CONSOLIDATED CAPITAL OF NORTH AMERICA INC, SB-2, 1998-08-06

CONSOLIDATED CAPITAL OF NORTH AMERICA INC
SB-2, 1998-08-06
REAL ESTATE

Previous: CNL INCOME FUND VI LTD, 10-Q, 1998-08-06

Next: TELVUE CORP, 10-Q, 1998-08-06

<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 6, 1998
REGISTRATION NO. 333-

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

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

FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

COLORADO 3440 93-0962072
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) INDUSTRIAL CLASSIFICATION IDENTIFICATION NO.)
CODE NUMBER)

410 17TH STREET, SUITE 400
DENVER, COLORADO 80202
(888) 313-8051
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)

CAPITOL METALS CO.
20000 SOUTH WESTERN AVENUE
TORRANCE, CALIFORNIA 90501
(Address of Principal Place of Business)

COPIES TO:

DONALD R. JACKSON THOMAS P. GALLAGHER, ESQ.
SECRETARY BARBARA J. COMLY, ESQ.
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC. GALLAGHER, BRIODY & BUTLER
410 17TH STREET, SUITE 400 212 CARNEGIE CENTER, SUITE 402
DENVER, COLORADO 80202 PRINCETON, NEW JERSEY 08540
(888) 313-8051 (609) 452-6000
(NAME, ADDRESS AND TELEPHONE
NUMBER OF AGENT FOR SERVICE)

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.

IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON A
DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR
INTEREST REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. [ X ]

IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(b) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING
BOX AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]

IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(c) UNDER
THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. [ ]

IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. [ ]
<PAGE> 2
CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
=======================================================================================================================
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION FEE
SHARE(1) PRICE(1)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON SHARES ISSUABLE UPON 7,895,470 $1.75 $ 13,817,072.50 $ 4,076.04
CONVERSION OF 10% CONVERTIBLE
NOTES(2)
- -----------------------------------------------------------------------------------------------------------------------
COMMON SHARES ISSUABLE IN LIEU OF 631,644 $.625 $ 394,777.50 $ 116.46
CASH INTEREST ON 10% CONVERTIBLE
NOTES(3)
- -----------------------------------------------------------------------------------------------------------------------
COMMON SHARES ISSUABLE UPON 4,311,294 $1.75 $ 7,544,764.50 $ 2,225.71
CONVERSION OF SERIES C PREFERRED
SHARES(4)
- -----------------------------------------------------------------------------------------------------------------------
COMMON SHARES ISSUABLE UPON 1,000,000 $1.00 $ 1,000,000.00 $ 295.00
EXERCISE OF WARRANTS(5)
- -----------------------------------------------------------------------------------------------------------------------
COMMON SHARES ISSUABLE UPON 1,000,000 $ .75 $ 750,000.00 $ 221.25
EXERCISE OF WARRANTS(6)
- -----------------------------------------------------------------------------------------------------------------------
COMMON SHARES ISSUABLE UPON 250,000 $2.38 $ 595,000.00 $ 175.53
EXERCISE OF WARRANTS(7)
- -----------------------------------------------------------------------------------------------------------------------
COMMON SHARES ISSUABLE UPON 200,000 $2.00 $ 400,000.00 $ 118.00
EXERCISE OF WARRANTS(8)
- -----------------------------------------------------------------------------------------------------------------------
OUTSTANDING COMMON SHARES(9) 1,542,460 $.625 $ 964,037.50 $ 284.40
- -----------------------------------------------------------------------------------------------------------------------
TOTAL(10) 16,830,868 $ 25,465,652.00 $ 7,512.39
=======================================================================================================================
</TABLE>

(1) Estimated solely for the purpose of computing the amount of
the registration fee.

(2) Includes the indeterminate number of Common Shares issuable upon
conversion of $5.0 million principal of 10% Convertible Notes at the
conversion price equal to the lesser of (i) $1.75 per share or (ii) the
following conversion prices: (x) on or after August 6, 1998 at a per
share price equal to eighty percent (80%) of the arithmetic average of
the closing bid and ask prices of the Company's Common Shares for the
twenty trading days prior to the exercise date of such conversion and
(y) on or after October 5, 1998 at a per share price equal to seventy-
five (75%) of the arithmetic average of the closing bid and ask prices
of the Company's Common Shares for each of the twenty trading days prior
to the exercise date of such conversion. The maximum offering price per
share is based upon the estimated conversion price of $1.75 which is
higher than the average of the reported bid and asked price of the
Company's Common Shares on July 31, 1998 or $.625 (in accordance with
Rule 457(g)).

(3) Includes the indeterminate number of Common Shares issuable by the
Company in lieu of cash interest on the 10% Convertible Notes. The
maximum offering price per share is based upon the average of the
reported bid and asked price of the Company's Common Shares on July 31,
1998 or $.625 (in accordance with Rule 457(g)).
<PAGE> 3
(4) Includes the indeterminate number of Common Shares issuable upon
conversion of 186 outstanding Series C Preferred Shares at the
conversion price per Series C Preferred Share equal to $10,000 divided
by the lesser of (x) $1.75 and (y) seventy-five percent (75%) of the
arithmetic average of the closing bid prices for each of the five
trading days prior to the exercise date of any such conversion. The
maximum offering price per share is based upon the estimated conversion
price of $1.75 which is higher than the average of the reported bid and
asked price of the Company's Common Shares on July 31, 1998 or $.625 (in
accordance with Rule 457(g)).

(5) Includes 1,000,000 Common Shares issuable upon the exercise of
outstanding warrants to purchase Common Shares at an exercise price of
$1.00. The maximum offering price per share is based upon the $1.00
exercise price of the warrants since it is higher than the average of
the reported bid and asked price of the Company's Common Shares on July
31, 1998 or $.625 (in accordance with Rule 457(g)).

(6) Includes 1,000,000 Common Shares issuable upon the exercise of
outstanding warrants to purchase Common Shares at an exercise price of
$.75. The maximum offering price per share is based upon the $.75
exercise price of the warrants since it is higher than the average of
the reported bid and asked price of the Company's Common Shares on July
31, 1998 or $.625 (in accordance with Rule 457(g)).

(7) Includes 250,000 Common Shares issuable upon the exercise of outstanding
warrants to purchase Common Shares at an exercise price of $2.38. The
maximum offering price per share is based upon the $2.38 exercise price
of the warrants since it is higher than the average of the reported bid
and asked price of the Company's Common Shares on July 31, 1998 or $.625
(in accordance with Rule 457(g)).

(8) Includes 200,000 Common Shares issuable upon the exercise of outstanding
warrants to purchase Common Shares at an exercise price of $2.00. The
maximum offering price per share is based upon the $2.00 exercise price
of the warrants since it is higher than the average of the reported bid
and asked price of the Company's Common Shares on July 31, 1998 or $.625
(in accordance with Rule 457(g)).

(9) Outstanding Common Shares owned by the Selling Shareholders. Includes
269,349 Common Shares which are subject to adjustment, and the
indeterminate number of Common Shares issuable upon such antidilution
adjustment. The maximum offering price per share is based upon $.625,
the average of the reported bid and asked price of the Company's Common
Shares on July 31, 1998 or $.625.

(10) Includes in each case reoffers of the Common Shares offered hereby and
Common Shares issuable pursuant to antidilution provisions pursuant to
Rule 416.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
<PAGE> 4
CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
Item Number and Caption Location or Heading in Prospectus
----------------------- ---------------------------------
<S> <C> <C>
1. Front of Registration Statement and Outside Outside Front Cover Page
Front Cover of Prospectus

2. Inside Front and Outside Back Cover Pages of Inside Front Cover Page; Back Cover Page
Prospectus
3. Summary Information and Risk Factors Prospectus Summary; Risk Factors

4. Use of Proceeds Use of Proceeds

5. Determination of Offering Price Not Applicable

6. Dilution Not Applicable

7. Selling Security Holders Selling Shareholders

8. Plan of Distribution Plan of Distribution

9. Legal Proceedings Business

10. Directors, Executive Officers, Promoters and Management
Control Persons

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

12. Description of Securities Description of Securities

13. Interest of Named Experts and Counsel Not Applicable

14. Disclosure of Commission Position on Description of Securities
Indemnification for Securities Act
Liabilities

15. Organization Within Last Five Years Not Applicable

16. Description of Business Business

17. Management's Discussion and Analysis or Plan Management's Discussion and Analysis and Plan of
of Operation Operation

18. Description of Property Business

19. Certain Relationships and Related Certain Relationships and Related Transactions
Transactions

20. Market for Common Equity and Related Market Prices and Dividends
Stockholder Matters

21. Executive Compensation Executive Compensation

22. Financial Statements Index to Financial Statements

23. Changes In and Disagreements with Accountants Not Applicable
on Accounting and Financial Disclosures
</TABLE>
<PAGE> 5
SUBJECT TO COMPLETION DATED AUGUST 6, 1998
PROSPECTUS

CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.

16,830,868 Common Shares

This Prospectus relates to the sale by certain holders of securities
(the "Selling Shareholders") of Consolidated Capital of North America, Inc.
(the "Company") of the following number of Common Shares, $.01 par value per
share (the "Common Shares"), of the Company: (i) an estimated 7,895,470 Common
Shares issuable upon conversion of $5,000,000 in principal amount of 10%
Convertible Notes of the Company (the "Convertible Notes"), (ii) an estimated
631,644 Common Shares that may be issued as interest on the Convertible Notes
at the option of the Company in lieu of cash interest (the "Interest Shares"),
(iii) an estimated 4,311,294 Common Shares issuable upon conversion of 184
Series C Convertible Preferred Shares of the Company (the "Series C Shares"),
(iv) 2,450,000 Common Shares underlying Warrants of the Company (the
"Warrants"), and (v) 1,542,460 outstanding Common Shares ( the "Outstanding
Shares"). (The shares issuable upon conversion or exercise of the Convertible
Notes, the Series C Shares and the Warrants, are referred to as the "Conversion
Shares"; the Outstanding Shares, the Interest Shares and the Conversion Shares,
are referred to as the "Shares"). Because the conversion price of the
Convertible Notes and the Series C Shares is related to the market price of the
Common Shares at the time of conversion and the issuance price of the Interest
Shares is related to the market price of the Common Shares at the time of
issuance and because there may be antidilution adjustments to the exercise
price of the Convertible Notes, the Series C Shares and the Warrants and
antidilution adjustments to 269,349 of the Outstanding Shares, the number of
Conversion Shares, Interest Shares and Common Shares which are subject to this
Prospectus is indeterminate and this Prospectus relates to the resale of such
entire indeterminate number of Shares.

The Company has the right, at its sole option, to pay any interest due
on the Convertible Notes in Common Shares of the Company (the "Interest
Shares") based on the arithmetic average of the closing bid and ask price of
the Company's Common Shares for the twenty trading days prior to the interest
payment due date.

The Shares covered by this Prospectus are being sold by the Selling
Shareholders identified herein. See "Selling Shareholders". Except for the
exercise price of the Warrants, the Company will not receive any part of the
proceeds from the sale of the Shares. One Selling Shareholder offering 442,000
Shares is paying a pro-rata portion of the expenses incurred by the Company in
connection with the offering. All other expenses incurred in connection with
the offering by Selling Shareholders are being borne by the Company.

The Common Shares are quoted on the "OTC Bulletin Board" under the stock
symbol "CDNO". On July 31, 1998, the closing bid price for the Common Shares
was $.59375 per share and the closing asked price was $.65625 per share.

THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
COMMENCING ON PAGE 8.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

The date of this Prospectus is _____________________, 1998.
<PAGE> 6
------------------------------

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

------------------------------
<PAGE> 7
AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement under the Securities Act of 1933, as
amended, with respect to the Shares offered by this Prospectus (the
"Registration Statement").

The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files reports and
other information with the Commission. Such reports and other information
filed by the Company, including the Registration Statement, can be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and
will also be available for inspection and copying at the regional offices of
the Commission located at 7 World Trade Center, New York, New York 10048, and
at Northwestern Atrium Center, 500 West Madison Street, Suite #1400, Chicago,
Illinois 60661. Copies of such material may also be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. In addition, the Commission maintains a Web site
(http://www.sec.gov) that contain certain reports, proxy and information
statements and other information regarding companies that file electronically
with the Commission, including the Company.

This Prospectus does not contain all the information set forth in the
Registration Statement and the exhibits thereto. For further information with
respect to the Company and the Shares, reference is made to the Registration
Statement and the exhibits filed therewith. The Company will provide without
charge to each person who receives this Prospectus upon written or oral request
of such person, a copy of the information that was incorporated by reference in
this Prospectus (not including exhibits to the information that is incorporated
by reference, unless the exhibits themselves are specifically incorporated by
reference). All such requests should be directed to the Company at 410 17th
Street, Suite 400, Denver, Colorado 80202, Attention: Secretary, or by
telephone at (888-313-8051). Statements contained in this Prospectus as to the
contents of any document filed as an exhibit to the Registration Statement are
qualified in all respects by reference to the exhibit for a complete statement
of its terms and conditions.

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

THIS PROSPECTUS CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS. STATEMENTS
CONTAINED IN THIS PROSPECTUS THAT ARE NOT HISTORICAL FACTS ARE FORWARD-LOOKING
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS
TO DIFFER MATERIALLY FROM THOSE STATED IN THE FORWARD-LOOKING STATEMENTS.
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY INCLUDE, AMONG
OTHERS: GENERAL ECONOMIC CONDITIONS, CHANGES IN LAWS AND GOVERNMENT
REGULATIONS, FLUCTUATIONS IN DEMAND FOR THE COMPANY'S PRODUCTS, THE COMPANY'S
ABILITY TO CONSUMMATE STRATEGIC ACQUISITIONS AND THE COMPANY'S ABILITY TO
SUCCESSFULLY FINANCE ANY SUCH ACQUISITIONS, AS WELL AS ITS CURRENT ONGOING
OPERATIONS. WHEN USED IN THIS PROSPECTUS, THE WORDS "BELIEVES," "INTENDS,"
"ANTICIPATES" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. ALL FORWARDING STATEMENTS INCLUDED IN THIS PROSPECTUS ARE BASED ON
INFORMATION AVAILABLE TO THE COMPANY ON THE DATE HEREOF. SUCH STATEMENTS ARE
SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE PROJECTED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS.

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

-3-
<PAGE> 8
PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the detailed
information and financial statements (including the notes thereto) appearing
elsewhere in this Prospectus.

THE COMPANY

The Company operates a steel service center, a steel processing facility
and fabricates and sells steel framing for commercial and residential
structures through its two subsidiaries Capitol Metals Co. ("Capitol"), which
was acquired by the Company in January 1998, and Angeles Metal Trim Co.
("Angeles"), which was acquired by the Company in January 1997.

Capitol is one of the largest flat rolled service facilities in Southern
California. Capitol sells and processes flat rolled carbon steel products,
which include:

o Hot rolled steel
o Pickled and oiled steel
o Cold rolled steel
o Galvanized steel
o Aluminized steel

Capitol processes steel to the precise thickness, length, width, shape,
temper and surface quality specified by its customers. Value-added processes
provided by Capitol include:

o Cutting to length - the cutting of steel into pieces and
along the width of a coil to create sheets or plates.

o Blanking - the process in which flat-rolled steel is cut
into precise two dimensional shapes by passing it through
a slitter and leveler.

o Leveling - the flattening of steel to uniform tolerances
for proper machining.

o Slitting - the cutting of coiled steel to specified
widths along the length of the coil.

o Pickling - a chemical treatment to improve surface quality
by removing the surface oxidation and scale which develops
on the steel shortly after it is hot-rolled.

o Edge trimming - a process which removes a specified
portion of the outside edges of coiled steel to produce
uniform width and round or smooth edges.

Capitol owns three slitting lines, four cut-to-length lines and one
banding line for slit coil packing. The only toll coil pickling line on the
West Coast capable of handling 40,000 pound coils is owned by Capitol. This
line has capacity to process over 14,000 tons per month. Capitol also
warehouses customer owned material.

Management believes that Capitol's toll pickling line provides a
significant competitive advantage to the Company. In addition to providing the
only pickling service on the West Coast for 40,000 pound coils, Capitol is able
to offer to its pickling customers customized processing services for steel
owned by such customers or purchased from Capitol as well as storage of such
steel in Capitol's warehouse facility.

Angeles is in the business of fabricating and selling light gauge steel
framing materials for commercial and residential structures. Angeles' products
include galvanized steel components, framing materials, studs, tracks, trusses
and joists for domestic and international markets. Angeles also provides
technical support, engineering and estimating services for specialized
projects, primarily in the residential housing market. A subsidiary of Angeles
has also developed a proprietary low-cost steel frame housing structure.

-4-
<PAGE> 9
The Company's business strategy is to achieve profitability through
expansion of its existing operations and acquisitions of businesses that are
strategically located or positioned to diversify or enhance the Company's
customer base, product range and geographic coverage.

The executive offices of the Company are located at 410 17th Street,
Suite 400, Denver, Colorado 80202 and its telephone number is (888) 313-8051.

RISK FACTORS

The Common Shares offered hereby involves a high degree of risk. See
"Risk Factors."

THE OFFERING

Common Shares offered by An estimated 16,830,868 Common Shares including:
Selling Shareholders (i) an estimated 7,895,470 Common Shares issuable
upon conversion of $5,000,000 in principal amount
of 10% Convertible Notes of the Company (the
"Convertible Notes")(1), (ii) an estimated 631,644
Common Shares that may be issued as interest on
the Convertible Notes at the option of the Company
in lieu of cash interest (the "Interest
Shares")(2), (iii) an estimated 4,311,294 Common
Shares issuable upon conversion of 186 Series C
Convertible Preferred Shares of the Company (the
"Series C Shares")(3), (iv) 2,450,000 Common
Shares underlying Warrants of the Company (the
"Warrants")(4), and (v) 1,542,460 outstanding
Common Shares (the "Outstanding Shares"). (The
shares issuable upon conversion or exercise of the
Convertible Notes, the Series C Shares and the
Warrants, are referred to as the "Conversion
Shares"; the Outstanding Shares, the Interest
Shares and the Conversion Shares, are referred to
as the "Shares"). Because the conversion price of
the Convertible Notes and the Series C Shares is
related to the market price of the Common Shares
at the time of conversion and the issuance price
of the Interest Shares is related to the market
price of the Common Shares at the time of issuance
and because there may be antidilution adjustments
to the exercise price of the Convertible Notes,
the Series C Shares and the Warrants and
antidilution adjustments to 269,349 of the
Outstanding Shares, the number of Conversion
Shares, Interest Shares and Outstanding Shares
which are subject to this Prospectus is
indeterminate and this Prospectus relates to the
resale of such entire indeterminate number of
Shares.

Common Shares to be
outstanding after the
offering 35,065,275 shares(5)

-5-
<PAGE> 10
THE OFFERING

Estimated Proceeds $2,745,000 gross proceeds to the Company if all of
the Warrants are exercised. The Company will
receive none of the proceeds from the sale of the
Conversion Shares, the Interest Shares or the
Outstanding Shares by the Selling Shareholders.

Use of Proceeds Working capital.

Risk Factors Investment in the securities offered hereby
involves a high degree of risk. See "Risk
Factors".

OTC Bulletin Board Symbol CDNO

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

(1) The number of Common Shares issuable upon conversion of the Convertible
Notes, and the consequent number of Shares available for resale under
this Prospectus, is based upon a conversion price which is equal to the
lesser of (i) $1.75 per share and (ii) the following conversion prices:
(x) on or after August 6, 1998 at a per share price equal to eighty
percent (80%) of the arithmetic average of the closing bid and ask
prices of the Company's Common Shares for the twenty trading days prior
to the exercise date of such conversion and (y) on or after October 5,
1998 a per share price equal to seventy-five (75%) of the arithmetic
average of the closing bid and ask prices of the Company's Common Shares
for each of the twenty trading days prior to the exercise date of such
conversion. The Convertible Notes mature on April 8, 1999. Common
Shares issuable upon conversion of the Convertible Notes referenced in
this Prospectus are based on an assumed conversion date of July 29, 1998
and an assumed conversion price of $.633275 (80% of $.791594) but this
Prospectus covers the indeterminate number of Common Shares issuable
upon conversion of the Convertible Notes based on the conversion price
in effect at the time of conversion.

(2) Interest is due on the unpaid principal of the Convertible Notes at the
rate of 10% per annum, payable semi-annually on October 1 and April 1
commencing October 1, 1998. The Company has the right, at its sole
option, to pay any interest due on the Convertible Notes in Common
Shares of the Company (the "Interest Shares") based on the arithmetic
average of the closing bid and ask price of the Company's Common Shares
for the twenty trading days prior to the interest payment due date (the
"Interest Price"). The Interest Shares referenced in this Prospectus
assume an Interest Price for the Common Shares at the time of issuance
of $.791594 but this Prospectus covers the indeterminate number of
Common Shares that may be issued as Interest Shares based on the market
price at the time of issuance.

(3) The number of Common Shares issuable upon conversion of the Series C
Shares, and the consequent number of Shares available for resale under
this Prospectus, is based upon a conversion price per Series C Share
which is equal to $10,000 divided by the lesser of (x) $1.75 and (y)
seventy five percent (75%) of the arithmetic average of the closing bid
prices for each of the five trading days prior to the exercise date of
any such conversion. Common Shares issuable upon conversion of the
Series C Shares referenced in this Prospectus are based on an assumed
conversion date of July 29, 1998 and an assumed conversion price of
$.431438 (75% of $.57525) but this Prospectus covers the indeterminate
number of Common Shares issuable upon conversion of the Series C Share
based on the conversion price in effect at the time of conversion.

(4) The Warrants include warrants to purchase 1,000,000 Common Shares at
$1.00 per share, warrants to purchase 1,000,000 Common Shares at $.75,
warrants to purchase 250,000 Common Shares at $2.38 per share and
warrants to purchase 200,000 Common Shares at $2.00 per share.

-6-
<PAGE> 11
(5) Includes 19,776,867 Common Shares issued and outstanding on August 5,
1998 and all of the Conversion Shares and the Interest Shares. Excludes
1,025,000 Common Shares which are issuable upon exercise of outstanding
options, 744,000 Common Shares underlying Series A Convertible Preferred
Shares, 449,000 Common Shares underlying Series B Convertible Preferred
Shares and any Common Shares issuable in lieu of cash dividends on the
Series A Convertible Preferred Shares and Series B Convertible Preferred
Shares and Series C Convertible Preferred Shares.

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION

The following table contains selected financial information derived from
the financial statements set forth elsewhere in this Prospectus. The summary
financial information should be read in conjunction with Management's
Discussion and Analysis and Plan of Operation and the financial statements and
notes thereto included elsewhere in this Prospectus.

The unaudited financial information of the Company as of March 31, 1998
and for the three months ended March 31, 1998 and 1997 has been prepared on the
same basis as the audited financial statements of the Company and, in the
opinion of management, includes all adjustments necessary to present fairly the
financial position and the results of operations of the Company.

The results of operations for interim periods are unaudited and are not
necessarily indicative of the results for the full year.

SUMMARY STATEMENT OF OPERATIONS DATA

<TABLE>
<CAPTION>
Year Ended December 31 Three Months Ended
------------------------------ -------------------------------
March 31, March 31,
1997 1996 1998 1997
-------------- ------------- ----------- -------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales $ 16,989,478 $ -- $ 5,539,506 $ 5,330,147
Gross profit 2,968,368 -- 634,427 945,625
Loss from operations (2,061,238) (91,110) (1,619,638) (474,143)
Net loss (2,478,577) (312,482) (1,982,996) (524,190)
Loss applicable to common
stockholders (2,478,577) (312,482) (2,462,732) (524,190)
Basic and diluted loss per share (.17) (.20) (.14) (.04)
Weighted average number of
common shares outstanding 14,980,423 1,532,129 17,661,271 12,407,313
</TABLE>

SUMMARY BALANCE SHEET DATA

<TABLE>
<CAPTION>
December 31, 1997 March 31, 1998
----------------- ---------------
(Unaudited)
<S> <C> <C>
Working capital (deficit) $ (1,942,872) $ (1,043,275)
Total assets 7,706,283 15,896,780
Long-term debt, less current
portion 2,928,133 6,050,813
Redeemable Series C preferred
shares ---- $ 1,674,797
Total liabilities 7,698,431 14,663,358
Stockholders' equity (deficit) 7,852 (441,375)
</TABLE>

-7-
<PAGE> 12
RISK FACTORS

AN INVESTMENT IN THE COMMON SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE
OF RISK. PROSPECTIVE INVESTORS, PRIOR TO MAKING AN INVESTMENT DECISION, SHOULD
CAREFULLY CONSIDER, ALONG WITH OTHER MATTERS CONTAINED IN THIS PROSPECTUS, THE
FOLLOWING RISK FACTORS.

NEW BUSINESS; OPERATING LOSSES. Although the Company has existed since
1987, the Company entered a new line of business in January 1997. Since
commencing its steel operations in January 1997 the Company has incurred
operating and net losses. No assurance can be given that the Company will
generate an operating profit or achieve profitability in the future. For the
fiscal year ended December 31, 1997 and the three months ended March 31, 1998,
the Company's loss was $2,478,577 and $2,462,732, respectively. See
"Management's Discussion and Analysis of Financial Condition and Plan of
Operations."

NEED FOR ADDITIONAL CAPITAL. As of March 31, 1998, the Company had an
accumulated deficit of $5,676,769, a working capital deficit of $1,043,275 and
stockholder's deficit of $441,375. Since January 1997, the Company has
financed its operations with cash available under its credit facilities and
funds advanced under loan arrangements with affiliated entities. The Company
has also financed its operations through the private placement of capital stock
and convertible securities, including $1,000,000 from the sale of Common Shares
in January 1997, $2,000,000 from the March 1998 sale of Series C Shares and
$5,000,000 from the April and June 1998 issuances of Convertible Notes.

The Company is in default under the Handel Note assumed in connection
with the acquisition of Capitol Metals (the "Capitol Acquisition") and has an
obligation to repay $450,000 plus accrued interest on such Note. The Company
is also in default under a $300,000 Note issued in connection with the Capital
Acquisition (the "BINHAD Note"). The Handel Note and the BINHAD Note are
subordinate to the Congress Facility. No action may be commenced on the Handel
Note or the BINHAD Note until October 12, 1998 and January 12, 1999,
respectively. Failure to cure such default on such dates will constitute an
event of default under the Congress Facility and the Convertible Notes.

The Company intends to raise additional capital to fund the repayment of
the Handel Note and working capital requirements of the Company. There can be
no assurances that such financing will be available to the Company. The
Company has filed a claim against BINHAD for certain breaches of
representations and warranties by BINHAD in connection with the Capital
Acquisition. The Company intends to offset such damages against amounts
outstanding under the BINHAD Note.

The Company will be required to obtain additional lines of credit for
working capital purposes and make periodic public offerings or private
placements in order to meet the liquidity needs of its business. The Company
believes that the funds raised from the sale of the Series C Preferred Shares,
the sale of the Convertible Notes, operating cash flows of the Company, funds
available under the Congress Facility and funds raised in an equity offering
will provide adequate resources to fund ongoing operating requirements and
future capital expenditures related to the development of its business for the
next twelve months. There can be no assurances that financing sources will be
available to the Company in sufficient amounts or on acceptable terms. Under
such circumstances, the Company would expect to manage its growth within the
financing available. See "Management's Discussion and Analysis of Financial
Condition and Plan of Operations."

RISKS RELATED TO THE COMPANY'S EXPANSION AND ACQUISITION STRATEGY. The
Company's business strategy is to achieve profitability through expansion of
its existing operations and acquisitions of businesses that are strategically
located or positioned to diversify or enhance the Company's customer base,
product range and geographic coverage. As these acquisition candidates are
identified, funds will be needed to complete such

-8-
<PAGE> 13
acquisitions. There can be no assurance that any acquisition will be completed
or that financing will be available for such acquisitions. In addition, there
can be no assurance that the Company will be able to identify, acquire or
manage profitably additional businesses or to integrate successfully any
acquired businesses into the Company without substantial costs, delays or other
operational or financial difficulties. Further, acquisitions involve a number
of special risks, including failure of the acquired business to achieve
expected results, diversion of management's attention, failure to retain key
personnel of the acquired business and risks associated with unanticipated
events or liabilities, some or all of which could have a material adverse
effect on the Company's business, financial condition and results of
operations. See "Business."

RISKS RELATED TO INTERNAL GROWTH AND OPERATING STRATEGIES. The
Company's business strategy is to achieve profitability of the Company and any
acquired businesses and to increase the net sales of the Company and any
acquired businesses. Although the Company intends to achieve profitability by
various means, including realizing overhead and purchasing efficiencies, there
can be no assurances that the Company will be able to do so. The Company's
ability to increase the net sales of the Company and any acquired businesses
and achieve profitability will be affected by various factors, including demand
for products and services, pricing and availability of raw materials, the
Company's ability to expand the range of products and services offered by the
Company and any acquired businesses and the Company's ability to successfully
enter new markets. Many of these factors are beyond the control of the
Company, and there can be no assurance that the Company's strategies will be
successful or that it will be able to generate cash flow adequate for its
operations and to support internal growth. See "Business."

POSSIBLE IMPACT OF VARYING STEEL PRICES. The steel industry as a whole
is cyclical, and at times pricing and availability of raw materials in the
steel industry can be volatile due to numerous factors beyond the control of
the Company, including general, domestic and international economic conditions,
labor costs, production levels, competition, import duties and tariffs and
currency exchange rates. This volatility can significantly affect the
availability and cost of raw materials for the Company, and may, therefore,
adversely affect the Company's net sales, operating margin and net income. The
Company maintains substantial inventories of steel to accommodate the short
lead times and just-in-time delivery requirements of its customers.
Accordingly, the Company purchases steel in an effort to maintain its inventory
at levels that it believes to be appropriate to satisfy the anticipated needs
of its customers based on information derived from customers, market
conditions, historic usage and industry research. The Company's commitments
for steel purchases are generally at prevailing market prices in effect at the
time the Company places its orders. The Company has no long-term, fixed price
purchase contracts. During periods of rising raw materials pricing, there can
be no assurance the Company will be able to pass any portion of such increases
on to customers. When raw material prices decline, customer demands for lower
prices could result in lower sale prices and, as the Company uses existing
inventory, lower margins. See "Business."

COMPETITION. The steel distribution and servicing industry is highly
fragmented and competitive. Competition is based on price, service, quality,
availability of products and geographic proximity. The Company faces
competition from national, regional and local independent steel distributors
and servicing centers, many of which may have greater resources than the
Company. While the Company believes that it will be able to compete more
effectively as a result of the combined purchasing volume and operational
economies of scale resulting from the recent consolidation of the operations of
Angeles with Capitol, there can be no assurance that the Company will be able
to compete successfully. See "Business - Competition."

REGULATION. The operations of the Company are subject to extensive
federal, state and local laws and regulations, relating to the protection of
human health and the environment. In particular, the Company's operations are
subject to extensive federal, state and local laws and regulations governing
waste disposal, air and water emissions, the handling of hazardous substances,
environment protection, remediation, workplace exposure and other matters.
Hazardous materials that the Company uses in its operations primarily include
lubricants, cleaning solvents and hydrochloric acid used in its pickling
operations. The Company believes that its facilities are in material
compliance with these laws and regulations and does not believe that future
compliance with such laws and regulations will have a material adverse effect
on its results of operations or financial condition. However,

-9-
<PAGE> 14
environmental laws are becoming increasingly more stringent and, consequently,
the Company's environmental expenditures and costs for environmental compliance
may increase in the future. In addition, due to the possibility of
unanticipated regulatory or other developments, the amount and timing of future
environmental expenditures may vary substantially from those currently
anticipated. See "Business - Government Regulation."

EXERCISE OF OUTSTANDING CONVERTIBLE SECURITIES; ADDITIONAL DILUTION. At
August 5, 1998, the Company had outstanding the following securities
convertible into the following number of Common Shares: (i) $5,000,000 of
Convertible Notes convertible into an estimated 7,895,470 Common Shares at an
assumed conversion price of $.633275; (ii) 744,000 Series A Preferred Shares
convertible into 744,000 Common Shares, (iii) 449,000 Series B Preferred Shares
convertible into 449,000 Common Shares; (iv) 186 Series C Shares convertible
into an estimated 4,311,294 Common Shares at an assumed conversion price of
$.431438; (v) warrants to purchase 1,000,000 Common Shares at an exercise
price of $1.00 per share; (vi) warrants to purchase 1,000,000 Common Shares at
an exercise price of $.75 per share; (vii) warrants to purchase 250,000 Common
Shares at an exercise price of $2.38 per share; (viii) warrants to purchase
200,000 Common Shares at an exercise price of $2.00 per share and (ix) stock
options to purchase an aggregate of 1,025,000 Common Shares at exercise prices
ranging from $1.22 to $2.08. All of the foregoing securities are currently
convertible or exercisable other than 975,000 stock options which vest over a
period of one to four years from the date hereof. In addition, the Company has
the option to pay interest on the Convertible Notes and dividends on the Series
A Preferred Shares, Series B Preferred Shares and Series C Shares in Common
Shares of the Company. To the extent that the foregoing outstanding
convertible securities are exercised or interest on the Convertible Notes and
dividends on the Preferred Shares is paid in Common Shares, substantial
additional dilution to the interests of the Company's stockholders may occur.

VARIABILITY OF NUMBER OF COMMON SHARES ISSUABLE UPON CONVERSION OF
CONVERTIBLE NOTES AND SERIES C SHARES. The number of Common Shares issuable
upon conversion of the Convertible Notes and Series C Shares will depend upon
the market price of the Common Shares at the time of conversion. If the price
of the Common Shares is less than the assumed conversion prices referenced
herein, the Company will be required to issue substantially more than the
7,895,470 shares assumed hereunder to be issuable upon conversion of the
Convertible Notes, substantially more than the 631,644 shares assumed hereunder
to be issued as Interest Shares and substantially more than the 4,311,294
shares assumed hereunder to be issuable upon conversion of the Series C Shares.
In addition, 269,349 Common Shares included herein are subject to increase to
such number of Common Shares, which together with the 269,349 Common Shares,
have a market value of $300,000 on the date 30 days after the date this
Registration Statement is filed with the Commission.

All Common Shares issuable by the Company upon conversion of the
Convertible Notes, as Interest Shares, upon conversion the Series C Shares and
upon adjustment of the 269,349 Common Shares are registered hereunder and
included in this Prospectus. Consequently, all of such Shares will be eligible
for sale in the market place without restriction, except to the extent that any
of the selling holders are deemed to be "affiliates" of the Company at the time
of sale. No assurance can be given that the trading price of the Company's
Common Stock will not fall significantly below the assumed conversion prices
referenced herein, or that purchasers in this offering will not suffer
significant additional dilution as a result of any such decline in the price of
the Common Shares.

POTENTIAL EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE ON PRICE OF COMMON
STOCK. As of August 5, 1998 there were 19,776,867 Common Shares issued and
outstanding of which approximately eight million Common Shares may be deemed to
be "control" shares. The remaining outstanding shares may be resold publicly
following their registration under the Securities Act of 1933, as amended (the
"Securities Act"), or pursuant to an available exemption from registration
(such as provided by Rule 144 following a one year holding period for
previously unregistered shares). The holders of the control shares have demand
rights to have their shares registered in the future under the Securities Act.
The Company has filed a registration statement on Form S-8 for the purpose of
registering all three million shares subject to the Company's 1997 Stock
Incentive Plan under the Securities Act for public resale. Sales, or the
availability for sale of, substantial amounts of Common Shares in the public
market could

-10-
<PAGE> 15
adversely affect prevailing market prices and the future ability of the Company
to raise equity capital and complete any additional acquisitions for Common
Shares.

TRADING AND VOLATILITY OF COMMON STOCK. The Company's outstanding
Common Shares are quoted only on the OTC Bulletin Board, and on July 31, 1998,
the closing bid price was $.59375 per share and the closing ask price was
$.65625 per share. There can be no assurance that the existing market for the
Company's Common Shares will be maintained or that the holders of Common Shares
will be able to sell the Common Shares should they so desire. The market price
of the Common Shares has fluctuated significantly and may continue to be highly
volatile. Furthermore, trading in the stock is thin and because the
Convertible Notes and Series C Shares are convertible at a discount to the
market price, the holders of these securities can convert into Common Shares
and sell such Common Shares at a profit at any time, which may have a
depressive effect on the stock price. See "Market Prices and Dividends."

CONTROL BY EXISTING SHAREHOLDERS. The existing officers and directors
of the Company and related parties currently control approximately 61% of the
outstanding Common Shares (including shares that may be acquired upon the
exercise of options that are exercisable or will become exercisable within 60
days) and are able to exercise control over the Company's affairs, to elect the
entire Board of Directors and to control the outcome of any matter submitted to
a vote of shareholders. See "Security Ownership of Certain Beneficial Owners
and Management."

LACK OF DIVIDENDS ON COMMON SHARES. The holders of the Company's Series
A Preferred Shares, Series B Preferred Shares and Series C Shares are entitled
to receive, prior and in preference to any declaration or payment of any
dividend on Common Shares of the Company, dividends at the rate of $0.12, $.012
and $600 per share, respectively, per annum, payable quarterly in cash or at
the option of the Company, in Common Shares. No dividends on the Common Shares
have been paid by the Company to date. The Company's Loan and Security
Agreement with Congress Financial Corporation (Western) ("Congress") prohibits
the payment of cash dividends on the Common Shares. The Company currently
intends to retain future earnings to fund the development and growth of its
business and, therefore, does not anticipate paying cash dividends on the
Common Shares within the foreseeable future. Any future payment of dividends
or Common Shares will be determined by the Company's Board of Directors and
will depend on the Company's financial condition, results of operations and
other factors deemed relevant by its Board of Directors. See "Market Prices
and Dividends."

POSSIBLE ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER PROVISIONS. The
Company's Articles of Incorporation authorize the Board of Directors to issue,
without stockholder approval, one or more series of preferred shares having
such preferences, powers and relative, participating, optional and other rights
(including preferences over the Common Shares respecting dividends and
distributions and voting rights) as the Board of Directors may determine. The
issuance of this "blank-check" preferred shares could render more difficult or
discourage an attempt to obtain control of the Company by means of a tender
offer, merger, proxy contest or otherwise. Certain provisions of the Colorado
General Corporation Law may also discourage takeover attempts that have not
been approved by the Board of Directors. In addition, as permitted by the
Company's Articles of Incorporation, the Board of Directors is divided into
three classes of directors, with each class serving a staggered three-year
term. This division of the Board of Directors into three classes may tend to
discourage a third party from making a tender offer or otherwise attempting to
obtain control of the Company and may maintain the incumbency of the Board of
Directors, because such a division generally makes it more difficult for
stockholders to replace a majority of directors. See "Description of
Securities."

-11-
<PAGE> 16
USE OF PROCEEDS

Because the Shares offered hereby are being sold by the Selling
Shareholders, the Company will not receive any proceeds from the sale of the
Shares. The Company will receive $2,745,000 if all of the Warrants are
exercised. The Company will use the proceeds from the exercise of the
Warrants, if any, for working capital purposes.

PLAN OF DISTRIBUTION

The Shares offered hereby may be sold by the Selling Shareholders or by
pledgees, donees, transferees or other successors-in-interest (including sales
after exercise of convertible securities). Such sales may be made in the over-
the-counter market, in privately negotiated transactions, or otherwise, at
prices and at terms then prevailing, at prices related to the then current
market prices or at negotiated prices. The Shares may be sold by one or more
of the following methods: (a) a block trade in which the broker or dealer so
engaged will attempt to sell the Shares as agent but may position and resell a
portion of the block as principal in order to consummate the transaction; (b) a
purchase by a broker or dealer as principal, and the resale by such broker or
dealer for its account pursuant to this Prospectus, including resale to another
broker or dealer; or (c) ordinary brokerage transactions and transactions in
which the broker solicits purchasers. In effecting sales, brokers or dealers
engaged by a Selling Shareholder may arrange for other brokers or dealers to
participate. Any such brokers or dealers will receive commissions or discounts
from a Selling Stockholder in amounts to be negotiated immediately prior to the
sale. Such brokers or dealers and any other participating brokers or dealers
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended. Any gain realized by such a broker or dealer on the sale of
shares which it purchases as a principal may be deemed to be compensation to
the broker or dealer in addition to any commission paid to the broker by a
Selling Shareholder. The Shares offered hereby will be sold by the Selling
Securityholders (or their pledgees, donees, transferees or other successors in
interest) acting as principals for their own account. Any commissions or other
fees payable to broker-dealers in connection with any sale of the Shares will
be borne by the Selling Shareholders or other party selling such Shares.

The Company will not receive any portion of the proceeds of the
securities sold by the Selling Shareholders, but will receive amounts upon
exercise of the Warrants, if any, which funds will be used for working capital.
There is no assurance that the Selling Shareholders will sell any or all of the
securities offered hereby.

In order to comply with certain state securities laws, if applicable,
the Shares may not be sold in certain states unless the Shares have been
registered or qualified for sale in such state or an exemption from
registration for qualification is available and complied with.

No underwriting arrangements exist as of the date of this Prospectus for
any Selling Securityholders to sell its shares. Upon being advised of any
underwriting arrangements that may be entered into by a Selling Securityholder
after the date of this Prospectus, the Company will prepare a supplement to
this Prospectus to disclose such arrangements.

SELLING SHAREHOLDERS

The following table sets forth as of August 5, 1998, the following
information regarding each Selling Shareholder who is offering Shares pursuant
to this Prospectus: the name of each Selling Shareholder and the number of
Common Shares owned by each Selling Shareholder before the offering pursuant to
this Prospectus, the amount of Common Shares to be offered for each Selling
Shareholder's account, and the amount and percentage of the Common Shares to be
owned by each Selling Shareholder after the offering pursuant to this
Prospectus is complete. Information set forth in the following table regarding
the securities owned by each Selling Shareholder is provided to the best
knowledge of the Company based on information furnished to the Company by the
respective Selling Shareholder and/or available to the Company through its
stock transfer records. No Selling Shareholder has had any position, office,
or other material relationship which the Selling Shareholder has had within the
past three years with the Company or any of its predecessors or affiliates.

-12-
<PAGE> 17
<TABLE>
<CAPTION>
========================================================================================================================
Shares to be Owned
Total Number of Upon Completion of
Shares Shares to be Offering
Beneficially Offered for
Owned Selling
Name of Selling Prior to Shareholder's Percentage
Shareholder Offering(a) Account(a) Number of Class
------ --------
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gamma Global Fund Ltd.(b) 852,711(1) 852,711(1) 0 0
- ------------------------------------------------------------------------------------------------------------------------
ProFutures Special Equities Fund, L.P.(c) 2,558,132(2) 2,558,132(2) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Augustine Fund LP(d) 852,711(3) 852,711(3) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Fernhill Holdings Limited(e) 794,599(4) 794,599(4) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Jay A. Smith(e) 794,599(4) 794,599(4) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Dr. Brian H. Price(e) 187,578(5) 187,578(5) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Albert D. Reichmann(e) 187,578(5) 187,578(5) 0 0
- ------------------------------------------------------------------------------------------------------------------------
R.J. Cole Financial Consulting Ltd.(e) 187,578(5) 187,578(5) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Tricaster Management, Inc.(e) 455,360(6) 455,360(6) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Excalibur Limited Partnership(e) 2,461,233(7) 2,461,233(7) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Talisman Capital Opportunity Fund Ltd.(f) 1,705,421(8) 1,705,421(8) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Chedington Hill Inc.(e) 267,762(9) 267,762(9) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Mimarco Investments, Ltd.(e) 267,762(9) 267,762(9) 0 0
- ------------------------------------------------------------------------------------------------------------------------
National Utility Service (Cda) Ltd.(e) 267,762(9) 267,762(9) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Mark Rider(e) 487,623(10) 487,623(10) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Ronald Frisch(e) 267,762(9) 267,762(9) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Jefrob Glorich Ltd.(e) 267,762(9) 267,762(9) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Dale H. Lastman(e) 267,762(9) 267,762(9) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Paul Godfrey(e) 267,762(9) 267,762(9) 0 0
- ------------------------------------------------------------------------------------------------------------------------
GUNDYCO(e) 4,622,405(11) 4,622,405(11) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Accpac Holdings Ltd.(g) 858,970(12) 300,000(12) 558,970 2.83%
- ------------------------------------------------------------------------------------------------------------------------
Solanic Investments Ltd.(g) 850,000(13) 850,000(13) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Verand Ltd.(g) 850,000(14) 850,000(14) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Atlantis Holding Corporation(h) 1,412,068(15) 442,000(15) 970,068 4.90%
- ------------------------------------------------------------------------------------------------------------------------
BINHAD, Inc.(i) 269,349(16) 269,349(16) 0 0
- ------------------------------------------------------------------------------------------------------------------------
MCM Capital Management, Inc.(j) 118,182 100,000 18,182 *
- ------------------------------------------------------------------------------------------------------------------------
Trilogy Capital Management, Inc.(k) 50,000 50,000 0 0
- ------------------------------------------------------------------------------------------------------------------------
International Investor Relations Group(l) 320,000 320,000(17) 0 0
- ------------------------------------------------------------------------------------------------------------------------
Wheatar Corp.(m) 349,500 250,000 299,500 1.52
========================================================================================================================
</TABLE>

-13-
<PAGE> 18
(a) Includes the following number of Common Shares of the Company: (i) an
estimated 7,895,470 Common Shares issuable upon conversion of $5,000,000
in principal amount of Convertible Notes, (ii) an estimated 631,644
Common Shares that may be issued as interest on the Convertible Notes at
the option of the Company in lieu of cash interest, (iii) an estimated
4,311,294 Common Shares issuable upon conversion of 186 Series C Shares
of the Company, (iv) 2,450,000 Common Shares underlying Warrants of the
Company, and (v) 1,542,460 outstanding Common Shares. Because the
conversion price of the Convertible Notes and the Series C Shares is
related to the market price of the Common Shares at the time of
conversion and the issuance price of the Interest Shares is related to
the market price of the Common Shares at the time of issuance and
because there may be antidilution adjustments to the exercise price of
the Convertible Notes, the Series C Shares and the Warrants and
antidilution adjustments to 269,349 of the Outstanding Shares, the
number of Conversion Shares, Interest Shares and Outstanding Shares
which are subject to this Prospectus is indeterminate and this
Prospectus relates to the resale of such entire indeterminate number of
Shares.

The number of Common Shares issuable upon conversion of the Convertible
Notes, and the consequent number of Shares available for resale under
this Prospectus, is based upon a conversion price which is equal to the
lesser of (i) $1.75 per share and (ii) the following conversion prices:
(x) on or after August 6, 1998 at a per share price equal to eighty
percent (80%) of the arithmetic average of the closing bid and ask
prices of the Company's Common Shares for the twenty trading days prior
to the exercise date of such conversion and (y) on or after October 5,
1998 a per share price equal to seventy-five (75%) of the arithmetic
average of the closing bid and ask prices of the Company's Common Shares
for each of the twenty trading days prior to the exercise date of such
conversion. The Convertible Notes mature on April 8, 1999. Common
Shares issuable upon conversion of the Convertible Notes referenced in
this Prospectus are based on an assumed conversion date of July 29,
1998 and an assumed conversion price of $.633275 (80% of $.791594) but
this Prospectus covers the indeterminate number of Common Shares
issuable upon conversion of the Convertible Notes based on the
conversion price in effect at the time of conversion.

Interest is due on the unpaid principal of the Convertible Notes at the
rate of 10% per annum, payable semi-annually on October 1 and April 1
commencing October 1, 1998. The Company has the right, at its sole
option, to pay any interest due on the Convertible Notes in Common
Shares of the Company (the "Interest Shares") based on the arithmetic
average of the closing bid and ask price of the Company's Common Shares
for the twenty trading days prior to the interest payment due date (the
"Interest Price"). The Interest Shares referenced in this Prospectus
assume an Interest Price at the time of issuance of $.791594 but this
Prospectus covers the indeterminate number of Common Shares that may be
issued as Interest Shares based on the market price at the time of
issuance.

The number of Common Shares issuable upon conversion of the Series C
Shares, and the consequent number of Shares available for resale under
this Prospectus, is based upon a conversion price per Series C Share
which is equal to $10,000 divided by the lesser of (x) $1.75 and (y)
seventy five percent (75%) of the arithmetic average of the closing bid
prices for each of the five trading days prior to the exercise date of
any such conversion. Common Shares issuable upon conversion of the
Series C Shares referenced in this Prospectus are based on an assumed
conversion date of July 29, 1998 and an assumed conversion price of
$.431438 (75% of $.57525) but this Prospectus covers the indeterminate
number of Common Shares issuable upon conversion of the Series C Share
based on the conversion price in effect at the time of conversion.

-14-
<PAGE> 19
(b) c/o Carol O'Donnell
540 Joan Drive
Fairfield, CT 06430-2207

(d) c/o Augustine Capitol Management, Inc.
141 West Jackson Boulevard
Suite 2182
Chicago, IL 60604

(e) c/o Jay A. Smith
CIBC Wood Gundy Securities, Inc.
200 King Street West
P.O. Box 23, Suite 1807
Toronto, Ontario M5H 3T4

(f) 16101 LaGrande Drive
Suite 100
Little Rock, AK

(g) Dawson Building
Road Town
Tortola, BVI

(h) 7986 E. Arapahoe Court
Suite 1800
Englewood, CO 80112

(i) c/o Daniel J. Eget
2850 Benedict Canyon Drive
Beverly Hills, CA 90210

(j) 5525 Erindale Drive
Suite 201
Colorado Springs, CO 80918

Raymond McElhaney
and Bill Conrad,
Principals of
MCM Capital
Management Inc.,
are former
directors and
officers of
the Company

(k) 2811 Airpark Drive
Santa Maria, CA 93455

(l) Premiere Point North
225 South Westmonte Drive
Suite 1170
Altamonte Springs, FL 32714

(m) 300 S.E. Fifth Avenue
Suite 5140
Boca Raton, FL 33432

-15-
<PAGE> 20
(*) Less than 1%

(1) Includes 789,547 shares issuable upon conversion of $500,000 principal
of 10% Convertible Notes and 63,164 shares issuable upon payment of
interest in Common Shares.

(2) Includes 2,368,640 shares issuable upon conversion of $1,500,000
principal of 10% Convertible Notes and 189,492 shares issuable upon
payment of interest in Common Shares.

(3) Includes 789,547 shares issuable upon conversion of $500,000 principal
of 10% Convertible Notes and 63,164 shares issuable upon payment of
interest in Common Shares.

(4) Includes 284,237 shares issuable upon conversion of $180,000 principal
of 10% Convertible Notes, 22,739 shares issuable upon payment of
interest in Common Shares, and 25,000 shares issuable upon conversion of
Warrants to purchase shares at $2.38 per share. Also includes 440,401
shares issuable upon conversion of 19 Series C Shares and 22,222 Common
Shares held of record by GUNDYCO which Shares will be offered by GUNDYCO
for the account of the Selling Shareholder (see Note 11).

(5) Includes 173,701 shares issuable upon conversion of $110,000 principal
of 10% Convertible Notes and 13,897 shares issuable upon payment of
interest in Common Shares.

(6) Includes 173,701 shares issuable upon conversion of $110,000 principal
of 10% Convertible Notes, 13,897 shares issuable upon payment of
interest in Common Shares and 13,750 shares issuable upon conversion of
warrants to purchase shares at $2.38 per share. Also includes 231,790
shares issuable upon conversion of 10 Series C Shares and 22,222 Common
Shares held of record by GUNDYCO which Shares will be offered by GUNDYCO
for the account of the Selling Shareholder (see Note 11).

(7) Includes 1,105,365 shares issuable upon conversion of $700,000 principal
of 10% Convertible Notes, 88,403 shares issuable upon payment of
interest in Common Shares and 65,000 shares issuable upon conversion of
warrants to purchase shares at $2.38 per share. Also includes 1,135,771
shares issuable upon conversion of 49 Series C Shares and 66,667 Common
Shares held of record by GUNDYCO which Shares will be offered by GUNDYCO
for the account of the Selling Shareholder (see Note 11).

(8) Includes 1,579,093 shares issuable upon conversion of $1,000,000
principal of 10% Convertible Notes and 126,328 shares issuable upon
payment of interest in Common Shares.

(9) Includes 13,750 shares issuable upon conversion of warrants to purchase
shares at $2.38 per share. Also includes 231,790 shares issuable upon
conversion of 10 Series C Shares and 22,222 Common Shares held of record
by GUNDYCO which Shares will be offered by GUNDYCO for the account of
the Selling Shareholder (see Note 11).

(10) Includes 25,000 shares issuable upon conversion of warrants to purchase
shares at $2.38 per share. Also includes 440,401 shares issuable upon
conversion of 19 Series C Shares and 22,222 Common Shares held of record
by GUNDYCO which Shares will be offered by GUNDYCO for the account of the
Selling Shareholder (see Note 11).

(11) Includes 4,311,294 shares issuable upon conversion of 186 Series C
Shares and 311,111 Common Shares held by GUNDYCO as holder of record for
the benefit of the persons set forth in Notes (4), (6), (7), (9) and
(10).

(12) Includes 150,000 shares issuable upon conversion of warrants to purchase
shares at $.75 per share and 150,000 shares issuable upon conversion of
warrants to purchase shares at $1.00 per share.

(13) Includes 850,000 shares issuable upon conversion of warrants to purchase
shares at $1.00 per share.

(14) Includes 850,000 shares issuable upon conversion of warrants to purchase
shares at $.75 per share.

-16-
<PAGE> 21
(15) Atlantis Holding Corporation ("AHC") directly owns 1,211,568 of the
Company's outstanding Common Shares. AHC has the sole dispositive power
over the AHC Shares and Stone Pine Colorado, LLC has the sole voting
power over the AHC Shares pursuant to a voting proxy until the earlier
of the transfer of the AHC Shares by AHC to a nonaffiliate and February
4, 2000. Invester Capital Enterprises, Inc. ("ICE") directly owns
200,000 of the Company's outstanding Common Shares. Gary Kucher
directly owns 500 of the Company's outstanding Common Shares (the
"Kucher Shares").

Mr. Kucher as the sole shareholder of AHC has dispositive power over the
AHC Shares and as the sole shareholder, director and executive officer
of ICE has voting and dispositive power over the ICE Shares and
accordingly may be deemed to beneficially own the AHC Shares and the ICE
Shares. Mr. Kucher, AHC and ICE may be deemed to be persons who
comprise a group with the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, and therefore each may be deemed to
beneficially own all of the Kucher Shares, the AHC Shares and the ICE
Shares.

(16) The 269,349 Common Shares are subject to increase to such number of
Common Shares which together with the 269,349 Common Shares have a
market value of $300,000 on the date 30 days after the date this
Registration Statement is filed with the Commission.

(17) Includes 200,000 shares issuable upon conversion of warrants to purchase
shares at $2.00 per share.

-17-
<PAGE> 22
MARKET PRICES AND DIVIDENDS

MARKET PRICES

The Company's Common Shares are traded in the over-the-counter market
and are quoted in the OTC Bulletin Board maintained by the NASD under the
symbol "CDNO". The following table sets forth the range of high and low bid
quotations as reported by the NASD for the Common Shares of the Company for the
periods indicated. Quotations represent prices between dealers, do not include
retail markups, markdowns or commissions, and do not necessarily represent
prices at which actual transactions were effected.

<TABLE>
<CAPTION>
1998 HIGH BID LOW BID
-------- -------
<S> <C> <C>
First Quarter $3.53125 $.625
Second Quarter $2.34375 $1.00

1997

First Quarter $2.75 $1.50
Second Quarter $3.00 $1.00
Third Quarter $3.50 $1.50
Fourth Quarter $2.00 $1.00

1996

First Quarter $0.30 $0.30
Second Quarter $__ (1) $__(1)
Third Quarter $0.25(2) $0.25(2)
Fourth Quarter $0.01(2) $0.01(2)
</TABLE>

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

(1) No quotations reported by the NASD.

(2) Sales price reported by the NASD.

On July 31, 1998, the closing bid and asked quotations for the Company's Common
Shares as reported by the OTC Bulletin Board were $.59375 and $.65625. The
number of record holders of Common Shares of the Company as of July 31, 1998
was 112.

DIVIDENDS

The holders of the Series A Preferred Shares, Series B Preferred Shares and
Series C Preferred Shares are entitled to receive, prior and in preference to
any declaration or payment of any dividend on Common Shares of the Company,
dividends at the rate of, $0.12, $.012 and $600 per share, respectively, per
annum, payable quarterly in cash or at the option of the Company, in Common
Shares.

No dividends on the Common Shares have been paid by the Company to date. The
Company's Loan and Security Agreement with Congress prohibits the payment of
cash dividends on the Common Shares. The Company currently intends to retain
future earnings to fund the development and growth of its business and,
therefore, does not anticipate paying cash dividends on the Common Shares
within the foreseeable future. Any future payment of dividends on the Common
Shares will be determined by the Company's Board of Directors and will depend
on the Company's financial condition, results of operations and other factors
deemed relevant by its Board of Directors.

-18-
<PAGE> 23
PRO FORMA COMBINED FINANCIAL INFORMATION

The pro forma statements of operations for the three months ended March 31,
1998 and for the year ended December 31, 1997 assumes that the acquisition of
Capitol Metals Co., Inc. ("Old Capitol") occurred on January 1, 1997.

The historical financial information of the Company for the three months ended
March 31, 1998 (unaudited) and the year-ended December 31, 1997 has been derived
from the consolidated financial statements included elsewhere in this
Prospectus. The pro forma financial information should be read in conjunction
with the accompanying notes thereto and with the financial statements of the
Company and Old Capitol included elsewhere in this Prospectus. The pro forma
combined financial information does not purport to be indicative of operating
results which would have been achieved had the acquisition occurred as of the
dates indicated and should not be construed as representative of future
operating results. In the opinion of the Company's management, all adjustments
have been made to reflect the effects of this acquisition.

<TABLE>
<CAPTION>
===================================================================================================

Historical Year Ended
12/31/97
-------- Pro Forma
Consolidated Adjustments
Capital of North Capitol Metals Increases Pro Forma
America, Inc. Co. Inc., (Decreases) Combined
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Sales $ 16,989,478 $ 20,485,843 $ -- $ 37,475,321
Cost of Sales 14,021,110 18,800,676 158,276(1) 32,980,062
------------ ------------ ------------ ------------
Gross profit 2,968,368 1,685,167 (158,276) 4,495,259
------------ ------------ ------------ ------------
Operating Expenses
Selling and shipping 1,012,504 -- -- 1,012,504
General and
administrative 1,513,959 3,763,951 -- 5,277,910
Payroll and related
benefits 2,061,144 -- -- 2,061,144
Depreciation and
amortization 441,999 149,286 850,000(2) 1,441,285
30,145 30,145
------------ ------------ ------------ ------------
Total operating expenses 5,029,606 3,913,237 880,145 9,822,988
------------ ------------ ------------ ------------

(Loss) from operations (2,061,238) (2,228,070) (1,038,421) (5,327,729)
------------ ------------ ------------ ------------
Other Income (Expense)
Interest expense (582,713) (1,136,555) (210,000)(3) (1,929,268)
656,216 (4) 656,216
Other Income 165,374 -- -- 165,374
------------
Net Income (Loss) (2,478,577) (3,364,625) (592,205) (6,435,407)
------------ ------------ ------------ ------------
Preferred share dividends -- -- -- --
Discount attributable to
conversion of preferred
shares and warrants -- -- -- --
Loss applicable to common
stockholders $ (2,478,577) $ (3,364,625) $ (592,205) $ (6,435,407)
============ ============ ============ ============
Basic Loss Per Share $ (0.17) $ (336.46) $ (0.33) $ (0.38)
------------ ------------ ------------ ------------
Weighted Average Shares
of Common Stock 14,980,423 10,000 1,769,349 16,749,772
============ ============ ============ ============
===================================================================================================
<CAPTION>
===================================================================================================
Historical
For The
Historical Period
Three Months January 1,
Ended 1998 to
3/31/98 January 12, Pro Forma
------- 1998 Adjustments
Consolidated ----------- Increases
Capital of North Capitol Metals (Decreases) Pro Forma
America, Inc. CO., INC. (5) Combined
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Sales $ 5,539,506 $ 260,894 -- $ 5,800,400
Cost of Sales 4,905,079 219,866 -- 5,124,945
Gross profit 634,427 41,028 -- 675,455
Operating Expenses
Selling and shipping 193,672 6,031 -- 199,703
General and
administrative 1,232,941 78,606 -- 1,311,547
Payroll and related
benefits 599,546 26,782 -- 626,328
Depreciation and
amortization 227,906 2,710 -- 230,616

Total operating expenses 2,254,065 114,129 -- 2,368,194
------------ ------------ ------------ ------------
(Loss) from operations (1,619,638) (73,101) -- (1,692,739)
------------ ------------ ------------ ------------
Other Income (Expense)
Interest expense (475,258) (60,278) -- (535,536)

Other Income 111,900 -- -- 111,900
------------ ------------ ------------ ------------
Net Income (Loss) (1,982,996) (133,379) -- (2,116,375)
Preferred share dividends (43,023) -- -- (43,023)
Discount attributable to
conversion of preferred
shares and warrants (436,713) -- -- (436,713)
------------ ------------ ------------ ------------
Loss applicable to common
stockholders $ (2,462,732) $ (133,379) -- $ (2,596,111)
============ ============ ============ ============
Basic Loss Per Share $ (0.14) $ (0.79) -- $ (0.15)
============ ============ ============ ============
Weighted Average Shares
of Common Stock 17,661,271 169,246 -- 17,830,517
============ ============ ============ ============
===================================================================================================
</TABLE>

-19-
<PAGE> 24
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION
(UNAUDITED)

Below are explanations for the numerical notes used in the Pro Forma Combined
Financial Information:

(1) To adjust for additional depreciation resulting from the revaluation of
assets as determined by appraisal. Assets are depreciated over their useful
lives using the straight-line method.

(2) Amortization of loan fees attributable to the new subordinated debt over
a period of one year.

(3) To record interest at 12% on the subordinated debt for the year.

(4) To record interest expense on new debt incurred to finance this
purchase, less reduction for the interest on the old debt.

(5) Adjustments to reflect the acquisition as of January 1, 1998 such as
depreciation, amortization and interest were not significant for the 12 day
period ended January 12, 1998, and therefore not reflected in the pro forma
combined financial statements.

-20-
<PAGE> 25
MANAGEMENT'S DISCUSSION AND ANALYSIS
AND PLAN OF OPERATION

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

INTRODUCTION AND PLAN OF OPERATION

Prior to January 21, 1997, the Company's operations were exclusively in the
real estate business. On January 21, 1997, Consolidated Land & Cattle Company,
a subsidiary of the Company, merged with Angeles Acquisition Corp. ("Angeles
Acquisition"), a privately held company. Angeles Acquisition survived the
Merger and became a wholly owned subsidiary of the Company. Prior to the
merger Angeles Acquisition had acquired Angeles Metal Trim Co. ("Angeles").
Angeles and its wholly-owned subsidiary fabricate and sell steel framing
materials for commercial and residential structures.

In January 1998, the Company, through Angeles Acquisition, acquired
substantially all of Capitol Metals Co., Inc.'s ("Old Capitol") assets in a
sale approved by the U.S. Bankruptcy Court (the "Capitol Acquisition"). The
purchase price of Old Capitol's assets were approximately $8,100,000 consisting
of $336,000 in cash, $1,500,000 in promissory notes, $300,000 of Common Shares
of the Company (269,349 Common Shares), the assumption of an outstanding note
of $626,000, the repayment of $4,764,000 of Capitol's previously existing
senior debt and the assumption of approximately $574,000 of costs and expenses
associated with the acquisition. During February 1998, Angeles Acquisition
changed its corporate name to Capitol Metals Co. ("Capitol"). Capitol operates
a steel service center, selling steel and providing pickling, slitting,
leveling, storage and other processing services to its customers.

With the acquisition of Angeles and Capitol, the Company intends to focus on
the steel frame building business, steel service center operations and
complementary businesses. Acquisition plans, capital needs and plans to raise
additional capital by the Company are described below under "Liquidity, Capital
Resources and Financial Condition."

The Company's business strategy is to achieve profitability through expansion
of its existing operations and acquisitions of businesses that are
strategically located or positioned to diversify or enhance the Company's
customer base, product range and geographic coverage.

RESULTS OF OPERATIONS

Three Months Ended March 31, 1998

During the first quarter of 1998, the Company reported net sales of $5,539,506
as compared with net sales for the first quarter of 1997 of $5,330,147. Net
sales in the quarter included $2,207,203 of sales of Capitol which was acquired
on January 12, 1998. Sales in the first quarter of 1998 for Angeles decreased
from $5,330,147 to $2,832,303 for 1998. This decrease in net sales for Angeles
was mainly a result of insufficient working capital to purchase steel necessary
to produce products.

Cost of goods sold for both entities amounted to $4,905,079 for the first
quarter in 1998 resulting in a gross margin of 11.5% of net sales. The gross
profit for Angeles amounted to 15% for the first quarter in 1998 and Capitol
generated a gross profit of 8% for the same quarter. The gross profit for
Angeles for the first quarter ended March 31, 1997 amounted to 17.7% or a
reduction of 2.7% as compared to the same period in 1998. This reduction in
gross profit percentage of Angeles resulted from the impact of decreased sales
without a related decrease in the fixed costs of sales.

Operating expenses increased by $834,297, or 59%, to $2,254,065 for the first
quarter of 1998 from $1,419,768 in the first quarter of 1997. The increase is
primarily attributable to general and administrative expenses from Capitol.
The Company anticipates that the operating expenses will decrease as a
percentage of sales as the Company combines the operations of Angeles and
Capitol over the next few months. In addition to the long term reduction in
facilities cost, the combination of the operations of Angeles and Capitol will
allow management to combine several previously duplicated functions, creating
efficiencies and cost savings. These functions will include: materials
receiving, slitting operations, purchasing, accounting and other administrative
functions.

-21-
<PAGE> 26
Additionally, as the companies currently use several common suppliers, the
Company believes that the purchasing volume created by the addition of the
Capitol may create reduced pricing for materials and services utilize by both
Angeles and Capitol.

Interest expense increased by $397,260 to $475,258 in the first quarter of 1998
as compared to $77,998 in the first quarter of 1997. This increase is the
result of the interest expense related to the various financing arrangements
entered into by the Company to provide working capital and the financing
related to the acquisition of Capitol.

The Company reported a net loss for the three months ended March 31, 1998 of
$1,982,996 as compared to a net loss of $524,190 for the same period in 1997.
The net loss for the Capitol operations amounted to $687,765 for the first
quarter ended March 31, 1998. Including the discount attributable to the
conversion value of preferred shares and warrants of $436,173, the Company
reported a loss for the three months ended March 31, 1998 of $2,462,732 ($.14
per share).

Year Ended December 31, 1997

For the year ended December 31, 1997, the Company had a net loss of $2,478,577
on revenues of $16,989,478. This loss is mainly the result of insufficient
working capital at Angeles to purchase inventory to generate steel sales volume
necessary to cover overhead and administrative costs. The net loss per share
amounted to $.17 for 1997 as compared to a $.20 loss per share for 1996.

The Company reported net sales of $16,989,478 from its steel fabrication
activities during the year ended December 31, 1997. Cost of goods sold totaled
$14,021,110, resulting in a gross profit of $2,968,368, or 17.5% of net sales.

Operating expenses totaled $5,029,606 for the year ended December 31, 1997
including selling expenses of $1,012,504, general and administrative expenses
of $1,513,959, payroll and related benefit expenses of $2,061,144 and
depreciation and amortization of $441,999. The gross profit of approximately
$2,968,000 was not sufficient to cover these operating expenses. As a result,
the Company incurred a loss from operations of $2,061,238.

Interest expense for the period totaled $582,713 and the Company reported
$165,374 of other income from sales of scrap. The net loss for the year ended
December 31, 1997 was $2,478,577, or $.17 per share.

A comparison of operating results for the year ended December 31, 1997 to the
prior year has not been made because such a comparison would not be meaningful
given the change in the Company's business activities during 1997.

Year Ended December 31, 1996

For the year ended December 31, 1996, the Company had a loss of $312,482 on
revenues of $17,269 from interest income. Since Angeles was acquired in
January 1997, the 1996 operating results did not reflect Angeles' operations.
The loss in 1996 was primarily the result of a $213,672 loss incurred on the
writedown of the assets included in the Asset Sale to realizable value, based
upon fair value of such assets as determined by the Asset Sale. The Company
also incurred an $11,400 loss from the buyout of certain stock options, in
which the Company issued 28,500 Common Shares to cancel options covering 35,000
Common Shares.

Effect of Inflation

Inflation did not have a significant effect on the operations of the Company
during the fiscal year ended December 31, 1997. However, in the steel
business, acquisition of steel is a major cost factor in the production
process. As steel prices rise and decline, management believes that proper
selection, competition of steel supply companies, timing of purchases and
future sales price adjustments should preclude any significant adverse effect
on the Company.

Seasonality

The Company distributes steel products to customers in a variety of industries,
including the construction, manufacturing and automotive industries. Because
the Company sells to a variety of customers in several industries, management
does not believe that the Company's operations are impacted by any material
seasonal trends. There can be no assurance however, that period-to-period
fluctuations will not occur in the future.

-22-
<PAGE> 27
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION

Cash flows used in operations were $705,770 for the three months ended March
31, 1998 as compared to $227,451 used in operations for the first quarter ended
March 31, 1997. The increase in cash used in operations for the first quarter
ended March 31, 1998 was a result of the larger loss in the first quarter of
1998 compared to the same quarter of 1997 after adjustment in 1998 for the
Common Shares issued for loan fees. Also, for the first quarter of 1998
compared to the same period of 1997, accounts receivable and inventory
decreased thereby providing additional cash for operations. The acquisition of
Capitol in January 1998 resulted in the use of cash of approximately $2 million
compared to approximately $.9 million in the same period for 1997. Cash flows
from financing activities for the first quarter of 1998 increased by $1.8
million compared to the same period in 1997 because of cash needed for the
acquisition of Capitol. As of March 31, 1998, the Company has a working
capital deficit of $1,043,275, a stockholders' deficit of $441,375 and an
accumulated deficit of $5,676,769. See the Company's financial statements and
notes thereto, included elsewhere in this Prospectus, for detailed financial
information regarding the Company.

Since January 1997, the Company has primarily financed its operations with cash
available under its credit facilities and funds advanced under loan
arrangements, including certain loans from affiliated entities. The Company
has also financed its operations through the private placement of capital stock
and convertible securities, including $1,000,000 from sales of Common Shares in
January 1997, $2,000,000 from the March 1998 sale of Series C Preferred Shares
and $5,000,000 from the issuances of convertible notes in April and June 1998.

During 1997, the Company borrowed approximately $1,000,000 from various
affiliated entities. Interest and loan fees to these entities amounted to
$298,382, of which $248,234 was paid by issuing 286,666 Common Shares. On
December 31, 1997, the Company issued to these entities 744,000 shares of its
Series A Preferred Shares and 449,000 shares of its Series B Preferred Shares
in exchange for the retirement of $1,025,000 of these loans and payment of
$168,000 of management fees. In March 1998, the Company repaid the remaining
amounts outstanding on these loans.

During January 1998, the Company entered into a new financing arrangement with
Congress Financial. The Company incurred $8,100,000 of indebtedness from
Congress Financial, of which $3,300,000 was utilized for the repayment of
outstanding revolving and term indebtedness of Angeles and $4,800,000 of which
was utilized in connection with the acquisition of Capitol. Congress Financial
provided $1,400,000 and $3,300,000 in financing under revolving lines of credit
to Angeles and Capitol, respectively, and provided $1,900,000 and $1,500,000 to
Angeles and Capitol, respectively, in financing under term loans. These loans
are collectively referred to as the "Congress Facility".

Under the Congress Facility, Angeles and Capitol can borrow up to a maximum of
$20 million. The revolving line of credit portion of the Congress Facility is
limited by the amount of eligible accounts receivable and inventory and
requires Angeles and Capitol to comply with certain financial and other non-
financial covenants, as defined in the agreement. The Congress Facility is
available, subject to support by the appropriate levels of assets and
compliance with the applicable financial and other non-financial covenants by
both Angeles and Capitol, to provide financing for general corporate purposes.
The Company is in compliance with these covenants. The revolving line of
credit component of the Congress Facility is due in January 2000. The term
loans are to be repaid in 60 monthly installments commencing February 1, 1998.
Amounts drawn under the Congress Facility bear interest at a rate which is .75%
per annum over the prime rate announced by Core States Bank, N.A. for the
interest period. All of the accounts receivable, inventory, equipment and
intangibles of Angeles and Capitol have been pledged as security for the
Congress Facility. The Congress Facility has been guaranteed by the Company
and California Building Systems, Inc., a subsidiary of Angeles.

During January 1998, in connection with the Capitol Acquisition and the
transactions with Congress Financial, Paul Bagley, the Chairman and Chief
Executive Officer of the Company, loaned $1,500,000 to the Company. The loan
is evidenced by a convertible promissory note of the Company (the "1998 Bagley
Note") in the amount of $1,750,000, with a 12% annual interest rate, payable
monthly in arrears. The 1998 Bagley Note is due in one year or sooner in the
event of a $25 million equity issuance by the Company and is secured by a
subordinate security interest in all of the assets of the Company and its
subsidiaries, effective upon the consent of Congress Financial to such security
interest or the refinancing or repayment of the Congress Facility. The 1998
Bagley Note is convertible into 1,750,000 Common Shares. As additional
consideration for the loan, the Company issued 1,500,000 Common Shares to Mr.
Bagley.

-23-
<PAGE> 28
During March 1998, Stone Pine Atlantic, LLC ("SP Atlantic") loaned $214,286 to
the Company. The loan is evidenced by a convertible promissory note of the
Company (the "SP Atlantic Note") in the aggregate amount of $250,000, with a
12% annual interest rate, payable monthly in arrears. The SP Atlantic Note is
due in one year or sooner in the event of a $25 million equity issuance by the
Company and is secured by a subordinate security interest in all of the assets
of the Company and its subsidiaries, effective upon the consent of Congress
Financial to such security interest or the refinancing and repayment of the
Congress Facility. The SP Atlantic Note is convertible into 250,000 Common
Shares. As additional consideration for the loan the Company issued 214,286
Common Shares to SP Atlantic.

During March 1998, the Company sold to off-shore accredited investors 200 shares
of Series C Preferred Shares at $10,000 per share for a total consideration of
$2,000,000, of which 14 shares have been converted to date. The Series C
Convertible Preferred Shares are convertible into Common Shares of the Company,
at a conversion price per Series C Preferred Share equal to $10,000 divided by
the lessor of (x) $1.75 or (y) 75% of the arithmetic average of the closing bid
prices for each of the five trading days prior to the exercise date of any such
conversion. Based on a conversion price of $.431438, the outstanding 186 Series
C Preferred Shares are convertible into approximately 4,311,294 Common Shares.
As part of this transaction, the Company issued Common Stock Purchase Warrants
to purchase 250,000 of the Company's Common Shares at a price of $2.38 per
share. The Warrants can be exercised any time until March 6, 2000.

In March 1998, the Company issued to off-shore investors warrants to purchase
2,000,000 Common Shares (1,000,000 exercisable at $1.00 per share and 1,000,000
at $.75 per share), expiring March 2001 and March 2000, respectively. The
warrants were issued in exchange for $385,000 of cash paid by SP Atlantic and
are currently exercisable.

The Company has issued and sold, in a private placement, an aggregate of
$5,000,000 of its 10% Convertible Notes (collectively, the "Notes") pursuant to
the terms of a Note Purchase Agreement between the Company and the purchasers
of the Notes (the "Note Purchase Agreement"). The Company issued $2,000,000 of
the Notes on April 9, 1998, $1,500,000 on April 16, 1998, $500,000 on June 10,
1998 and $1,000,000 on June 16, 1998. The proceeds from the issuance of the
Notes will be used for working capital. Interest is payable on the principal
of the Notes from the date of issuance at the rate of 10% per annum. The
interest accrues from the date of issuance of the Notes and is payable semi-
annually on October 1 and April 1 commencing October 1, 1998, until the
principal is paid in full. The maturity date of the Notes is April 9, 1999
(the "Maturity Date"). Principal and interest on the Notes is payable in cash,
however, the Company has the right, at its sole option, to pay any interest due
on the Notes in Common Shares of the Company based on the arithmetic of the
closing bid and ask price of the Company's Common Shares for the twenty trading
days prior to the interest payment due date (the "Interest Shares").

At any time after issuance and prior to the Maturity Date, the outstanding
principal amount of the Notes, and all accrued and unpaid interest thereon, in
whole or in increments of at least $20,000 of principal, may be converted by
the holder thereof into Common Shares of the Company (the "Conversion Shares")
at the Conversion Price equal to the lessor of (i) $1.75 per share or (ii) the
following conversion prices: (x) on or after August 6, 1998 at a per share
price equal to eighty percent (80%) of the arithmetic average of the closing
bid and ask prices of the Company's Common Shares for the twenty trading days
prior to the exercise date of such conversion and (y) on or after October 5,
1998 a per share price equal to seventy-five percent (75%) of the arithmetic
average of the closing bid and ask prices of the Company's Common Shares for
each of the twenty trading days prior to the exercise date of the such
conversion. Based upon a conversion price of $.633275, the Notes are
convertible into 7,895,470 Common Shares. The conversion price is subject to
adjustment under specified antidilution provisions. The Company agreed to
register the Conversion Shares and Interest Shares on a registration statement
to be filed with the Securities and Exchange Commission and to have such
registration statement effective within 90 days of each issuance date. Failure
to have the registration statement effective by such dates subjects the Company
to monetary penalties.

The Company is in default under the Handel Note assumed in connection with the
Capitol Acquisition and has an obligation to repay $450,000 plus accrued
interest on such Note. The Company is also in default under a $300,000 Note
issued in connection with the Capitol Acquisition (the "BINHAD Note"). The
Handel Note and the BINHAD Note are subordinate to the Congress Facility. No
action may be commenced on the Handel Note or the BINHAD Note until October 12,
1998 and January 12, 1999, respectively. Failure to cure such default on such
dates will constitute an event of default under the Congress Facility and the
Convertible Notes.

-24-
<PAGE> 29
The Company has filed a claim against BINHAD for certain breaches of
representations and warranties by BINHAD in connection with the Capital
Acquisition. The Company intends to offset such damages against amounts
outstanding under the BINHAD Note.

The Company plans to engage in strategic acquisitions. As these investments
are identified and funds are needed to complete such acquisitions, funding for
such acquisitions will be necessary.

The Company will be required to obtain additional lines of credit for working
capital purposes and make periodic public offerings or private placements in
order to meet the liquidity needs of the business. The Company believes that
the funds raised from the sale of the Series C Preferred Shares, the sale of
the Convertible Notes, operating cash flows of the Company, funds available
under the Congress Facility and funds raised in an equity offering will provide
adequate resources to fund ongoing operating requirements and future capital
expenditures related to the development of its business for the next twelve
months. There can be no assurances that financing sources will be available to
the Company in sufficient amounts or on acceptable terms. Under such
circumstances, the Company would expect to manage its growth within the
financing available.

Readiness for Year 2000

The Company is in the process of upgrading its information systems. The new
systems, which will be installed during 1998 and used by both Capitol and
Angeles, are designed to be compatible for the year 2000 and beyond. The new
systems will also provide management with better information, on a more timely
basis. The costs of the Company's year 2000 compliance effort are being funded
with cash flows from operations. These costs are not expected to have a
material adverse effect on the Company's results of operations or cash flows.

Recent Accounting Pronouncements

SFAS No. 130 "Reporting Comprehensive Income" and SFAS No. 131 "Disclosure
About Segments of an Enterprise and Related Information" are effective for
fiscal years beginning after December 15, 1997. The Company will adopt the new
standards in 1998. The Company has complied with these pronouncements and has
determined there is no material impact for the first quarter of 1998.

-25-
<PAGE> 30
BUSINESS

HISTORY OF THE COMPANY

The Company was incorporated under the laws of the State of Delaware on
November 24, 1987. In March 1992, the Company was reincorporated in the State
of Colorado through the merger of the Delaware corporation into a newly formed
Colorado corporation.

The Company was originally organized to take advantage of potential business
opportunities made available to the Board of Directors. Commencing in 1989,
the Company investigated business opportunities in various industries and in
1991 the Company acquired an interest in a natural gas pipeline located in
southeast Kansas and northeast Oklahoma. The pipeline was operated by an
independent third party on behalf of the Company and its joint venture partner
until May 1993, when the pipeline was sold.

Commencing in 1994, the Company focused on real estate development and acquired
an interest in two entities participating in the real estate industry in
Colorado Springs, Colorado - the Northcrest Joint Venture and the Bear Star
Limited Liability Company ("Bear Star"). The Northcrest Joint Venture owns
undeveloped real estate east of Colorado Springs which has been zoned for
single family residential development. The Company owned a 53% interest in
that entity until such interest was sold in January 1997 prior to the Merger
described below. Bear Star was organized to develop and market partially
developed real estate west of Colorado Springs, which was zoned for single
family homes. The Company owned an 18.54% interest in that entity until such
interest was sold in April 1997. See "Former Real Estate Development Business"
for a description of the Northcrest Joint Venture, Bear Star, and the other
former real estate development interests of the Company.

On January 21, 1997, a subsidiary of the Company merged with Angeles
Acquisition, a privately held company, with Angeles Acquisition surviving the
merger as a wholly-owned subsidiary of the Company (the "Merger"). Prior to
the Merger, Angeles Acquisition had acquired Angeles, which does business as
Angeles Metal Systems. During August 1997, the Company reorganized its
subsidiaries and Angeles became a direct wholly-owned subsidiary of the
Company. Angeles and its wholly owned subsidiary, California Building Systems,
Inc. ("CBS"), fabricate and sell steel framing materials for commercial and
residential structures. CBS has also developed a low-cost complete steel frame
housing structure. See "Angeles Metal Trim Co. and Subsidiary" for a
description of the business of Angeles and CBS.

On January 12, 1998, the Company through a wholly-owned subsidiary, purchased
substantially all of the assets of Capitol Metals Co., Inc. ("Old Capitol"), a
privately held steel processing and service center headquartered in Torrance,
California. Old Capitol filed for protection under Chapter 11 of the
Bankruptcy Code on October 7, 1997. The total consideration was approximately
$8,100,000, consisting of $336,000 in cash, $1,500,000 in promissory notes
($300,000 of which is in default), $300,000 of Common Shares of the Company
(269,349 Common Shares), the assumption of an outstanding note and interest of
$626,000 (which is currently in default), the repayment of $4,764,000 of Old
Capitol's then existing senior debt and the assumption of approximately
$574,000 of costs and expenses associated with the acquisition. The Common
Shares issued in connection with the acquisition of the assets of Old Capitol
are included in this Prospectus and are subject to increase in the event the
value of such shares is less than $300,000, 30 days after the filing of this
Registration Statement. Information on the acquisition of the assets of Old
Capitol, and the obligations incurred in connection with such acquisition
appears in note K to the Company's 1997 Financial Statements that are included
in this Prospectus. See also "Management's Discussion and Analysis of
Financial Condition and Results of Operation".

With the recent acquisition of Angeles and Capitol, the Company intends to
focus on the steel frame building business, steel service center operations and
complementary businesses. Management believes that the acquisition of Capitol
will provide the Company with several advantages toward the accomplishment of
its business objective of increasing the Company's profitability. The Company
has recently relocated the Los Angeles, California operations of Angeles to the
Torrance, California facility used by Capitol. In addition to the long term
reduction in facilities cost, this relocation allows management to combine
several previously duplicative functions, creating efficiencies and cost
savings. These functions include: materials receiving, slitting operations,
purchasing, accounting and other administrative functions. Additionally, as
the companies currently use several common suppliers, the Company believes that
the purchasing volume created by the addition of Capitol may create reduced
pricing for materials and services utilized by Angeles and Capitol.

-26-
<PAGE> 31
The Company's business strategy is to achieve profitability through expansion
of its existing operations and acquisitions of businesses that are
strategically located or positioned to diversify or enhance the Company's
customer base, product range and geographic coverage.

NARRATIVE DESCRIPTION OF BUSINESS

Angeles Metal Trim Co. and Subsidiary

Products and Markets

Angeles is in the business of fabricating and selling light gauge steel framing
materials for commercial and residential structures. Angeles' products include
galvanized steel components, framing materials, studs, tracks, trusses and
joists for domestic and international markets. Angeles also provides technical
support, engineering and estimating services for specialized projects,
primarily in the residential housing market. CBS has also developed a
proprietary low-cost steel frame housing structure.

Angeles has been supplying its steel framing products to the commercial
construction industry for over 40 years. The commercial construction market
segment represented approximately 95% of Angeles' sales during 1997.

Since 1992, Angeles has been developing the use of steel framing for
residential housing markets. The residential construction market segment
represented approximately 5% of Angeles' sales during 1997. While the use of
steel framing is not new in residential construction, the recent escalation and
volatility in lumber prices has caused widespread attention to be focused on
the advantages of building homes with steel. Management believes that the
early entry by Angeles into this growing market gives it a significant
advantage over its competitors in terms of designing and engineering products,
training framers and subcontractors, and developing relationships with
builders.

Management believes that its sales to the residential construction market
segment will grow during the current fiscal year. Steel has a number of
attractive qualities over lumber and concrete block as a building material,
including (i) steel's comparatively lower cost compared to lumber, which is
becoming increasingly scarce and expensive due to environmental and other
factors; (ii) steel's long life compared to lumber, which rots and is
susceptible to termites and other pests; (iii) steel's greater structural
integrity, which allows for greater consistency of quality, straightness and
strength under adverse conditions such as earthquakes; (iv) steel's faster
construction time with an experienced crew; (v) steel's pre-cut convenience and
ease of assembly with conventional tools; and (vi) steel's ability to be re-
cycled. Where wood is desired as an exterior material or trim, it can easily
be mixed with steel. The Company believes that the use of steel frames in
residential construction will continue to grow given the high cost of
conventional framing and the numerous positive attributes of steel framing.

In addition to selling light gauge steel framing materials and components for
residential structure, CBS also sells a pre-engineered low-cost steel frame
housing structure which it developed, known as Model 640. This product is a
pre-engineered 640 square foot steel framed basic structure which can be easily
customized to meet the differing requirements of a variety of customers. It is
a complete, steel framed housing structure that provides punch-outs for
subsequent plumbing and wiring. The materials can be delivered to a housing
site for a price of under $2,500.

The Model 640 was primarily designed for export. The Company has identified
the worldwide low-cost housing market as a significant market ready to
experience substantial growth. The need for small, but affordable housing, is
mushrooming in third-world countries, which are beginning to emerge
economically, but still have very under-developed housing infrastructures for
their populations. The Model 640 and customized versions of the Model 640 have
been sold in the Pacific Rim and there has been additional interest in Europe,
South America and the Far East.

Most of the steel utilized in the Model 640 is pre-cut and galvanized for
corrosion resistance for maximum durability, even in the most damp climates.
Models can be engineered to withstand winds up to 155 mph and each home can be
engineered to be earthquake resistant up to a seismic 4 rating. The Model 640
is (i) designed to meet the requirements of most governmental agencies; (ii)
wind, earthquake, corrosion, termite and dry rot resistant; (iii) easy to build
and quickly assembled, even with semi-skilled labor; (iv) economic to ship; and
(v) available with flexible floor plans.

-27-
<PAGE> 32
Manufacturing

Angeles' products are manufactured in accordance with customer specifications.
Most of Angeles' products comply with Angeles' certification by the
International Conference of Building Officials ("ICBO"). Angeles is the only
major steel roll forming company on the West Coast that has it's own ICBO
certification in addition to being ICBO certified through AMS' membership in
the Metal Stud Manufacturing Association.

All of Angeles' design, engineering, manufacturing and administration
operations are performed at the company's manufacturing facilities in Torrance,
California and Vancouver, Washington. Angeles manufactures approximately 85-
90% of the goods it sells and outsources the remaining 10-15%. Both
manufacturing locations also conduct sales, marketing and distribution. In
addition, Angeles maintains marketing, sales and distribution facilities in
Tacoma, Washington and Sacramento, California. All of Angeles' facilities are
leased. See "Property".

Angeles is currently operating with one full shift and is equipped (but not
staffed) to run two shifts. Angeles owns all of its manufacturing and
engineering equipment.

Angeles strives to provide its customers with fast, reliable delivery of its
products. Angeles keeps sufficient inventory to respond quickly to customer
needs. Angeles purchases raw materials, which consist of full and slit steel
coils, in advance. Angeles distributes its commercial products on a truckload
basis. Residential products are also delivered by the truckload, to framing
companies, value added centers and to specific job sites. In some cases,
trusses are assembled at the company and in other cases they are assembled on
site.

Marketing, Distribution and Customers

Unlike many of its competitors, Angeles primarily markets and sells its steel
products directly to building contractors rather than through wholesalers or
distributors. As a result of transportation costs, products are marketed and
sold primarily in 13 western states. Products are also sold in Hawaii, Canada,
Mexico and other foreign countries. During 1997, international sales were
approximately 1% of total sales, reflecting sales primarily to Japan. The top
ten customers of 1997 represented approximately 26% of sales by Angeles, with
no one customer representing more than 10% of sales.

Raw Materials and Supplies

Galvanized steel is the primary raw material utilized by Angeles and it
represents the majority of cost of goods sold. Sources for this steel are
numerous and the supply has been and is expected to remain sufficient to meet
Angeles' needs. USS Posco, a joint venture between U.S. Steel and the Pohang
Steel Company of Korea, has been the primary supplier of steel for Angeles. In
addition, Angeles has also maintained continuous and competitive purchasing
relationships with other companies in order to ensure an uninterrupted supply
of material. Recently, Angeles has focused attention on more aggressively
sourcing these steel supply contracts, including additional purchases on the
secondary and spot markets.

-28-
<PAGE> 33
Research and Development

Angeles has not incurred significant research and development expenditures in
the last two years.

Patents

Angeles holds a number of patents and trademarks on its products, none of which
is essential to the business. Management believes that Angeles' reputation,
know how and experience in the steel framing business is more important than
its patents and trademarks. Accordingly, Angeles relies upon trade secrets and
other unpatented proprietary information in its business.

Capitol Metals Co.

Background

In January 1998, the Company, through a wholly-owned subsidiary, purchased
substantially all of the assets of Old Capitol, a privately held steel
processing and service center headquartered in Torrance, California. Old
Capitol, which started operating in 1946, grew to become one of the largest
flat-rolled steel service facilities in Southern California. Old Capitol
experienced financial difficulty due in part to insufficient working capital
necessary to maintain adequate inventory levels. On October 7, 1997, Old
Capitol filed for protection under Chapter 11 of the Bankruptcy Code. On
November 26, 1997, the Bankruptcy Court entered an order establishing the
procedures for the sale of substantially all of the assets of Old Capitol
pursuant to the Asset Purchase Agreement dated December 1, 1997 between Old
Capitol and the Company. After the January 1998 acquisition, Angeles
Acquisition changed its name to Capitol Metals Co. ("Capitol").

Management believes that the acquisition of Capitol will provide the Company
with several advantages toward the accomplishment of its business objectives of
increasing the Company's profitability. The Company has recently relocated the
Los Angeles, California operations of Angeles to the Torrance, California
facility currently used by Capitol. In addition to the long term reduction in
facilities cost, this relocation allows management to combine several
previously duplicative functions, creating efficiencies and cost savings.
These functions include: materials receiving, slitting operations, purchasing,
accounting and other administrative functions. Additionally, as the companies
currently use several common suppliers, the Company believes that the
purchasing volume created by the addition of Capitol may create reduced pricing
for materials and services utilized by both Angeles and Capitol.

Products and Services

Capitol sells and processes flat rolled carbon steel products, which include:

o Hot rolled steel
o Pickled and oiled steel
o Cold rolled steel
o Galvanized steel
o Aluminized steel

Capitol processes steel to the precise thickness, length, width, shape, temper
and surface quality specified by its customers. Value-added processes provided
by Capitol include:

o Cutting to length - the cutting of steel into pieces and
along the width of a coil to create sheets or
plates.
o Blanking - the process in which flat-rolled steel is cut
into precise two dimensional shapes by passing it through
a slitter and leveler.
o Leveling - the flattening of steel to uniform tolerances
for proper machining.
o Slitting - the cutting of coiled steel to specified widths
along the length of the coil.

-29-
<PAGE> 34
o Pickling - a chemical treatment to improve surface quality
by removing the surface oxidation and scale which develops
on the steel shortly after it is hot-rolled.
o Edge trimming - a process which removes a specified
portion of the outside edges of coiled steel to produce
uniform width and round or smooth edges.

Capitol is one of the largest flat rolled service facilities in Southern
California. Capitol owns three slitting lines, four cut-to-length lines and one
banding line for slit coil packing. The only toll coil pickling line on the
West Coast capable of handling 40,000 pound coils is owned by Capitol. This
line has capacity to process over 14,000 tons per month. Approximately 90% of
Capitol's 1997 revenues were derived from processed steel sales, and
approximately 10% was derived from steel processing services. Management
believes that the steel processing services, particularly the pickling
operations, will increase as a percentage of Capitol's revenues over the next
12 months. Capitol also warehouses customer owned material.

Management believes that Capitol's toll pickling line provides a significant
competitive advantage to the Company. In addition to providing the only
pickling service on the West Coast for 40,000 pound coils, Capitol is able to
offer to its pickling customers customized processing services for steel owned
by such customers or purchased from Capitol as well as storage of such steel in
Capitol's warehouse facility.

Capitol intends to capitalize on the trend of both primary steel producers and
end-users of steel products to reduce in-house processing and to outsource
processing and inventory management requirements. Capitol purchases steel from
primary producers, who focus on large volume sales of unprocessed steel, and in
most cases Capitol performs customized processing services on this steel to
meet specifications provided by end-use customers. By providing these
services, as well as offering inventory management and just-in-time delivery
services, Capitol enables its customers to reduce material costs, enhance
quality, decrease capital required for raw materials inventory and processing
equipment and save time, labor and other expenses.

Manufacturing

Capitol's products and processing services are manufactured in accordance with
customer specifications. All engineering, manufacturing and administrative
operations are performed at Capitol's facility in Torrance, California.

Capitol is currently operating with one full shift and one second shift crew
and is equipped (but not staffed) to run three full shifts. Capitol owns all
of its manufacturing and engineering equipment.

Capitol strives to provide its customers with fast, reliable delivery of its
products. Capitol keeps sufficient inventory to respond quickly to customer
needs. Capitol purchases raw materials, which consist of full and slit steel
coils, in advance. Capitol distributes its products on a truckload basis.

Marketing, Distribution and Customers

Capitol has over 200 active customers throughout the western states. No one
customer accounted for more than 10% of Capitol's business in 1997. By
category for 1997, the customers by industry were approximately as follows:

-30-
<PAGE> 35
<TABLE>
<CAPTION>
Description of Customers Percent of Sales
------------------------ ----------------
<S> <C>
Building and construction related 26
Service centers and trading companies 17
Specialty manufacturers 12
Automotive components and parts 11
Metal stamping and rollformers 11
Tube manufacturers 10
Miscellaneous 13
</TABLE>

Raw Materials and Supplies

Hot rolled steel is the primary raw material used by Capitol. Capitol also
purchases galvanized and cold rolled steel as well as other types of steel.
Sources for steel to meet Capitol's requirements are numerous and the supply
has been and is expected to remain sufficient to meet the requirements of
Capitol. USS Posco, a joint venture between U.S. Steel and the Pohang Steel
Company of Korea, Duferco Steel, Ferrostal and Thyssen Steel Trading Co., a
German trading company are major current suppliers of steel to Capitol.

COMPETITION

Angeles

Competition in the steel frame industry is intense and Angeles competes with a
number of entities, some of which may have greater financial resources than
Angeles. Angeles competes against a number of other companies for sales in
both the commercial and residential steel framing markets. To the extent that
steel framing for residential housing becomes more widely accepted as an
alternative to conventional lumber and concrete construction, competition may
increase. Angeles competes for orders from its customers primarily on the
basis of price, quality, timely delivery, engineering capability and
reliability. Most of Angeles' orders are awarded by its customers on the basis
of competitive bidding. Angeles sells primarily on a direct basis to
contractors and sub-contractors, while it's competitors sell primarily through
building material dealers. Angeles believes that it can better service
customers by selling products directly, rather than through dealers. In
addition to competitors who sell directly to contractors and to sub-
contractors, manufacturers also sell to building materials houses, who, in
turn, sell to contractors and sub-contractors. Those building materials houses
sell materials in addition to the light gauge steel products, and may, from
time to time, sell the steel products delivered to the job sites.

Capitol

The steel distribution and servicing industry is highly fragmented and
competitive. Competition is based on price, service, quality, availability of
products and geographic proximity. Capitol faces competition from national,
regional and local independent steel distributors and servicing centers, many
of which may have greater resources than Capitol. The Company believes that it
will be able to compete more effectively as a result of the combined purchasing
volume and operational economies of scale resulting from the acquisition of
Capitol and combining the operations of Angeles with Capitol over the next few
months. Management believes that Capitol's toll pickling line provides a
significant competitive advantage to the Company. In addition to providing the
only pickling service on the West Coast for 40,000 pound coils, Capitol is able
to offer to its pickling customers customized processing services for steel
owned by such customers or purchased from Capitol as well as storage of such
steel in Capitol's warehouse facility.

GOVERNMENT REGULATION

The operations of the Company are subject to extensive federal, state and local
laws and regulations, relating to the protection of human health and the
environment. In particular, the Company's operations are subject to extensive
federal, state and local laws and regulations governing waste disposal, air and
water emissions, the handling of hazardous substances, environment protection,
remediation, workplace exposure and other matters. Hazardous materials that
the Company uses

-31-
<PAGE> 36
in its operations primarily include lubricants, cleaning solvents and
hydrochloric acid used in its pickling operations. The Company believes that
its facilities are in material compliance with these laws and regulations and
does not believe that future compliance with such laws and regulations will
have a material adverse effect on its results of operations or financial
condition. However, environmental laws are becoming increasingly more
stringent and, consequently, the Company's environmental expenditures and costs
for environmental compliance may increase in the future. In addition, due to
the possibility of unanticipated regulatory or other developments, the amount
and timing of future environmental expenditures may vary substantially from
those currently anticipated.

The Company's operations are also governed by laws and regulations relating to
workplace safety and worker health, principally the Occupational Health and
Safety Act and regulations thereunder, which among other requirements,
establish noise, dust and safety standards. Management believes that the
Company is in material compliance with applicable laws and regulations and does
not anticipate that future compliance with such laws and regulations will have
a material adverse effect on the results of operations or financial condition
of the Company.

The use of steel framing products in commercial and residential construction
are governed by local building codes. Over the past several years, local
building codes in a number of jurisdictions have been revised to provide for
the use of steel for residential construction in addition to the traditional
wood framing. Angeles anticipates no significant adverse effects of
governmental regulations related to the use of light gage steel in commercial
and residential framing.

EMPLOYEES

At July 31, 1998, the Company had 75 full-time employees at Angeles and 55
full-time employees at Capitol. The Company believes that its employee
relations are good.

Hourly employees of Capitol are represented by the International Longshoremen
and Warehousemen's Union Local 26 ("ILWU"). Capitol and the ILWU have entered
into a labor agreement with a 30 month term expiring on November 1, 2000. The
Company does not believe that the collective bargaining agreement will have a
material impact either favorably or unfavorably on the Company's revenues or
profitability. The Company believes that it maintains a good relationship with
the ILWU and its employees.

Former Real Estate Development Business

From 1994 through the January 1997 Merger, the Company's operations were
exclusively in the real estate development business described below. Prior to
the Merger, the Company sold certain assets of the Company, including the
Company's interest in the Northcrest Joint Venture, to three executive officers
and directors (the "Former Directors") of the Company (the "Asset Sale"). As
part of the Asset Sale, the Former Directors assumed all obligations of the
Company existing prior to the Merger. See "Certain Relationships and Related
Transactions" for a description of the Asset Sale. During April 1997, the
Company sold its interest in Bear Star.

The Northcrest Joint Venture

During July 1994, the Company acquired an interest in a 59 acre parcel of
property, commonly known as the "Northcrest Development," located east of
Colorado Springs, Colorado through the formation of the Northcrest Joint
Venture (the "Northcrest Joint Venture") with Glacier Valley Holding
Corporation ("Glacier Valley") and certain other entities for purposes of
developing the property. In September 1994, the Northcrest Joint Venture
executed an agreement to sell 27 of the 189 lots comprising the development to
JBS Corporation ("JBS"), an unaffiliated third party, and the Company granted
an option to JBS with regard to the remaining lots, which option was contingent
upon completion of the initial purchase. Through December 31, 1995, the
Company sold 90 lots to JBS.

During April 1996, the Company entered into a new option agreement with Elite
Properties of America ("Elite"), an unaffiliated third party, to sell the
remaining 99 lots of the development. In a transaction effective June 21,
1996, the

-32-
<PAGE> 37
Northcrest Joint Venture sold the remaining 99 lots to Elite for a price of
$668,250, which was reduced by an improvement credit of $50,000 given to Elite,
prior deposits of $5,000 and miscellaneous closing costs paid by the Company of
$1,629. The remaining balance due was $611,620, of which $5,870 was paid at
closing and the balance of $605,750 represented by a non-recourse promissory
note in favor of the Northcrest Joint Venture (the "Elite Note").

Prior to the Merger, the Company sold its entire interest in the Northcrest
Joint Venture and its interest in the Elite Note to the Former Directors of the
Company as part of the Asset Sale. In such Asset Sale, the Former Directors of
the Company provided certain consideration and assumed all obligations of the
Company existing prior to the Merger including any obligation of the Company
relating to its interest in the Northcrest Joint Venture. See "Certain
Relationships and Related Transactions".

Golden Prairie Northcrest Joint Venture

During the first quarter of 1995, the Company organized another joint venture
to acquire additional real estate adjoining the Northcrest Development. The
Golden Prairie Northcrest Joint Venture was comprised of the Company and
Glacier Valley, as equal participants, and acquired approximately seven acres
of undeveloped land. During November 1995, the Company sold its 50% interest
in Golden Prairie to affiliates of Glacier Valley for a promissory note in the
amount of $18,000 (the "Golden Prairie Note") and an assumption of liabilities
on the Golden Prairie Joint Venture by the purchaser. As part of the Asset
Sale, the Company sold its interest in the Golden Prairie Note to the Former
Directors of the Company. See "Certain Relationships and Related
Transactions".

Columbine Homes Sales LLC

The Company owned approximately 19% of Columbine Homes Sales, LLC
("Columbine"), which interest was acquired in 1994. Columbine operated a
retail manufactured housing dealership in Colorado Springs and owned 60% of a
real estate development known as "The Community at Bear Creek," a manufactured
housing community located west of Colorado Springs.

During 1995, the Company transferred its interest in Columbine. Concurrent
with the sale, the ownership of Columbine and Bear Star were reorganized such
that the Company's indirect interest in Bear Star was converted to a direct
interest, together with that of the remaining members of Columbine. The
Company and the other Columbine members also purchased the remaining interest
in Bear Star such that the Company and the other Columbine members owned 100%
of that entity after such reorganization. See "Bear Star Limited Liability
Company."

The interests of the Company and other members of Columbine were sold for a
$125,000 promissory note (the "Columbine Promissory Note"). The Company, as a
former owner of Columbine, owned an 18.54% undivided interest in the Columbine
Promissory Note.

Bear Star Limited Liability Company

Bear Star was formed to acquire, develop and market developed and partially
developed land located west of Colorado Springs. Bear Star was owned 60% by
Columbine and 40% by unrelated parties, but reorganized so that the owners of
Columbine directly acquired an interest in Bear Star. Following the
reorganization and acquisition of the remaining minority interest, the Company
owned 18.54% of Bear Star.

During June 1994, Bear Star acquired approximately 16 acres of partially
developed property, zoned for double-wide manufactured homes and intended for
approximately 110 lots. In conjunction with this purchase, Bear Star also
acquired an option to acquire an additional 14 acres of undeveloped land, which
additional property is also zoned for manufactured homes. During fiscal 1996,
Bear Star sold approximately 5.6 acres of the 16 acres to a third party. As of
December 31, 1996, Bear Star had also sold 33 lots of the developed portion of
the property, leaving 15 lots unsold.

-33-
<PAGE> 38
The original 16 acres were acquired by Bear Star for an effective price of
approximately $2,065,000, consisting of two promissory notes in the aggregate
principle amount of $765,000 (the "Bear Star Property Notes") and approximately
$1,300,000 in cash and property. The Bear Star Property Notes were paid in
full in 1996.

The interest of the minority members was acquired by the Company and the other
former owners of Columbine for an $880,000 promissory note and secured by a
then second mortgage on the property. That note was subsequently canceled in
exchange for the issuance of two new notes, both equally secured by a new first
mortgage on the property. The balance of these two notes at December 31, 1996
was $432,400 and $146,029, respectively. During April 1997, the Company sold
its interest in Bear Star for $30,000 cash.

PROPERTY

Executive Offices

The Company currently occupies office space at 410 17th Street, Suite 400,
Denver, Colorado 80202. The Company shares its Denver office, consisting of an
aggregate of 7,585 square feet, including office space, conference facilities
and reception area, with The Stone Pine Companies and other affiliated
entities. Stone Pine Atlantic, LLC ("SP Atlantic") and its affiliates provide
administrative, accounting, investor relations and investment banking services
to the Company pursuant to a Services Agreement. See "Certain Relationships
and Related Transactions". The Company also maintains executive offices at
Capitol, 20000 South Western Avenue, Torrance, California 90501 consisting of
20,000 square feet. Management is of the opinion that the executive office
space in Denver and Torrance is adequate for the needs of the Company for the
foreseeable future.

Production Facilities

The principal production facility of Capitol and Angeles, which is leased,
consists of the following:

<TABLE>
<CAPTION>
Approximate
Location Square Footage Lease Term
-------- -------------- ----------
<S> <C> <C> <C>
Torrance, California Buildings 340,0000 1-13-98
(Corporate Headquarters, Manufacturing Land through
Plant, Warehouse, Land and Buildings) (14 acres) 609,840 12-31-2006*
</TABLE>

*Includes two three-year extension options.

-34-
<PAGE> 39
Angeles also leases the following facilities:

<TABLE>
<CAPTION>
Approximate
Location Square Footage Lease Term
-------- -------------- ----------
<S> <C> <C> <C>
Vancouver, Washington Buildings 20,000 01-15-97 through
(Plant, Offices, Warehouse, Land and Buildings) Land 130,680 01-14-2000

Sacramento, California Buildings 11,500 Month to Month
(Warehouse and Office) Land 46,600

Tacoma, Washington Buildings 20,000 10-01-96 through
(Warehouse and Offices) Land 93,400 09-30-99

Vancouver, Washington Building 7,500 Month to Month
(Warehouse, Land and Building) Land 120,000

Los Angeles, California Land 33,000 Month to Month
(Land)
</TABLE>

All of the Company's facilities are in good or excellent condition and are
adequate for its existing operations. In connection with the relocation of the
Angeles operations to the Torrance, California facility of Capitol, Angeles
terminated the Los Angeles facility lease. The total cost to terminate this
lease was $22,000.

LEGAL PROCEEDINGS

No material legal proceedings to which the Company or any subsidiary of the
Company is a party or to which the property of the Company or any subsidiary of
the Company is subject, is pending other than ordinary routine litigation
incidental to the business of the Company.

-35-
<PAGE> 40
MANAGEMENT

Information concerning the current members of the Company's Board of Directors
(the "Board") and its executive officers is as follows:

<TABLE>
<CAPTION>
Directors and Executive Officers Age Position
-------------------------------- --- --------
<S> <C> <C>
Paul Bagley 55 Chairman of the Board and Chief
Executive Officer
Richard D. Bailey 40 Director
Carl Casareto 39 Chief Financial Officer
L. Wayne Harbor 44 Director
Donald R. Jackson 48 Director, Secretary and Treasurer
John D. McKey, Jr. 54 Director
Thompson H. Rogers 44 Director
Christian W. Wolf 42 Director
</TABLE>

Paul Bagley has served as a director of the Company since January 21, 1997, as
Chairman of the Board of Directors since November 17, 1997 and as Chief
Executive Officer since March 10, 1998. Mr. Bagley is a Managing Member of The
Stone Pine Companies (since 1994), a group of companies involved in investment
banking, asset management and merchant banking activities, and is Chairman and
Chief Executive Officer of FCM Fiduciary Capital Management Company (since
1989), an investment-related company. Mr. Bagley was Chief Executive Officer
of Laidlaw Holdings, Inc., an investment services company, from January 1995
until November 1996. For more than twenty years prior to October 1988, Mr.
Bagley was engaged in investment banking activities with Shearson Lehman Hutton
Inc. and its predecessor, E.F. Hutton & Company Inc. Mr. Bagley served in
various capacities with Shearson and E.F. Hutton, including Executive Vice
President and Director, Managing Director, Head of Direct Investment
Origination and Manager of Corporate Finance. Mr. Bagley serves as Chairman of
the Board of Directors of Silver Screen Management, Inc. and International Film
Investors, Inc., which manage film portfolios. Mr. Bagley is also a director
of Hollis-Eden Pharmaceuticals, Inc. a publicly held company, LMC Operating
Corp., a privately held manufacturer of low ground pressure vehicles, and
Hamilton Lane Private Equity Fund, PLC, an Irish Stock Exchange listed
investment partnership. Mr. Bagley graduated from the University of California
at Berkeley in 1965 with a BS degree in Business and Economics and from Harvard
Business School in 1968 with an MBA in Finance.

Richard D. Bailey, a director of the Company since March 10, 1998, is the
President of RDB Capital Advisers, LLC, a privately held company involved in
investment banking activities. During 1995, Mr. Bailey acquired, restructured
and subsequently sold the Rigging Company, a mail order manufacturer of custom
yacht rigging. From 1991 to 1995, he was a principal of the New England Wire
Company, a manufacturer of specialty shaped wire and cable with primary
applications in the defense, electronics, safety and consumer products
industries. From 1986 to 1991, Mr. Bailey was the Executive Vice President of
Pennsylvania Rolling Mills, Inc., a manufacturer of cold rolled carbon strip
steel, supplying the automotive, defense and building products industries. Mr.
Bailey holds a BA degree in Political Science from Providence College and a MA
degree in International Relations from Fairfield University.

Carl Casareto was elected Chief Financial Officer of the Company and each of
its subsidiaries on March 10, 1998. Mr. Casareto served as a financial
consultant to the Company from June 1997 until January 12, 1998. From October
1989 to April 1997, Mr. Casareto was the Chief Financial Officer and Senior
Vice President of Finance of TELACU and Subsidiaries. TELACU is a Community
Development Corporation managing for profit subsidiaries involved in, real
estate development, utility industry construction, asset and real property
management, retail and financing. From December 1995 to April 1997, Mr.
Casareto also served as President of Telalink Corporation, a Los Angeles based
subsidiary of TELACU, which was involved in the fiber optics industry. From
1981 to 1989, Mr. Casareto was associated with the accounting firm of Grant
Thornton, where he served as the partner-in-charge of Grant Thornton's Southern
California tax practice. Mr. Casareto holds a BS degree in accounting from
Loyola Marymount University and is a certified public accountant.

-36-
<PAGE> 41
L. Wayne Harber, a director of the Company since January 21, 1997, is a
Managing Director of The Stone Pine Companies (since 1994). From 1990 to 1993,
Mr. Harber was the Senior Vice President of Marketing for Aegis Holdings
Corporation, an asset management and investment banking concern specializing in
asset securitization and structured finance. From 1980 to 1990, Mr. Harber was
a Vice President and National Sales Manager for Franchise Finance Corporation
of America. Mr. Harber holds a BS degree in Economics and English from the
University of Tennessee.

Donald R. Jackson has served as the Secretary and Treasurer of the Company
since January 21, 1997 and a director of the Company since February 4, 1997.
From January 21, 1997 until March 10, 1998, Mr. Jackson also served as Chief
Financial Officer of the Company. Mr. Jackson is a Managing Director and Chief
Financial Officer of The Stone Pine Companies (since 1994) and is a Senior Vice
President, Treasurer and Chief Financial Officer of FCM Fiduciary Capital
Management Company. From January 1990 to June 1994, Mr. Jackson was a
Corporate Vice President with PaineWebber Incorporated, where he was involved
in the financial administration of various publicly and privately offered
investment programs. During 1989, Mr. Jackson was self-employed. Immediately
prior to that he was a First Vice President in the Direct Investments Group
with Shearson Lehman Hutton Inc. and its predecessor, E.F. Hutton & Company,
Inc. From 1972 to 1986, Mr. Jackson was associated with the accounting firm of
Arthur Andersen & Co., serving as a partner from 1981 to 1986. Mr. Jackson is
a director of LMC Operating Corp., a privately held manufacturing company. Mr.
Jackson holds a BSBA degree in accounting from the University of Denver and is
a certified public accountant.

John D. McKey, Jr., a director of the Company since February 4, 1997, has been
a partner at the law firm of McCarthy, Summers, Bobko & McKey, P.A. since
September 1993, and from June 1986 to September 1993, was a partner at Kohl,
Bobko, McKey & Higgins, P.A. Mr. McKey is a director of Lithium Technology
Corporation.

Thompson H. Rogers has served as a director of the Company since January 21,
1997 and served as Chairman of the Board from January 21, 1997 until November
17, 1997. Mr. Rogers is a Managing Member of The Stone Pine Companies (since
1994) and is the Chairman of Affiliated Holdings, Inc., a private investment
management company (since 1985). Prior thereto, Mr. Rogers was with FIRSTIER,
now known as First Bank, a financial institution in Omaha, Nebraska. From 1995
to 1996, Mr. Rogers was the Chairman of New York based, Laidlaw Holdings Asset
Management, Inc. Mr. Rogers serves on the Board of Directors of Pinnacle Bank
of Omaha, located in Omaha, Nebraska; Havelock Bank, located in Lincoln,
Nebraska; Aspen Holdings Inc., an insurance holding company; and Worldwave
Communications Inc., a telecommunications company.

Christian W. Wolf has served as a director of the Company since October 8,
1997. In addition, Mr. Wolf served as the Chief Executive Officer of the
Company from October 1997 to March 1998 and is engaged as an consultant to the
Company. Mr. Wolf is the founding partner of Phaedrus Ltd., an investment
banking concern founded in January 1996 to focus on advisory services for small
to mid capitalization companies. From 1994 to 1995, Mr. Wolf was Managing
Director of Private Placements for First Union Capital Markets, a new
initiative for the company. From 1989 to 1994, Mr. Wolf was a Senior Vice
President and Director of Corporate Finance for NationsBanc Capital Markets.
From 1983 to 1989, Mr. Wolf was a Vice President of JP Morgan's Private
Placement Group. Prior to 1983, Mr. Wolf spent four years with Wheeling
Pittsburgh Steel. Mr. Wolf's operational experience involved; annealing, roll
forming, cold rolling, slitting and pickling.

The members of the Board are divided into three classes, with staggered terms.
The terms of Messrs. Bagley and Rogers expire in 1998, the terms of Messrs.
Harber and McKey expire in 1999 and the terms of Messrs. Bailey, Jackson and
Wolf expire in 2000. Officers of the Company serve at the pleasure of the
Board of Directors.

No family relationships exist between any of the officers and directors of the
Company.

Innovest Holdings, Ltd., which purchased Common Shares of the Company in the
January 1997 Share Issuance, has the right to nominate two directors to the
Board of Directors of the Company or, in the alternative, has the right to be
present at all Board meetings. As of the date hereof no such directors have
been nominated to the Board.

-37-
<PAGE> 42
Committees of the Board of Directors

The Board has three standing committees: an Executive Committee, an Audit
Committee and a Compensation Committee.

The Executive Committee of the Board was established during August 1997 and
currently consists of Messrs. Bagley and Jackson. The Executive Committee is
authorized to exercise all of the authority of the Board in the management of
the Company to the fullest extent permissible by the Colorado Business
Corporation Act.

The Audit Committee of the Board was established during February 1997 and
currently consists of Messrs. Bagley, Rogers and Jackson. The Audit Committee
provides general financial oversight in financial reporting and the adequacy of
the Company's internal controls through periodic meetings with the Company's
management and its external auditors.

The Compensation Committee of the Board was established during February 1997
and currently consists of Messrs. Rogers, Harber and Jackson. The Compensation
Committee administers the Company's 1997 Stock Incentive Plan, subject to the
review and oversight of the entire Board. The Compensation Committee also
provides general oversight in all employee personnel matters through periodic
meetings with the management of the Company.

-38-
<PAGE> 43
EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth information concerning the annual and
long-term compensation for services rendered to the Company and its
subsidiaries during 1997, 1996 and 1995 by each of the Named Executive
Officers.

<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation Awards
------------------------------------------ --------------------------------
Securities
Name and Fiscal Other Annual Underlying All Other
Principal Position Year Salary($) Bonus($) Compensation($) Options(#) Compensation($)
- ------------------ ---- --------- -------- --------------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Raymond E. 1997 0 0 __(2) 0 0
McElhaney(1) 1996 12,000(2) 0 * 0 0
1995 12,000 0 * 0 0

Peter W. 1997 36,525 0 * 0 2,631(4)
Damisch(3)

Thompson H. 1997 0 0 0 0 0
Rogers(5)

Christian W. 1997 37,500 0 * 0 0
Wolf(6)

Ronald F. 1997 65,546 10,000 * 500,000 3,041(8)
Martin(7)
</TABLE>

- ----------

(1) Mr. McElhaney resigned his position as President and Chief Executive
Officer of the Company, effective January 21, 1997.

(2) No cash payments were made to Mr. McElhaney during 1996. The accrued
amount of $12,000 and future payments due under Mr. McElhaney's
Employment Agreement were partial consideration for the Asset Purchase
in January 1997. See "Certain Relationships and Related Transactions".

(3) Mr. Damisch served as President and Chief Executive Officer of the
Company and each of its active subsidiaries from January 21, 1997 until
April 6, 1997.

(4) Includes $2,500 reimbursement of personal legal fees and $131 of
disability insurance premiums paid by Angeles on behalf of Mr. Damisch.

(5) Mr. Rogers, who was Chairman of the Board of Directors at the time,
served as Chief Executive Officer of the Company without compensation
from April 6, 1997 until October 8, 1997.

(6) Mr. Wolf served as President and Chief Executive Officer of the Company
from October 8, 1997 until he resigned on March 10, 1998. Mr. Wolf
continues to serve as a director of, and a consultant to, the Company.

-39-
<PAGE> 44
(7) Mr. Martin served as President of Angeles Metal Trim Co., an operating
subsidiary of the Company, from April 10, 1997 until May 12, 1998.

(8) Includes $2,988 of disability and life insurance premiums paid by
Angeles on behalf of Mr. Martin and $53 of contributions by Angeles to
Angeles' 401 plan on behalf of Mr. Martin.

* Did not receive perquisites or other personal benefits, securities, or
property having an aggregate value of greater than the lower of $50,000
or 10% of the total salary and bonus reported for such executive
officer.

Option/SAR Grants in 1997

At the Annual Meeting of the Shareholders of the Company held on October 8,
1997, the Shareholders adopted the Company's 1997 Stock Incentive Plan (the
"Plan"). Under the terms of the Plan, the Company may grant employees of, or
any other individual providing services to, the Company and its subsidiaries
stock options, stock appreciation rights or stock awards. The Company has
reserved 3 million Common Shares for issuance pursuant to the Plan. The
exercise price of all stock options granted pursuant to the Plan shall not be
less than the fair market value of the Common Shares on the date of grant. As
of December 31, 1997, options to acquire an aggregate of 500,000 Common Shares
were outstanding under the Plan, all of which were held by Ronald F. Martin,
President of Angeles Metal Trim Co. in 1997, an operating subsidiary of the
Company. As of December 31, 1997, no stock appreciation rights had been
granted and there had been no stock awards under the Plan.

The Company does not offer its employees any long-term incentive plans, other
than stock options, stock appreciation rights or stock awards issued pursuant
to the Plan, nor does it offer any defined benefit or actuarial plans. The
Company does offer a 401(k) plan to employees.

The following table sets forth information concerning individual grants of
stock options during 1997 to Named Executive Officers.

<TABLE>
<CAPTION>
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees or Base Expiration
Name Granted (#) in 1997 Price ($/Sh) Date
---- ----------- ---------- ------------ ---------
<S> <C> <C> <C> <C>
Ronald F. Martin 250,000(1) 50.0% $2.00 04/10/02
Ronald F. Martin 250,000(1) 50.0% $2.00 04/10/07
</TABLE>

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

(1) The options were cancelled in connection with the termination of Mr.
Martin's employment.

Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values

As of December 31, 1997, the Company had not granted any SARs. In addition, no
stock options were exercised by employees during 1997. The following table
sets forth information concerning the value of unexercised stock options as of
December 31, 1997.

-40-
<PAGE> 45
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
12/31/97 (#) 12/31/97($)
Shares
Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable Unexercisable
---- --------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Ronald F. Martin 0 0 0/500,000 0/0
</TABLE>

COMPENSATION OF DIRECTORS

Directors receive no cash compensation for serving on the Company's Board of
Directors other than reimbursement for out-of-pocket expenses incurred in
attending meetings.

EMPLOYMENT AND CONSULTING AGREEMENTS

Raymond E. McElhaney, Bill M. Conrad and Ronald R. McGinnis each served as
officers of the Company pursuant to three-year Employment Agreements with the
Company that had termination dates of November 17, 1997. Messrs. McElhaney,
Conrad and McGinnis resigned from such positions as of January 21, 1997
immediately after the consummation of the Merger. Each Employment Agreement
provided for payment of salary in the amount of $1,000 per month, plus
reimbursement of reasonable and necessary expenses incurred on behalf of the
Company. The Agreements were terminable without liability to the Company
immediately for "cause" and upon 90 days advance written notice in other cases.
No payments were made to Messrs. McElhaney, Conrad or McGinnis under such
Agreements during 1996 or 1997 (the "Accrued Payments"). The Accrued Payments
and future payments due under such Agreements were partial consideration for
the Asset Purchase and such Employment Agreements were terminated in connection
with the Asset Purchase. See "Certain Relationships and Related Transactions".

Ronald F. Martin served as the President of Angeles Metal Trim Co., an
operating subsidiary of the Company, from April 10, 1997 to May 12, 1998. As
part of the consideration for services rendered under the Employment Agreement,
Mr. Martin was granted 500,000 options with an exercise price of $2.00 per
share to purchase Common Shares. Effective May 12, 1998, Mr. Martin was
terminated as the President of Angeles Metal Trim Co. and all stock options
held by Mr. Martin were terminated.

Christian W. Wolf served as the President and Chief Executive Officer of the
Company from October 8, 1997 until he resigned on March 10, 1998. On January
12, 1998, Mr. Wolf was granted 200,000 options to purchase Common Shares, with
an exercise price of $1.22 per share for the three year period ended January
11, 2001 and an exercise price of $2.00 per share for the two year period
thereafter. These options are currently vested and have a five year term. Mr.
Wolf continues to serve as a director of the Company. On March 10, 1998, the
Company entered into a consulting arrangement with Mr. Wolf. Under the
arrangement, Mr. Wolf provided consulting services in connection with a
potential acquisition by the Company. Mr. Wolf received $40,000, plus 250,000
Common Shares as compensation for these services.

SERVICES AGREEMENT

The Company entered into a Services Agreement (the "Services Agreement") with
SP Atlantic, effective as of February 1, 1997, pursuant to which SP Atlantic
and its affiliates provide administrative, accounting and investor relations
services to the Company and its subsidiaries as well as investment banking
services and assistance in merger and acquisition transactions, financing
transactions and stock offerings by the Company. In consideration for such
services, the Company is obligated to pay SP Atlantic $10,000 per month, plus
reimbursement for the cost of providing the administrative, accounting and
investor relations services. Messrs. Bagley, Harber, Jackson and Rogers,
directors and officers of the

-41-
<PAGE> 46
Company, have a financial interest in SP Atlantic. In addition, Messrs. Bagley
and Rogers are beneficial owners of approximately 59% and 47%, respectively, of
the outstanding Common Shares.

The Services Agreement has a term of five years, and is subject to automatic
renewals of one year unless either party provides written notice of non-renewal
to the other party at least 90 days prior to the expiration of the initial or
any renewal term of the Services Agreement. SP Atlantic has the option to
terminate the Agreement at any time for any reason upon written notice. The
Company may terminate the Services Agreement at any time upon written notice;
however, in the event this provision is exercised by the Company, SP Atlantic
shall not receive less compensation and benefits that would otherwise be due to
it for the remainder of the term of the Services Agreement. The Company may
terminate the Services Agreement for cause, effective upon written notice, and
upon such a termination the Company shall be obligated to pay SP Atlantic fees
and any expense reimbursements due through the date of termination. "Cause" is
defined to mean that SP Atlantic has: (i) knowingly acted fraudulently in SP
Atlantic's relations with the Company, (ii) misappropriated or done material,
intentional damage to the property of the Company, (iii) willfully and
materially failed to follow a legal and reasonable order or directive by the
Chairman of the Board of Directors of the Company (which order or directive is
consistent with the provisions of the Services Agreement), or (iv) been grossly
negligent in the performance of its duties as provided for by the Services
Agreement.

-42-
<PAGE> 47
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Prior to the January 1997 Merger described herein, Raymond McElhaney, Bill
Conrad, and Ronald McGinnis, the sole executive officers and directors of the
Company (the "Former Directors"), purchased from the Company the following
assets of the Company (the "Asset Sale"): (i) the furniture and equipment of
the Company, (ii) 7,000 shares of common stock of American Educational
Products, Inc. including warrants to purchase additional shares of the common
stock of American Education Products, Inc., (iii) 37,500 shares of common stock
of Gold Capital Corporation, (iv) a Promissory Note receivable by and between
the Company and Glacier Valley Holding Corporation dated November 13, 1995 in
the principal amount of $18,000 (see "Item 1. Description of Business -
Narrative Description of Business - Former Real Estate Development Business -
Glacier Valley") and (v) the Company's interest in and to the Elite Note and
the Company's interest in the Northcrest Joint Venture (see "Business -
Narrative Description of Business - Former Real Estate Development Business -
The Northcrest Joint Venture").

The purchase price for the assets sold in the Asset Sale was $99,625 which
consideration consisted of (x) the cancellation of stock options held by the
Former Directors to acquire an aggregate of 455,454 shares of the common stock
of the Company at the exercise price of $.55 per share, (y) the relinquishment
of any interest in and to the salaries which were accrued for the accounts of
the Former Directors and any claim for future salaries pursuant to the
Employment Agreements between the Company and the Former Directors, in the
aggregate amount of $69,000, and the cancellation of such Employment Agreements
and (z) the assumption by the Former Directors of all debts, liabilities and
outstanding accounts of the Company which were outstanding prior to the Merger.

The following assets purchased by the Former Directors and included in the
Asset Sale were acquired during the last two years for the following purchase
price: (i) 7,000 shares of common stock of American Educational Products, Inc.
and warrants to purchase additional shares of common stock, $7,000, (ii) a
promissory note receivable from Glacier Valley Holding Corporation, $18,000,
and (iii) a 52% interest in the nonrecourse promissory note payable by Elite
Properties of America, $415,750, with a principal balance equal to $216,190 at
the time of sale.

The Company paid $80,000 in consideration of services provided by ICE in
connection with the Merger. ICE is the beneficial owner of approximately 7.45%
of the outstanding Common Shares.

The Company agreed to pay SP Colorado an acquisition structuring fee of
$250,000 in connection with the Merger and the related transactions and
delivered a non-interest bearing promissory note for such amount ("the SP
Colorado Note"). During December 1997, the Company issued 317,500 Series B
Preferred Shares to SP Colorado in exchange for the forgiveness of the SP
Colorado Note and $67,500 of other obligations of the Company to SP Colorado.
SP Colorado is the owner of approximately 44% of the outstanding Common Shares
and Messrs. Bagley, Harber, Jackson, McKey and Rogers, directors and officers
of the Company, have a financial interest in SP Colorado.

The Company entered into a Services Agreement with SP Atlantic effective as of
February 1997. See "Executive Compensation - Services Agreement" for a
discussion of the terms of the Services Agreement. During December 1997, the
Company issued 131,500 Series B Preferred Shares to SP Atlantic in exchange for
the forgiveness of $100,000 of fees due under the terms of the Services
Agreement and $31,500 of other indebtedness owed to SP Atlantic by the Company.
Messrs. Bagley, Harber, Jackson and Rogers, directors and officers of the
Company, have a financial interest in SP Atlantic.

During April 1997, ERB loaned $300,000 to Angeles, which loan was evidenced by
a 12% promissory note payable to ERB (the "ERB Note"). As additional
consideration for such loan, (i) Angeles agreed to pay ERB a facility fee of
$9,000, which was added to the principal balance of the ERB Note, (ii) the
Company issued 50,000 Common Shares to ERB upon such funding, and (iii) the
Company agreed to issue 10,000 Common Shares on the first day of each month
commencing July 1, 1997 until the ERB Note was repaid in full. During December
1997, the Company issued 384,000 Series A Preferred Shares to ERB in exchange
for forgiveness of this $309,000 loan and $75,000 of other indebtedness owed to
ERB by the

-43-
<PAGE> 48
Company. The Company issued a total of 110,000 Common Shares to ERB as
additional consideration for the ERB Note during its term.

During June 1997, SP Financial loaned $107,000 to Angeles, which loan was
evidenced by a 12% promissory note payable to SP Financial (the "SP Financial
Note"). As additional consideration for such loan, Angeles agreed to pay SP
Financial a commitment fee of $3,210, which was added to the principal balance
of the SP Financial Note, and the Company issued 16,666 Common Shares to SP
Financial. During December 1997, the Company issued 110,000 Series A Preferred
Shares to SP Financial in exchange for the forgiveness of $110,000 of the
principal balance of the SP Financial Note, with the $210 balance of the Note
being paid in cash.

During August 1997, SP Financial loaned $250,000 to the Company, which loan was
evidenced by a 12% promissory note payable to SP Financial (the "Second SP
Financial Note"). As additional consideration for such loan, the Company
issued 60,000 Common Shares to SP Financial. During December 1997, the Company
issued 250,000 Series A Preferred Shares to SP Financial in exchange for the
forgiveness of the $250,000 principal balance of the Second SP Financial Note.

During December 1997, SP Advisors loaned $75,000 to the Company, which loan was
evidenced by a 12% promissory note payable to SP Advisors (the "SP Advisors
Note"). As additional consideration for such loan, the Company issued 33,333
Common Shares to SP Advisors. The Company repaid the SP Advisors Note during
January 1998. Messrs. Bagley, Harber, Jackson and Rogers, directors and
officers of the Company, have a financial interest in SP Advisors.

During December 1997, SP Capital loaned $75,000 to the Company, which loan was
evidenced by a 12% promissory note payable to SP Capital (the "SP Capital
Note"). As additional consideration for such loan, the Company issued 33,333
Common Shares to SP Capital. The Company repaid the SP Advisors Note during
March 1998.

During December 1997, Mr. Bagley loaned $75,000 to the Company, which loan was
evidenced by a 12% promissory note payable to Mr. Bagley (the "Bagley Note").
As additional consideration for such loan, the Company issued 33,334 Common
Shares to Mr. Bagley. The Company repaid the Bagley Note during March 1998.
Mr. Bagley is a director and officer of the Company and the beneficial owner of
approximately 59% of the outstanding Common Shares.

In January 1998, the Company issued to Christian W. Wolf, who was serving as
President and Chief Executive Officer of the Company at such time, 200,000
options to purchase Common Shares, with an exercise price of $1.22 per share
for the three year period ended January 11, 2001 and an exercise price of $2.00
per share for the two year period thereafter. These options are currently
vested and have a five year term. Mr. Wolf continues to serve as a director of
the Company.

In January 1998, the Company issued to Carl Casareto, who was appointed the
Chief Financial Officer of the Company in March 1998, options to purchase
200,000 Common Shares at $1.22 per share. 50,000 of the options are currently
vested and 50,000 of the options vest on January 12, 1999, 2000 and 2001,
respectively.

During January 1998, in connection with the acquisition of Capitol and the
transactions with Congress Financial, Mr. Bagley loaned an additional
$1,500,000 to the Company. The loan is evidenced by a convertible promissory
note of the Company (the "Second Bagley Note") in the amount of $1,750,000,
with a 12% annual interest rate payable monthly in arrears. The Second Bagley
Note is due in one year or sooner in the event of a $25 million equity issuance
by the Company and is secured by a subordinate security interest in all of the
assets of the Company and its subsidiaries, effective upon the consent of
Congress Financial to such security interest or the refinancing or repayment of
the Congress Facility. The Second Bagley Note is convertible into 1,750,000
Common Shares. As additional consideration for the loan, the Company issued
1,500,000 Common Shares to Mr. Bagley.

During March 1998, SP Atlantic loaned $214,286 to the Company. The loan is
evidenced by a convertible promissory note of the Company (the "SP Atlantic
Note") in the aggregate amount of $250,000, with a 12% annual interest rate
payable monthly in arrears. The SP Atlantic Note is due in one year or sooner
in the event of a $25 million equity issuance by the Company and is secured by
a subordinate security interest in all of the assets of the Company and its
subsidiaries, effective

-44-
<PAGE> 49
upon the consent of Congress Financial to such security interest or the
refinancing or repayment of the Congress Facility. The SP Atlantic Note is
convertible into 250,000 Common Shares. As additional consideration for the
loan, the Company issued 214,286 Common Shares to SP Atlantic.

During March 1998, the Company entered into an agreement with RDB Capital
Advisors, LLC ("RDB") pursuant to which the Company paid RDB $120,000 as
compensation for services rendered by RDB in arranging for the $2 million
purchase of the Company's Series C Preferred Shares by a group of investors.
RDB is owned by Mr. Bailey, a director of the Company.

During March 1998, the Company entered into a consulting arrangement with Mr.
Wolf. Under the arrangement, Mr. Wolf provided consulting services in
connection with a potential acquisition. Mr. Wolf received $40,000, plus
250,000 Common Shares as compensation for these services.

In March 1998, the Company issued to employees of the Company and employees of
related companies providing services to the Company, stock options to purchase
a total of 625,000 Common Shares at $2.08 per share. These 625,000 options
included 400,000 options granted to Carl Casareto, the Chief Financial Officer
of the Company and 100,000 options granted to Donald R. Jackson, the Secretary
and Treasurer of the Company. The options vest over a four year period
commencing on March 10, 1999.

Messrs. Bagley and Rogers, who are directors and officers of the Company and
who are beneficial owners of approximately 59% and 47%, respectively, of the
outstanding Common Shares, have a financial interest in SP Colorado, SP
Atlantic, ERB, SP Financial, SP Advisors and SP Capital.

The Company believes that the transactions described above were fair to the
Company and were as favorable to the Company as those which it might have
obtained from non-affiliated third parties, given the circumstances under which
such transactions were proposed and effectuated.

-45-
<PAGE> 50
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

The following table reflects information concerning the ownership, as of August
5, 1998, of Common Shares by (i) each person who is known by the Company to be
a beneficial owner of more than 5% of the Common Shares; (ii) by all directors;
(iii) by each of the Named Executive Officers, and (iv) by all directors and
executive officers of the Company as a group.

<TABLE>
<CAPTION>
Percent of
----------
Name Number of Shares Voting Securities
---- ---------------- -----------------
<S> <C> <C>
Stone Pine Colorado, LLC(1) 8,765,503(2) 43.62%

Stone Pine Capital, LLC(1) 8,798,836(3) 43.79%

Stone Pine Atlantic Equities, LLC(1) 8,765,503(4) 43.62%

Paul Bagley(1)(9)(10) 13,647,455(11) 59.42%

Richard D. Bailey(9)(12) 0 0

Thompson H. Rogers(1)(9) 9,749,502(13) 46.83%

Duke DeGrassi(1) 8,765,503(5) 43.62%

Carl Casareto(10)(14) 50,000(15) *

L. Wayne Harber(1)(9) 0 0

Donald R. Jackson(1)(9)(10) 5,000 *

Ronald F. Martin(16) 0(17) *

John D. McKey, Jr.(9)(18) 0 0

Christian W. Wolf(9)(19) 451,000(20) 2.36%

Berkshire Capital Partners, Ltd.(21) 3,000,000(22) 15.16%

ProFutures Special Equities 1,680,672(24) 7.83%
Fund, LP(23)

Excaliber Limited Partnership(25) 2,372,803(26) 10.74%

Talisman Capital Opportunity 1,579,093(28) 7.98%
Fund, LP(27)

Atlantis Holding Corp.(29) 1,412,068(30) 7.14%

Investor Capital Enterprises, 1,412,068(30) 7.14%
Inc.(29)

Gary Kucher(29) 1,412,068(30) 7.14%

All Directors and Executive 14,183,455(31) 61.08%
Officers as a group (8 persons)
</TABLE>

-46-
<PAGE> 51
- --------------------------------

(1) The address for each person is 410 17th Street, Suite 400, Denver,
Colorado 80202.

(2) SP Colorado directly owns 6,481,867 of the Company's outstanding Common
Shares and 317,500 shares of the Company's Series B Preferred Shares,
which are convertible into 317,500 Common Shares. SP Colorado holds
proxies to vote 1,211,568 Common Shares (the "AHC Shares") which are
owned by Atlantis Holding Corp. and 754,568 Common Shares (the "Herstone
Shares") that are owned by Richard Herstone, until the earlier of a
transfer of the AHC Shares and the Herstone Shares and February 4, 2000.
(The 6,481,867 outstanding Common Shares directly owned by SP Colorado,
the 317,500 Common Shares that would be received by SP Colorado if the
Series B Preferred Shares were converted, the AHC Shares and the
Herstone Shares are collectively referred to as the "SP Colorado
Shares"). The following persons are members of SP Colorado and each own
an equal voting interest in SP Colorado: SP Capital, Stone Pine Atlantic
Equities, LLC ("SP Equities") and Thompson H. Rogers. Paul Bagley and
W. Duke DeGrassi are the designated voting persons for SP Capital and SP
Equities, respectively. SP Colorado, SP Capital, SP Equities, Thompson
H. Rogers, Paul Bagley and W. Duke DeGrassi are referred to herein as
the "Stone Pine Reporting Persons". Each Stone Pine Reporting Person
may be deemed a member of a group that shares voting power over the AHC
Shares and the Herstone Shares and voting and dispositive power over the
SP Colorado Shares and accordingly may be deemed to beneficially own the
SP Colorado Shares, including the AHC Shares and the Herstone Shares.

(3) This amount includes (i) 33,333 of the Company's outstanding Common
Shares directly owned by SP Capital (the "SP Capital Shares") and (ii)
the SP Colorado Shares (see (2)).

(4) This amount includes the SP Colorado Shares (see (2)).

(5) SP Atlantic directly owns 214,286 of the outstanding Common Shares,
131,500 of the Company's Series B Preferred Shares and a $250,000
Convertible Note issued by the Company. The Series B Preferred Shares
and the Note are collectively convertible into 381,500 Common Shares.
(The 214,286 outstanding Common Shares and the 381,500 Common Shares
that would be received if the Series B Preferred Shares and the Note
were converted are collectively referred to as the "SP Atlantic
Shares"). Mr. Bagley is the manager of SP Atlantic. As a result, Mr.
Bagley may be deemed to beneficially own the SP Atlantic Shares.

(6) Stone Pine Financial Group LLC ("SP Financial") directly owns 76,666 of
the Company's outstanding Common Shares and 360,000 of the Company's
Series A Preferred Shares, which are convertible into 360,000 Common
Shares. (The 76,666 outstanding Common Shares and the 360,000 Common
Shares that would be received if the Series B Preferred Shares were
converted are collectively referred to as the "SP Financial Shares").
Messrs. Bagley and Rogers are members of SP Financial and may be deemed
to beneficially own the SP Financial Shares.

(7) ERB directly owns 110,000 of the Company's outstanding Common Shares and
384,000 of the Company's Series A Preferred Shares, which are
convertible into 384,000 of Common Shares. (The 110,000 outstanding
Common Shares and the 384,000 Common Shares that would be received if
the Series A Preferred Shares were converted are collectively referred
to as the "ERB Shares"). Messrs. Bagley and Rogers are members of ERB
and may be deemed to beneficially own the ERB Shares.

(8) Stone Pine Investment Banking, LLC ("SP Investment Banking") directly
owns 33,333 of the Company's outstanding Common Shares ("SP Investment
Banking Shares"). Mr. Bagley is the manager of SP Investment Banking
and may be deemed to beneficially own the SP Investment Banking Shares.

(9) Director.

(10) Executive Officer.

-47-
<PAGE> 52
(11) Mr. Bagley directly owns 1,533,334 of the Company's outstanding Common
Shares and a $1,750,000 Convertible Note issued by the Company, which is
convertible into 1,750,000 Common Shares. In addition, 5,000 of the
Company's outstanding Common Shares are held by Mr. Bagley's spouse and
500 of the Company's outstanding Common Shares are held in Mr. Bagley's
individual retirement account. (The above discussed 1,538,834
outstanding Common Shares and the 1,750,000 Common Shares that would be
received if the Note was converted are collectively referred to as the
"Bagley Shares").

This amount includes (i) the Bagley Shares, (ii) the SP Colorado Shares
(see (2)), (iii) the SP Capital Shares (see (3)), (iv) the SP Atlantic
Shares (see (5)), (v) the SP Financial Shares (see (6)), (vi) the ERB
Shares (see (7)), and (vii) the SP Investment Banking Shares (see (8)).

(12) The address for Mr. Bailey is 580 Thames Street, Suite 228, Newport,
Rhode Island 02840.

(13) This amount includes (i) 30,000 of the Company's outstanding Common
Shares directly owned by Mr. Rogers (the "Rogers Shares"), (ii) the SP
Colorado Shares (see (2)), (iii) the SP Capital Shares (see (3)), (iv)
the SP Financial Shares (see (6)), and (v) the ERB Shares (see (7)).

(14) The address for Mr. Casareto is 20000 South Western Avenue, Torrance,
California 90501.

(15) This amount represents 50,000 Common Shares that are represented by
stock options that are currently exercisable at a price of $1.22 per
share (the "Casareto Shares").

(16) Former President of Angeles Metal Trim Co. The address for Mr. Martin
is 20000 South Western Avenue, Torrance, California 90501.

(17) Stock options cancelled upon termination of employment.

(18) The address for Mr. McKey is 2081 East Ocean Boulevard, 2nd Floor,
Stuart, Florida 34996.

(19) The address for Mr. Wolf is 436 Seneca Lane, Boca Raton, Florida 33487.

(20) This amount includes 200,000 Common Shares that are represented by stock
options that are currently exercisable at a price of $1.22 per share
until January 11, 2001 and at $2.00 thereafter, 1,000 of the Company's
outstanding Common Shares that are held in Mr. Wolf's individual
retirement account and 250,000 of the Company's outstanding Common
Shares owned by Mr. Wolf (collectively referred to as the "Wolf
Shares").

(21) The address for Berkshire Capital Partners, Ltd. ("Berkshire Capital")
is 1221 Post Road East, Westport, Connecticut 06880.

(22) As reported in a Schedule 13D filed by Berkshire Capital on March 9,
1997, Berkshire Capital directly owns 3,000,000 of the Company's
outstanding Common Shares.

(23) The address for ProFutures Special Equities Fund, LP ("ProFutures") is
1310 Highway 620 South, Suite 200, Austin, Texas 78734.

(24) As reported in a Schedule 13G filed by ProFutures on July 7, 1998,
ProFutures owns $1,500,000 principal of 10% Convertible Notes
convertible into 1,680,672 at an assumed conversion price of $0.8925

(25) The address for Excaliber Limited Partnership is c/o Jay A. Smith, CIBC
Wood Gundy Securities, Inc., 200 King Street West, P.O. Box 23, Suite
1807, Toronto, Ontario M5H 3T4.

-48-
<PAGE> 53
(26) This amount includes 1,105,365 shares issuable upon conversion of
$700,000 principal of 10% Convertible Notes at an assumed conversion
price of $.633275 and 65,000 shares issuable upon conversion of warrants
to purchase shares at $2.38 per share. The shareholder also has a
beneficial interest in 49 Series C Preferred Shares convertible into
1,135,771 Common Shares at an assumed conversion price of $.431438 and
66,667 Common Shares held of record by GUNDYCO.

(27) The address for Talisman Capital Opportunity Fund LP is 16101 LaGrande
Drive, Suite 100, Little Rock, AK.

(28) This amount includes 1,579,093 shares issuable upon conversion of
$1,000,000 principal of 10% Convertible Notes at an assumed
conversion price of $.633275.

(29) The address for Atlantis Holding Corp. ("AHC"), Investor Capital
Enterprises, Inc. ("ICE") and Mr. Kucher is 7986 E. Arapahoe Court,
Suite 1800, Englewood, Colorado 80112.

(30) AHC directly owns 1,211,568 of the Company's outstanding Common Shares.
AHC has the sole dispositive power over the AHC Shares and SP Colorado
has the sole voting power over the AHC Shares pursuant to a voting proxy
until the earlier of the transfer of the AHC Shares by AHC to a
nonaffiliate and February 4, 2000. ICE directly owns 200,000 of the
Company's outstanding Common Shares. Mr. Kucher directly owns 500 of
the Company's outstanding Common Shares (the "Kucher Shares").

(31) This amount includes (i) the SP Colorado Shares (see (2)), (ii) the SP
Capital Shares (see (3)), (iii) the SP Atlantic Shares (see (5)), (iv)
the SP Financial Shares (see (6)), (v) the ERB Shares (see (7)), (vi)
the SP Investment Banking Shares (see (8)), (vii) the Bagley Shares (see
(11)), (viii) the Rogers Shares (see (13)), (ix) the Casareto Shares
(see (15)), and (x) the Wolf Shares (see (20)).

* Less than 1%.

-49-
<PAGE> 54
DESCRIPTION OF SECURITIES

AUTHORIZED CAPITAL

The authorized capital of the Company consists of 60,000,000 shares, of
which 10,000,000 shares are Preferred Shares, par value $.01 per share, and
50,000,000 shares are Common Shares, par value $.0001 per share.

COMMON SHARES

Each Common Share is entitled to one vote in all meetings of
shareholders. All Common Shares are equal to each other with respect to
liquidation rights and dividend rights. There are no preemptive rights to
purchase any additional Common Shares. The Articles of Incorporation of the
Company prohibit cumulative voting in the election of directors. Directors are
elected by a plurality of shares cast at any shareholders' meeting. All other
actions requiring a vote of the shareholders require a majority under the
Company's Bylaws. In the event of liquidation, dissolution, or winding up of
the Company, holders of the Common Shares will be entitled to receive, on a
prorata basis, all assets of the Company remaining after satisfaction of all
liabilities and all liquidation preferences, if any, granted to holders of
Preferred Shares of the Company. As of August 5, 1998, the Company had
outstanding an aggregate of 19,776,867 Common Shares.

PREFERRED SHARES

The Articles of Incorporation vest the directors of the Company with the
authority to divide the class of Preferred Shares into series and to fix and
determine the relative rights and preferences of the shares of any such series
so established to the full extent permitted by the laws of the State of
Colorado and the Articles of Incorporation in respect of, among other things,
(a) the number of shares of Preferred Shares to constitute such series and the
distinctive designation thereof; (b) the rate and preference of dividends, if
any, the time of payment of dividends, whether dividends are cumulative and the
date from which any dividends shall accrue; (c) whether the Preferred Shares
may be redeemed, and if so, the redemption price and the terms and conditions
of redemption; (d) the liquidation preference payable on Preferred Shares in
the event of any voluntary or involuntary liquidation; (e) sinking fund or
other provisions, if any, for redemption or purchase of Preferred Shares; (f)
the terms and conditions by which the Preferred Shares of any series is issued
with the privilege of conversation; and (g) voting rights, if any.

The Company considers it desirable to have preferred shares available to
provide increased flexibility in structuring possible future acquisitions and
financings and in meeting corporate needs which may arise. If opportunities
arise that would make desirable the issuance of preferred shares through either
public offering or private placements, the provisions for preferred shares in
the Company's Articles of Incorporation would avoid the possible delay and
expense of a shareholder's meeting, except as may be required by law or
regulatory authorities. Issuance of the preferred shares could result,
however, in a series of securities outstanding that will have certain
preferences with respect to dividends and liquidation over the Common Stock
which would result in dilution of the income per share and net book value of
the Common Stock. The specific terms of any series of preferred shares will
depend primarily on market conditions, terms of a proposed acquisition or
financings, and other factors existing at the time of issuance. Therefore, it
is not possible at this time to determine in what respect a particular series
of preferred shares will be superior to the Company's Common Shares except for
the outstanding Series A Preferred Shares, Series B Preferred Shares and Series
C Preferred Shares. The Board of Directors may issue additional preferred
shares in future financings.

The issuance of Preferred Shares could have the effect of making it more
difficult for a third party to acquire a majority of the outstanding voting
stock of the Company. Further, certain provisions of Colorado law could delay
or make more difficult a merger, tender offer or proxy contest involving the
Company. While such provisions are intended to enable the Board of Directors
to maximize stockholder value, they may have the effect of discouraging
takeovers which could be in the best interest of certain stockholders. There
is no assurance that such provisions will not have an adverse effect on the
market value of the Company's stock in the future.

The Company has authorized the following classes of Preferred Shares:
Series A Preferred Shares having 1,000,000 authorized shares, Series B
Preferred Shares having 1,000,000 authorized shares and Series C Preferred
Shares having 200

-50-
<PAGE> 55
authorized shares. The Company has outstanding 744,000 Series A Preferred
Shares, 449,000 Series B Preferred Shares and 186 Series C Preferred Shares.

Both the Series A Preferred Shares and Series B Preferred Shares have a
cumulative $0.12 per annum dividend per share and a liquidation preference of
$1.00 per share, plus any accumulated but unpaid dividends. The dividends are
payable quarterly, in cash or at the option of the Company, in Common Shares.
The Series A Preferred Shares and Series B Preferred Shares are convertible at
the option of the holders of such shares at the conversion price of $1.00 per
share. In the event of an increase or decrease in the number of Company Common
Shares as a result of a stock dividend, stock split, recapitalization,
combination or reclassification, the conversion ratio shall be equity adjusted.
The Series A Preferred Shares and Series B Preferred Shares are redeemable at
the option of the Company at any time at the redemption price of $1.00 per
share, plus all accumulated and unpaid dividends.

The Series C Preferred Shares have a stated value of $10,000 per share,
a cumulative $600 per share annum dividend and a liquidation preference of
$10,000 per share, plus any accumulated but unpaid dividends. The dividends
are payable quarterly in cash, or at the option of the Company in Common
Shares. The Series C Preferred Shares are convertible, at the option of the
holders of such shares at the conversion price per Series C Preferred Share
equal to $10,000 divided by the lesser of (x) $1.75 or (y) 75% of the
arithmetic average of the closing bid prices of the Common Shares for each of
the five trading days prior to the exercise date of any such conversion. In
the event of an increase or decrease in the number of Company Common Shares as
a result of a stock dividend, stock split, recapitalization, combination or
reclassification, the conversion ratio shall be equitably adjusted. The Series
C Preferred Shares have a mandatory redemption feature on March 10, 2001 at a
redemption price of $10,000 per share, plus all accumulated and unpaid
dividends.

The Series A Preferred Shares and the Series C Preferred Shares rank
pari passu in liquidation and the Series B Preferred Shares rank junior to the
Series A Preferred Shares and the Series C Preferred Shares in liquidation.
The Series A Preferred Shares, Series B Preferred Shares and Series C Preferred
Shares are nonvoting.

CLASSIFIED BOARD

As permitted by the Company's Articles of Incorporation, the Board of
Directors is divided into three classes of directors, with each class serving a
staggered three-year term. This division of the Board of Directors into three
classes may tend to discourage a third party from making a tender offer or
otherwise attempting to obtain control of the Company and may maintain the
incumbency of the Board of Directors, because such a division generally makes
it more difficult for stockholders to replace a majority of directors.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

There are no indemnification provisions for directors, officers or
controlling persons of the Company against liability under the Securities Act
of 1933. However, Sections 7-109-101 to 7-109-110 of the Colorado Business
Corporation Act gives Colorado corporations the power to indemnify their
directors, officers, employees, fiduciaries and agents against liability
incurred in any proceeding to which they are made parties by reason of being or
having served in such capacities, subject to specified conditions and
exclusions set forth in the Act; authorize the payment for or reimbursement of
reasonable expenses incurred by such persons in such proceedings; mandate
indemnification of directors and officers who are successful on the merits; and
permit companies to obtain directors' and officers' liability insurance.

Article IX of the Company's Articles of Incorporation provides that the
Board of Directors of the Company has the power to: (1) indemnify any
director, officer, employee or agent of the Company to the fullest extent
permitted by the Colorado Business Corporation Act; (2) authorize payment of
expenses incurred in defending a civil or criminal action, suit or proceeding
in advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of the director, officer, employee or
agent to repay such amount unless it is ultimately determined that he is
entitled to be indemnified by the Company; and (3) purchase and maintain
insurance on behalf of any person who is or was a directors, officer, employee
or agent of the Company or who is or was serving at the request of the Company
as a director, officer, employee or agent of another Company, partnership,
joint venture, trust or other enterprise against any liability

-51-
<PAGE> 56
asserted against him and incurred by him in any such capacity or arising out of
his status as such, whether or not the Company would have the power to
indemnify him against such liability under the provisions of Article IX of the
Company's Articles of Incorporation.

Article XI of the Company's By-Laws provides that the Company shall
indemnify a person made a party to a proceeding because the person is or was a
director or officer against liability incurred in the proceeding if: (i) the
person conducted himself or herself in good faith; and (ii) the person
reasonably believed: (1) in the case of conduct in an official capacity with
the Company, that his or her conduct was in the Company's best interests; and
(2) in all other cases, that his or her conduct was at least not opposed to the
company's best interests; and (iii) in the case of any criminal proceeding, the
person had no reasonable cause to believe his or her conduct was unlawful. The
Company may not indemnify a director or officer (i) in connection with a
proceeding by or in the right of the Company in which the director or officer
was adjudged liable to the Company; or (ii) in connection with any other
proceeding charging that the director or officer derived an improper personal
benefit, whether or not involving action in an official capacity, in which
proceeding the director was adjudged liable on the basis that he or she derived
an improper personal benefit. The By-Laws provide that the Company shall
indemnify a person who was wholly successful, on the merits or otherwise, in
defense of any proceeding to which the person was a party because the person is
or was a director or officer, against reasonable expenses incurred by him or
her in connection with the proceeding.

Article XI of the Company's By-Laws provides that the Company may
purchase and maintain insurance on behalf of a person who is or was a director,
officer, employee, fiduciary, or agent of the Company or who, while a director,
officer, employee, fiduciary, or agent of the Company, is or was serving at the
request of the Company as a director, officer, partner, trustee, employee,
fiduciary, or agent of another domestic or foreign Company or other person or
of an employee benefit plan, against any liability asserted or incurred by the
person in that capacity or arising out of his or her status as a director,
officer, employee, fiduciary, or agent, whether or not the Company would have
the power to indemnify the person against the same liability under Article XI
of the Company's By-Laws.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted against the
Company by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

TRANSFER AGENT

The transfer agent and registrar of the Company's Common Shares is
Securities Transfer Corporation, 16910 Dallas Parkway, Suite 100, Dallas, Texas
75248.

-52-
<PAGE> 57
LEGAL MATTERS

The validity of the Shares offered hereby has been passed upon for the
Company by Gallagher, Briody & Butler, Princeton, New Jersey.

EXPERTS

The financial statements of the Company and Capitol Metals, Inc. as of
December 31, 1997 and for the year then ended included in this Prospectus and
elsewhere in the Registration Statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.

The financial statements of the Company for the year ended December 31,
1996 included in this Prospectus have been audited by Grant Thornton, LLP,
independent certified public accountants, and have been so included in reliance
upon the reports given upon the authority of that firm as experts in auditing
and accounting.

The financial statements of Capitol Metals Co., Inc. for the year ended
December 31, 1996 included in this Prospectus have been audited by Gumbiner,
Savett, Finkel, Fingleson & Rose, Inc., independent certified public
accountants, and have been so included in reliance upon the reports given upon
the authority of that firm as experts in auditing and accounting.

-53-
<PAGE> 58

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC. AND SUBSIDIARIES
Report of Independent Public Accountants............................... F-2
Report of Independent Certified Public Accountants..................... F-3
Consolidated Balance Sheets at December 31, 1997 and 1996.............. F-4
Consolidated Statements of Operations for the Years Ended
December 31, 1997 and 1996........................................... F-6
Consolidated Statements of Stockholders' Equity for the Years
Ended December 31, 1997 and 1996..................................... F-7
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1997 and 1996........................................... F-8
Notes to Consolidated Financial Statements for the Years Ended
December 31, 1997 and 1996........................................... F-10

Consolidated Balance Sheets at March 31, 1998 (unaudited) and
December 31, 1997.................................................... F-23
Consolidated Statements of Operations for the Three Months Ended
March 31, 1998 and 1997 (unaudited).................................. F-25
Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 1998 and 1997 (unaudited).................................. F-26
Notes to Consolidated Financial Statements for the Three Months Ended
March 31, 1998 and 1997 (unaudited).................................. F-28

CAPITOL METALS CO., INC.
Report of Independent Public Accountants............................... F-34
Report of Independent Public Accountants............................... F-35
Balance Sheets at December 31, 1997 and December 31, 1996.............. F-36
Statements of Operations and Accumulated Deficit for the Years Ended
December 31, 1997 and December 31, 1996.............................. F-38
Statements of Cash Flows for the Years Ended December 31, 1997 and
December 31, 1996.................................................... F-39
Notes to Financial Statements.......................................... F-40
</TABLE>

F-1
<PAGE> 59
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Consolidated Capital of North America, Inc.:

We have audited the accompanying consolidated balance sheet of Consolidated
Capital of North America, Inc. (a Colorado corporation) and subsidiaries as of
December 31, 1997, and the related consolidated statements of operations,
stockholders' equity and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Consolidated
Capital of North America, Inc. and subsidiaries as of December 31, 1997 and the
results of their operations and their cash flows for year then ended in
conformity with generally accepted accounting principles.

/s/ Arthur Andersen LLP

Los Angeles, California
March 27, 1998

F-2

<PAGE> 60
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Consolidated Capital of North America, Inc.

We have audited the accompanying balance sheet of Consolidated Capital of North
America, Inc. (the "Company") as of December 31, 1996, and the related
statements of operations, stockholders' equity and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statements presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Consolidated Capital of North
America, Inc. as of December 31, 1996, and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.

/s/ Grant Thornton LLP

Los Angeles, California
March 21, 1997

F-3
<PAGE> 61
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
CONSOLIDATED BALANCE SHEETS
December 31, 1997 and 1996

<TABLE>
<CAPTION>
ASSETS 1997 1996
---- ----
<S> <C> <C>
Current assets
Cash $ 14,304 $ 26,937
Accounts receivable less allowance
for doubtful accounts of $138,003
at December 31, 1997 1,587,035 --
Inventories 1,193,208 --
Prepaid expenses and other 32,879 --
Notes receivable -- 32,125
Investment in joint venture held for sale -- 52,000
Equipment held for sale -- 2,500
Marketable securities held for sale -- 44,500
---------- --------

Total current assets 2,827,426 158,062

Property and equipment, net of
accumulated depreciation of
$216,004 at December 31, 1997 2,053,215 --

Goodwill, net of accumulated amortization
of $225,995 at December 31, 1997 2,133,013 --

Other assets 692,629 --
---------- --------

Total assets $7,706,283 $158,062
========== ========
</TABLE>

The accompanying notes are an integral part of these statements.

F-4
<PAGE> 62
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
CONSOLIDATED BALANCE SHEETS - Continued
December 31, 1997 and 1996

<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY 1997 1996
---- ----
<S> <C> <C>
Current liabilities
Accounts payable $3,872,397 $ 24,632
Accrued liabilities 290,618 36,000
Current portion of long-term debt 320,738 --
Notes payable to affiliates 225,000 --
Other 61,545 20,000
---------- --------
Total current liabilities 4,770,298 80,632
---------- --------
Long-term debt, less current portion 2,928,133 --
---------- --------
Stockholders' equity
Series A preferred shares, par value of
$.01 per share, liquidation value of
$1.00 per share: Authorized 1,000,000
shares, 744,000 shares issued and
outstanding 744,000 --
Series B preferred shares, par value of
$.01 per share, liquidation value of
$1.00 per share: Authorized 1,000,000
shares, 449,000 shares issued and
outstanding 449,000 --
Common Shares, par value $.0001 per share:
Authorized 50,000,000 shares, 15,992,121 and
1,570,541 shares outstanding at December
31, 1997 and 1996, respectively 1,599 157
Additional paid-in-capital 2,070,313 855,756
Accumulated deficit (3,257,060) (778,483)
---------- --------
Total stockholders' equity 7,852 77,430
---------- --------
Total liabilities and stockholders' equity $7,706,283 $158,062
========== ========

</TABLE>

The accompanying notes are an integral part of these statements.

F-5

<PAGE> 63
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1997 and 1996

<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Net sales $ 16,989,478 $ --
Cost of goods sold 14,021,110 --
------------ -----------
Gross profit 2,968,368 --
------------ -----------

Operating expenses
Selling expenses 1,012,504 --
General and administrative expenses 1,513,959 50,623
Payroll and related benefits 2,061,144 40,487
Depreciation and amortization 441,999 --
------------ -----------
Total expenses 5,029,606 91,110
------------ -----------

Loss from operations (2,061,238) (91,110)
------------ -----------

Other income and (expense)
Interest income -- 17,269
Other income 165,374 --
Interest expense (582,713) (3,671)
Income (loss) from operations of affiliates
held for sale -- (9,898)
Write-down of assets held for sale -- (213,672)
Settlement of stock options -- (11,400)
------------ -----------
(417,339) (221,372)
------------ -----------

Net loss $ (2,478,577) $ (312,482)
============ ===========

Basic loss per share $ (.17) $ (.20)
============ ===========

Weighted average number of basic
common shares outstanding 14,980,423 1,532,129
============ ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-6

<PAGE> 64
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Years Ended December 31, 1997 and 1996

<TABLE>
<CAPTION>
Number of Shares
Common Preferred Common Preferred Stock
Shares Shares Shares Series A Series B
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1996 1,529,541 - $ 153 $ - $ -

Issuance of common shares:
Legal services 12,500 - 1 - -
Cancellation of stock options 28,500 - 3 - -

Net loss - - - - -
----------------------------------------------------------------------

Balance at December 31, 1996 1,570,541 - 157 - -

Sale of common shares through a
private placement, net of expenses 5,496,911 - 550 - -

Merger with Angeles Acquisition
Corp. 8,638,003 - 864 - -

Issuance of common shares
for loan fees 286,666 - 28 - -

Issuance of preferred shares in
exchange for debt and services:
Series A - 744,000 - 744,000 -
Series B - 449,000 - - 449,000

Net loss - - - - -
---------------------------------------------------------------------

Balance at December 31, 1997 15,992,121 1,193,000 $1,599 $744,000 $449,000
=====================================================================
</TABLE>

<TABLE>
<CAPTION>
Additional
Paid-in Accumulated
Capital Deficit Total
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at January 1, 1996 $ 832,075 $ (466,001) $ 366,227

Issuance of common shares:
Legal services 12,284 - 12,285
Cancellation of stock options 11,397 - 11,400

Net loss - (312,482) (312,482)
------------------------------------------

Balance at December 31, 1996 855,756 (778,483) 77,430

Sale of common shares through a
private placement, net of expenses 966,351 - 966,901

Merger with Angeles Acquisition
Corp. - - 864

Issuance of common shares
for loan fees 248,206 - 248,234
Issuance of preferred shares in
exchange for debt and services:
Series A - - 744,000
Series B - - 449,000

Net loss - (2,478,577) (2,478,577)
------------------------------------------

Balance at December 31, 1997 $2,070,313 $(3,257,060) $ 7,852
==========================================
</TABLE>

The accompanying notes are an integral part of these statements.

F-7
<PAGE> 65
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1997 and 1996

<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,478,577) $(312,482)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Amortization and depreciation 441,999 --
Provision for doubtful accounts 45,017 --
Gain on sale of assets (1,000) --
Stock options settled for stock -- 11,400
Management fees paid in preferred stock 168,000 --
Write-down of assets held for sale -- 213,757
Common shares issued for loan fees and interest 223,234 --
Legal services paid in stock -- 12,285
Change in assets and liabilities net of effects
from the business acquisition:
Accounts receivable, net 853,904 --
Inventories 780,931 --
Prepaid expenses and other assets (599,564) --
Accounts payable and accrued liabilities 559,648 7,246
Other liabilities 41,545 --
---------- -------
Net cash provided by (used in) operating
activities 35,137 (67,794)
---------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash used in business acquisition (966,901) --
Purchase of property and equipment (117,667) --
Proceeds from sale of assets held for sale 70,000 --
Purchase of marketable securities -- (7,000)
Deposit received in connection with acquisition -- 20,000
Proceeds from the sale of equipment -- 4,200
Distribution from investment in affiliates held for sale -- 84,588
---------- -------
Net cash (used in) provided by investing activities (1,014,568) 101,788
---------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in note payable -- (12,524)
Proceeds from long-term borrowings 720,000 --
Principal payments on long-term debt (1,462,807) --
Proceeds from notes payable to affiliates 1,000,000 --
Principal payment on note payable to former officer (285,000) --
Proceeds from issuance of common shares,
net of related costs 966,901 --
---------- -------
Net cash provided by (used in) financing activities 939,094 (12,524)
========== =======
</TABLE>

The accompanying notes are an integral part of these statements.

F-8
<PAGE> 66
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
For the Years Ended December 31, 1997 and 1996

<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
CASH FROM ACQUIRED ENTITY $ 27,704 $ --
--------------- -------------

NET (DECREASE) INCREASE IN CASH (12,633) 21,470

CASH AT BEGINNING OF YEAR 26,937 5,467
--------------- -------------
CASH AT END OF YEAR $ 14,304 $ 26,937
=============== =============
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid for interest $ 338,065 $ --
=============== =============
Cash paid for income taxes $ -- $ --
=============== =============
NONCASH FINANCING ACTIVITIES:
Preferred shares issued for retirement of debt $ 1,193,000 $ --
=============== =============

BUSINESS ACQUISITION:
Assets acquired, including cash of $27,704 $ 9,067,178 $ --
Liabilities assumed (8,099,413) --
Common shares issued (864) --
--------------- -------------
Cash used in business acquisition $ 966,901 $ --
=============== =============
</TABLE>

The accompanying notes are an integral part of these statements.

F-9
<PAGE> 67
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997 and 1996

NOTE A - BUSINESS AND INVESTMENT RISK

Consolidated Capital of North America, Inc., a Colorado corporation (the
"Company"), was organized in 1987. During 1997, the Company sold all of its real
estate investments. With the 1997 acquisition of Angeles Metal Trim Co.
("Angeles") and the 1998 acquisition of substantially all of the assets of
Capitol Metals Co., Inc. ("Old Capitol"), the Company intends to focus on the
steel frame building business, steel service center operations and complementary
businesses.

As of December 31, 1997, the Company had a working capital deficit of $1,942,872
and a net loss of $2,478,577 for the year ended December 31, 1997. In January
1998, the Company acquired substantially all of the assets of Old Capitol, which
had filed for protection under Chapter 11 of the Bankruptcy Code (see note K).
The ability of the Company to successfully carry out its business plan is
dependent upon its ability to obtain sufficient additional capital and to
generate significant revenues through its existing assets, including the Capitol
assets.

The Company plans to raise additional working capital through private offerings
of debt and equity (see note K). There is no assurance that the Company will
have sufficient funds to execute its business plan or generate positive
operating results. Management believes that funds on hand and raised in
placements subsequent to year end will be sufficient to fund its operating needs
through at least December 31, 1998.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the Company's significant accounting policies applied in the
preparation of the accompanying financial statements follows:

1. Principles of Consolidation

The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries, Angeles Acquisition Corp. ("Angeles Acquisition")
and Angeles and its wholly-owned subsidiary, California Building Systems, Inc.
All significant intercompany accounts and transactions have been eliminated.

2. Inventories

Inventories are stated at the lower of standard cost (which approximates
first-in, first-out basis) or market.

F-10

<PAGE> 68
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
December 31, 1997 and 1996

3. Depreciation and Amortization

Depreciation and amortization are provided using principally the straight-line
method over estimated useful lives of five to ten years. Leasehold improvements
are amortized over the lives of the respective leases or the service lives of
the improvements, whichever is shorter.

4. Goodwill

Goodwill represents the excess of the purchase price over the estimated fair
value of the net assets acquired, and is being amortized over ten years on a
straight line basis. The Company periodically evaluates the carrying value and
the remaining useful life of its goodwill, and will adjust the carrying value
and related amortization period, if appropriate.

5. Income Taxes

The Company accounts for income taxes using the asset and liability method in
accordance with Statement of Financial Accounting Standards No. 109 ("SFAS No.
109") "Accounting for Income Taxes".

6. Use of Estimates

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

7. Concentrations of Risk

The Company purchases its raw materials from a few vendors which potentially
subjects the Company to a concentration of supplier risk. Although its purchases
of raw materials are currently concentrated with a few key suppliers, management
believes that other suppliers could provide similar services and comparable
terms. A change in suppliers, however, could cause delays in manufacturing and
shipping and a possible loss of sales, which could adversely affect operating
results.

The majority of the Company's sales are to customers in the commercial
construction market. An adverse change in the financial condition of the market
could cause a loss of sales, which could adversely affect operating results.

F-11
<PAGE> 69
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
December 31, 1997 and 1996

8. Investments

The Company accounts for its interest in investments for which it has less than
a 50% interest and in majority owned subsidiaries where control is expected to
be temporary under the equity method. Under this method, the Company's
proportionate share of the equity investments' income or loss either increases
or decreases the Company's investment. At December 31, 1996, the Company reduced
its investment to net realizable value. In January 1997, the Company sold its
53% interest in the Northcrest Joint Venture. In April 1997, the Company sold
its majority interest in Bear Star.

9. Marketable Securities Held for Sale

Investments in equity securities are classified as trading. Trading securities
are measured at fair value, with net unrealized holding gains and losses
reported in operations.

10. Basic Loss Per Share

The Financial Accounting Standards Board recently issued SFAS No. 128 "Earnings
Per Share", effective for years ending after December 15, 1997. Basic loss per
share in the accompanying financial statements is calculated in accordance with
SFAS No. 128. Loss per share for 1996, calculated in accordance with SFAS No.
128, did not change from the amount previously reported. SFAS No. 128 requires
basic earnings per share be calculated based on weighted average shares
outstanding for the period without giving effect to outstanding common stock
equivalents, while diluted earnings per share considers the effect of common
stock equivalents on weighted average shares outstanding. Diluted earnings per
share of common stock is the same as basic earnings per share as the Company
reported a loss for 1997 and 1996.

11. Financial Instruments

The carrying amounts of the Company's accounts receivable, accounts payable and
short-term debt approximated fair value as of December 31, 1997 and 1996,
because of their relatively short maturity.

12. New Financial Accounting Pronouncements

SFAS No. 130 "Reporting Comprehensive Income" and SFAS No. 131 "Disclosure About
Segments of an Enterprise and Related Information" are effective for fiscal
years beginning after December 15, 1997. The Company will adopt the new
standards in 1998. The effects of these new standards have not yet been
determined.

F-12

<PAGE> 70
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
December 31, 1997 and 1996

NOTE C - INVENTORIES

Inventories at December 31, 1997 consist of the following:

Raw materials $ 202,522
Work-in-process 185,225
Finished goods 805,461
-----------
$ 1,193,208
===========

NOTE D - RELATED PARTY TRANSACTIONS

In 1997, the Company borrowed approximately $1,000,000 from various affiliated
entities. Interest and loan fees to these entities for 1997 amounted to
$298,382, of which $248,234 was paid by issuing 286,666 shares of the Company's
Common Stock. The fair value of the stock was determined by the Board of
Directors of the Company. The balance of $50,148 was paid or accrued in 1997. On
December 31, 1997, the Company issued to these entities 744,000 shares of its
Series A Preferred Shares and 449,000 shares of its Series B Preferred Shares in
exchange for the retirement of $1,025,000 of these loans and payment of $168,000
in management fees.

Notes payable to affiliates include three notes in the amount of $75,000 each,
which bear interest at the rate of 12% per annum and were due March 31, 1998.
These loans were repaid subsequent to year end.

During 1997, the Company entered into a five-year agreement with an affiliated
entity to provide administrative, accounting, investment banking and investor
relations services as defined in the agreement. Fees for these services were
$192,500 for the year ended December 31, 1997. The Company issued 168,000 shares
of preferred stock valued at $168,000 and the remaining portion was paid in
cash.

NOTE E - MARKETABLE SECURITIES

During December 1993, the Company acquired 12,500 units in Gold Capital
Corporation ("GCC") in a private offering of securities at a per unit cost of
$2.00 with each unit consisting of two common shares and one warrant to purchase
common shares at $1.00. In 1994, the Company exercised its warrants and held a
total of 37,500 shares. During January 1997, the Company exchanged all of its
GCC securities in exchange for the cancellation of the stock options (see note
F.3).

F-13

<PAGE> 71

CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
December 31, 1997 and 1996

NOTE F - STOCKHOLDERS' EQUITY

1. Preferred Stock

As of December 31, 1997, the Company had two classes of Preferred Shares: Series
A and Series B. Both the Series A and B Shares (i) have 1,000,000 authorized
shares, (ii) are entitled to a cumulative $0.12 per annum dividend, and (iii) a
liquidation preference of $1.00 per share, plus any accumulated but unpaid
dividends. The dividends are payable quarterly, in cash or at the option of the
Company, in Common Shares. The Series A Shares have a priority in liquidation
over the Series B Shares.

The Company has the right to redeem both the Series A and B Shares at any time
for an amount equal to their liquidation preference amount. In addition, both
the Series A and B Shares are convertible, at the option of the holders, into
Common Shares, on a share for share basis. Both the Series A and B Shares are
nonvoting.

2. Common Stock

On January 21, 1997, Consolidated Land & Cattle Company (an inactive subsidiary
of the Company) merged with Angeles Acquisition Corp. Angeles Acquisition Corp.
survived the merger and is a wholly owned subsidiary of the Company (see note
G). In January 1997, the Company issued 8,638,003 Common Shares to the sole
stockholder of Angeles Acquisition Corp. at the stockholder's basis in the
entity.

In January 1997, the Company sold 5,496,911 Common Shares in a private
transaction for an aggregate purchase price of $1,000,000.

3. Stock Options

The Company had an aggregate of 140,000 Common Shares reserved for issuance
under a Compensatory Benefit Plan. The purpose of this plan was to compensate
officers, directors, consultants and advisors for services rendered to the
Company through the issuance of Common Shares. No shares were issued under the
Compensatory Benefit Plan in 1997 and 1996.

The Company had 5,000,000 Common Shares reserved for future issuance under an
Incentive Stock Option Plan (the "Old Plan"). During 1994, the Company granted
520,000 options to employees and

F-14

<PAGE> 72

CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
December 31, 1997 and 1996

officers/directors at $.55 per share. In September 1994, 54,546 stock options
were exercised. In 1996, 10,000 options were settled through the issuance of
8,500 Common Shares with a fair value of $3,400. In January 1997, the remaining
455,454 options were canceled in exchange for approximately $45,000 of
marketable securities which were held by the Company.

In 1994, the Company reserved 750,000 Common Shares for future issuance under a
nonqualified stock option plan the (the "1994 Plan"). In 1995, options to
acquire a total of 25,000 Common Shares at an exercise price of $.50 were
issued. As of December 31, 1996, the stock options to exercise 25,000 shares
were settled through the issuance of 20,000 Common Shares with a fair value of
$8,000.

During 1997, the Compensatory Benefit Plan, the Old Plan and the 1994 Plan were
terminated and any future amounts will be granted under the 1997 Stock Incentive
Plan.

At the annual Meeting of the Shareholders of the Company, held on October 8,
1997, the Shareholders adopted the Company's 1997 Stock Incentive Plan (the
"1997 Plan"). Under the terms of the 1997 Plan, the Company may grant employees
or consultants and advisors for services rendered to the Company, stock options,
stock appreciation rights or stock awards. The Company has reserved 3,000,000
Common Shares for issuance pursuant to the 1997 Plan. The exercise price of all
options shall not be less than the fair market value of the Common Shares on the
date of grant. As of December 31, 1997, options to acquire an aggregate of
500,000 Common Shares were outstanding under the 1997 Plan during 1997. As of
December 31, 1997, no stock appreciation rights had been granted and there had
been no stock awards under the 1997 Plan. The 1997 Plan expires on August 22,
2007.

The following represents stock option activity for the 1997 Plan for the year
ended December 31, 1997:

<TABLE>
<CAPTION>
Weighted Average
Number Exercise Exercise
of Shares Price per Share Price per Share
--------- --------------- ---------------
<S> <C> <C> <C>
Outstanding at December 31, 1996 -- $ -- $ --
Granted 500,000 2.00 2.00
Exercised -- -- --
Canceled -- -- --
------- ------- -------
Outstanding at December 31, 1997 500,000 $ 2.00 $ 2.00
======= ======= =======
</TABLE>

At December 31, 1997 none of the options granted have vested.

F-15

<PAGE> 73
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
December 31, 1997 and 1996

In accordance with provisions of SFAS No. 123, the Company applies APB Opinion
25 and related interpretations in accounting for its employee stock option plan
and, accordingly, does not recognize compensation expense for options issued to
employees. If the Company had elected to recognize compensation expense based on
the fair value of the options granted at grant date as prescribed by SFAS No.
123, net loss and basic loss per share would have been reduced to the pro forma
amounts indicated in the table below:

1997
----
Net loss attributable to common
stockholders - as reported $(2,478,577)
Net loss attributed to common
stockholders - pro forma $(2,548,577)
Basic loss per share - as reported $ (.17)
Basic loss per share pro forma $ (.17)

Because the SFAS No. 123 method of accounting has not been applied to options
granted prior to December 31, 1995, the resulting pro forma compensation expense
may not be representative of the cost to be expected in future years.

The fair value of each option granted is estimated on the date of grant using
the Black-Scholes option pricing model with the following assumptions:

Expected dividend 0%
Expected stock price volatility 142%
Risk free interest rate 6%
Expected life of option 5 years

NOTE G - ANGELES METAL TRIM CO.

On January 21, 1997, Consolidated Land & Cattle Company (an inactive subsidiary
of the Company) merged with Angeles Acquisition Corp. (a privately held
company). Angeles Acquisition Corp. survived the merger and is a wholly owned
subsidiary of the Company. As part of the merger, the Company issued 8,638,003
Common Shares to the sole shareholder of Angeles Acquisition Corp. The shares
were recorded at the stockholder's basis in the entity. Concurrent with the
merger, the Company sold 5,496,911 Common Shares in a private transaction, for
an aggregate purchase price of $1,000,000. Prior to the merger, Angeles
Acquisition Corp. acquired Angeles for approximately $4,300,000, including fees
and expenses. Angeles incurred indebtedness of approximately $4,300,000, which
was

F-16

<PAGE> 74
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
December 31, 1997 and 1996

used in connection with this acquisition. A portion of the proceeds from the
indebtedness was used to repay the outstanding balance of $900,000 under
Angeles' line of credit. The transaction was accounted for using the purchase
method of accounting. The allocation of the purchase price resulted in an excess
purchase price over fair value of net assets acquired of $2,384,904. This amount
represents goodwill and is being amortized over 10 years. The results of
operations for Angeles are included in the statement of operations from the date
of acquisition.

The pro forma effect on the statement of operations for the years ended December
31, 1997 and 1996 assuming this acquisition had occurred on January 1, 1996,
would have been as follows:

1997 1996
---- ----
Revenues $ 17,935,393 $20,879,891
Net loss $ (2,478,577) $(2,351,665)

These pro forma results have been prepared for comparative purposes and are not
meant to be indicative of the results had the acquisition occurred on the date
indicated, or which may result in the future.

NOTE H - NOTES PAYABLE

On January 15, 1997, the Company entered into a credit facility with a lender
and borrowed approximately $2,800,000. This credit facility was due on December
15, 1998 and bore interest at a rate of 2% per annum over the lender's
LIBOR-Rate. The balance outstanding at December 31, 1997 was approximately
$2,116,000. Interest expense was approximately $203,000 in 1997.

On January 17, 1997, the Company also borrowed $1,400,000 from a financial
institution at an interest rate of 9.78%, payable in forty-eight installments,
with the final payment due on February 17, 2001. The balance outstanding at
December 31, 1997 was approximately $1,132,000. Interest expense was
approximately $115,000 in 1997.

On January 12, 1998, both of the above discussed loans were repaid in connection
with the establishment of a new financing facility with Congress Financial
Corporation (Western) ("Congress Financial"). The new facility consists of
$3,443,000 in term loans, payable $57,384 per month, through January 2003, and
revolving lines of credit as determined as a percentage of eligible accounts
receivable and eligible inventories expiring January 2000, less certain reserves
as defined in the new agreement. The maximum borrowings permitted under the new
credit facility is $20,000,000, as defined in the agreement. Interest is payable
monthly at the bank's prime rate plus 0.75% per annum (9.25% at December 31,
1997). All the advances under the new facility are collateralized by all of the

F-17
<PAGE> 75
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
December 31, 1997 and 1996

assets of Angeles and Angeles Acquisition (Capitol) and are also guaranteed by
the Company and California Building Systems, Inc., a subsidiary of Angeles.

The new financing facility contains a number of financial and other
non-financial covenants for both Angeles and Capitol. Angeles and Capitol are in
compliance with these new covenants.

NOTE I - INCOME TAXES

Deferred taxes are determined based on the estimated future tax effects of
difference between the financial statements and the basis of assets and
liabilities under the provisions of the enacted tax laws.

The tax effects of temporary differences that give rise to net deferred taxes at
December 31, 1997 and 1996 are as follows:

<TABLE>
<CAPTION>
Deferred tax assets: 1997 1996
---- ----
<S> <C> <C>
Allowance for bad debts $ 55,201 $ --
Reserve for inventory 40,000 --
Net operating loss carryfoward 1,664,954 240,000
Inventory capitalization 56,497 --
Depreciation and amortization 62,794 --
Provision for write-down of assets -- 85,000
Others 15,200 --
----------- -----------
Total deferred tax assets 1,894,646 325,000

Valuation allowance for deferred tax assets (1,894,646) (325,000)
----------- -----------
Net deferred tax asset $ -- $ --
=========== ===========
</TABLE>

A valuation allowance was established because of the uncertainty that the
deferred tax asset will be realized.

At December 31, 1997 the Company had net operating loss carryforwards of
approximately $4,400,000 and $2,200,000 for Federal and State income tax
purposes and expire through 2012. Due to the additional common stock issued in
1997 and a change in ownership, pursuant to Section 382 of the Internal Revenue
Code, the Company's utilization of its net operating loss carryforwards may be
subject to limitation.

F-18

<PAGE> 76
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
December 31, 1997 and 1996

NOTE J - COMMITMENTS

1. Leases

The Company leases its plant facilities under various operating lease
agreements. A majority of the plant facilities were leased from a former owner
of Angeles under three year lease agreements.

Total rent expense under operating lease agreements for the years ended December
31, 1997 and 1996, (net of sublease rental income of $19,512 and $21,071,
respectively) was $328,932 and $289,774, respectively. In addition to the lease
payments, the Company is responsible for property taxes.

The following is a schedule of approximate future minimum lease payments under
operating leases for facilities and equipment that have initial or remaining
noncancelable lease terms in excess of one year:

Year Ending
December 31,
------------
1998 $ 281,000
1999 262,500
2000 8,500
---------
$ 552,000
=========

Subsequent to December 31, 1997 (see note K), in connection with the acquisition
of substantially all of Old Capitol's assets, the Company assumed additional
future minimum lease payments due under a facilities lease of $900,000 per year
through December 31, 2000.

2. Employment Contract

During 1997, the Company has a one-year employment contract with the President
of one of its subsidiaries. The contract provides for annual compensation of
$84,000 plus bonuses and the issuance of 500,000 stock options.

NOTE K - SUBSEQUENT EVENTS

1. Acquisition

On January 12, 1998, the Company through its wholly-owned subsidiary, Angeles
Acquisition purchased substantially all of the assets of Old Capitol, a steel
processing and service center.

F-19

<PAGE> 77
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
December 31, 1997 and 1996

Old Capitol filed for protection under Chapter 11 of the Bankruptcy Code on
October 7, 1997. On November 26, 1997, the Bankruptcy Court entered an order
establishing the procedures for the sale of substantially all of Old Capitol's
assets pursuant to the Asset Purchase Agreement dated December 1, 1997 between
Old Capitol and the Company.

The transaction was accounted for using the purchase method of accounting and
the total consideration was approximately $8,100,000, consisting of $336,000 in
cash, $1,500,000 in promissory notes (bearing interest at 9% due in installments
through 1999), $300,000 of the Company's Common Shares (269,349 Common Shares),
the assumption of an outstanding note and interest of $626,000, the repayment of
$4,764,000 of Old Capitol's then existing senior debt and the assumption of
approximately $574,000 of cost and expenses associated with the acquisition.
Following the January 1998 acquisition, Angeles Acquisition changed its name to
Capitol Metals Co. ("Capitol").

The following related unaudited pro forma statement of operations gives effect
to such transactions as if they had occurred on January 1, 1997:

Year Ended
December 31, 1997
-----------------
Revenues $ 37,475,321
Loss from operations $ (5,327,729)
Net Loss $ (6,435,407)
Basic loss per share $ (.38)
Weighted average number of
common shares outstanding 16,749,772

2. Sale of Series C Preferred Shares

During March 1998, the Company sold 200 shares of its newly authorized Series C
Preferred Shares at $10,000 per share for a total consideration of $2,000,000.
In connection with the purchase of the Preferred Shares, the Company issued
warrants to purchase up to 250,000 Common Shares at $2.38 per share. The
warrants can be exercised any time until March 6, 2000. In addition, the Company
paid $120,000 to a company owned by a director of the Company, for services
rendered in connection with arranging for the Series C funding.

F-20
<PAGE> 78
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
December 31, 1997 and 1996

The Series C Preferred Shares have a stated value of $10,000 per share and a 6%
annual dividend rate payable quarterly in cash, or at the option of the Company
in Common Shares. The Series C Preferred Shares have a liquidation preference of
$10,000 per share, plus any accumulated but unpaid dividends. The Series A
Preferred Shares and the Series C Preferred Shares rank pari passu in
liquidation and the Series B Preferred Shares rank junior to the Series A
Preferred Shares and the Series C Preferred Shares in liquidation. The Series C
Preferred Shares are convertible, at the option of the holders of such shares,
commencing April 20, 1998, at the conversion price per Series C Preferred Share
equal to $10,000 divided by the lesser of (x) $1.75 or (y) 75% of the arithmetic
average of the closing bid prices of the Common Shares for each of the five
trading days prior to the exercise date of any such conversion. The Series C
Preferred Shares have a mandatory redemption feature on March 10, 2001 at a
redemption price of $10,000 per share, plus all accumulated and unpaid
dividends. In addition, the Series C Preferred Shares are nonvoting.

3. Consulting Arrangement

In March 1998, the Company entered into a consulting arrangement with a director
of the Company. This individual will receive approximately $40,000 and 150,000
Common Shares as compensation for these services and may receive up to 200,000
additional Common Shares.

4. Related Party Transactions

During January 1998, in connection with the acquisition of Capitol and the
transactions with Congress Financial, a related party loaned an additional
$1,500,000 to the Company. The loan is evidenced by a convertible promissory
note of the Company (the "Note") in the amount of $1,750,000, with a 12% annual
interest rate payable monthly in arrears. The Note is due in one year or sooner
in the event of a $25 million equity issuance by the Company and is secured by a
subordinate security interest in all of the assets of the Company and its
subsidiaries, effective upon the consent of Congress Financial to such security
interest or the refinancing or repayment of the loan from Congress Financial.
The Note is convertible into 1,750,000 Common Shares. As additional
consideration for the loan, the Company issued 1,500,000 Common Shares to the
individual.

During March 1998, an affiliate loaned $214,286 to the Company. The loan is
evidenced by a convertible promissory note of the Company (the "Promissory
Note") in the aggregate amount of $250,000, with a 12% annual interest rate
payable monthly in arrears. The Promissory Note is due in one year or sooner in
the event of a $25 million equity issuance by the Company and is secured by a
subordinate security interest in all of the assets of the Company and its
subsidiaries, effective upon the consent of Congress Financial to such security
interest or the refinancing or repayment of the loan from Congress Financial.
The Promissory Note is convertible into 250,000 Common Shares. As additional
consideration for the loan, the Company issued 214,286 Common Shares to the
affiliate.

F-21
<PAGE> 79
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
December 31, 1997 and 1996

5. Issuance of Warrants

In March 1998, the Company issued warrants to purchase 2,000,000 Common Shares
(1,000,000 exercisable at $1.00 per share and the remaining 1,000,000 at $.75
per share, expiring March 2001 and March 2000, respectively). The warrants were
issued in exchange for $385,000 of cash paid by a related party.

6. Issuance of Stock Options

In January 1998, two officers of the Company were granted a total of 400,000
stock options to purchase Common Shares with an exercise price of $1.22 per
share. These stock options vest at various dates through 2001.

In March 1998, the Company issued to officers, employees and employees of
affiliated entities stock options to purchase 625,000 Common Shares at $2.08 per
share. These stock options vest over a four year period commencing on March 10,
1999.

F-22
<PAGE> 80

CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.

CONSOLIDATED BALANCE SHEETS

MARCH 31, 1998 AND DECEMBER 31, 1997

ASSETS March 31, December 31,
1998 1997
------------- -------------
(unaudited)

<S> <C> <C>
Current assets
Cash $ 276,777 $ 14,304
Accounts receivable, less allowance
for doubtful accounts of $166,789 and
$138,003 in 1998 and 1997, respectively 2,752,129 1,587,035
Inventories 3,000,219 1,193,208
Deferred loan costs 810,561 --
Prepaid expenses and other 381,794 32,879
----------- -----------
Total current assets 7,221,480 2,827,426

Property and equipment, net of
accumulated depreciation of $384,960
and $216,004 in 1998 and 1997, respectively 5,450,002 2,053,215

Goodwill, net of accumulated amortization of
$284,945 and $225,995 in 1998 and 1997,
respectively 2,074,063 2,133,013

Other assets 1,151,235 692,629
----------- -----------

Total assets $15,896,780 $ 7,706,283
=========== ===========
</TABLE>

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

F-23

<PAGE> 81

CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.

CONSOLIDATED BALANCE SHEETS - CONTINUED

MARCH 31, 1998 AND DECEMBER 31, 1997

LIABILITIES AND STOCKHOLDERS' March 31, December 31,
(DEFICIT) EQUITY 1998 1997
------------ ------------

(unaudited)
<S> <C> <C>
Current liabilities
Accounts payable $ 4,032,844 $ 3,872,397
Accrued liabilities 221,976 290,618
Current portion of long-term debt 308,608 320,738
Convertible notes payable to affiliates 2,000,000 --
Note payable to affiliates -- 225,000
Notes and loan payable 1,650,000 --
Other 51,327 61,545
------------ ------------
Total current liabilities 8,264,755 4,770,298
------------ ------------

Long-term liabilities
Long-term debt - less current portion 6,050,813 2,928,133
Payable to consultant 312,000 --
Dividends 35,790 --
------------ ------------
Total long-term liabilities 6,398,603 2,928,133
------------ ------------

Redeemable Series C preferred shares 1,674,797 --
------------ ------------

Stockholders' (deficit) equity
Series A preferred shares, par value of $.01
per share, liquidation value of $1.00 per share:
Authorized 1,000,000 shares, 744,000 shares
issued and outstanding 744,000 744,000
Series B preferred shares, par value of $.01
per share, liquidation value of $1.00 per share:
Authorized 1,000,000 shares, 449,000 shares
issued and outstanding 449,000 449,000
Common shares, par value $.0001 per share:
Authorized - 50,000,000 shares, 17,975,756
and 15,992,121 shares outstanding, respectively 1,798 1,599
Additional paid-in capital 4,040,596 2,070,313
Accumulated deficit (5,676,769) (3,257,060)
------------ ------------
Total stockholders' (deficit) equity (441,375) 7,852
------------ ------------

Total liabilities and stockholders' (deficit) equity $ 15,896,780 $ 7,706,283
============ ============
</TABLE>

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

F-24

<PAGE> 82

CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(unaudited)

1998 1997
------------ ------------
<S> <C> <C>
Net sales $ 5,539,506 $ 5,330,147
Cost of goods sold 4,905,079 4,384,522
------------ ------------
Gross profit 634,427 945,625
------------ ------------

Operating expenses
Selling and shipping 193,672 253,280
General and administrative 1,232,941 497,414
Payroll and related benefits 599,546 581,433
Depreciation and amortization 227,906 87,641
------------ ------------
Total expenses 2,254,065 1,419,768
------------ ------------

Loss from operations (1,619,638) (474,143)
------------ ------------

Other income (expense)
Interest expense (475,258) (77,998)
Other 111,900 27,951
------------ ------------
(363,358) (50,047)
------------ ------------

Net loss (1,982,996) (524,190)
Preferred share dividends (43,023) --
------------ ------------

(2,026,019) (524,190)
Discount attributable to conversion value of
preferred shares and warrants (436,713) --
------------ ------------
Loss applicable to common stockholders $ (2,462,732) $ (524,190)
============ ============

Basic and diluted loss per share $ (.14) $ (.04)
============ ============

Weighted average number of
common shares outstanding 17,661,271 12,407,313
============ ============
</TABLE>

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

F-25

<PAGE> 83

CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(unaudited)

<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,982,996) $ (524,190)
Adjustments to reconcile net loss to net cash
used in operations:
Amortization and depreciation 227,906 87,641
Provision for doubtful accounts (17,213) --
Gain on sale of assets -- (1,000)
Common shares issued for loan fees 685,715 --
Value of options granted to non-employees 873 --
Change in assets and liabilities:
Accounts receivable 429,087 63,114
Inventories 349,501 241,499
Prepaid expenses and other (144,378) (47,592)
Deferred loan costs (524,847) --
Other assets 428,448 23,012
Accounts payable and accrued liabilities (119,195) (133,365)
Other liabilities (38,671) 63,430
----------- -----------
Net cash used in operating activities (705,770) (227,451)
----------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of businesses, net of cash acquired (1,750,000) (939,197)
Purchase of property and equipment (51,929) (17,755)
Notes receivable from land sales -- 70,000
Purchase of certificate of deposit restricted -
against long-term obligations (250,000) --
----------- -----------
Net cash used in investing activities (2,051,929) (886,952)
----------- -----------
</TABLE>

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

F-26

<PAGE> 84

CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(unaudited)

1998 1997
----------- -----------

<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 8,066,262 511,686
Principal payments on long-term debt (9,105,143) (46,557)
Principal payments on note payable to former officer -- (185,000)
Payable to consultant 312,000 --
Payment of notes payable to affiliates (225,000) --
Proceeds from issuance of common stock -- 966,901
Short-term borrowings 1,714,286 --
Proceeds from issuance of redeemable preferred shares, net 1,880,000 --
Proceeds from sale of common stock purchase warrants 385,000 --
Dividends (7,233) --
----------- -----------
Net cash provided by financing activities 3,020,172 1,247,030
----------- -----------

NET INCREASE IN CASH 262,473 132,627

CASH AT BEGINNING OF PERIOD 14,304 26,937
----------- -----------

CASH AT END OF PERIOD $ 276,777 $ 159,564
=========== ===========

SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid during the period for interest $ 196,881 $ 63,396
=========== ===========

NONCASH FINANCING ACTIVITIES:
Issuance of common stock for business acquisitions $ 300,000 $ 864
=========== ===========
Cumulative dividends of preferred shares $ 35,790 $ --
=========== ===========

BUSINESS ACQUISITIONS:
Assets acquired $ 8,114,162 $ 9,039,474
Liabilities incurred or assumed (6,064,162) (8,099,413)
Common shares issued (300,000) (864)
----------- -----------
Cash used in business acquisitions $ 1,750,000 $ 939,197
=========== ===========
</TABLE>

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

F-27

<PAGE> 85

CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 1998
(unaudited)

1. GENERAL

The accompanying unaudited interim financial statements of Consolidated Capital
of North America, Inc. (the "Company") include the accounts of the Company and
its wholly-owned subsidiaries, after elimination of all significant intercompany
transactions, accounts and profits. These statements include all adjustments
(consisting solely of normal recurring adjustments) which, in the opinion of
management, are necessary to fairly present the financial position of the
Company as of March 31, 1998 and the results of its operations and its cash
flows for the three months then ended. The results of operations for this
interim period are not necessarily indicative of results to be expected for the
full year.

These interim financial statements should be read in conjunction with the
Summary of Significant Accounting Policies and other Notes to Financial
Statements included in the Company's annual audited financial statements for the
year ended December 31, 1997. Certain prior year amounts have been reclassified
to conform with the current period presentation.

2. BUSINESS ACTIVITIES

Prior to January 21, 1997, the Company's operations were exclusively in the real
estate business. On January 21, 1997, Consolidated Land & Cattle Company, a
subsidiary of the Company, merged with Angeles Acquisition Corp., a privately
held company. Angeles Acquisition Corp. survived the Merger and became a wholly
owned subsidiary of the Company. Prior to the merger Angeles Acquisition Corp.
had acquired Angeles Metal Trim Co. ("Angeles"). Angeles and its wholly-owned
subsidiary fabricate and sell steel framing materials for commercial and
residential structures.

On January 12, 1998, the Company through a wholly-owned subsidiary, purchased
substantially all of the assets of Capitol Metals Co., Inc. ("Old Capitol"), a
privately held steel processing and service center headquartered in Torrance,
California. Old Capitol filed for protection under Chapter 11 of the Bankruptcy
Code on October 7, 1997. The total consideration was approximately $8,100,000,
consisting of $336,000 in cash, $1,500,000 in promissory notes, $300,000 of
Common Shares of the Company (269,349 Common Shares), the assumption of an
outstanding note and interest of $626,000, the repayment of $4,764,000 of Old
Capitol's then existing senior debt and the assumption of approximately $574,000
of costs and expenses associated with the acquisition. The Company agreed to
include the Common Shares issued in connection with the acquisition of the
assets of Old Capitol in a registration statement which is to be filed with the
Securities and Exchange Commission during May 1998. During February 1998,
Angeles Acquisition Corp. changed its corporate name to Capitol Metals, Co.
("Capitol").

F-28

<PAGE> 86

CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

MARCH 31, 1998
(unaudited)

With the recent acquisition of Angeles and Capitol, the Company intends to focus
on the steel frame building business, steel service center operations and
complementary businesses. Management believes that the acquisition of Capitol
will provide the Company with several advantages toward the accomplishment of
its business objective of increasing the Company's profitability. The Company
intends to relocate the Los Angeles, California operations of Angeles to the
Torrance, California facility currently used by Capitol. In addition to the long
term reduction in facilities cost, this relocation will allow management to
combine several previously duplicative functions, creating efficiencies and cost
savings. These functions will include: materials receiving, slitting operations,
purchasing, accounting and other administrative functions. Additionally, as the
companies currently use several common suppliers, the Company believes that the
purchasing volume created by the addition of Capitol may create reduced pricing
for materials and services utilized by Angeles and Capitol.

The pro forma effect on the statement of operations for the Company had the
acquisition taken place on January 1, 1997 would have been as follows:

<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------
1998 1997
------------ ------------
<S> <C> <C>
Revenues $ 5,800,400 $ 11,312,776
Loss from operations $ (1,692,739) $ (514,558)
Net loss $ (2,596,111) $ (896,684)
Basic and fully diluted loss per share $ (.15) $ (.06)
Weighted average number of Common
Shares outstanding 17,830,517 14,176,722
</TABLE>

3. LONG-TERM DEBT

During January 1998, the Company entered into a new financing arrangement with
Congress Financial Corporation (Western) ("Congress Financial"). The Company
incurred $8,100,000 of indebtedness from Congress Financial, of which $3,300,000
was utilized for the repayment of outstanding revolving and term indebtedness of
Angeles and $4,800,000 of which was utilized in connection with the acquisition
of Capitol. Congress Financial provided $1,400,000 and $3,300,000 in financing
under revolving lines of credit to Angeles and Capitol, respectively, and
provided $1,900,000 and $1,500,000 to Angeles and Capitol, respectively, in
financing under term loans. These loans are collectively referred to as the
"Congress Facility."

F-29

<PAGE> 87

CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

MARCH 31, 1998
(unaudited)

support by the appropriate levels of assets and compliance with the applicable
financial and other non-financial covenants by both Angeles and Capitol, to
provide financing for general corporate purposes. The Company is in compliance
with these covenants. The revolving line of credit component of the Congress
Facility is due in January 2000. The term loans are to be repaid in 60 monthly
installments commencing February 1, 1998. Amounts drawn under the Congress
Facility bear interest at a rate which is .75% per annum over the prime rate
announced by Core States Bank, N. A. for the interest period.

There are no compensating balance requirements under either of these two
financing arrangements.

All of the accounts receivable, inventory, equipment and intangibles of Angeles
and Capitol have been pledged as security for the Congress Facility. The
Congress Facility has been guaranteed by the Company and California Building
Systems, Inc., a subsidiary of Angeles.

4. DIVIDENDS

As of March 31, 1998, the Company has a liability for the dividends accrued to
the preferred shareholders for the Series A, Series B and Series C Preferred
Shares which amount to $22,320, $13,470 and $7,233, respectively. The dividends
for the Series A and B Preferred Shares are considered as a noncurrent liability
in the amount of $35,790, as the Company will not pay dividends on these shares
in 1998. The dividends to the Series C Preferred shareholders was paid in April,
1998 in the amount of $7,233 in cash.

5. SALE OF SERIES C PREFERRED SHARES

During March 1998, the Company sold 200 shares of its Series C Preferred Shares
at $10,000 per share for a total consideration of $2,000,000. In connection with
the purchase of the Preferred Shares, the Company issued warrants to purchase up
to 250,000 Common Shares at $2.38 per share. The warrants can be exercised any
time until March 6, 2000. In addition, the Company paid $120,000 to a company
owned by a director of the Company, for services rendered in connection with
arranging for the Series C funding. The Series C Preferred Shares have a stated
value of $10,000 per share and a 6% annual dividend rate payable quarterly in
cash, or at the option of the Company in Common Shares. The Series C Preferred
Shares have a liquidation preference of $10,000 per share, plus any accumulated
but unpaid dividends. The Series A Preferred Shares and the Series C Preferred
Shares rank pari passu in liquidation and the Series B Preferred Shares rank
junior to the Series A Preferred Shares and the Series C Preferred Shares in
liquidation. The Series C Preferred Shares are convertible, at the option of the
holders of such shares, commencing April 20, 1998, at the conversion price per
Series C Preferred Share equal to $10,000 divided by the lesser of (x) $1.75 or
(y) 75% of the arithmetic average of the closing

F-30

<PAGE> 88

CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

MARCH 31, 1998
(unaudited)

bid prices of the Common Shares for each of the five trading days prior to the
exercise date of any such conversion. Based on a conversion price of $1.75, the
Series C Preferred Shares are convertible into approximately 1,143,000 Common
Shares. The Series C Preferred Shares have a mandatory redemption feature on
March 10, 2001 at a redemption price of $10,000 per share, plus all accumulated
and unpaid dividends. The Series C Preferred Shares are nonvoting.

6. CONSULTING AGREEMENT

In March 1998, the Company entered into a consulting arrangement with a director
of the Company. This individual will receive approximately $40,000 and 250,000
Common Shares as compensation for these services and may receive 100,000
additional Common Shares before December 31, 1998. Compensation for the services
are valued at the quoted market value of the Common Shares on the date earned.

7. RELATED PARTY TRANSACTIONS

During January 1998, in connection with the acquisition of Capitol and the
transaction with Congress Financial, a related party loaned $1,500,000 to the
Company. The loan is evidenced by a convertible promissory note to the Company
(the "Note") in the amount of $1,750,000, with a 12% annual interest rate
payable monthly in arrears. The Note is due in one year or sooner in the event
of a $25 million equity issuance by the Company and is secured by a subordinated
security interest in all of the assets of the Company and its subsidiaries,
effective upon the consent of Congress Financial to such security interest or
the refinancing or repayment of the loan from Congress Financial. The Note is
convertible into 1,750,000 Common Shares. As additional consideration for the
loan, the Company issued 1,500,000 Common Shares to the individual.

During March 1998, a company affiliated with certain directors loaned $214,286
to the Company. The loan is evidenced by a convertible promissory note of the
Company (the "Promissory Note") in aggregate amount of $250,000, with a 12%
annual interest rate payable monthly in arrears. The Promissory Note is due in
one year or sooner in the event of a $25 million equity issuance by the Company
and is secured by a subordinated security interest in all of the assets of the
Company and its subsidiaries, effective upon the consent of Congress Financial
to such security interest or the refinancing or repayment of the loan from
Congress Financial. The Promissory Note is convertible into 250,000 Common
Shares. As additional consideration for the loan, the Company issued 214,286
Common Shares to the lender.

8. LOSS PER SHARE

Common share equivalents were not considered as they would be anti-dilutive and
had no impact on the loss per share for the three month periods presented.
However, the impact under the treasury method of

F-31

<PAGE> 89

CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

MARCH 31, 1998
(unaudited)

dilutive stock options and warrants would have been 927,632 Common Shares for
the three months ended March 31, 1998. There were no dilutive stock options or
warrants for the three months ended March 31, 1997.

9. SUBSEQUENT EVENTS

A. Sale of Convertible Notes

The Company has issued and sold, in a private placement, an aggregate of $5.0
million of its 10% Convertible Notes (collectively, the "Notes") pursuant to the
terms of a Note Purchase Agreement between the Company and the purchasers of the
Notes (the "Note Purchase Agreement"). The Company issued $2 million of the
Notes on April 9, 1998, $1.5 million on April 16, 1998, $500,000 on June 9, 1998
and $1,000,000 on June 16, 1998. The proceeds from the issuance of the Notes
will be used for working capital. Interest is payable on the principal of the
Notes from the date of issuance at the rate of 10% per annum. The interest is
payable semi-annually on October 1 and April 1 commencing October 1, 1998, until
the principal is paid in full. The maturity date of the Notes is April 9, 1999
(the "Maturity Date"). The Company has the right, at its sole option, to pay any
interest due on the Notes in Common Shares of the Company based on the
arithmetic average of the closing bid and ask price of the Company's Common
Shares for the twenty trading days prior to the interest payment due date (the
"Interest Shares").

At any time after issuance and prior to the Maturity Date, the outstanding
principal amount of the Notes, any and all accrued and unpaid interest thereon,
in whole or in increments of at least $20,000 of principal, may be converted by
the holder thereof into Common Shares of the Company (the "Conversion Shares")
at the Conversion Price equal to the lesser of (i) $1.75 per share or (ii) the
following conversion prices: (x) on or after August 6, 1998 at a per share price
equal to eighty percent (80%) of the arithmetic average of the closing bid and
ask prices of the Company's Common Shares for the twenty trading days prior to
the exercise date of such conversion and (y) on or after October 5, 1998 at a
per share price equal to seventy-five percent (75%) of the arithmetic average of
the closing bid and ask prices of the Company's Common Shares for each of the
twenty trading days prior to the exercise date of the such conversion. Based on
a conversion price of $.633275, the Notes are convertible into 7,895,470 Common
Shares. The conversion price is subject to adjustment under specified
antidilution provisions. The Company agreed to register the Conversion Shares
and Interest Shares in a registration statement to be filed with the Securities
and Exchange Commission and to have such registration statement effective within
90 days of each issuance date. Failure to have the registration statement
effective by such dates subjects the Company to monetary penalties.

F-32

<PAGE> 90

CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

MARCH 31, 1998
(unaudited)

B. Handel and BINHAD Notes

The Company is in default under the Handel Note assumed in connection with the
acquisition of Capitol Metals (the "Capitol Acquisition") and has an obligation
to repay $450,000 plus accrued interest on such Note. The Company is also in
default under a $300,000 Note issued in connection with the Capitol Acquisition
(the "BINHAD Note"). The Handel Note and the BINHAD Note are subordinate to the
Congress Facility. No action may be commenced on the Handel Note or the BINHAD
Note until October 12, 1998 and January 12, 1999, respectively. Failure to cure
such default on such dates will constitute an event of default under the
Congress Facility and the Convertible Notes.

The Company has filed a claim against BINHAD for certain breaches of
representations and warranties by BINHAD in connection with the Capital
Acquisition. The Company intends to offset such damages against amounts
outstanding under the BINHAD Note.

C. Termination of President of Angeles

Ronald F. Martin served as the President of Angeles Metal Trim Co., an operating
subsidiary of the Company, from April 10, 1997 to May 12, 1998. As part of the
consideration for services rendered under the Employment Agreement, Mr. Martin
was granted 500,000 options with an exercise price of $2.00 per share to
purchase Common Shares. Effective May 12, 1998, Mr. Martin was terminated as the
President of Angeles Metal Trim Co. and all stock options held by Mr. Martin
were terminated.

F-33

<PAGE> 91

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Capitol Metals Co., Inc.:

We have audited the accompanying balance sheet of Capitol Metals Co., Inc. (the
"Company") as of December 31, 1996, and the related statements of operations and
accumulated deficit, and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Capitol Metals Co., Inc. as of
December 31, 1996, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.

As described in Note 1 of the financial statements, the Company filed for
protection under Chapter 11 of the Bankruptcy Code on October 7, 1997. On
November 26, 1997, the Bankruptcy Court entered an order establishing the
procedures for the sale of substantially all of the assets of the Company (see
note 12). It is not presently determinable whether the amounts realizable from
the disposition of the remaining assets or the amounts that creditors agree to
accept in settlement of the obligations due them will differ materially from the
amounts shown in the accompanying financial statements. The accompanying
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

/s/ Gumbiner, Savett, Finkel, Fingleson & Rose, Inc.

May 7, 1997, except for Notes 1 and 12
as to which the date is January 12, 1998

F-34

<PAGE> 92

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Capitol Metals Co., Inc.:

We have audited the accompanying balance sheet of Capitol Metals Co., Inc. (the
"Company") as of December 31, 1997, and the related statements of operations and
accumulated deficit and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Capitol Metals Co., Inc. as of
December 31, 1997, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.

/s/ Arthur Andersen LLP

Los Angeles, California
March 24, 1998

F-35

<PAGE> 93

CAPITOL METALS CO., INC.
BALANCE SHEETS
December 31, 1997 and 1996

<TABLE>
<CAPTION>
ASSETS
1997 1996
---- ----
<S> <C> <C>
Current Assets
Cash $ 25,720 $ 15,533
Accounts receivable, less allowance
for doubtful accounts of $145,000 and
$100,000 in 1997 and 1996, respectively 1,489,625 3,141,946
Inventories 2,372,916 6,681,605
Prepaids and other current assets 126,462 370,458
----------- -----------

Total current assets 4,014,723 10,209,542
----------- -----------

Property and Equipment, at cost
net of accumulated depreciation 1,005,090 968,474
----------- -----------

Other Assets
Deposits 51,681 129,440
Intangibles -- 335,813
----------- -----------

Total other assets 51,681 465,253
----------- -----------

Total Assets $ 5,071,494 $11,643,269
=========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-36

<PAGE> 94

CAPITOL METALS CO., INC.
BALANCE SHEETS
December 31, 1997 and 1996

<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDER'S DEFICIT
1997 1996
---- ----
<S> <C> <C>
Current Liabilities
Short-term borrowings $ 4,649,789 $ 8,749,352
Current portion of long-term debt 18,453 26,403
Accounts payable 5,713,157 5,423,776
Accrued expenses 294,292 357,304
Due to stockholder 60,000 --
Due to affiliates 336,502 54,055
Loan payable 600,000 250,000
------------ ------------

Total current liabilities 11,672,193 14,860,890
------------ ------------

Long-term Debt 10,000 28,453
------------ ------------

Subordinated Debt to Stockholder 2,714,952 2,714,952
------------ ------------

Commitments and Contingencies (Note 9)

Stockholder's Deficit
Common stock, no par value:
Authorized, 100,000 shares
Outstanding, 10,000 shares 500,000 500,000
Paid in capital 692,966 692,966
Liabilities assumed in excess of assets acquired
in related party acquisition (3,079,930) (3,079,930)
Accumulated deficit (7,438,687) (4,074,062)
------------ ------------

Total stockholder's deficit (9,325,651) (5,961,026)
------------ ------------

Total Liabilities and Stockholder's Deficit $ 5,071,494 $ 11,643,269
============ ============
</TABLE>

The accompanying notes are an integral part of these statements.

F-37

<PAGE> 95

CAPITOL METALS CO., INC.
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
For the Years Ended December 31, 1997 and 1996

<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Net Sales $ 20,485,843 $ 28,650,588

Cost of Sales 18,800,676 25,027,828
------------ ------------

Gross Profit 1,685,167 3,622,760
------------ ------------

Operating Expenses
General and administrative 1,001,067 963,443
Salaries 949,709 1,153,040
Rent 747,453 671,589
Insurance 398,776 310,349
Professional fees 499,528 340,640
Loan fees 316,704 65,286
------------ ------------
Total operating expenses 3,913,237 3,504,347
------------ ------------

(Loss) Income from Operations (2,228,070) 118,413

Interest Expense 1,136,555 1,551,903
------------ ------------

Net Loss (3,364,625) (1,433,490)

Accumulated Deficit, beginning of year (4,074,062) (2,640,572)
------------ ------------

Accumulated Deficit, end of year $ (7,438,687) $ (4,074,062)
============ ============

Basic Loss Per Share $ (336.46) $ (143.35)
============ ============

Common Shares Outstanding 10,000 10,000
============ ============
</TABLE>

The accompanying notes are an integral part of these statements.

F-38

<PAGE> 96

CAPITOL METALS CO., INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1997 and 1996

<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $(3,364,625) $(1,433,490)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 149,286 185,327
Write-off of intangibles 267,421 --
Provision for doubtful accounts 45,000 --
Changes in assets and liabilities:
Accounts receivable 1,607,321 70,440
Inventories 4,308,689 2,898,551
Prepaids and other assets 323,861 (187,833)
Accounts payable and accrued expenses 226,369 (33,190)
Due to affiliates 282,447 25,332
Due to stockholder 60,000 --
----------- -----------
Net cash provided by operating activities 3,905,769 1,525,137
----------- -----------

Cash Flows from Investing Activities:
Purchases of property and equipment (84,616) (237,475)
----------- -----------
Net cash used in investing activities (84,616) (237,475)
----------- -----------

Cash Flows From Financial Activities:
Proceeds from loan payable 600,000 250,000
Payments of short-term borrowings and loan payable (4,349,563) (1,395,082)
Proceeds from long-term debt -- 166,667
Payments of long-term debt (26,403) (309,044)
Payments of loan fees (35,000) (5,917)
----------- -----------
Net cash used in financing activities (3,810,966) (1,293,376)
----------- -----------

Net increase (decrease) in cash 10,187 (5,714)

Cash, beginning of year 15,533 21,247
----------- -----------

Cash, end of year $ 25,720 $ 15,533
=========== ===========

Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for:
Interest $ 1,040,234 $ 1,418,269
Income taxes $ 800 $ 800
</TABLE>

The accompanying notes are an integral part of these statements.

F-39

<PAGE> 97

CAPITOL METALS CO., INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997

NOTE 1: BUSINESS AND OPERATIONS

Capitol Metals Co., Inc., a California corporation (the "Company"), is
a supplier and processor of flat rolled steel for use in the
manufacture of consumer goods. Its customers are steel suppliers and
manufacturers throughout the United States.

The Company incurred losses for the years ended December 31, 1997 and
1996, has a stockholder's deficit of $9,325,651 and a negative working
capital of $7,657,470 as of December 31, 1997.

The Company filed for protection under Chapter 11 of the Bankruptcy
Code on October 7, 1997. On November 26, 1997, the Bankruptcy Court
entered an order establishing the procedures for the sale of
substantially all of the Company's assets pursuant to the Asset
Purchase Agreement dated December 1, 1997 between the Company and
Angeles Acquisition Corp. ("Angeles"), a wholly owned subsidiary of
Consolidated Capital of North America, Inc. ("Consolidated"). The sale
was consummated on January 12, 1998 (see note 12). The plan for the
disposition of the remaining assets and settlement of liabilities is to
be filed by July 22, 1998 with the Bankruptcy Court. A hearing on the
proposed plan is expected to occur prior to the end of 1998. It is not
presently determinable whether the amounts realizable from the
disposition of the remaining assets or the amounts that creditors agree
to accept in settlement of the obligations due them will differ
materially from the amounts shown in the accompanying financial
statements. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Inventories:

Inventories are stated at the lower of cost (specific identification)
or market and consist primarily of raw materials.

b. Property and equipment:

Depreciation is computed principally on the straight-line method based
on the estimated useful lives of the assets, generally as follows:

<TABLE>
<S> <C>
Furniture, fixtures and office equipment 5-7 years
Machinery and equipment 5-15 years
Transportation equipment 5 years
Leasehold improvements 20 years
</TABLE>

F-40

<PAGE> 98

CAPITOL METALS CO., INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997

c. Intangibles:

Intangible assets consist of reorganization costs and loan fees which
are being amortized over five-year and seven-year periods,
respectively. During 1997, it was determined that there was no
continuing value to these intangible assets and the remaining costs of
$267,421 were written off.

d. Income taxes:

The Company and its sole stockholder have made the election for the
Company to be taxed as an S Corporation. Therefore, corporate income is
taxed directly as income to the stockholder. Accordingly, federal and
state income taxes are liabilities of the stockholder and not of the
Company, except that California levies a 1.5% corporate tax on electing
S corporations.

e. Use of estimates:

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ
from those estimates.

f. Revenue recognition:

The Company recognizes revenue upon shipment.

g. Reclassifications:

Certain amounts in the 1996 financial statements have been reclassified
to conform with the 1997 presentation.

F-41

<PAGE> 99

CAPITOL METALS CO., INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997

NOTE 3: PROPERTY AND EQUIPMENT

As of December 31, 1997 and 1996, property and equipment consisted of
the following:

<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Furniture, fixtures and office equipment $ 229,625 $ 229,625
Machinery and equipment 1,692,167 1,616,313
Transportation equipment 48,052 48,052
Leasehold improvements 240,192 231,432
----------- -----------
2,210,036 2,125,422
Less accumulated depreciation
and amortization (1,204,946) (1,156,948)
----------- -----------
$ 1,005,090 $ 968,474
=========== ===========
</TABLE>

NOTE 4: INTANGIBLES

As of December 31, 1997 and 1996, intangibles consisted of the
following:

<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Reorganization costs $ -- $165,658
Loan fees -- 463,489
-------- --------
-- 629,147
Less accumulated amortization -- 293,334
-------- --------
$ -- $335,813
======== ========
</TABLE>

NOTE 5: SHORT-TERM BORROWINGS

The Company had a credit facility with a financial institution, which
expired on October 31, 1997. This debt was repaid on January 12, 1998
in connection with the establishment of a new financing facility for
Angeles. The new facility consists of a $1,500,000 term loan, payable
$25,000 per month, and a revolving line of credit not to exceed $10
million, less certain reserves as defined in the new agreement. The
maximum borrowings permitted under the new revolving line of credit
facility are determined as a percentage of eligible accounts receivable
and eligible inventories, as defined in the agreement. Interest is
payable monthly at the bank's prime rate plus 0.75% per annum (9.25% at
December 31, 1997). All advances under the new facility are
collateralized by all of the assets of Angeles and are also guaranteed
by Consolidated and its other subsidiaries.

F-42

<PAGE> 100

CAPITOL METALS CO., INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997

The new financing facility contains various covenants including a
minimum adjusted net worth, as defined in the agreement. Angeles is in
compliance with the new covenants.

NOTE 6: LONG-TERM DEBT

As of December 31, 1997 and 1996, long-term debt consisted of the
following:

<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Note, collateralized by transportation equipment, payable $866 per
month through December, 1997, including interest at 8.8% per
annum $ -- $ 9,833

Contract, collateralized by computer equipment,
payable $1,719 per month through June, 1999,
including interest at 10.8% per annum 28,453 45,023
------- -------
$28,453 $54,856
======= =======

Current portion $18,453 $26,403
======= =======
Noncurrent portion $10,000 $28,453
======= =======
</TABLE>

Maturities of long-term debt during 1998 and 1999 are $18,453 and
$10,000, respectively.

NOTE 7: LOAN PAYABLE

In May 1997, the Company entered into a $600,000 loan agreement with an
unrelated third party, the terms of which were revised subsequent to
year end. The new loan (i) bears interest at 10% per annum, (ii) is
collateralized by substantially all of Angeles' assets (subordinated to
the primary lender) (see note 5), and (iii) is due in 1998.

NOTE 8: SUBORDINATED DEBT

As of December 31, 1997 and 1996, subordinated debt (subject to
subordination agreements entered into with the primary lender, which
prohibit principal reductions without the consent of the primary
lender) (see note 5), consisted of the following:

F-43

<PAGE> 101

CAPITOL METALS CO., INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997

<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Note payable to sole stockholder, uncollateralized,
interest payable monthly at prime plus 2% per annum
(10.5% at December 31, 1997) or $30,000 per month,
whichever is greater, and due on demand $2,714,952 $2,714,952
========== ==========
</TABLE>

The Company paid $30,000 per month in interest through June 1997 and
accrued $60,000 of additional interest expense through August 1997. As
a result of the bankruptcy filing and sale of the Company (see notes 1
and 12), no additional amounts have been accrued.

NOTE 9: COMMITMENTS AND CONTINGENCIES

a. Leases:

The Company leases its facilities on a month-to-month basis from a
partnership which is partially owned by the Company's sole stockholder.
Total rent expense amounted to $747,453 and $671,589 in 1997 and 1996,
respectively.

b. Litigation:

The Company is a defendant in a suit in the United States District
Court which seeks to recover damages for environmental cleanup at the
Operating Industries Superfund site in Monterey Park, California. The
Company was a party to the Second and Third Consent Decrees executed in
this action. Under the Second Consent Decree, the Company paid
approximately $108,000. Under the Third Consent Decree, the Company was
required to pay an additional $197,100 over an extended time period.
Quarterly payments of approximately $4,100 were required until
December, 1997.

F-44
<PAGE> 102

CAPITOL METALS CO., INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997

NOTE 10: RELATED PARTY TRANSACTIONS

The Company bought and sold steel from an affiliated entity. The
Company leased its facilities from a partnership which is partially
owned by its sole stockholder and utilized a trucking company which is
owned by its sole stockholder. During the years ended December 31, 1997
and 1996, such transactions aggregated:

<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Sales $208,183 $184,726
Purchases $672,847 $526,332
Freight expense $213,222 $293,547
Rent expense $747,453 $671,589
Interest expense $240,000 $360,000
</TABLE>

As of December 31, 1997 and 1996, $392,502 and $54,055, respectively,
were payable by the Company to these affiliated entities.

The Company's credit facility, which expired on October 31, 1997, was
guaranteed to the lender by the Company's sole stockholder (see note 5).

NOTE 11: EMPLOYEE BENEFIT PLAN

The Company sponsors an employee benefit plan for eligible employees.
Eligibility begins after completion of one year of eligible service.
Under the plan, the Company's contributions are discretionary and it
may elect to make a matching contribution at any time. There were no
contributions for the plan years ended December 31, 1997 and 1996.

NOTE 12: SUBSEQUENT EVENTS

On January 12, 1998, Consolidated through its wholly-owned subsidiary,
Angeles, purchased substantially all of the assets of the Company out
of bankruptcy.

The transaction was accounted for using the purchase method of
accounting. The total consideration was approximately $8,100,000,
consisting of $336,000 in cash, $1,500,000 in promissory notes (bearing
interest at 9%, due in installments through 1999), $300,000 (269,349
Common Shares) of Common Stock of Consolidated, the assumption of an
outstanding note and interest of $626,000 (see note 7), the repayment
of $4,764,000 of the Company's then existing senior debt and the
assumption of approximately $574,000 of costs and expenses associated
with the acquisition.

F-45

<PAGE> 103
No dealer, salesman or other person has been authorized to give any
information or to make any representations, other than those contained or
incorporated by reference in this Prospectus, in connection with the offering
contained herein, and, if given or made, such information and representations
must not be relied upon as having been authorized by the Company or the Selling
Shareholder. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer in such
jurisdiction. Neither the delivery of this Prospectus nor any sale made
hereunder shall under any circumstances create any implication that there has
been no change in the affairs of the Company since the date hereof.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SELLING SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
MARKET PRICES AND DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . 18
PRO FORMA COMBINED FINANCIAL
INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
MANAGEMENT'S DISCUSSION AND
ANALYSIS AND PLAN OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . 21
BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
DESCRIPTION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . 50
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
</TABLE>

CONSOLIDATED CAPITAL
OF
NORTH AMERICA, INC.

16,830,868 COMMON SHARES

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

PROSPECTUS

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

____________, 1998
<PAGE> 104
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS

II-2
<PAGE> 105
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of
the Company in the successful defense of any action, suit or proceeding) is
asserted against the Company by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION(1)

<TABLE>
<S> <C>
SEC Registration Fee . . . . . . . . . . . . . . . . . . . . . . . . $7,512.39

Printing of Registration Statement, Prospectus, etc. . . . . . . . . . . . (2)

Blue Sky Fee and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . (2)

Accounting Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . (2)

Legal Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2)

Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2)
</TABLE>

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

(1) One Selling Shareholder offering 442,000 Shares is paying a pro-rata
portion of the expenses incurred by the Company in connection with the
offering. All other expenses incurred in connection with the offering by
Selling Shareholders are being borne by the Company.

(2) To be filed by amendment.

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

In the three years preceding the date of this Registration Statement,
the Company has issued the following securities which were not registered under
the Securities Act of 1933, as amended (the "Securities Act"):

In December 1996, the Company issued, in a private transaction, 28,500
Common Shares in exchange for cancellation of certain stock options held by
employees of the Company and 12,500 Common Shares in consideration of legal
services provided to the Company. The issuances of the securities were private
transactions exempt from registration under Section 4(2) of the Securities Act.

II-3
<PAGE> 106
On January 21, 1997, the Company issued to Stone Pine Colorado, LLC in a
private transaction, 8,638,003 of the Company's Common Shares in connection
with the merger of Angeles Acquisition Corporation and Consolidated Land and
Cattle Company, a subsidiary of the Company (the "Merger"). The issuance of
the securities was a private transaction exempt from registration under Section
4(2) of the Securities Act.

Immediately following the Merger, the Company sold 5,496,911 Common
Shares in a private transaction exempt from registration under Regulation S of
the Securities Act to seven off-shore investors who are not "U.S. Persons" (as
defined in Rule 902(o) of Regulation S) for an aggregate purchase price of $1.0
million.

On June 25, 1997, the Company issued to Stone Pine Financial Group, LLC
("SP Financial"), a company affiliated with certain directors of the Company,
in a private transaction, 16,666 of the Company's Common Shares in
consideration of a loan made by SP Financial to the Company in June 1997. The
issuance of the securities was a private transaction exempt from registration
under Section 4(2) of the Securities Act.

On August 21, 1997, the Company issued to SP Financial in a private
transaction, 60,000 of the Company's Common Shares in consideration of a loan
made by SP Financial to the Company in August 1997. The issuance of the
securities was a private transaction exempt from registration under Section
4(2) of the Securities Act.

The Company issued to ERB Acquisition Group, LLC ("ERB"), a company
affiliated with certain directors of the Company, in a private transaction a
total of 110,000 of the Company's Common Shares in consideration of a loan made
by ERB to the Company in April 1997. 50,000 shares were issued on June 7, 1997
and 10,000 were issued on the first of each month from July 1997 through
December 1997. The issuance of the securities was a private transaction exempt
from registration under Section 4(2) of the Securities Act.

On December 31, 1997, the Company issued in a private transaction to
Stone Pine Capital, LLC ("SP Capital"), Stone Pine Advisors, LLC ("SP
Advisors"), companies affiliated with certain directors of the Company, and
Paul Bagley, the Chairman of the Company, 33,333, 33,333 and 33,334 of the
Company's Common Shares, respectively, in consideration of loans made by SP
Capital, SP Advisors and Mr. Bagley to the Company during December 1997. The
issuance of the securities were private transactions exempt from registration
under Section 4(2) of the Securities Act.

On December 31, 1997, the Board of Directors of the Company approved the
issuance in a private transaction of the following number of Convertible
Preferred Shares of the Company in exchange for the forgiveness of outstanding
indebtedness and other obligations of the Company to the following, companies
affiliated with certain directors of the Company: SP Financial - 360,000
Series A Preferred Shares; ERB - 384,000 Series A Preferred Shares; Stone Pine
Atlantic LLC - 131,500 Series B Preferred Shares; Stone Pine Colorado LLC -
317,500 Series B Preferred Shares. The issuances of the securities were
private transactions exempt from registration under Section 4(2) of the
Securities Act.

On January 12, 1998, Consolidated issued in a private transaction
269,349 Common Shares to BINHAD, Inc. on behalf of the unsecured creditors of
Capitol Metals Co. as partial consideration for the acquisition of the assets
of Capitol Metals Co. The issuance of the securities was a private transaction
exempt from registration under Section 4(2) of the Securities Act.

On January 30, 1998, the Company issued to Paul Bagley, the Chairman of
the Company, 1,500,000 of the Company's Common Shares in consideration of a
loan made by Mr. Bagley to the Company during January 1998. The issuance of
the securities was a private transaction exempt from registration under Section
4(2) of the Securities Act.

On March 3, 1998, the Company issued in a private transaction warrants
to purchase up to one million Common Shares of the Company, exercisable at
$1.00 per share, having an exercise term of three years from the date of
issuance and warrants to purchase up to one million Common Shares of the
Company, exercisable at $0.75 per share, having an exercise term of two years
from the date of issuance. The Warrants were issued pursuant to an exemption
from registration under Regulation S of the Securities Act to private offshore
investors who are not "U.S. Persons" (as defined in Rule 902(o) of Regulation
S).

II-4
<PAGE> 107
On March 10, 1998, the Company sold 200 shares of the Company's Series C
6% Convertible Preferred Shares pursuant to an exemption from registration
under Regulation S of the Securities Act (the "Series C Shares") for an
aggregate purchase price of $2 million. Effective July 22, 1998, 14 of the
Series C Shares were exercised and 311,111 Common Shares were issued upon
conversion. The Shares were issued to twelve private investors who are not
"U.S. Persons" (as defined in Rule 902(o) of Regulation S). In connection with
the purchase of the Series C Shares, the Company issued to the investors
warrants to purchase up to 250,000 Common Shares of the Company, exercisable at
$2.38 per share, having an exercise term of two years from the date of
issuance.

On March 24, 1998, the Company issued to Stone Pine Atlantic LLC, a
company affiliated with certain directors of the Company, in a private
transaction 214,286 of the Company's Common Shares in consideration of a loan
made by Stone Pine Atlantic LLC to the Company during March 1998. The issuance
of the securities was a private transaction exempt from registration under
Section 4(2) of the Securities Act.

On April 19, 1998, April 16, 1998, June 9, 1998 and June 16, 1998 the
Company issued and sold, in private transactions, $2,000,000, $1,500,000,
$500,000 and $1,000,000, respectively, principal amount of its 10% Convertible
Notes to eleven accredited investors. The issuance of the securities were
private transactions exempt from registration under Section 4(2) of the
Securities Act.

On May 5, 1998, the Company issued to a consultant to the Company, who
is also a director of the Company, in a private transaction, 100,000 Common
Shares pursuant to the terms of a Consulting Agreement with the Company. The
issuance of the securities was a private transaction exempt from registration
under Section 4(2) of the Securities Act.

On July 13, 1998, the Company issued to an advisor to the Company, in a
private transaction, 120,000 Common Shares and warrants to purchase 200,000
Common Shares at $2.00 per share, having an exercise term of two years from the
date of issuance, pursuant to the terms of an Advisory Agreement with the
Company. The issuance of the securities was a private transaction exempt from
registration under Section 4(2) of the Securities Act.

On July 13, 1998, the Company issued to a consultant to the Company, in
a private transaction, 50,000 Common Shares pursuant to the terms of a
Consulting Agreement with the Company. The issuance of the securities was a
private transaction exempt from registration under Section 4(2) of the
Securities Act.

On July 29, 1998, the Company issued to a former advisor to the Company,
in a private transaction, 250,000 Common Shares pursuant to the terms of the
Advisory Agreement with the Company. The issuance of the securities was a
private transaction exempt from registration under Section 4(2) of the
Securities Act.

On August 4, 1998, the Company issued to a consultant to the Company, in
a private transaction, 100,000 Common Shares pursuant to the terms of a
Consulting Agreement with the Company. The issuance of the securities was a
private transaction exempt from registration under Section 4(2) of the
Securities Act.

There were no underwriters involved in any of the transactions described
above.

II-5
<PAGE> 108
ITEM 27. EXHIBITS

<TABLE>
<CAPTION>
Exhibit No. Description
----------- ---------------------------------------------------
<S> <C>
2.1(1) Stock Purchase Agreement, dated as of January 15,
1997, between Angeles Acquisition Corp., Angeles
Metal Trim Co., California Building Systems, Inc.,
and the shareholders of Angeles Metal Trim Co. and
D. Kingston Cable (Exhibits and Schedules omitted).

2.2(1) Agreement and Plan of Merger, dated January 16,
1997, between the Company, Consolidated Land &
Cattle Company, Raymond E. McElhaney, Bill M.
Conrad, Ronald R. McGinnis, Angeles Acquisition
Corp. and Stone Pine Colorado, LLC (Exhibits and
Schedules omitted).

3.1(2) Articles of Incorporation of the Company.

3.2 Articles of Amendment to Articles of Incorporation,
dated as of December 31, 1997 (Setting Forth Terms
of Series A Preferred Stock and Series B Preferred
Stock).

3.3(3) Articles of Amendment to Articles of Incorporation,
dated as of March 9, 1998 (Setting Forth Terms of
Series C Preferred Stock).

3.4(4) By-Laws Revised and Amended, as of August 26, 1997.

4.1(3) Form of Warrant to Purchase 1,000,000 Common Shares
at $1.00.

4.2(3) Form of Warrants to Purchase 1,000,000 Common
Shares at $.75.

4.3(3) Form of Warrants to Purchase 250,000 Common Shares
at $2.38.

4.4* Form of Warrants to Purchase 200,000 Common Shares
at $2.00.

5.1 Opinion of Gallagher, Briody & Butler.

10.1(5) Purchase and Sale Agreement, dated January 16,
1997, between the Company, Raymond McElhaney, Bill
Conrad and Ronald McGinnis (Exhibits and Schedules
omitted).

10.2(1) Form of Stock Purchase Agreement, dated January 16,
1997, between the Company and the investors
(Exhibits and Schedules omitted).

10.3(5) Lease Agreement, dated January 15, 1997, by and
between Angeles Metal Trim Co. and D. Kingston
Cable, Trustee of the Daniel Kingston Cable and
Barbara White Cable 1995 Revocable Intervivos Trust
(Re: property at 4817 and 4915 Sheila Street,
Commerce, California).
</TABLE>

II-6
<PAGE> 109
<TABLE>
<S> <C>
10.4(5) Lease Agreement, dated January 15, 1997, by and
between Angeles Metal Trim Co. and D. Kingston
Cable, Trustee of the Daniel Kingston Cable and
Barbara White Cable 1995 Revocable Intervivos Trust
(Re: property at 116 Y Street, Vancouver,
Washington).

10.5(5) Lease Agreement, dated November 13, 1989, by and
between Angeles Metal Trim Co. and 83rd Street
Investors (Re: property at 4841 83rd Street,
Sacramento, California).

10.6(5) Lease Agreement, dated October 1, 1996, by and
between Angeles Metal Trim Co. and Fred G. and
Patricia A. Duncolon (Re: property at 1851
Alexander Avenue, Tacoma, Washington).

10.7(5) Services Agreement, dated as of February 1, 1997,
between the Company and Stone Pine Atlantic, LLC.

10.8(5) Promissory Note, dated as of January 16, 1997,
between the Company and Stone Pine Colorado, LLC.

10.9(6) Loan Agreement, dated as of April 9, 1997, between
Angeles Metal Trim Co., Consolidated Capital of
North America, Inc., Stone Pine Colorado, LLC and
ERB Acquisition Group, LLC.

10.10(6) Promissory Note, dated April 9, 1997, of Angeles
Metal Trim Co. in the principal amount of $309,000,
payable to ERB Acquisition Group, LLC.

10.11(6) Guaranty, dated April 9, 1997, and delivered by
Consolidated Capital of North America Inc. and
Stone Pine Colorado, LLC to and for the benefit of
ERB Acquisition Group, LLC.

10.12(6) Security Agreement, dated as of April 9, 1997, made
and delivered by Consolidated Capital of North
America, Inc. in favor of ERB Acquisition Group,
LLC.

10.13(7) Loan Agreement, dated as of June 18, 1997, between
Angeles Metal Trim Co., Consolidated Capital of
North America, Inc. and Stone Pine Financial Group,
LLC.

10.14(7) Promissory Note, dated June 18, 1997, of Angeles
Metal Trim Co., in the principal amount of
$110,210, payable to Stone Pine Financial Group,
LLC.

10.15(7) Employment Agreement, dated April 10, 1997, between
Angeles Metal Trim Co. and Ronald F. Martin.

10.16(4) Loan Agreement and Term Note, dated as of August
21, 1997, between Consolidated Capital of North
America, Inc. and Stone Pine Financial Group, LLC.

10.17(4) Amendment to Term Note, dated August 21, 1997.

10.18(4) Promissory Note, dated as of July 8, 1997, between
ERB Acquisition Group, LLC and Consolidated Capital
of North America, Inc.

10.19(4) Amendment to Promissory Note, dated July 8, 1997.

10.20(4) Consolidated Capital of North America, Inc. 1997
Stock Incentive Plan.

10.21(4) Form of Incentive Stock Option Agreement for Grants
to Employees.

10.22(4) Form of Non-Qualified Stock Option Agreement for
Grants to Employees.

10.23(4) Form of Non-Qualified Stock Option Agreement for
Grants to Non-Employees.

10.24(8) Asset Purchase Agreement, dated as of December 1,
1997, between the Company and Capitol Metals Co.,
Inc. (Exhibits and Schedules omitted).
</TABLE>

II-7
<PAGE> 110
<TABLE>
<S> <C>
10.25(8) First Amendment to Asset Purchase Agreement, dated
as of January 8, 1998, among Binhad, Inc. (formerly
known as Capitol Metals Co., Inc.), the Company and
Angeles Acquisition Corp.

10.26(8) Assignment and Bill of Sale, dated January 9, 1998,
from Binhad, Inc. (formerly known as Capitol Metals
Co., Inc.) to Angeles Acquisition Corp.

10.27(8) Secured Promissory Note, dated January 12, 1998, in
the principal amount of $1,200,000, from the
Company and Angeles Acquisition Corp., to Binhad,
Inc. (formerly known as Capitol Metals, Inc.).

10.28(8) Secured Promissory Note, dated January 12, 1998, in
the principal amount of $300,000, from the Company
and Angeles Acquisition Corp., to Binhad, Inc.
(formerly known as Capitol Metals Co., Inc.).

10.29(8) Security Agreement, dated January 8, 1998, between
Binhad, Inc. (formerly known as Capitol Metals Co.,
Inc.) and Angeles Acquisition Corp.

10.30(8) Registration Agreement, dated as of January 6,
1998, between Binhad, Inc. (formerly known as
Capitol Metals Co., Inc.) and the Company.

10.31(8) Assignment and Assumption Agreement, dated as of
January 8, 1998, among the Company, Binhad, Inc.
(formerly known as Capitol Metals Co., Inc.) and
Angeles Acquisition Corp.

10.32(8) Note Secured by Collateral Security Agreement,
dated January 12, 1998, by and between the Company
and Angeles Acquisition Corp., and Nat and Evelyn
Handel, Trustees of the Nat and Evelyn Handel
Family Trust.

10.33(8) Collateral Security Agreement, dated January 12,
1998, by and between Angeles Acquisition Corp. and
Nat and Evelyn Handel, Trustees of the Nat and
Evelyn Handel Family Trust.

10.34(11) Loan Agreement, dated as of December 31, 1997,
between the Company and Stone Pine Advisors, LLC.

10.35(11) Promissory Note, dated as of December 31, 1997, in
the principal amount of $75,000 from the Company to
Stone Pine Advisors, LLC.

10.36(11) Loan Agreement, dated as of December 31, 1997,
between the Company and Stone Pine Capital, LLC.

10.37(11) Promissory Note, dated as of December 31, 1997, in
the principal amount of $75,000 from the Company to
Stone Pine Capital, LLC.

10.38(11) Loan Agreement, dated as of December 31, 1997,
between the Company and Paul Bagley.

10.39(11) Promissory Note, dated as of December 31, 1997, in
the principal amount of $75,000 from the Company to
Paul Bagley.

10.40(11) Agreement, dated as of December 31, 1997, between
the Company and Stone Pine Financial Group, LLC
relating to the issuance of Series A Preferred
Shares.
</TABLE>

II-8
<PAGE> 111
<TABLE>
<S> <C>
10.41(11) Agreement, dated as of December 31, 1997, between
the Company and ERB Acquisition Group, LLC relating
to the issuance of Series A Preferred Shares.

10.42(11) Agreement, dated as of December 31, 1997, between
the Company and Stone Pine Colorado, LLC relating
to the issuance of Series B Preferred Shares.

10.43(11) Agreement, dated as of December 31, 1997, between
the Company and Stone Pine Atlantic, LLC relating
to the issuance of Series B Preferred Shares.

10.44(11) Convertible Note, dated as of January 9, 1998, in
the principal amount of $1,750,000 from the Company
to Paul Bagley.

10.45(11) Convertible Note, dated as of March 3, 1998, in the
principal amount of $250,000 from the Company to
Stone Pine Atlantic, LLC.

10.46(3) Offshore Securities Subscription Agreement for 6%
Convertible Preferred Shares - Series C, dated
March 6, 1998 (Exhibits and Schedules omitted).

10.47(11) Loan Agreement, dated January 9, 1998, by and
between Congress Financial Corporation (Western),
Angeles Metal Trim Co. and Angeles Acquisition
Corp.

10.48(11) Secured Promissory Note, dated January 9, 1998, in
the original principal amount of $1,943,000, from
Angeles Metal Trim Co. to Congress Financial
Corporation (Western).

10.49(11) Secured Promissory Note, dated January 9, 1998, in
the original principal amount of $200,000 from
Angeles Acquisition Corp. to Congress Financial
Corporation (Western).

10.50(11) Secured Promissory Note, dated January 9, 1998, in
the original principal amount of $1,500,000 from
Angeles Acquisition Corp. to Congress Financial
Corporation (Western).

10.51(11) Guarantee, dated January 9, 1998 executed by the
Company Angeles Metal Trim Co. and California
Building Systems, Inc. in favor of Congress
Financial Corporation (Western) with respect to
Angeles Acquisition Corp. notes.

10.52(11) Guarantee, dated January 9, 1998 executed by the
Company, Angeles Acquisition Corp. and California
Building Systems, Inc. in favor of Congress
Financial Corporation (Western) with respect to
Angeles Metal Trim Co. notes.

10.53(11) Lease Agreement, dated January 12, 1998, by and
between Danat Investment Company and the Company
(Re: property at 20000 South Western Avenue,
Torrance , California).

10.54(11) Subordination, Nondisturbance and Attornment
Agreement, dated January 12, 1998, by and among the
Company, Angeles Acquisition Corp., Danat
Investment Company and Aid Association for
Lutherans.

10.55(11) Mortgage Agreement, dated January 12, 1998,
executed by Aid Association for Lutherans in favor
of Congress Financial Corporation (Western) with
respect to premises at 20000 S. Western Avenue,
Torrance, California (Exhibits omitted).

10.56(11) Agreement, dated as of March 3, 1998, by and
between RDB Capital Advisors, LLC, Richard D.
Bailey, Stone Pine Investment Banking, LLC and the
Company.
</TABLE>

II-9
<PAGE> 112
<TABLE>
<S> <C>
10.57(12) Agreement between Company and Christian W. Wolf
effective March 10, 1998.

10.58(12) Form of Note Purchase Agreement between the Company
and the Purchasers of 10% Convertible Notes
(Exhibits and Schedules Omitted).

10.59(12) Form of 10% Convertible Note due April 9, 1999.

10.60(12) Agreement between the Company and Jeffrey R. Leach
effective April 29, 1998.

10.61* Amendment to 10% Convertible Note due April 9,
1999.

16.1(9) Letter from Kish Leake & Associates, P.C., dated
February 5, 1997, regarding change of certifying
accountant.

16.2(10) Letter from Grant Thornton LLP, dated January 28,
1998, regarding change of certifying accountant.

21(11) Subsidiaries of the Company.

23.1 Consent of Arthur Andersen LLP

23.2 Consent of Arthur Andersen LLP

23.3 Consent of Grant Thornton LLP

23.4 Consent of Gumbiner, Savett, Finkel, Fingleson &
Rose, Inc.

23.5 Consent of Gallagher, Briody & Butler (included as
part of Exhibit 5.1)

24.1 Power of Attorney (included as part of the
signature page)
</TABLE>

(1) Incorporated by reference from the Company's Report on Form 8-K, dated
January 23, 1997.

(2) Incorporated by reference from the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1991.

(3) Incorporated by reference from the Company's Report on Form 8-K, dated
March 18, 1998.

(4) Incorporated by reference from the Company's Quarterly Report on Form
10-QSB for the period ended September 30, 1997.

(5) Incorporated by reference from the Company's Annual Report on Form 10-
KSB for the fiscal year ended December 31, 1996.

(6) Incorporated by reference from the Company's Quarterly Report on Form
10-QSB for the period ended March 31, 1997.

(7) Incorporated by reference from the Company's Quarterly Report on Form
10-QSB for the period ended June 30, 1997.

II-10
<PAGE> 113
(8) Incorporated by reference from the Company's Report on Form 8-KA, filed
on January 29, 1998.

(9) Incorporated by reference from the Company's Report on Form 8-K filed
on February 7, 1997.

(10) Incorporated by reference from the Company's Report on Form 8-KA, filed
on January 30, 1998.

(11) Incorporated by reference from the Company's Annual Report on Form 10-
KSB for the fiscal year ended December 31, 1997.

(12) Incorporated by reference from the Company's Quarterly Report on Form
10-QSB for the period ended March 31, 1998.

* To be filed by Amendment.

ITEM 28. UNDERTAKINGS

The undersigned registrant will:

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

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

(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change
in the information in the registration statement; and
notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant
to Rule 424(b) (#230.424(b) of this chapter) if, in the
aggregate, the changes in the volume and price represent
no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;

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

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

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

II-11
<PAGE> 114
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of
the Company in the successful defense of any action, suit or proceeding) is
asserted against the Company by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

II-12
<PAGE> 115
SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form SB-2 and authorized this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Denver, Colorado, August 3, 1998.

Consolidated Capital of North America, Inc.

By: /s/ Paul Bagley
-----------------------------------------
Paul Bagley
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by or on behalf of the following
persons in the capacities and on the dates indicated.

Each person, in so signing, also makes, constitutes and appoints Carl
Casareto, Chief Financial Officer, and Donald R. Jackson, Secretary and
Treasurer, and each of such officers acting singly, his true and lawful
attorney-in-fact, in his name, place and stead to execute and cause to be filed
with the Securities and Exchange Commission any or all amendments to this
Registration Statement, with all exhibits and any and all documents required to
be filed with respect thereto, and to do and perform each and every act and
thing necessary to effectuate the same.

<TABLE>
<CAPTION>
Signature Capacity Date
- --------- -------- ----
<S> <C>
/s/ Paul Bagley Chairman and Chief Executive August 3, 1998
- ---------------------------------- Officer (Principal Executive Officer)
Paul Bagley

/s/ Carl Casareto Chief Financial Officer (Principal August 3, 1998
- ---------------------------------- Financial and Accounting Officer)
Carl Casareto

/s/ Donald R. Jackson Director August 3, 1998
- ----------------------------------
Donald R. Jackson

/s/ Richard D. Bailey Director August 3, 1998
- -----------------------------------
Richard D. Bailey

/s/ L. Wayne Harber Director August 3, 1998
- ---------------------------------
L. Wayne Harber

/s/ John D. McKey, Jr. Director August 3, 1998
- ---------------------------------
John D. McKey, Jr.

/s/ Thompson H. Rogers Director August 3, 1998
- -------------------------------
Thompson H. Rogers

/s/ Christian W. Wolf Director August 3, 1998
- ---------------------------------
Christian W. Wolf
</TABLE>
<PAGE> 116
INDEX TO EXHIBITS

3.1(2) Articles of Incorporation of the Company.

3.2 Articles of Amendment to Articles of Incorporation,
dated as of December 31, 1997 (Setting Forth Terms
of Series A Preferred Stock and Series B Preferred
Stock).

3.3(3) Articles of Amendment to Articles of Incorporation,
dated as of March 9, 1998 (Setting Forth Terms of
Series C Preferred Stock).

3.4(4) By-Laws Revised and Amended, as of August 26, 1997.

4.1(3) Form of Warrant to Purchase 1,000,000 Common Shares
at $1.00.

4.2(3) Form of Warrants to Purchase 1,000,000 Common
Shares at $.75.

4.3(3) Form of Warrants to Purchase 250,000 Common Shares
at $2.38.

4.4* Form of Warrants to Purchase 200,000 Common Shares
at $2.00.

5.1 Opinion of Gallagher, Briody & Butler.

10.1(5) Purchase and Sale Agreement, dated January 16,
1997, between the Company, Raymond McElhaney, Bill
Conrad and Ronald McGinnis (Exhibits and Schedules
omitted).

10.2(1) Form of Stock Purchase Agreement, dated January 16,
1997, between the Company and the investors
(Exhibits and Schedules omitted).

<PAGE> 117
<TABLE>
<S> <C>
10.4(5) Lease Agreement, dated January 15, 1997, by and
between Angeles Metal Trim Co. and D. Kingston
Cable, Trustee of the Daniel Kingston Cable and
Barbara White Cable 1995 Revocable Intervivos Trust
(Re: property at 116 Y Street, Vancouver,
Washington).