, if necessary by proper and
sufficient vote of its stockholders, shall have
approved the Agreement and the transactions
contemplated hereby and will have approved such
other changes as are consistent with the Agreement
for submission to IPD stockholders, if required to
do so under Utah Corporate Law;

2. That CYAA's representations and warranties
contained herein shall be true and correct at the
time of Closing as if such representations and
warranties were made at such time; and

3. That CYAA shall have performed or complied with all
agreements, terms and conditions required by the
Agreement to be performed or complied with by it
prior to or at the time of Closing.

4. That the parties jointly and severally indemnify
and hold harmless IPD's former officers, directors,
agents and affiliates against any claims or
liabilities, including reasonable attorney's fees
and other reasonable defense costs incurred in
defending such claims or liabilities, resulting
from any claims or liabilities asserted against
them as to any material misrepresentation or
omissions in the Agreement made by any party
hereto.

VIII. Termination. The Agreement may be terminated at any time before or; at
Closing, by:

A. The mutual agreement of the parties;

B. Any party if:

1. Any provision of the Agreement applicable to a
party shall be materially untrue or fail to be
accomplished.

2. Any legal proceeding shall have been instituted or
shall be imminently threatening to delay, restrain
or prevent the consummation of the Agreement.

IX. Exhibits. All Exhibits attached hereto are incorporated herein by this
reference as if they were set forth in entirety.

<PAGE>

XI. Closing. The Closing of the transactions contemplated by the Agreement
("Closing") shall take place at 1:00 P.M. on the first business day
after the stockholders of IPD approve this transaction, if approval is
required or on December , 1998, whichever is sooner, if shareholder
approval is not required or can be obtained subsequent to closing by
shareholder ratification. The Closing shall occur at the offices of
______________________ or such other date and place as the parties
hereto shall agree upon. At the Closing, all of the documents and items
referred to herein shall be exchanged.

XII. Post-Closing: Form 10 or Form 10-SB. As soon as practical after Closing
and after IPD meets the initial listing requirements for the NASDAQ
Small Caps market, IPD will prepare, file and use its best efforts to
have declared effective a Form 10 or Form 10-SB Registration Statement
with the Securities and Exchange Commission.

XIII. Governing Law. The Agreement shall be governed by and construed in
accordance with the internal laws of the State of Utah.

XIV. Counterparts. The Agreement may be executed in duplicate facsimile
counterparts, each of which shall be deemed an original and together
shall constitute one and the same binding Agreement, with one
counterpart being delivered to each party hereto.

IN WITNESS WHEREOF, the parties hereto have set their hands and seals
as of the date and year above first written.

Innovative Property Development Corp.

By: /s/ Richard D. Surber
---------------------
Richard D. Surber

Its: President

CyberAmerica Corporation

<PAGE>

By: /s/ Gerald Einhorn
------------------

Its: Vice-President

<PAGE>

INDEX TO EXHIBITS

Exhibit No. Description

A List of shares to be transferred by CYAA to IPD

B List of CYAA's stockholders

C CYAA's Certificate of Incorporation, as amended and
By-laws

D Pending Actions

E Licenses and registrations of CYAA

F Liens and encumbrances on CYAA's assets or property

G CYAA's liabilities

H CYAA's unaudited Financial Statements

I CYAA's Corporate Summary

J IPD's By-Laws

K Significant Agreements

ASSIGNMENT OF REAL ESTATE PURCHASE CONTRACT

FOR VALUE RECEIVED, the undersigned Assignor hereby assigns, transfers and
sets over to Canton's Commercial Carpet Corporation (Assignee) all rights, title
and interest held by the Assignor in and to the following described contract:
Real Estate Purchase Contract, with an offer date of July 14, 1998, to purchase
property known as the New Brigham Building, 2402 Wall Avenue.
The Assignor warrants and represents that said contract is in full force
and effect and is fully assignable.
The Assignee hereby assumes and agrees to perform all the remaining and
executory obligations of the Assignor under the contract and agrees to indemnify
and hold the Assignor harmless from any claim or demand resulting from
non-performance by the Assignee.
The Assignee shall be entitled to all monies remaining to be paid under the
contract, which rights are also assigned hereunder.
The Assignor warrants that the contract is without modification, and
remains on the terms contained.
The Assignor further warrants that it has full right and authority to
transfer said contract and that the contract rights herein transferred are free
of lien, encumbrance or adverse claim.
This assignment shall be binding upon and inure to the benefit of the
parties, their successors and assigns. Signed this 22nd day of July, 1998.

/s/ Richard Surber, President
- -----------------------------
Assignor (CyberState, Inc.)

/s/ Richard Surber, President
- -----------------------------
Assignee ( Canton's Commercial Carpet Corporation)

CONSULTING AGREEMENT

This Consulting Agreement ("Agreement") is made effective this 1st day
of February, 1999 by Allen Wolfson, an individual ("Consultant") and
AmeriResource Technologies, Inc. ("Client") with principal offices located at
8815 E Long Street, Lenexa, Kansas 66215.

PREMISES

WHEREAS, Client wishes to obtain financial consulting services.

WHEREAS, Consultant is experienced in 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 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 introducing Client to potential business partners,
introduce Client to potential acquisition or merger candidates in the form of
business opportunities, assisting in a restructuring of Client's common stock,
if necessary, the issuance of new shares 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 (1) year from the execution of this
Agreement, unless a party to this Agreement, in writing, serves 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 services to be provided or services that have
been provided under this Agreement.

B. Consultant shall be issued, upon the execution of this
Agreement, a non-refundable engagement fee and as payment for
services provided prior to the execution hereof twenty million
(20,000,000) shares of Client's capital stock ("Capital
Stock"). For purposes of this Agreement Capital Stock shall be
defined as any instrument which provides an interest in the
equity of Client or other applicable corporation.

C. Client and Consultant agree that any additional consulting fee
shall be negotiated and agreed upon by the parties prior to
any additional consulting services being performed. Once the
fee has been determined, Consultant shall bill Client on a

<PAGE>

monthly basis, and payment shall be due upon receipt of the
bill, payable in either cash or in Client's Common Stock
("Common Stock").

D. If Consultant assists Client in merging with or acquiring a
Company, either by introducing the 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 four and one-half percent (4.5%) of the total
issued and outstanding shares of the corporate entity created
from the merger with or acquisition of the Company by Client
("New Entity"). New Entity shares shall be issued within five
(5) days of Client's receipt of services. 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 four and
one-half percent (4.5%) 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 services. Consultant may introduce a
company to Client in writing, verbally, by facsimile or by
telephone conversation or conference.

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.

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

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

<PAGE>

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 any
time 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

(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 be 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
prospectuses 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.

<PAGE>

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.

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 (i) 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 in 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.

<PAGE>

Section 4 - Client's 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 its incorporation, 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. Client is duly qualified to do
business in and is in good standing in every jurisdiction in
which the nature of its business or the property owned or
leased by it makes such qualifications necessary.

B. Disclosure Documents. Client has or will cause to be
delivered, concurrent with the execution of this Agreement,
copies of its articles 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.

C. Client's Capitalization. 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 non
assessable 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. No options,
warrants, calls, conversion, subscription or other rights,
agreements or commitments of any kind obligating Client
contingently, or otherwise, to issue or sell any shares of its
capital stock of any class, or any securities convertible into
or exchangeable for any such shares, are outstanding and no
authorization therefor has been given. 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. 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
of the transactions contemplated herein will not conflict with
or result in any violation of any provision of the Articles 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.

E. 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

<PAGE>

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.

F. 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.

G. Minute Books and Stock Options. The minute books of Client
contain full and complete minutes of all annual, special and
other meetings (or written consents in lieu thereof) of the
directors and committees of directors and shareholders of
Client; the signatures on such minutes and written consents
are the true signatures of the persons purporting to have
signed them; and the stock ledger of Client with respect to
shares of Client's common stock issued or transferred is
complete and no documentary stamp taxes are required to be
affixed and canceled in connection with the transfer or
issuance of the shares.

H. 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.

I. Independent Legal and Financial Advice. Consultant is not a
law firm, neither is it an accounting firm. Consultant does
however work with professionals to better provide 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 provided by Consultant
to Client and all opportunities Consultant introduces to
Client. Client acknowledges that the attorneys, accountants
and other advisors Consultant works with represent the
interests of Consultant solely, and that no representation or
warranty has been given to Client by Consultant as to any
legal, tax, accounting, financial or other aspect of the
transactions contemplated by this Agreement.

<PAGE>

Section 5 - Non-Circumvention

Client agrees that Client will not enter into any merger with or
acquisition of a 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.

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
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.

H. Notwithstanding the termination of this Agreement, Consultant
shall be entitled to receipt of all compensation owed pursuant
to Section 2 up to the time of termination of this Agreement.
Consultant shall also be entitled to any fees owed pursuant to
Section 2, should Client, subsequent to the termination of
this Agreement, enter into any transaction contemplated
pursuant to Section 2. Pursuant to Section 2, 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:

<PAGE>

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 in 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.

C. Notwithstanding the termination of this Agreement, Consultant
shall be entitled to receipt of all compensation owed pursuant
to Section 2 up to the time of termination of this Agreement.
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.

Section 7 - Utilization of Attorneys

Consultant utilizes attorneys to assist 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's. 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

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 clients' 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;

<PAGE>

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 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 will have any impact on Client's
business or that any subsequent financial improvement will result from
Consultant's efforts.

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.

<PAGE>

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.

Section 16 - Disclosure of Documents

Upon the execution of this Agreement, and prior to the consummation of
the transactions contemplated herein, Client will provide Consultant, at
Client's sole expense, audited financial statements in accordance with generally
accepted accounting principles and financial documentation with respect to
Client since the later of either the date of incorporation of Client or three
(3) years prior to the execution of this Agreement, other financial and
corporate information, pro-forma, due-diligence, articles of incorporation,
by-laws, business plans, proof of ownership of assets, accounts receivable, bank
statements and copies of deeds, liens, mortgages, a certificate of good standing
issued by Client's state of incorporation, and any other documents that may be
reasonably required by Consultant to provide services to Client for the
transactions contemplated herein. After review of the documents and information
provided in this paragraph, or after review of the due diligence information
requested by Client, Consultant or Client may make a determination that the
transactions contemplated are not in their best interests and may terminate this
Agreement with no further obligation.

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 notification
to 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.

<PAGE>

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:

Allen Wolfson
268 West 400 South, Suite 300
Salt Lake City, Utah 84101
(801) 575-8073
(801) 575-8092 (fax)

(ii) In the Case of Client to:

AmeriResource Technologies, Inc.
P.O. Box 14748
Shawnee Mission, Kansas 66285-4748
(913) 859-9292
(913) 859-9520

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

<PAGE>

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.

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.

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.

<PAGE>

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

By:/s/ Allen Wolfson
-----------------
Allen Wolfson

By:/s/ Delmar Janovec
------------------
Delmar Janovec, CEO
AmeriResource Technologies, Inc.

CONSULTING AGREEMENT

This Consulting Agreement ("Agreement") is made effective this 1st day
of February, 1999 by Richard D. Surber, an individual ("Consultant") and
AmeriResource Technologies, Inc. ("Client") with principal offices located at
8815 E Long Street, Lenexa, Kansas 66215.

PREMISES

WHEREAS, Client wishes to obtain financial consulting services.

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

Section 1 - Engagement of Consultant and Term of Agreement

Section 2 - Compensation

Client shall compensate Consultant in the following manner:

<PAGE>

bill, payable in either cash or in Client's Common Stock
("Common Stock").

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

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:

<PAGE>

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 any
time 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:

<PAGE>

Section 4 - Client's Representations

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

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
of the transactions contemplated herein will not conflict with
or result in any violation of any provision of the Articles 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.

<PAGE>

Section 5 - Non-Circumvention

Client agrees that Client will not enter into any merger with
or acquisition of a 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.

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

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.

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

<PAGE>

Section 7 - Utilization of Attorneys

Section 8 - Nondisclosure of Confidential Information

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;

<PAGE>

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 9 - Best Efforts

Section 10 - Client's Right to Approve Transaction

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

Section 13 - Nonexclusive Services

Section 14 - All Prior Agreements Terminated

<PAGE>

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

Section 16 - Disclosure of Documents

Section 17 - Continue Operations in Substantially Same Manner

Section 18 - Miscellaneous

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>

D. Assignment:

(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.

(i) In the case of Consultant to:

Richard D. Surber
268 West 400 South, Suite 300
Salt Lake City, Utah 84101
(801) 575-8073
(801) 575-8092 (fax)

(ii) In the Case of Client to:

AmeriResource Technologies, Inc.
P.O. Box 14748
Shawnee Mission, Kansas 66285-4748
(913) 859-9292
(913) 859-9520

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.

<PAGE>

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.

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

<PAGE>

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

By:/s/ Richard Surber
--------------------
Richard D. Surber

By:/s/ Delmar Janovec
-------------------
Delmar Janovec, CEO
AmeriResource Technologies, Inc.

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
UNAUDITED CONDENSED FINANCIAL STATEMENTS FILED WITH THE COMPANY'S DECEMBER 31,
1998 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> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
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<SECURITIES> 937,282
<RECEIVABLES> 1,582,263
<ALLOWANCES> (100,000)
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<PP&E> 10,460,084
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0
0
<COMMON> 2,867
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<TOTAL-LIABILITY-AND-EQUITY> 12,594,655
<SALES> 4,189,634
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<CGS> 2,731,987
<TOTAL-COSTS> 2,731,987
<OTHER-EXPENSES> 1,726,766
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</TABLE>