<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                        -------------------------------

                                  FORM 10-KSB

             ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                          THE SECURITIES ACT OF 1934

                   For the Fiscal Year Ended April 30, 1999

                          COMMISSION FILE NO. 0-21255

                           IAS COMMUNICATIONS, INC.
          (Name of small business issuer as specified in its charter)

            OREGON                                       91-1063549
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                     Identification Number)

                          185 - 10751 SHELLBRIDGE WAY
                  RICHMOND, BRITISH COLUMBIA V6X 2W8, CANADA
 (Address, including postal code, of registrant's principal executive offices)

                                (604) 278-5996
                    (Telephone number including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act: NONE

Securities registered pursuant to Section 12(g) of the Exchange Act: CLASS A
COMMON STOCK

     Indicate by check mark whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months,
and (2) has been subject to such filing requirements for the past 90 days.
Yes  X
     -

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained herein and will not be contained, to the
best of registrant's knowledge in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.

     The registrant's revenues for its most recent fiscal year were:  nil.

     The Aggregate market value of the voting stock held by non-affiliates of
the registrant on June 30, 1999, computed by reference to the price at which the
stock was sold on that date: $4,517,699.62.

     The number of shares outstanding of the registrant's Class A voting Common
Stock, no par value, as of June 30, 1999 was 10,268,858.

     Documents incorporated by reference:

      The information required by Part III, relating to Directors, Executive
      Officers, Promoters and Control Persons; Compliance with Section 16(a) of
      the Exchange Act; Executive Compensation; and Security Ownership of
      Certain Beneficial Owners and Management; Certain Relationships and
      Related Transactions; is hereby incorporated by reference from the
      Company's definitive proxy statement to be filed on or before August 28,
      1999.

-------------------------------------------------------------------------------
<PAGE>

                           IAS COMMUNICATIONS, INC.

                                  FORM 10-KSB

                               TABLE OF CONTENTS

PART I                                                                     Page
                                                                           ----
Item 1.    Description of Business........................................    3

Item 2.    Property.......................................................    9

Item 3.    Legal Proceedings..............................................    9

Item 4.    Submission of Matters to a Vote of Security Holders............    9

PART II

Item 5.    Market for Common Equity and Related Stockholder Matters.......   10

Item 6.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations..........................................   11

Item 7.    Financial Statements...........................................   14

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

PART III

Item 9.    Directors, Executive Officers, Promoters and Control Persons;
           Compliance with Section 16(a) of the Exchange Act..............   30

Item 10.   Executive Compensation.........................................   30

Item 11.   Security Ownership of Certain Beneficial Owners and
           Management.....................................................   30

Item 12.   Certain Relationships and Related Transaction..................   30

Item 13.   Exhibits and Reports on Form 8-K...............................   30

                                       2

<PAGE>

                                    PART I

ITEM 1.        DESCRIPTION OF BUSINESS
-------        -----------------------

(a)  BUSINESS DEVELOPMENT

IAS Communications, Inc. (the "Company") is a development stage company
incorporated in the state of Oregon in 1994. Its principal business operations
are conducted in West Virginia and Illinois. The Company is engaged in the
commercialization of advanced antenna technology known as the Contrawound
Torroidal Helical Antenna, (the "CTHA"), for wireless communications markets
including cellular, meter reading and global positioning services. The CTHA,
developed in conjunction with researchers at West Virginia University, is a
technologically advanced antenna design which can be incorporated into a wide
variety of telecommunications applications. The Company has been granted world-
wide sublicensing rights for commercial applications, excluding military and
governmental applications, for the antenna. Emergent Technologies Corporation
("ETC") has the sublicense for military and governmental applications for the
CTHA technology.

Dr. James E. Smith, the Chairman of the Board of Directors of the Company ("Dr.
Smith"), is a tenured professor at West Virginia University ("WVU") and has
directed the research and development of CTHA utilizing WVU's facilities and
funding. Under Dr. Smith's employment agreement with WVU, the patentable ideas
for the CTHA were assigned to West Virginia University Research Corporation
("WVURC") and became its property on April 12, 1994. An exclusive worldwide
license was granted by WVURC to Integral Concepts, Inc. ("ICI"), a corporation
owned and controlled by Dr. Smith, to: (1) manufacture the CTHA and, (2)
sublicense others to manufacture, market, sell copies of, license and distribute
the CTHA (the "ICI License").

ICI entered into an option agreement with SMR Investment Ltd., ("SMR") a
corporation owned by Sue Robertson, the wife of John Robertson, the Company's
President, Chief Executive Officer and a member of the Board of Directors
("Robertson"), dated November 18, 1994, and amended December 16, 1994 (the
"Option Agreement"). The Option Agreement provided that ICI would issue a
sublicense to SMR for the CTHA subject to the payment of $250,000; a 3% royalty
from gross sales; and shares in a subsequent public entity. The Company was
organized by SMR and Robertson as a result. ICI retained all military and
governmental applications and resulting procurement interests. The contract
period relating to the three percent royalty to be paid to ICI commences when
sales are made by the Company and continues during the life of the Option
Agreement. The term of the Option Agreement is perpetual as is the ICI License.

On December 13, 1994, SMR assigned the rights to the Option Agreement to the
Company in consideration for $50,000 advanced by Access Information Services,
Inc. (the "Option Assignment"). Access Information Services, Inc. is a
corporation owned and controlled by Robertson.

On December 14, 1994, the Company issued 3,000,000 shares to Dr. Smith and
3,000,000 shares to Access Information Services Ltd. pursuant to the Option
Assignment. The value assigned to the 3,000,000 shares issued to Dr. Smith was a
total of $0.50 and the value assigned to the 3,000,000 shares issued to Access
Information Systems, Inc. was $0.50. These valuations of the 3,000,000 shares
issued to Dr. Smith and Access Information Systems, Inc. were arbitrarily
determined by the Company's Board of Directors. The $250,000 paid to ICI was a
one-time payment.

On July 10, 1995, ICI granted an exclusive worldwide sublicense to the Company
to: (1) manufacture, sell copies of, sublicense and distribute the process and
equipment related to the design, construction and operation of the CTHA; and,
(2) to sublicense others to manufacture, sell copies of, license and distribute
the same, excluding all military and governmental applications and resulting
procurement interests (the "Sublicense"). The Sublicense was the culmination of
the agreements between ICI and SMR, and SMR and the Company. On December 27,

                                       3

<PAGE>

1995, SMR assigned all of its rights and duties in the CTHA technology to the
Company pursuant to the Option Assignment. The term of the Sublicense, subject
to compliance of the terms thereof, is perpetual and requires the payment of a
minimum annual royalty of $3,000. Further, the Company will pay a royalty of l0%
of the net revenues derived from sales, leases or sublicenses of the CTHA
technology less a credit for the minimum royalty. In addition, the Company shall
pay a royalty of 3% of the gross revenues derived from the sales, leases or
sublicenses of the CTHA technology.

The Sublicense was amended effective March 4, 1997, to (i) reduce the amount of
the royalty payable by the Company by 50% over the next 3 years, (ii) clarify
that the Company's rights pertain to commercial applications, excluding military
and governmental applications, and (iii) enlarge the definition of Technology to
include all future enhancements to the CTHA technology developed by ICI, ETC, or
the Company.

The Company entered into a joint venture agreement with ETC on March 4, 1997, to
fund and develop a research and development laboratory through a new
corporation, The Eclipse Antenna Manufacturing Corporation, a West Virginia
corporation, ("TEAM"). The purpose of the joint venture is to cooperate in the
research and development of certain applications for the CTHA. The Company and
ETC each own 50% of the issued and outstanding common shares of TEAM. Pursuant
to a voting agreement the Company can vote 100% of the shares of TEAM. The
Company and ETC granted to TEAM certain rights to sell and manufacture the
antennas. All sales of antennas by TEAM will be for the credit of either the
Company or ETC, according to the end-user. However, the Company and ETC retained
the rights to sublicense certain rights, including development and manufacturing
rights to relating to the Technology. The Company and ETC intend to focus on
research and development of the CTHA and arrange for other manufacturers to fill
initial orders.

Circuit Systems, Inc. ("Circuit Systems") has agreed to consult with the Company
on manufacturing matters and to manufacture all orders for the Company. Circuit
Systems is located in Elk Grove Village, Illinois and is an underwriters
laboratory recognized manufacturer of single-sided, double-sided and multi-layer
printed circuit boards. Circuit Systems is reputed for producing high volume
quality printed circuit boards and special orders with short lead times.

The Company successfully tested the CTHA for the ham version of the CTHA at the
Dayton Hamvention during the past fiscal year, which demonstration served to
introduce the CTHA to users in the ham frequency range.

An agreement was completed to build and test the CTHA Antenna for receiver sites
in the narrowband personal communications system network of MobileComm
(MobileMedia Communications, Inc.). Ten prototypes of the CTHA were completed
for testing by MobileComm. The test results from MobileComm have been
unsuccessful.

By News Release dated October 27, 1998, the Company announced that Larry Hawks,
the Company's Chief Engineer and Vice-President of Research and Development, had
designed and tested a new technology antenna that is 14" in diameter and 2"
thick that will receive in an omni pattern or can be directional to receive in
35 degree segments. The new antenna requires no amplifier and is easy to connect
as it is simply bolted in place with the mounting provided. The Company's low
profile, environmentally friendly television antenna will receive all local
VHF/UHF stations and will replace the unsightly existing beam antennas used
today. They can be attached to a satellite dish mounted on a recreational
vehicle, placed in the attic of a house or condominium, on top of a roof or
placed on a television set to receive local television statements within a 60
mile radius. A new amateur radio antenna was also designed and tested, which new
design is portable on 10 through 80 meters with an antenna tuner or operates as
a mono band on 20 and 40 meters. With its unique properties, the antenna can be
laid on the ground, in an attic, on a roof or awning, or placed on a tree or on
top of a motorhome and even transmits and receives in the trunk of an
automobile. The antenna is approximately 36" in diameter and is 2" high. It can
use a 50-OHM coax of choice and will load to the full legal limit and is broad
banded to receive signals from .5 MHz to 30 MHz. It has been field tested by
Larry Hawks for one year, with logged contacts from California to New York,
north central Indiana to Mexico, all of South America, Spain, England, Russia,
Norway, Switzerland and many other European countries.

By a News Release dated January 11, 1999, the Company issued a progress report
on the successful test results received from the ARINC engineer on the new
satellite antenna. The objective of the joint development effort is to produce a
new antenna product designed to meet identified Dominium(R) market needs. The
specific markets targeted for this antenna are the untethered trailer tracking,
intermodal shipping container, and military transportation segments, which
markets require a simple, low-cost tracking

                                       4

<PAGE>

device and covert installation that includes an unobtrusive antenna. The current
"First Pre-Production Prototype" of this development was delivered to ARINC,
Inc., Colorado Springs, Colorado on December 29, 1998. An additional 20 antennas
were delivered to ARINC. Since delivery these antennas have been under
continuous testing.

New antenna technology was evaluated to determine technical feasibility,
production ability, and installation parameters and issues. The new antenna for
a "flat" (approximately 1/2 inch thick) antenna was designed to meet specific
Dominium/R/ size, performance, and packaging requirements. This project also
included analysis with respect to technical maturity, manufacturing and
integration issues, installation issues (new trailers via trailer manufacturers
and retrofits to fielded trailers), impacts on the existing and future fielded
system costs, and time to implement.

Larry Hawks, the Company's Chief Engineer, has delivered 19 additional
prototypes of the new Hawks antenna (ORBCOMM) to ARINC in Colorado Springs for
final acceptance testing. Production of the Dominium/R/ antennas is expected to
start immediately after successful testing.

The Company granted ARINC an exclusive license to market and sell the new
antennas for ORBCOMM satellite applications under the Dominium/R/ product line
to encompass the worldwide inter-modal shipping containers market area for one
year. ARINC, founded in 1929 and headquartered in Annapolis, Maryland, provides
communications and systems integration engineering to business and industry.
ARINC's Dominium/R/ product line uses the ORBCOMM low earth orbit (LEO)
satellite communication system, which provides global communications coverage
especially useful in remote areas that are not serviced by conventional or
cellular telephone or other terrestrial communication networks. The Dominium/R/
tracker unit is battery powered and equipped with the Global Positioning System
(GPS). It can be programmed to automatically report its position and other
information like temperature, engine speed or load capacity, at any desired time
interval, or upon reaching a user-determined alarm value. Dominium/R/ also
markets a data messaging line of products, which integrates input/output devices
for sending and receiving text messages.

A subscriber installs the tracker unit on the asset to be tracked or monitored
for a variety of applications including trucks, truck tractors, detached truck
trailers, rail cars, ships and containers. Dominium/R/ currently provides
service to national and regional trucking companies and to national railroads.
Container shipping companies are currently evaluating the product for delivery
in 1999.

The new antenna is a compact, low profile, donut shaped antenna, flush mounted
on an application at a fraction of the height of the monopole antenna used
today. The Company holds the worldwide rights to all commercial applications for
this technology and ETC owns the Military/Government rights.

On January 20, 1999, the Company announced that it had entered into an exclusive
licensing agreement with Information Highway, Inc., a leading edge web content
developer and Internet service provider (ISP), to sell its products over the
worldwide web.

Information Highway agreed to sell the Company's television and amateur radio
antennas on their virtual mall Internet website, which is being constructed at
Information Highway's Executive Club site at www.theexecutive.com. Information
Highway maintained exclusive worldwide web rights for the sale of the antennas
for a five-year period starting March 1, 1999.

TDP Electronics has been contracted to supply the housing and accessories to
complete a unit for the IAS television antennas. TDP is a supplier of antennas
and accessories to many retailers throughout North America.

By News Release dated March 9, 1999 the Company announced that it had received
the first supply of antenna housing and hardware from its supplier TDP
Electronics (a division of Tandy Electronics), and had commenced production of
the Hawks low profile TV and Amateur Radio Antennas.

The new TV and Amateur Radio Antenna can be purchased on the World Wide Web at
www.iascom.com. IAS Communications also sells the antennas on Information-
Highway.com, Inc.'s (OTC BB: IHWY) virtual mall Internet Web site at
http://www.theexecutive.com.

On April 21st, 1999 the Company announced that the Hawks television antenna was
in its final stage of design. The television antenna is 2" high and 5" in
diameter and replaces the Company's existing 14" dish antenna. The new
television antenna can be effortlessly placed at many locations, such as on
roofs, behind satellite dishes or even on a trailer/mobile home. It is not
affected by surrounding interference. Acme Testing Inc., an ISO 9002 registered
company has completed testing on the 14" television antenna. Testing confirmed
that the VHF/UHF/FM antenna exceeded all normal requirements for the receiving
range of 54 MHz to 800 MHz in the horizontal and vertical modes proving that the
Company's antenna performs with a near isotropic pattern.

The Company is currently in production with the 14" television and amateur radio
antennas and is receiving orders on a daily basis through its Internet site. The
Company plans to aggressively market the new 5" antenna at $29.95.

                                       5

<PAGE>

Y2K issue
---------

In recognition of the Year 2000 risk for information systems, computers,
equipment and products using date sensitive software, the Company has retained a
consultant to assess the risk to the Company, both internally and externally.
However, the Company does not anticipate that its operations will be materially
affected. In the unlikely event that the Company's computers are not Year 2000
compliant, the consultant will remedy any deficiencies.

The Company is monitoring the Year 2000 compliance by external parties to whom
the Company may be dependent, primarily its bank, suppliers and accountants. The
Company is unable to assess the potential damage that may be caused if external
parties are unable to resolve their Year 2000 compliance issues. If it appears
that any external party to whom the Company is dependent will be unable to
resolve its Year 2000 issue prior to December 31, 1999, the Company has
designated personnel to be responsible for developing a contingency plan to
minimize the risk of business interruption of the Company.

To mitigate any risk to the Company from external parties, the Company has made
every effort to ensure that all current financial, legal and administrative
information on the Company is maintained by the Company, both on paper and on
the Company's computers.

It is not expected that any material costs will be incurred in addressing the
Year 2000 compliance for the Company.

  (b)  BUSINESS OF THE COMPANY

THE PRODUCT

The CTHA is a low profile, lightweight, resonant antenna the size of a postage
stamp that is shaped like a donut and is 1/60 the size of a standard monopole
antenna. It has a toroidal (donut-shaped) geometry about which has been wrapped
helical windings (coils). The windings occur in pairs which are wrapped with
opposite pitch to each other (i.e. left handed windings versus right handed
windings) and are referred to as contra-windings. The small size of the CTHA
results from both the effect of taking long wires and wrapping them onto a small
geometry and the winding interactions which serve to slow the propagation of the
electrical current within the antenna thus behaving as a larger, lower frequency
antenna.

It can be placed on the ground, the deck of a boat, or embedded into a variety
of items like a cellular phone, pager, or meter reading devices. It can be mass
produced inexpensively for numerous wireless applications giving it an
impressive advantage over conventional monopole and dipole antennas.

The whole unit is ground plane independent. Traditional antennas are dependent
on the conductive plane found at the surface of the earth to achieve geographic
coverage. For that reason the higher above the surrounding terrain that an
antenna is installed, the greater its range of coverage. The CTHA appears from
anecdotal data and observed practical experiments to achieve its range of
coverage without reference to or being dependent on the conductive ground plane.
The result of "ground plane independence" is that the CTHA does not need to be
mounted on a tall tower or at the top of a mountain. The CTHA' s coverage
apparently can be achieved with a ground level installation. The elimination of
such towers is a major cost advantage and reduces interference in the visual
environment as well as in the physical environment. Signals are fed to the
antenna through up to four networks which attach to the structure at evenly-
spaced locations. Resulting electromagnetic fields act as if they are solely
produced by a ring of pure magnetic currents; in other words, the contributions
due to electric currents are canceled. This planar ring of magnetic current is
electromagnetically equivalent to a linear electric current.

Compared to traditional dipole and monopole antennas, the CTHA is much shorter
in height, yet its toroidal magnetic field is equivalent to the linear electric
field produced by other taller antennas. This makes CTHAs particularly excellent
candidates for low frequency broadcast transmission that otherwise require
prohibitively tall monopole

structures above the earth ground plane. For higher frequency applications, for
example, the Company believes that the CTHA could replace a car antenna with a

                                       6

<PAGE>

structure that could be made part of the rear view mirror or similarly sized
object. Resonant operations of the CTHA provides improved efficiency.

The Company believes that the CTHA has outperformed monopole antennas by over
300% in distances achieved in some cases. The basis for this statement is the
United States Department of Defense as reported by Jack Parsons of ETC. While
the Company's license for the CTHA does not include military applications, the
Company believes that the results from the Department of Defense testing will
support the non-military application and use of the CTHA. In addition, the CTHA
is half the diameter of the ground plane structure necessary for quarterwave
monopole antennas. According to Mr. Parsons, the United States Department of
Defense tested the CTHA at distances of over 37 miles, which is much farther
than the typical 10 mile distances for monopole antennas over a period of
several weeks.

ADVANTAGES/DISADVANTAGES

The principle advantages of this antenna are: (1) low physical profile; (2)
resonant operation providing improved efficiency; and, (3) low susceptibility to
electrostatic disturbances. The CTHA is well suited to long distance
communication applications which require vertical polarization for improved
efficiency. The low physical profile is conducive to flush mounted applications
for reducing aerodynamic drag on vehicles. For low frequency fixed applications,
the significantly shorter structures can be made lighter, more economical, more
aesthetic, and less hazardous to aircraft than the tall antenna structures that
are presently used. The CTHA can be constructed on rectangular or polygonal
frames which can be folded and stored for portable applications.

APPLICATIONS

There are many applications which can exploit the advantages of the CTHA. The
small size and especially low profile make it well suited to both commercial and
military applications that would benefit from an inconspicuous antenna package.
These would include both land, air and sea vehicles. The low profile and
magnetic principle of operation enable the antenna to be concealed in the
fuselage of the body of an airplane, car, truck, train or boat so as to reduce
drag. The CTHA can also be applied in commercial applications, including AM, FM
and TV broadcasting and reception, and cellular phone communications.

Vice President for Research for the Company, Larry Hawkes, demonstrated the ham
radio version of the CTHA at the Dayton, Ohio Hamvention on May 15-17, 1998.
This convention is the largest hamfest in the world, with 60-90 thousand
attendees annually. The CTHA display generated much interest and was well
attended by the visitors. In the demo, a 3-foot diameter CTHA was placed on the
hood of a GMC Suburban, where it was able to send and receive signals. When the
CTHA was placed under the truck, it still worked, which impressed audiences and
drew inquiries from CEOs and presidents of antenna and electronic companies. The
demo CTHAs were tuned to 7.2 MHz and 14.213 MHz, thereby replacing dipoles 65-
and 33-feet long, respectively. Audience members participated in all of the
tests and were also shown high frequency circuit board versions of the CTHA.
This demonstration successfully introduced the CTHA to users in the ham
frequency range.

LICENSING

The Company intends to license the technology to manufacture the CTHAs to third
parties. The licenses will be limited to specific applications on an exclusive
or nonexclusive basis, depending upon the terms of the license.

SALES AND MARKETING

The Company intends to market the CTHA through licensing with third party users
and in some cases the manufacture and sale of the antenna using third party
manufacturers.

COMPETITION

                                       7

<PAGE>

The market for antennas is highly competitive. There are numerous manufacturers
of antennas in the United States with substantially greater financial,
technical, marketing and other resources than the Company. To the Company's
knowledge, no competitors are currently manufacturing any product which is
substantially similar to the CTHA and patent research does not reveal any
competing technology. The Company has not determined if it will compete with
satellite dishes.

RAW MATERIALS

All materials necessary to make the antenna are readily available in the
marketplace from a variety of suppliers.

DEPENDENCE ON MAJOR CUSTOMERS

Since the Company is just beginning to receive orders, it will be dependent on a
few major customers for the near future. On February 27, 1997, the Company
announced an initial order to buy antennas. The Company and ETC announced on
April 21, 1997, that TEAM had received an order to include its antenna in a
wrist watch. On June 12, 1997, the Company and ETC announced that TEAM had
received its first order from a company in the automatic meter reading industry.

On June 11, 1998, the Company signed a license agreement for the CTHA antenna
with ARINC, Incorporated, an ORBCOMM value added reseller. ARINC provides
communications and systems integration engineering to business and industry.
ARINC's Dominium/R/ product line uses the ORBCOMM low earth orbit (LEO)
satellite communication system which provides global communications coverage
especially useful in remote areas that are not serviced by conventional or
cellular telephone or other terrestrial communications networks. The Dominium/R/
tracker unit is battery powered and equipped with the Global Positioning System.
It can be programmed to automatically report its position and other information
like temperature, engine speed or load capacity at any desired time interval or
upon reaching a user-determined alarm value. Dominium/R/ also markets a data
messaging line of products which integrates input/output devices for sending and
receiving text messages. A subscriber installs the tracker unit on the asset to
be tracked or monitored for a variety of applications including truck tractors,
detached truck trailers, rail cars, ships and containers. Dominium/R/ currently
provides service to national and regional trucking companies and to national
railroads. Container shipping companies are currently evaluating the product for
delivery in 1999.

PATENTS

WVURC received a patent for the CTHA in August 1995. Dr. Smith is a tenured
professor at WVU and conducts his research and development regarding the CTHA at
WVU's facilities. As a result, WVURC owns the patent rights to the CTHA which it
licensed to ICI. The ICI License provides that ICI can grant sublicenses of the
technology covered by the patent to third parties. On July 10, 1995, ICI issued
the Sublicense to the Company which was amended in March 1997.

On July 29, 1997, the Company announced that the second US patent had been
granted on the CTHA. This patent broadened the protection it already had for the
CTHA by encompassing several different geometry's not specifically covered by
the first patent.

NEED FOR GOVERNMENT APPROVAL

No government approval is necessary for the antenna other than meeting certain
frequency guidelines.

EFFECT OF EXISTING OR PROPOSED GOVERNMENTAL REGULATIONS

The antenna must meet existing governmental guidelines for antennas. The Company
believes that the antenna meets all governmental requirements.

RESEARCH AND DEVELOPMENT

                                       8

<PAGE>

The Company has spent $1,670,284 on research and development over the past two
years. Research and development is being jointly funded with ETC through TEAM.
Additional research and development of both a scientific and practical nature is
required to complete the commercialization of the CTHA. The cost of some future
research and development will be borne by customers for specific applications.

EMPLOYEES

In addition to its Officers, the Company currently employs three part-time
employees. The Company anticipates adding employees as needed in the future.

ITEM 2.        PROPERTY
-------        --------

The Company's executive offices are located at #185-10751 Shellbridge Way,
Richmond, British Columbia V6X2W8, and the telephone number is (604)278-5996.
The Company leases, on a month-to-month basis, approximately 200 square feet of
space at the aforementioned office from John Robertson. The monthly rent is
$500.00. The Company shares space with TEAM in Morgantown, West Virginia.

ITEM 3.        LEGAL PROCEEDINGS
-------        -----------------

To the best knowledge of the Officers and Directors of the Company, neither the
Company nor any of its Officers and Directors are parties to any legal
proceeding or litigation other than as described below. Further, the Officers
and Directors know of no threatened or contemplated legal proceedings or
litigation other than as described below. None of the Officers and Directors
has been convicted of a felony and none has been convicted of any criminal
offense, felony and misdemeanor relating to securities or performance in
corporate office. To the best of the knowledge of the Officers and Directors, no
investigations of felonies, misfeasance in office or securities investigations
are either pending or threatened at the present time.

The Company was sued in April 1998 in a civil action filed in U.S. District
Court for the District of Oregon (the "Oregon Litigation"). The Plaintiff seeks
money damages and equitable relief against the Company alleging patent
infringement by the Company for the CTHA. The Company has notified WVU of this
claim and will assist WVU in the defense. Two patents were granted for the CTHA
to WVU; one in August 1995, and another in August 1997. The Plaintiff's patent
was approved on March 31, 1998. Based upon the information available to the
Company at this time, the Company believes that the Plaintiff's alleged claim of
infringement is without legal or factual basis.

The Plaintiff in the Oregon Litigation is also a defendant in a pending civil
action in the U.S. District Court for the Northern District of West Virginia
brought by WVU (the "West Virginia Litigation") claiming that the CTHA invention
is owned by the WVU. As alleged in the West Virginia Litigation, the Company
believes that the patent rights for the CTHA technology belongs to WVU and
therefore, based on the ICI License and the Sublicense, the Company owns the
world wide rights to the CTHA commercial applications. The Company intends to
vigorously defend the Oregon Litigation.

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

No matters were submitted to a vote by the Company's security holders during the
fourth quarter of its fiscal year ended April 30, 1999.

                                       9

<PAGE>

                                    PART II

ITEM 5.        MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
-------        --------------------------------------------------------

The Common Stock of the Company trades on the OTC Bulletin Board under the
symbol "IASCA" where it has traded since April 16, 1996. The Company's Common
Stock has traded at between $1.75 and $4.62 per share since April 16, 1996.

     The following table sets forth the high and low prices for the Company's
Common Stock, as provided by OTC and reported on the Bulletin Board for the
quarters presented. These quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commissions, and may not reflect actual transactions.

                                       Bid Price    Asked Price
                                      High    Low   High    Low
                                      -----  -----  -----  -----
Quarter ended July  31, 1997          $2.43  $1.56  $2.75  $1.75
Quarter ended October 31, 1997        $3.75  $1.68  $4.00  $1.87
Quarter ended January 31, 1998        $3.00  $2.06  $3.18  $2.37
Quarter ended April 30, 1998          $2.71  $1.93  $2.81  $2.06
Quarter ended July 31, 1998           $2.12  $2.12  $2.25  $2.25
Quarter ended October 31, 1998        $1.437 $1.437 $1.75  $1.75
Quarter ended January 31, 1999        $1.218 $1.218 $1.281 $1.281
Quarter ended April 30, 1999          $1.531 $1.531 $1.593 $1.593

As of June 30, 1999, there were 10,268,858 shares of Common Stock outstanding,
held by 145 shareholders of record.

DIVIDEND POLICY

To date the Company has not paid any dividends on its Common Stock and does not
expect to declare or pay any dividends on such Common Stock in the foreseeable
future. Payment of any dividends will be dependent upon future earnings, if any,
the financial condition of the Company, and other factors as deemed relevant by
the Company's Board of Directors.

UNREGISTERED SECURITIES ISSUED OR SOLD WITHIN THREE YEARS.

     In July 1997, the Company sold, in a private placement, 99,000 shares of
Class A Common Stock at a price of $2.25 per share to 15 accredited investors.
These transactions were exempt from registration under the Act by reason of
Section 4(2) thereof and Rule 505 of Regulation D. Each certificate representing
shares issued to the investors in this private placement bears a legend
restricting transfer.

     In December 1997, the Company sold, in a private placement, $30,000 in
aggregate principal amount of its 8-3/4% of Convertible Debentures due June 15,
1998. Each Debenture is convertible into Common Stock of the Company at any time
at or prior to maturity at a conversion price of $2.50 per share up to June 15,
1998; at $3.00 from June 16, 1998 to June 15, 1999, and at $3.50 from June 16,
1999 to June 15, 2000. In the event the shares of Common Stock are trading below
$4.00 per share on any consecutive ten trading day period during the period May
15, 2000 to June 15, 2000, the conversion price on June 15, 2000 shall be 80% of
the average closing bid price of Common Stock over said ten day trading period
to 4 accredited investors. These transactions are exempt from registration under
the Act by reason of Section 4(2) thereof and Rule 506 of Regulation D. Each
certificate representing debentures issued to the investors in this private
placement bears a legend restricting transfer.

     In December 1997, the Company sold, in a private placement, 226,600 Units
at a price of $1.75 per Units to 21 accredited investors. Each Unit consists of
one share of Common Stock and one Warrant allowing the holder to purchase an
additional share of Common Stock at $1.75 during the first year following the
issue date, and $2.25 per share during the second year following the issue date.
The purchasers of these Units were, in the opinion of management, fully informed

                                      10

<PAGE>

with respect to the financial position, business and prospects of the Company.
These transactions were exempt from registration under the Act by reason of
Section 4(2) thereof and Rule 506 of Regulation D. Each certificate representing
securities issued to the investors in this private placement bears a legend
restricting transfer.

The Company entered into an agreement with an investment banker to place up to
$5,000,000 of units, each unit consisting of one $500,000, three year, 8%
interest, convertible debenture and one warrant to purchase 25,000 Class "A"
shares exercisable into 25,000 shares at $2.85 per share expiring July 22, 2001.
One unit was sold on July 22, 1998. The Company received $452,500 after paying
to the Agent a 6%, or $30,000, financing fee, legal costs of $17,500 and a
warrant to acquire 5,000 Class "A" shares at $ 2.85 per share expiring July 22,
2001. The debenture holder can convert its debenture into common shares based on
the face value plus accrued interest divided by 75% of the average five day
average trading price prior to conversion. During the year, $325,000 face value
plus $15,520 of accrued interest was converted into 471,508 Class "A" common
shares at an average price of $0.70 per share. The remaining face value of
$175,000 remains unconverted as at April 30, 1999.

Item 6: Management's Discussion and Analysis of Financial Condition and Results
------- -----------------------------------------------------------------------
        of Operations
        -------------

Management's Discussion
-----------------------

IAS Communications, Inc., herein "the Company", was incorporated on December 13,
1994 pursuant to the Laws of the State of Oregon, USA.

The Company is a development stage company engaged in the commercialization of
advanced antenna technology known as the Contrawound Torroidal Helical Antenna,
herein "CTHA", for wireless communications markets including cellular, meter
reading and global positioning services. The CTHA, developed in conjunction with
researchers at West Virginia University "WVU", is a technologically advanced
antenna design which can be incorporated into a wide variety of
telecommunications applications. The Company has been granted worldwide
sublicensing rights for commercial applications, excluding military and
governmental applications, for the CTHA pursuant to an agreement with Integral
Concepts Inc. and West Virginia University Research Corporation.

The Company was sued in April 1998 in a civil action filed in U.S. District
Court for the District of Oregon (the "Oregon Litigation"). The Plaintiff, Kirk
Vanvoorheis, ("Plaintiff") seeks money damages and equitable relief against the
Company alleging patent infringement by the Company for the CTHA. WVU owns the
patent rights to the CTHA technology which were sublicensed to the Company. Two
patents were granted for the CTHA to WVU; one in August 1995, and another in
August 1997. The Plaintiff's patent was approved on March 31, 1998.

The Plaintiff in the Oregon Litigation is also a defendant in a pending civil
action in the U.S. District Court for the Northern District of West Virginia
brought by WVU (the "West Virginia Litigation") claiming that the CTHA
invention is owned by WVU. As alleged in the West Virginia Litigation, the
Company believes that the patent rights for the CTHA technology belongs to WVU
and therefore based on the license, the Company owns the worldwide rights to
the CTHA commercial applications. Dr. James Smith, the former Chairman of the
Board of the Company, has been sued by Plaintiff in a third party complaint in
the West Virginia Litigation together with WVU and Integral Concepts, Inc.

Pursuant to various Motions to the U.S. District Court for the District of
Oregon, the Company was successful in having the Oregon Litigation transferred
to the Northern District of West Virginia. A trial date has not been set.

Based upon the information available to the Company at this time, the Company
believes that the Plaintiff's alleged claim of infringement is without legal or
factual basis. However, if the Plaintiff in the Oregon Litigation is successful,
it could seriously jeopardize the Company financially.

In a development stage company, management devotes most of its activities to
establishing a new business. Planned principal activities have not yet produced
significant revenues and the Company has undergone recurring losses from
inception, totalling $4,510,911 and has a working capital deficit of $526,924
which includes a negative cash balance of $26,095. These factors raise doubt
about the Company's ability to continue as a going concern. The ability of the
Company to emerge from the development stage with respect to its planned
principal business activity is dependent upon its successful efforts to raise
additional equity financing and develop markets for its products and receive
ongoing support from the majority of its creditors. The Company has arranged a
$25,000,000 convertible debenture with an investment banker, of which $500,000
has been drawn down.

The Company plans to raise $500,000 and issue 500,000 units at $1.00 per unit.
Each unit will contain one share and one warrant to acquire one additional share
at $1.50 per share if exercised in year one. A total of $200,000 was raised and
200,000 shares issued at

                                      11

<PAGE>

April 30, 1999 and $60,000 has been raised subsequently. The Company may also
raise additional funds through the exercise of warrants and stock options, if
exercised. Warrants with respect to 901,600 shares may be exercised to net
$1,789,200; these warrants are currently not in-the-money and are unlikely to be
exercised currently and options with respect to 1,015,000 shares may be
exercised to net $1,109,250. The Company subsequently received a final payment
of $33,000 to complete a $100,000 non-recurring engineering fee from a potential
licensee.

Results of Operation for the Year Ended April 30, 1999 as compared to the Year
------------------------------------------------------------------------------
Ended April 30, 1998
--------------------

During the latter part of fiscal 1999 the Company, through its agreement with
Information-Highway.com, Inc., has sold 4 ham radio antennas and 62 TV antennas
over the Internet. Sales revenue amounted to $3,000 for fiscal 1999 as compared
to nil for fiscal 1998.

The net loss for fiscal 1999 was $1,219,000 compared to $1,633,000 for fiscal
1998. The decrease of $314,000 was due to the decrease in research and
development expenses to $392,000 during fiscal 1999 as compared to $1,051,000
during fiscal 1998, a decrease of $559,000. The decrease was due to the Company
using hired consultants to perform the majority of the development work instead
of expensive large contractors such as West Virginia University Research
Corporation which cost decreased to $116,000 from $422,000, and such as Emergent
Technologies Inc., or (TEAM), which decreased to $227,000 from $533,000. The
Company has eliminated the need for these two subcontractors by setting up a
manufacturing and sales office in Kokomo, Indiana, which is operated by Larry
Hawks. As a result, consulting has increased to $74,000 during fiscal 1999 from
$32,000 in fiscal 1998. Potential licensees have defrayed some of the research
and development costs by contributing $81,000 during fiscal 1999 as compared to
$25,000 in fiscal 1998. Administrative expenses increased by $247,000. A total
of $49,000 was incurred during fiscal 1999 on financing and legal fees relating
to a debenture issue as compared to nil in fiscal 1998. Debenture interest
increased to $28,000 from $3,000 as a result of the $500,000, 8%, convertible
debentures. This expense will decrease during fiscal 2000 as a result of
$325,000 of such debentures converted during fiscal 1999 and $175,000 of such
debentures being currently unconverted. Professional fees increased by $140,000
as a result of the overall debenture financing and defending the litigation
referred to earlier. Travel and promotion increased by $50,000 to $70,000 as a
result of extensive travel to and from West Virginia, Indiana, New York and
Vancouver as a result of operating a facility in Kokomo, Indiana. Management
fees decreased to $40,000 from $60,000 as result of Dr. James Smith resigning
from the Board of Directors in November, 1998. Rent and secretarial increased by
$20,000 as a result of opening the Kokomo, Indiana facility. The Company issued
shares to three financial consulting firms for financial consulting services
during fiscal 1999 and fiscal 1998. The total non-cash investor relations
expense decreased by $30,000 to $230,000.

The Company's net loss per share decreased by $0.05 to $0.13 per share as a
result of the lower net loss for the year and the increase in outstanding shares
by 10% during the year.

Liquidity
---------
During fiscal 1999 the Company financed its operations and received $916,000 by:

(i)    completing a private placement and foreign units offering at $1.75 per
       unit raising $131,000. A total of $1,173,550 was received between
       November, 1997 and July 9, 1998 (date of closing) pursuant to this
       offering of 670,600 units at $1.75 per unit. Each unit has been issued
       and contained one share and one warrant to acquire one additional share
       at $1.75 per share expiring between November, 1998 and July, 1999 being
       one year after receipt of funds, of which 48,000 warrants were exercised
       during the year for proceeds of $84,000, and the remaining 622,600
       warrants are currently exercisable at $2.25 per share expiring between
       November 1999 and July 2000.

(ii)   issuing 200,000 units at $1.00 per unit and receiving $200,000 towards a
       total of 500,000 units offered. Each unit contained one share and one
       warrant to acquire one additional share at $1.50 expiring in April, 2000.
       Subsequent to April 30, 1999 the Company raised a further $60,000
       pursuant to this offering.

(iii)  Entering into an agreement with an investment banker to place up to
       $5,000,000 of units, each unit consisting of one $500,000, three year, 8%
       interest, convertible debenture and one warrant to purchase 25,000 Class
       "A" shares exercisable into 25,000 shares at $2.85 per share expiring
       July 22, 2001. One unit was sold on July 22, 1998. The Company received
       $452,500 after paying to the Agent a 6%, or $30,000, financing fee, legal
       costs of $17,500 and a warrant to acquire 5,000 Class "A" shares at $2.85
       per share expiring July 22, 2001. The debenture holder can convert its
       debenture into common shares based on the face value plus accrued
       interest divided by 75% of the average five day average trading price
       prior to conversion. During the year $325,000 face value plus $15,520 of
       accrued interest was converted into 471,508 Class "A" common shares at an
       average price of $0.70 per share. The remaining face value of $175,000
       remains unconverted.

During fiscal 1999 the Company invested these funds as follows:

                                      12
<PAGE>

(i)    $12,000 of these funds were spent on acquiring capital assets to set up
       its Kokomo, Indiana facility. The cost of these assets was $37,000 of
       which $25,000 was defrayed by way of a contribution by Information-
       Highway.com, Inc. pursuant to their exclusive license agreement to market
       the TV and Ham Radio CTHA antennas over the Internet.

(ii)   $20,000 of these funds were spent on patent protections costs in various
       jurisdictions.

(iii)  $926,000 of these funds were spent on operating activities as discussed
       above under Results of Operation for the Year Ended April 30, 1999 as
       compared to the Year Ended April 30, 1998. Significant non-cash operating
       activities were $230,000 of financial consulting expenses paid for with
       shares and $152,000 of operations were financed by an increase in
       accounts payable.

The Company's cash position has decreased by $42,000 to negative $26,000 and its
working capital deficit, as of April 30, 1999, is $477,000, which does not
include $210,000 of convertible debentures which are considered long term
liabilities and/or will be converted into Class "A" common shares. These factors
raise substantial doubt about the Company's ability to continue as a going
concern. The ability of the Company to emerge from the development stage with
respect to its planned principal business activity and/or remain a going
concern entity is dependent upon its successful efforts to raise additional
equity financing, develop markets for its products and receive further support
from its trade creditors.

The Company plans to raise $500,000 and issue 500,000 units at $1.00 per unit.
Each unit will contain one share and one warrant to acquire one additional share
at $1.50 per share if exercised in year one. A total of $200,000 was raised and
200,000 shares issued as of April 30, 1999 and $60,000 has been raised
subsequently. The Company may also raise additional funds through the exercise
of warrants and stock options, if exercised. Warrants with respect to 901,600
shares may be exercised to net $1,789,200; these warrants are currently not
in-the-money and are unlikely to be exercised currently and options with respect
to 1,015,000 shares may be exercised to net $1,109,250. The Company subsequently
received a final payment of $33,000 to complete a $100,000 non-recurring
engineering fee from a potential licensee.

                                      13

<PAGE>

Item 7. Financial Statements
------  --------------------

        Independent Auditor's Report

        Balance Sheets as of April 30, 1999 and 1998

        Statements of Operations accumulated from December 13, 1994 (Inception)
          to April 30, 1999 and the years ended April 30, 1999 and 1998

        Statements of Cash Flows accumulated from December 13, 1994 (Inception)
          to April 30, 1999 and the years ended April 30, 1999 and 1998

        Statement of Shareholders' Equity accumulated from December 13, 1994
          (Inception) to April 30, 1999

        Notes to the Financial Statements

                                      14

<PAGE>

                         INDEPENDENT AUDITOR'S REPORT
                         ----------------------------


To the Board of Directors
IAS Communications, Inc.
(A Development Stage Company)


We have audited the accompanying balance sheets of IAS Communications, Inc. (a
Development Stage Company) as of April 30, 1999 and 1998 and the related
statements of operations, shareholders' deficit and cash flows for the period
from December 13, 1994 (inception) to April 30, 1999 and the years ended April
30, 1999 and 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the aforementioned financial statements present fairly, in all
material respects, the financial position of the Company as at April 30, 1999
and 1998 and the results of its operations and its cash flows for the period
from December 13, 1994 (inception) to April 30, 1999 and the years ended April
30, 1999 and 1998 in conformity with generally accepted accounting principles in
the United States.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company has not generated significant revenues or profitable
operations since inception and has a working capital deficit. These factors
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regard to these matters are also discussed in
Note 1. The financial statements do not include any ad justments which might
result from the outcome of this uncertainty.


                                              /s/ Elliott, Tulk, Pryce, Anderson


                                                           CHARTERED ACCOUNTANTS

Vancouver, Canada
July 15, 1999

                                      15

<PAGE>

IAS Communications, Inc.
(A Development Stage Company)

Balance Sheets

April 30, 1999 and 1998

<TABLE>
<CAPTION>
                                                                                                1999                1998
                                                                                                  $                   $
<S>                                                                                          <C>                 <C>
                                                               Assets
Current Assets

     Cash                                                                                             -              15,882
     Accounts receivable                                                                          8,445                   -
     Inventory                                                                                    6,056                   -
     Prepaid expenses                                                                            43,031              14,925
                                                                                             ----------          ----------
                                                                                                 57,532              30,807
Capital Assets (Note 3)                                                                          39,860              40,437
Intangible Assets (Note 4)                                                                      368,947             368,836
                                                                                             ----------          ----------
                                                                                                466,339             440,080
                                                                                             ==========          ==========

                                                Liabilities and Shareholders' Deficit
Current Liabilities

     Cheques issued in excess of funds on deposit                                                26,095                   -
     Accounts payable                                                                           472,558             370,512
     Accrued liabilities                                                                         35,803              80,160
                                                                                             ----------          ----------
                                                                                                534,456             450,672
Convertible Debentures (Note 6)                                                                 210,000              40,000
                                                                                             ----------          ----------
                                                                                                744,456             490,672
                                                                                             ----------          ----------

Commitments and Contingencies (Notes 1, 9 and 10)

Shareholders' Deficit
Common Stock (Note 7)

     Class "A" voting       -  100,000,000 shares authorized
                               without par value; 10,268,858
                               and 9,320,350 shares issued
                               and outstanding respectively                                   4,182,794           3,155,884

                            -  paid for but unissued                                                  -              35,000

     Class "B" non-voting   -  100,000,000 shares authorized without
                               par value; none issued                                                 -                   -
                                                                                             ----------          ----------
                                                                                              4,182,794           3,190,884
Preferred Stock             50,000,000 shares authorized; none issued                                 -                   -

Deficit Accumulated During The Development Stage                                             (4,460,911)         (3,241,476)
                                                                                             ----------          ----------
                                                                                               (278,117)            (50,592)
                                                                                             ----------          ----------
                                                                                                466,339             440,080
                                                                                             ==========          ==========
</TABLE>

  (The accompanying notes are an integral part of these financial statements)

                                      16

<PAGE>

IAS Communications, Inc.
(A Development Stage Company)
Statements of Operations
Accumulated from December 13, 1994 (Inception)
to April 30, 1999 and the years ended April 30, 1999 and 1998


<TABLE>
<CAPTION>
                                                                       Accumulated from
                                                                 December 13, 1994 (Inception)
                                                                         to April 30,
                                                                             1999                     1999          1998
                                                                               $                        $             $
<S>                                                              <C>                               <C>            <C>
Revenue                                                                        2,813                    2,813             -
Cost of Sales                                                                    953                      953             -
                                                                           ---------                ---------     ---------

Gross Profit                                                                   1,860                    1,860             -
                                                                           ---------                ---------     ---------
Administration Expenses
     Bank charges                                                              3,177                    1,053           929
     Business plan                                                            57,119                   11,910        26,619
     Debenture financing fees                                                 49,199                   49,199             -
     Depreciation                                                              2,906                    1,752         1,030
     Interest on convertible debentures                                       31,032                   28,312         2,720
     Investor relations - advertising/publications                           357,812                  133,674       152,188
     Investor relations - consulting                                         361,693                  154,864       119,773
     Management fees                                                         247,500                   40,000        60,000
     Office, postage and courier                                             124,327                   43,882        53,093
     Professional fees                                                       535,093                  202,876        63,267
     Rent and secretarial                                                    144,144                   61,921        38,223
     Telephone                                                                86,195                   10,393        29,082
     Transfer agent and regulatory                                            50,337                   22,205        16,787
     Travel and promotion                                                    128,071                   69,692        19,609
     Less interest income                                                    (15,861)                  (2,414)       (1,622)
                                                                           ---------                ---------     ---------

                                                                           2,162,754                  829,319       581,698
                                                                           ---------                ---------     ---------

Research and Development Expenses
     Royalty                                                                  13,000                    4,000         3,000
     Consulting                                                              276,714                   74,295        32,000
     Depreciation and amortization                                            66,882                   30,662        26,634
     Market awareness and development                                         60,000                        -        60,000
     Subcontract - West Virginia University Research Corporation             942,014                  115,771       421,691
     Subcontract - Emergent Technologies Corporation                       1,390,427                  227,550       896,742
     Subcontract - Others                                                     20,479                   20,479             -
     Less contributions by a joint venture partner                          (363,718)                       -      (363,718)
     Less engineering contributions by licensees                            (105,781)                 (80,781)      (25,000)
                                                                           ---------                ---------     ---------

                                                                           2,300,017                  391,976     1,051,349
                                                                           ---------                ---------     ---------

Net Loss                                                                   4,460,911                1,219,435     1,633,047
                                                                           =========                =========     =========

Net Loss Per Share                                                                                       (.13)         (.18)
                                                                           =========                =========     =========

Weighted Average Shares Outstanding                                                                 9,600,000     8,900,000
                                                                                                    =========     =========
</TABLE>

                                      17

<PAGE>

IAS Communications, Inc.
(A Development Stage Company)
Statements of Cash Flows
Accumulated from December 13, 1994 (Inception)
to April 30, 1999 and the years ended April 30, 1999 and 1998

<TABLE>
<CAPTION>
                                                                       Accumulated from
                                                                 December 13, 1994 (Inception)
                                                                         to April 30,
                                                                             1999                     1999          1998
                                                                               $                        $             $
<S>                                                              <C>                               <C>           <C>
Cash Flows to Operating Activities
     Net loss                                                             (4,460,911)              (1,219,435)   (1,633,047)
     Adjustments to reconcile net loss to cash
         Gain on shares cancelled                                                (10)                       -             -
         Depreciation and amortization                                        69,788                   32,414        27,664
         Shares issued for services                                          499,098                  230,640       260,125
         Shares issued for debenture interest                                 15,520                   15,520             -
     Change in non-cash working capital items
         Increase in prepaid expenses                                        (43,031)                 (28,106)       (2,975)
         Increase in accounts receivable                                      (8,445)                  (8,445)            -
         Increase in inventory                                                (6,056)                  (6,056)            -
         Increase in accounts payable                                        472,558                  102,046       256,652
         Increase (decrease) in accrued liabilities                           35,803                  (44,357)      (46,840)
                                                                          ----------               ----------    ----------

Net Cash Used in Operating Activities                                     (3,425,686)                (925,779)   (1,138,421)
                                                                          ----------               ----------    ----------

Cash Flows to Investing Activities
     Increase in capital assets                                              (67,792)                 (11,801)       (5,686)
     Increase in licence                                                    (250,000)                       -             -
     Increase in patent protection costs                                    (160,802)                 (20,147)      (99,975)
                                                                          ----------               ----------    ----------

Net Cash Used in Investing Activities                                       (478,594)                 (31,948)     (105,661)
                                                                          ----------               ----------    ----------
Cash Flows from Financing Activities
     Increase in common stock                                              3,338,185                  415,750     1,084,925
     Convertible debentures proceeds                                         540,000                  500,000        40,000
                                                                          ----------               ----------    ----------

Net Cash Provided by Financing Activities                                  3,878,185                  915,750     1,124,925
                                                                          ----------               ----------    ----------

Increase (Decrease) in Cash                                                  (26,095)                 (41,977)     (119,157)
Cash - Beginning of Period                                                         -                   15,882       135,039
                                                                          ----------               ----------    ----------

Cash - End of Period                                                         (26,095)                 (26,095)       15,882
                                                                          ==========               ==========    ==========

Non-Cash Financing Activities
6,000,000 shares issued at a deemed fair value
     of $1 in total for property                                                   1                        -             -
Shares issued to an officer at inception
     donated back to the Company and cancelled                                   (10)                       -             -
Shares issued for services                                                     8,333                        -             -
Shares issued for convertible debentures converted                           345,520                  345,520             -
Shares issued pursuant to performance
     stock agreements for services                                           490,765                  230,640       260,125
                                                                          ----------               ----------    ----------

                                                                             844,609                  576,160       260,125
                                                                          ==========               ==========    ==========
Supplemental disclosures:
     Interest paid with cash                                                  15,511                   12,791         2,720
     Income tax paid with cash                                                     -                        -             -
</TABLE>

                                      18

<PAGE>

IAS Communications, Inc.
(A Development Stage Company)
Statement of Shareholders' Equity (Deficit)
Accumulated from December 13, 1994 (Inception)
to April 30, 1999

<TABLE>
<CAPTION>
                                                                                                                  Deficit
                                                                                                                Accumulated
                                                                                                  Common        During the
                                                                                                   Stock        Development
                                                                                     Shares      Class "A"         Stage
                                                                                        #            $               $
<S>                                                                               <C>            <C>            <C>
Balance - December 13, 1994 (Inception)                                                   -              -               -

Shares issued to an officer at inception
     for cash at $0.10 per share                                                        100             10               -
Shares issued, at inception, for property
     at a fair value of $1 in total                                               6,000,000              1               -
Shares issued for cash pursuant to:
     a private placement at $0.10 per share                                         700,000         70,000               -
     a public offering memorandum at $0.75 per share                                336,333        252,250               -
Net loss for the period                                                                   -              -         (83,615)
                                                                                  ---------      ---------      ----------

Balance - April 30, 1995                                                          7,036,433        322,261         (83,615)

Shares issued to an officer at inception
     donated back and cancelled                                                        (100)           (10)              -
Shares issued for cash pursuant to
     options exercised at $0.25 per share                                           210,000         52,500               -
Net loss for the year                                                                     -              -        (480,298)
                                                                                  ---------      ---------      ----------

Balance - April 30, 1996                                                          7,246,333        374,751        (563,913)

Shares issued for cash pursuant to:
     a private placement at $1.25 per share                                         500,000        625,000               -
     options exercised at $0.25 per share                                           139,500         34,875               -
     options exercised at $1.25 per share                                            84,500        105,625               -
     a private placement at $2.25 per share                                         222,000        499,500               -
Shares issued for services at $0.33 per share                                        25,000          8,333               -
Net loss for the year                                                                     -              -      (1,044,516)
                                                                                  ---------      ---------      ----------

Balance - April 30, 1997                                                          8,217,333      1,648,084      (1,608,429)
                                                                                  ---------      ---------      ----------
</TABLE>

  (The accompanying notes are an integral part of these financial statements)

                                      19

<PAGE>

IAS Communications, Inc.
(A Development Stage Company)
Statement of Shareholders' Equity (Deficit)
Accumulated from December 13, 1994 (Inception)
to April 30, 1999

<TABLE>
<CAPTION>
                                                                                                          Deficit
                                                                                                        Accumulated
                                                                                          Common        During the
                                                                                           Stock        Development
                                                                           Shares        Class "A"         Stage
                                                                              #              $               $
<S>                                                                       <C>            <C>            <C>
Carryforward from April 30, 1997                                          8,217,333      1,648,084      (1,608,429)

Shares previously issued, for cash during
     1994, pursuant to a public offering
     memorandum at $0.75 per share,
     transferred to shareholders' equity
     from redeemable status (Note 7(c))                                     263,667        197,750               -

Shares issued for cash pursuant to:
     options exercised at $0.25 per share                                    83,500         20,875               -
     options exercised at $1.50 per share                                     4,000          6,000               -
     a private placement at $2.25 per share                                   7,000         15,750               -
     a private placement and foreign units
     offering, at $1.75 per share                                           575,600      1,007,300               -

Shares issued for financial services pursuant to
     performance stock agreements                                           169,250        260,125               -

Net loss for the year                                                             -              -      (1,633,047)
                                                                          ---------      ---------      ----------

Balance - April 30, 1998                                                  9,320,350      3,155,884      (3,241,476)

Shares issued for cash pursuant to:
     options exercised at $0.25 per share                                     2,000            500               -
     a private placement and foreign units
     offering, at $1.75 per share                                            95,000        166,250               -
     a private placement at $1.00 per share                                 200,000        200,000               -
     exercise of warrants at $1.75 per share                                 43,000         84,000               -

Shares issued for financial services pursuant to
     performance stock agreements                                           132,000        230,640               -

Shares issued pursuant to conversion of convertible
     debentures including accrued interest                                  471,508        345,520               -

Net loss for the year                                                             -              -      (1,219,435)
                                                                         ----------      ---------      ----------

                                                                         10,268,858      4,182,794      (4,460,911)
                                                                         ==========      =========      ==========
</TABLE>

  (The accompanying notes are an integral part of these financial statements)

                                      20

<PAGE>

IAS Communications, Inc.

(A Development Stage Company)

Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)


1.   Development Stage Company

     IAS Communications, Inc., herein "the Company", was incorporated on
     December 13, 1994 pursuant to the Laws of the State of Oregon, USA.

     The Company is a development stage company engaged in the commercialization
     of advanced antenna technology known as the Contrawound Torroidal Helical
     Antenna, herein "CTHA", for wireless communications markets including
     cellular, meter reading and global positioning services. The CTHA,
     developed in conjunction with researchers at West Virginia University, is a
     technologically advanced antenna design which can be incorporated into a
     wide variety of telecommunications applications. The Company has been
     granted worldwide sublicensing rights for commercial applications,
     excluding military and governmental applications, for the CTHA pursuant to
     an agreement with Integral Concepts Inc. and West Virginia University
     Research Corporation. See Note 9(c) for legal proceedings regarding those
     rights.

     In a development stage company, management devotes most of its activities
     to establishing a new business. Planned principal activities have not yet
     produced significant revenues and the Company has undergone recurring
     losses from inception, totalling $4,460,911 and has a working capital
     deficit of $476,924 which includes a negative cash balance of $26,095.
     These factors raise doubt about the Company's ability to continue as a
     going concern. The ability of the Company to emerge from the development
     stage with respect to its planned principal business activity is dependent
     upon its successful efforts to raise additional equity financing and
     develop markets for its products and receive ongoing support from the
     majority of its creditors.

     The Company plans to raise $500,000 and issue 500,000 units at $1.00 per
     unit. Each unit will contain one share and one warrant to acquire one
     additional share at $1.50 per share if exercised in year one. A total of
     $200,000 was raised and 200,000 shares issued as at April 30, 1999 and
     $60,000 has been raised subsequently. The Company may also raise additional
     funds through the exercise of warrants and stock options, if exercised.
     Warrants with respect to 901,600 shares may be exercised to net $1,789,200;
     these warrants are currently not in-the-money and are unlikely to be
     exercised currently and options with respect to 1,015,000 shares may be
     exercised to net $1,109,250. The Company subsequently received a final
     payment of $33,000 to complete a $100,000 non-recurring engineering fee
     from a potential licensee.


2.   Summary of Significant Accounting Policies

     (a)  Basis of Presentation

          These financial statements include only the accounts of the Company.
          The Eclipse Antenna Manufacturing Co., herein "TEAM", which is 50%
          equity owned and 100% controlled through a voting agreement does not
          have any assets or operations and the Company's contributions for
          joint research and development has been paid directly to the other 50%
          owner of TEAM and expensed as paid.

     (b)  Research and Development

          Research and development costs are expensed in the period in which
          they are incurred.

     (c)  Capital Assets

                                      21

<PAGE>

          Capital assets are recorded at cost and are depreciated on a straight-
          line basis over their estimated useful lives of five years.

     (d)  Intangible Assets

          Costs to register and protect patents and to acquire rights are
          capitalized as incurred. These costs are being amortized on a straight
          line basis over 20 years. Intangible assets are evaluated in each
          reporting period to determine if there were events or circumstances
          which would indicate a possible inability to recover the carrying
          amount. Such evaluation is based on various analyses including
          assessing the Company's ability to bring the commercial applications
          to market, related profitability projections and undiscounted cash
          flows relating to each application which necessarily involves
          significant management judgment.

2.   Summary of Significant Accounting Policies (continued)

     (e)  Basic and Diluted Net Income (Loss) per Share

          The Company computes net income (loss) per share in accordance with
          SFAS No. 128, "Earnings per Share" (SFAS 128). SFAS 128 requires
          presentation of both basic and diluted earnings per shares (EPS) on
          the face of the income statement. Basic EPS is computed by dividing
          net income (loss) available to common shareholders (numerator) by the
          weighted average number of common shares outstanding (denominator)
          during the period. Diluted EPS gives effect to all dilutive potential
          common shares outstanding during the period including stock options,
          using the treasury stock method, and convertible preferred stock,
          using the if-converted method. In computing Diluted EPS, the average
          stock price for the period is used in determining the number of shares
          assumed to be purchased from the exercise of stock options or
          warrants. Diluted EPS excludes all dilutive potential common shares if
          their effect is antidilutive. Loss per share for 1999 and 1998 does
          not include the effect of the potential conversions of stock options,
          warrants or convertible debentures, as their effect would be anti-
          dilutive.

     (f)  Accounting for Stock Based Compensation

          The Company uses the intrinsic value based method of accounting
          prescribed by Accounting Principles Board Opinion No. 25, "Accounting
          for Stock Issued to Employees" ("APB Opinion No. 25") in accounting
          for its stock based method, compensation cost is the excess, if any,
          of the quoted market price of the stock at grant date over the amount
          an employee or director must pay to acquire the stock. See Note 6.

     (g)  Foreign Currency Transactions/Balances

          Transactions in currencies other than the U.S. dollar are translated
          at the rate in effect on the transaction date. Any balance sheet items
          denominated in foreign currencies are translated into U.S. dollars
          using the rate in effect on the balance sheet date.

     (h)  Cash and Cash Equivalents

          The Company considers all highly liquid instruments with a maturity of
          three months or less at the time of issuance to be cash equivalents.

     (i)  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 periods. Actual results could differ from
          those estimates.

     (j)  Tax Accounting

          Potential benefits of income tax losses are not recognized in the
          accounts until realization is more likely than not. Research and
          development costs are deducted in the year incurred and added to net
          operating loss.

          The Company has adopted Statement of Financial Accounting Standards
          No. 109 ("SFAS 109") as of its inception. The Company has incurred net
          operating losses as scheduled below:

<TABLE>
<CAPTION>
               Year of Loss        Amount        Year of
                                     $          Expiration
               <S>               <C>            <C>
               1995                 89,000         2010
               1996                497,000         2011
               1997              1,057,000         2012
               1998              1,096,000         2013
               1999              1,809,000         2014
                                 ---------
                                 4,548,000
                                 =========
</TABLE>

                                      22

<PAGE>

2.   Summary of Significant Accounting Policies (continued)

     (j)  Tax Accounting (continued)

          Pursuant to SFAS 109 the Company is required to compute tax asset
          benefits for net operating losses carried forward. Potential benefit
          of net operating losses have not been recognized in these financial
          statements because the Company cannot be assured it is more likely
          than not it will utilize the net operating losses carried forward in
          future years.

          The components of the net deferred tax asset at the end of April 30,
          1999 and 1998, and the statutory tax rate, the effective tax rate and
          the elected amount of the valuation allowance are scheduled below:


<TABLE>
<CAPTION>
                                                1999              1998
                                                  $                 $
                 <S>                        <C>             <C>
                 Net Operating Loss            1,808,000       1,096,000

                 Statutory Tax Rate         113,900 + 34%   113,900 + 34%
                                            in excess of    in excess of
                                                $335,000        $335,000

                 Effective Tax Rate                    -               -

                 Deferred Tax Asset              730,000         372,000

                 Valuation Allowance            (730,000)       (372,000)
                                            ------------    ------------

                 Net Deferred Tax Asset                -               -
                                            ------------    ------------
</TABLE>

3.   Capital Assets

<TABLE>
<CAPTION>
                                                                                 1999          1998
                                                             Accumulated       Net Book      Net Book
                                                  Cost       Amortization        Value         Value
                                                   $              $                $             $
     <S>                                         <C>         <C>               <C>           <C>
     Computer and office equipment               18,554          3,808          14,746          6,837
     Research and development equipment          48,000         24,000          24,000         33,600
     Vehicle                                      1,239            124           1,115              -
                                                 ------         ------          ------         ------

                                                 67,793         27,932          39,861         40,437
                                                 ======         ======          ======         ======

     Depreciation per class of capital asset:

     Computer and office equipment                                               2,654          1,030
     Research and development equipment                                          9,600          9,600
     Vehicle                                                                       124              -
</TABLE>

                                      23

<PAGE>


4.   Intangible Assets

<TABLE>
<CAPTION>
                                                                                         1999          1998
                                                                     Accumulated       Net Book      Net Book
                                                          Cost       Amortization        Value         Value
                                                            $             $                $             $
     <S>                                                 <C>         <C>               <C>           <C>
     Licence                                             250,001        29,167          220,834        233,334
     Patent protection costs                             160,802        12,689          148,113        135,502
                                                         -------        ------          -------        -------
                                                         410,803        41,856          368,947        368,836
                                                         =======        ======          =======        =======

     Amortization per class of intangible asset:
     Licence                                                                             12,500         12,500
     Patent protection costs                                                              7,536          4,534
</TABLE>

     Pursuant to the terms of an option agreement dated November 18, 1994 and
     amended December 16, 1994 between SMR Investments Ltd. ("SMR") and Integral
     Concepts Inc. ("ICI") and an assignment of this option agreement dated
     December 13, 1994, the Company acquired a sublicence to the CTHA, subject
     to entering into a formal sublicence agreement. Pursuant to the terms of
     the option agreement, the Company paid $250,000 to ICI, which owns the
     exclusive licence obtained from West Virginia University Research
     Corporation ("WVURC") in an agreement dated April 12, 1994. SMR, ICI and
     WVURC are not related to each other. Pursuant to the assignment agreement,
     the Company issued 3,000,000 shares to each of Access Information Systems
     Inc. (A company controlled by SMR) and a director of the Company (principal
     of ICI) for a total fair value of $1 for all 6,000,000 shares issued.

     Pursuant to the original licence agreement between WVURC and ICI, ICI was
     granted the exclusive licence to manufacture the CTHA or sublicence others
     to manufacture, market, sell copies of, licence and distribute the CTHA. On
     July 10, 1995, the Company and ICI entered into a sublicence agreement,
     which incorporates the terms and conditions of the original licence
     agreement between WVURC and ICI. The sublicence is exclusive, covering any
     and all international markets but excludes all military and governmental
     applications and resulting procurement interests which are retained by ICI
     and WVURC for development purposes. All improvements and embodiments that
     are created as a result of these military applications and additional
     research and development efforts by ICI and WVURC will be transferred
     directly to the Company. The terms of the sublicence agreement, which
     incorporates the financial obligations that ICI owes WVURC pursuant to the
     original licence agreement, are as follows:

       (i) The Company will pay WVURC a minimum annual royalty of $3,000 on or
           before December 31 of each year.

      (ii) The Company will pay WVURC an earned royalty on sales, leases or
           sublicences of the CTHA of 10% of net revenues less a credit for the
           minimum annual royalty. Revenues below that of the minimum annual
           royalty have been earned to April 30, 1999.

     (iii) The Company will pay ICI an earned royalty on sales, leases or
           sublicenses of the CTHA of 3% of gross revenues. As amended on
           March 4, 1997, ICI agreed to reduce the amount of royalties to be
           paid by 50% in an amount not to exceed $5,000,000 for up to three
           years.

     All royalties are payable within 30 days of each calendar quarter. The term
     of the original licence agreement and the sublicence agreement, subject to
     compliance with the terms thereof, is perpetual and renewable annually.

                                      24

<PAGE>

5.   Joint Venture Agreement

     The Company entered into a Joint Venture Agreement ("JVA") with Emergent
     Technologies Corporation (ETC) on March 4, 1997. The JVA required a new
     company to be incorporated (TEAM) whereby the Company owns 50% and ETC owns
     50%. Pursuant to a voting agreement the Company can vote 100% of the shares
     of TEAM. The President of ETC is the President of TEAM. TEAM was organized
     on June 4, 1997 under the laws of the State of West Virginia. The Company
     retains the worldwide commercial sublicence rights to the CTHA excluding
     all military and governmental applications.


     The business purpose of TEAM was to cooperate in the research and
     development of certain applications for the CTHA and to assemble and
     manufacture certain products relating thereto. IAS was to buy product from
     TEAM at cost to manufacture plus 30% for all commercial applications and
     ETC was to buy product from TEAM at cost to manufacture plus 30% for all
     military applications. ETC acquired the worldwide sublicence from ICI for
     all military and governmental applications on January 2, 1997.

     TEAM entered into a contract with ETC to carry out combined research and
     development activities to December 31, 1997. This contract was renewable on
     a monthly basis at the option of TEAM. ETC and the Company have each funded
     TEAM $250,000 as required in the JVA.

     TEAM does not have any assets or operations and the Company's contributions
     for joint research and development has been paid directly to ETC for the
     Company's specific applications which has been expensed as incurred.


6.   Convertible Debentures

     (i)  The Company offered three year, 8-3/4% interest, convertible
          debentures to raise $500,000, of which $40,000 was sold. Interest is
          paid annually. During the year, $5,000 of such debentures were
          converted into 2,000 Class "A" shares at $2.50 per share. The
          remaining $35,000 of such debentures are convertible into Class "A"
          shares at $3.50 on June 15, 2000. In the event the shares are trading
          below $4.00 per share over a ten-day average prior to exercising into
          shares of the Company during May 16, 2000 to June 16, 2000, the
          convertible debentures will be exercisable at 20% below the said ten-
          day average. The maturity date is June 15, 2000.

     (ii) The Company entered into an agreement with an investment banker to
          place up to $5,000,000 of units, each unit consisting of one $500,000,
          three year, 8% interest, convertible debenture and one warrant to
          purchase 25,000 Class "A" shares exercisable into 25,000 shares at
          $2.85 per share expiring July 22, 2001. One unit was sold on July 22,
          1998. The Company received $452,500 after paying to the Agent a 6%, or
          $30,000, financing fee, legal costs of $17,500 and a warrant to
          acquire 5,000 Class "A" shares at $2.85 per share expiring July 22,
          2001. The debenture holder can convert its debenture into common
          shares based on the face value plus accrued interest divided by 75% of
          the average five day average trading price prior to conversion. During
          the year $325,000 face value plus $15,520 of accrued interest was
          converted into 471,508 Class "A" common shares at an average price of
          $0.70 per share. The remaining face value of $175,000 remains
          unconverted.

                                      25

<PAGE>

7.   Common Stock

     (a) Stock Option Plan

         The Company has a Stock Option Plan to issue up to 2,500,000 Class "A"
         common shares to certain key directors and employees, approved and
         registered October 2, 1996 and amended May 28, 1999. Pursuant to the
         Plan the Company has granted stock options to certain directors and
         employees.

<TABLE>
<CAPTION>
                April 30,     Price         Granted         Cancelled (C)      April 30,            Expiry
                  1998          $          during the       Exercised (E)         1999               Date
                    #                         year           Lapsed (L)            #
                                               #                  #
                <S>           <C>          <C>              <C>                <C>          <C>
                    87,000     0.25                 -              2,000 (E)      85,000    December 29, 1999

                    40,000     0.25                 -                  -          40,000    February 4, 2000
                     3,000     1.00*                -                  -           3,000    March 4, 2001
                    21,000     1.00*                -             16,000 (C)       5,000    August 21, 2001

                   380,000     1.00*                -             15,000 (C)     365,000    December 19, 2001

                   150,000     2.25                 -                  -         150,000    December 19, 2001
                    17,500     1.00*                -                  -          17,500    August 1, 2001
                    25,000     1.00*                -                  -          25,000    April 14, 2003
                               1.00*          325,000                  -         325,000    April 14, 2003 to
                                                                                            November 12, 2003

                   723,500                    325,000            (33,000)      1,015,500
                   =======                    =======             =======      =========

         * repriced May 28, 1999.
</TABLE>


         On May 28, 1999 the Company granted stock options to certain employees
         to acquire up to 205,000 shares exercisable at $1.00 per share expiring
         May 28, 2004.

         The options are granted for current services provided to the Company.
         Statement of Financial Accounting Standards No. 123 ("SFAS 123")
         requires that an enterprise recognize, or at its option, disclose the
         impact of the fair value of stock options and other forms of stock
         based compensation in the determination of income. The Company has
         elected under SFAS 123 to continue to measure compensation costs on the
         intrinsic value basis set out in APB Opinion No. 25. As stock options
         are granted at exercise prices based on the market price of the
         Company's shares at the date of grant, no compensation cost is
         recognized. However, under SFAS 123, the impact on net income and
         income per share of the fair value of stock options must be measured
         and disclosed on a fair value based method on a pro forma basis. As
         performance stock is issued for services rendered the fair value of the
         shares issued is recorded as compensation expense or capitalized, at
         the date the shares are issued, based on a discounted average trading
         price of the Company's stock as quoted on the Over The Counter Bulletin
         Board.

                                      26

<PAGE>

         The fair value of the employee's purchase rights, pursuant to stock
         options, under SFAS 123, was estimated using the Black-Scholes model
         with the following assumptions: risk free interest rate was 5%,
         expected volatility of 20%, an expected option life of two years and no
         expected dividends.

         If compensation expense had been determined pursuant to SFAS 123, the
         Company's net loss and net loss per share for fiscal 1999 and 1998
         would have been as follows:

<TABLE>
<CAPTION>
                                                                1999          1998
                                                                 $              $
                  <S>                                        <C>           <C>
                  Net loss
                      As reported                            (1,219,435)   (1,633,047)
                      Pro forma                              (1,314,785)   (1,738,362)

                  Basic net loss per share
                      As reported                                  (.13)         (.18)
                      Pro forma                                    (.14)         (.19)
</TABLE>

                                      27

<PAGE>

7.   Common Stock (continued)

     (b)  Performance Stock Plan

          The Company has allotted 1,000,000 Class "A" Common shares to be
          issued pursuant to a Performance Stock Plan. Compensation is recorded
          when the shares are issued at their then fair market value. The
          Company has issued 301,250 shares for financial consulting services,
          at a fair value of $490,765. A further 400,000 shares may be earned,
          see Note 9(a)(i).

     (c)  Private placements/warrants

          (i)   A total of $1,173,550 was received between November, 1997 and
                July 9, 1998 (date of closing) pursuant to a private placement
                and foreign offering of 670,600 units at $1.75 per unit. Each
                unit has been issued and contained one share and one warrant to
                acquire one additional share at $1.75 per share expiring between
                November, 1998 and July, 1999 being one year after receipt of
                funds, of which 48,000 warrants were exercised during the year
                for proceeds of $84,000, and the remaining 622,600 warrants are
                currently exercisable at $2.25 per share expiring between
                November 1999 and July 2000.

          (ii)  The Company received $200,000 and issued 200,000 units at $1.00
                per unit towards a total of 500,000 units offered. Each
                contained one share and one warrant to acquire one additional
                share at $1.50 expiring in April, 2000. Subsequent to April 30,
                1999 the Company raised a further 60,000 pursuant to this
                offering.

          (iii) See Note 6(ii) for warrants to acquire 31,000 shares at $2.85
                per share expiring July 22, 2001.


8.   Related Party Transactions

     Management fees of $40,000 (1998 - $60,000) and rent and secretarial fees
     of $18,000 (1998 - $18,000) have been paid to directors or companies under
     their control. All fees were recorded at their exchange amounts.


9.   Commitments and Contingencies

     (a)  Contractual Commitments

               (i)  The Company is committed to issue up to 400,000 Class "A"
                    shares to the President of ETC and President of TEAM which
                    shall be earned as to 100,000 shares for every 1,000,000
                    CTHA's sold.

               (ii) See Note 7 for commitments to issue shares upon the exercise
                    of stock options and warrants.

     (b)  Contingent liability - Development Stage Company (See Note 1).

     (c)  Legal Proceedings

          The Company was sued in April 1998 in a civil action filed in U.S.
          District Court for the District of Oregon (the "Oregon Litigation").
          The Plaintiff, Kirk Vanvoorheis, ("Plaintiff") seeks money damages and
          equitable relief against the Company alleging patent infringement by
          the Company for the CTHA. The Company has notified West Virginia
          University ("WVU") of this claim and has contacted WVU to assist in
          the defence. WVU owns the patent rights to the CTHA technology which
          were licensed to the Company. Two patents were granted for the CTHA
          to WVU; one in August 1995, and another in August 1997. The
          Plaintiff's patent was approved on March 31, 1998.


          The Plaintiff in the Oregon Litigation is also a defendant in a
          pending civil action in the U.S. District Court for the Northern
          District of West Virginia brought by WVU (the "West Virginia
          Litigation") claiming that the CTHA invention is owned by WVU. As
          alleged in the West Virginia Litigation, the Company believes that the
          patent rights for the CTHA technology belongs to WVU and therefore
          based on the license, the Company owns the world wide rights to the
          CTHA commercial applications. Dr. James Smith, the former Chairman of
          the Board of the Company, has been sued by Plaintiff in a third party
          complaint in the West Virginia Litigation together with WVU and
          Integral Concepts, Inc.

                                      28

<PAGE>


9.   Commitments and Contingencies (continued)

     (c)  Legal Proceedings

          Pursuant to various Motions to the U.S. District Court for the
          District of Oregon the Company was successful in having the Oregon
          Litigation tried in the Northern District of West Virginia. A trial
          date has not been set.

          Based upon the information available to the Company at this time, the
          Company believes that the Plaintiff's alleged claim of infringement is
          without legal or factual basis. However, if the Plaintiff in the
          Oregon Litigation is successful, it could seriously jeopardize the
          Company financially.

     (d)  Lease Commitment

          The Company has renewed its Kokomo, Indiana facility lease which
          terminates August 10, 2000 at an annual lease rate of $24,000.

10.  Uncertainty Due to the Year 2000 Issue

     The Year 2000 Issue arises because many computerized systems use two digits
     rather than four to identify a year. Date-sensitive systems may recognize
     the year 2000 as 1900 or some other date, resulting in errors when
     information using year 2000 dates is processed. In addition, similar
     problems may arise in some systems which use certain dates in 1999 to
     represent something other than a date. The effects of the Year 2000 Issue
     may be experienced before, on, or after January 1, 2000, and, if not
     addressed, the impact on operations and financial reporting may range from
     minor errors to significant systems failure which could affect an entity's
     ability to conduct normal business operations. It is not possible to be
     certain that all aspects of the Year 2000 Issue affecting the Company,
     including those related to the efforts of customers, suppliers, or other
     third parties, will be fully resolved.


11.  Subsequent Events

     Subsequent to April 30, 1999 the Company has:

     (i)   received a further $60,000 pursuant to a private placement units
           offering at $1.00 per unit.

     (ii)  granted stock options to acquire 205,000 shares at $1.00 per share
           expiring May 28, 2004

     (iii) received $33,000 as final payment towards a $100,000 non-recurring
           engineering fee from a potential licensee.

                                      29

<PAGE>


                                   PART III

The information required by this Part III, relating to Directors, Executive
Officers, Promoters and Control Persons; Compliance with Section 16(a) of the
Exchange Act; Executive Compensation; and Security Ownership of Certain
Beneficial Owners and Management; Certain Relationships and Related
Transactions; is hereby incorporated by reference from the Company's definitive
proxy statement to be filed on or before August 29, 1999.

Item 13(a). Exhibits.

<TABLE>
<CAPTION>
Number                    Description                               Page No.
------                    -----------                               --------
<S>             <C>                                                 <C>
  3             Articles of Incorporation and By-Laws
  3.1           Articles of Incorporation                              (1)
  3.2           Article of Amendment                                   (1)
  3.3           By-Laws                                                (1)
  4             Instruments Defining Rights of Security Holders
  4.1           Specimen Share Certificate for Class A Shares          (1)
  4.2           Specimen Share Certificate for Class B Shares          (1)
  4.3           Specimen Warrant                                       (2)
  4.4           Specimen Debenture                                     (2)
  23            Consent of Experts and Counsel
  23.1          Consent of Elliott Tulk Pryce Anderson
  27            Financial Data Schedule
</TABLE>

________________________


(1) Incorporated by reference from Form S-1 Registration Statement (33-92592).

(2) Incorporated by reference from Form 10-KSB for Fiscal Year 1998.

Item 13(b). Reports on Form 8-K.

None.

                                      30

<PAGE>


SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has duly caused this report or amendment to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                    IAS COMMUNICATIONS, INC.



                                    By: /s/ John G. Robertson
                                        ---------------------------------------
                                        John G. Robertson, President
                                        Chief Executive Officer and Director

Dated:  July 29, 1999

In accordance with the Securities Exchange Act of 1934, this report has been
signed by the following persons on behalf of the Registrant and in the
capacities indicated as of July 30, 1999.


Signature                                              Title
---------                                              -----

/s/ John G. Robertson                        President, Chief Executive
-----------------------------------------      Officer and Director
John G. Robertson


/s/ James Vandeberg                          Director
-----------------------------------------
James Vandeberg


                                             Director
-----------------------------------------
Patrick Badgley


                                             Director
-----------------------------------------
Paul Lamarche


/s/ Jennifer Lorette                         Chief Financial Officer
-----------------------------------------     and Principal Accounting
Jennifer Lorette                              Officer

                                      31