<PAGE>   1
                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549

                                   FORM 10-KSB


Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act 
                                   of 1934

                   For the Fiscal Year Ended December 31, 1997

                           Commission File No. 0-21821

                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.

         COLORADO                                              93-0962072
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                            Identification No.)

               410 17TH STREET, SUITE 400, DENVER, COLORADO 80202
                                 (888) 313-8051
       (Address of principal executive offices; issuer's telephone number)

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

         Securities registered under Section 12(g) of the Exchange Act: Common
Shares

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

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB: [ ]

         Issuer's revenues for the most recent fiscal year:   $16,989,478

         The aggregate market value of the voting stock held by non-affiliates
of the issuer was approximately $14,045,805. The aggregate market value was
based upon the mean between the closing bid and asked price for the Common
Shares as reported on the NASD Electronic Bulletin Board as of March 25, 1998.

         As of March 25, 1998, there were 17,975,756 of the Issuer's Common
Shares outstanding.

                      Documents Incorporated by Reference:

                                      None

         Transitional Small Business Disclosure Format (check one): Yes [ ]
No [X]


<PAGE>   2
                                TABLE OF CONTENTS

                FORM 10-KSB ANNUAL REPORT - FOR FISCAL YEAR ENDED
                                DECEMBER 31, 1997

                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.

<TABLE>
<CAPTION>
PART I
<S>     <C>        <C>                                                      <C>
         Item 1.   Description of Business...................................2
         Item 2.   Description of Property..................................13
         Item 3.   Legal Proceedings........................................14
         Item 4.   Submission of Matters to a Vote
                     of Security Holders....................................15

PART II

         Item 5.   Market for Common Equity and Related
                     Stockholder Matters....................................17
         Item 6.   Management's Discussion and Analysis of
                     Financial Condition and Results of Operation...........19
         Item 7.   Financial Statements and Supplementary Data..............26
         Item 8.   Changes in and Disagreements with Accountants
                     on Accounting and Financial Disclosure.................26

PART III

         Item 9.   Directors and Executive Officers.........................28
         Item 10.  Executive Compensation...................................32
         Item 11.  Security Ownership of Certain
                     Beneficial Owners and Management.......................36
         Item 12.  Certain Relationships and
                     Related Transactions...................................39
PART IV

         Item 13.  Exhibits and Reports on Form 8-K.........................44

SIGNATURE PAGE..............................................................51

FINANCIAL STATEMENTS........................................................F-1
</TABLE>



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<PAGE>   3


The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for certain forward-looking statements. Statements contained in this report that
are not historical facts are forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially from those
stated in the forward-looking statements. Factors that could cause actual
results to differ materially include, among others: general economic conditions,
changes in laws and government regulations, fluctuations in demand for the
Company's products, the Company's ability to consummate strategic acquisitions
and the Company's ability to successfully finance any such acquisitions, as well
as its current ongoing operations.


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

HISTORY OF THE COMPANY

Consolidated Capital of North America, Inc. (the "Company") was incorporated
under the laws of the State of Delaware on November 24, 1987. In March 1992, the
Company was reincorporated in the State of Colorado through the merger of the
Delaware corporation into a newly formed Colorado corporation.

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

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

On January 21, 1997, a subsidiary of the Company merged with Angeles Acquisition
Corp. ("Angeles Acquisition"), a privately held company, with Angeles
Acquisition surviving the merger as a wholly-owned subsidiary of the Company
(the "Merger"). Prior to the Merger, Angeles Acquisition had acquired Angeles
Metal Trim Co. ("Angeles"), which does business as Angeles Metal Systems. During
August 1997, the Company reorganized its subsidiaries and 



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<PAGE>   4
Angeles became a direct wholly-owned subsidiary of the Company. Angeles and its
wholly owned subsidiary, California Building Systems, Inc. ("CBS"), fabricate
and sell steel framing materials for commercial and residential structures. CBS
has also developed a low-cost complete steel frame housing structure. See
"Narrative Description of Business - Angeles Metal Trim Co. and Subsidiary" for
a description of the business of Angeles and CBS.

On January 12, 1998, the Company through a wholly-owned subsidiary, purchased
substantially all of the assets of Capitol Metals Co., Inc. ("Old Capitol"), a
privately held steel processing and service center headquartered in Torrance,
California. Old Capitol filed for protection under Chapter 11 of the Bankruptcy
Code on October 7, 1997. The total consideration was approximately $8,100,000,
consisting of $336,000 in cash, $1,500,000 in promissory notes, $300,000 of
Common Shares of the Company (269,349 Common Shares), the assumption of an
outstanding note and interest of $626,000, the repayment of $4,764,000 of Old
Capitol's then existing senior debt and the assumption of approximately $574,000
of costs and expenses associated with the acquisition. The Company agreed to
include the Common Shares issued in connection with the acquisition of the
assets of Old Capitol in a registration statement to be filed with the
Securities and Exchange Commission by April 10, 1998. Information on the
acquisition of the assets of Old Capitol, and the obligations incurred in
connection with such acquisition appears in note K to the Company's 1997
Financial Statements that are included in this report. See also "Item 6.
Management's Discussion and Analysis of Financial Condition and Results of
Operation".

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

The Company's business strategy is to increase its profitability through
expansion of its existing operations and acquisitions of businesses that are
strategically located or positioned to diversify or enhance the Company's
customer base, product range and geographic coverage. The Company is in
preliminary negotiations with two potential acquisition candidates. In order to
facilitate the financing of these acquisitions, the Company has entered into an
engagement with an investment banking firm to act as its agent for the placement
of the Company's securities. There can be no assurance that either of these
acquisitions will be completed or that the Company will issue such securities.



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<PAGE>   5
NARRATIVE DESCRIPTION OF BUSINESS

                      Angeles Metal Trim Co. and Subsidiary

Products and Markets

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

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

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

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

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



                                       -4-
<PAGE>   6

subsequent plumbing and wiring. The materials can be delivered to a housing site
for a price of under $2,500.

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

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

Manufacturing

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

All of Angeles' design, engineering, manufacturing and administration operations
are performed at the company's manufacturing facilities in Los Angeles,
California and Vancouver, Washington. The Company intends to relocate the Los
Angeles, California operations of Angeles to the Torrance, California facility
used by Capitol. Angeles manufactures approximately 85-90% of the goods it sells
and outsources the remaining 10-15%. Both manufacturing locations also conduct
sales, marketing and distribution. In addition, Angeles maintains marketing,
sales and distribution facilities in Tacoma, Washington and Sacramento,
California. All of Angeles' facilities are leased. See "Item 2. Description of
Property".

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

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



                                       -5-
<PAGE>   7

Marketing, Distribution and Customers

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

Raw Materials and Supplies

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

Research and Development

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

Patents

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

                               Capitol Metals Co.

Background

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



                                       -6-
<PAGE>   8

Capitol pursuant to the Asset Purchase Agreement dated December 1, 1997 between
Old Capitol and the Company. After the January 1998 acquisition, Angeles
Acquisition changed its name to Capitol Metals Co. ("Capitol").

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

Products and Services

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

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

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

                     o Cutting to length - the cutting of steel into pieces and
                       along the width of a coil to create sheets or plates.
                     o Blanking - the process in which flat-rolled steel is cut
                       into precise two dimensional shapes by passing it through
                       a slitter and leveler.
                     o Leveling - the flattening of steel to uniform tolerances
                       for proper machining. Slitting - the cutting of coiled
                       steel to specified widths along the length of the coil.
                     o Pickling - a chemical treatment to improve surface
                       quality by removing the surface oxidation and scale which
                       develops on the steel shortly after it is hot-rolled.
                     o Edge trimming - a process which removes a specified
                       portion of the outside edges of coiled steel to produce
                       uniform width and round or smooth edges.




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<PAGE>   9
Capitol is one of the largest flat rolled service facilities in Southern
California. Capitol owns three slitting lines, four cut-to-length lines and one
banding line for slit coil packing. The only toll coil pickling line on the West
Coast capable of handling 40,000 pound coils is owned by Capitol. This line has
capacity to process over 14,000 tons per month. Approximately 90% of Capitol's
1997 revenues were derived from processed steel sales, and approximately 10% was
derived from steel processing services. Management believes that the steel
processing services, particularly the pickling operations, will increase as a
percentage of Capitol's revenues over the next 12 months. Capitol also
warehouses customer owned material.

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

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

Manufacturing

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

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

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



                                       -8-
<PAGE>   10


Marketing, Distribution and Customers

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

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

Raw Materials and Supplies

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

COMPETITION

Angeles

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



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<PAGE>   11

Capitol

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

GOVERNMENT REGULATION

The operations of the Company are subject to extensive federal, state and local
laws and regulations, relating to the protection of human health and the
environment. Hazardous materials that the Company uses in its operations
primarily include lubricants, cleaning solvents and hydrochloric acid used in
its pickling operations. Management believes that the Company is in material
compliance with all applicable environmental concerns. The Company does not
anticipate any material expenditures to meet environmental requirements.

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

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

EMPLOYEES

At March 1, 1998, the Company had 81 full-time employees at Angeles and 50
full-time employees at Capitol. The Company believes that its employee relations
are good.

Capitol is currently negotiating with the International Longshoremen and
Warehousemen's Union Local No. 76 ("ILWU"), which has been certified as the
exclusive representative for 25 



                                       -10-
<PAGE>   12
employees working in the Torrance, California facility. Management believes that
negotiations are progressing toward an agreement within budgetary ranges. The
ILWU represented the same employee group when they were employed by Old Capitol.

                     Former Real Estate Development Business

From 1994 through the January 1997 Merger, the Company's operations were
exclusively in the real estate development business described below. Prior to
the Merger, the Company sold certain assets of the Company, including the
Company's interest in the Northcrest Joint Venture, to three executive officers
and directors (the "Former Directors") of the Company (the "Asset Sale"). As
part of the Asset Sale, the Former Directors assumed all obligations of the
Company existing prior to the Merger. See "Item 12. Certain Relationships and
Related Transactions" for a description of the Asset Sale. During April 1997,
the Company sold its interest in Bear Star.

The Northcrest Joint Venture

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

During April 1996, the Company entered into a new option agreement with Elite
Properties of America ("Elite"), an unaffiliated third party, to sell the
remaining 99 lots of the development. In a transaction effective June 21, 1996,
the Northcrest Joint Venture sold the remaining 99 lots to Elite for a price of
$668,250, which was reduced by an improvement credit of $50,000 given to Elite,
prior deposits of $5,000 and miscellaneous closing costs paid by the Company of
$1,629. The remaining balance due was $611,620, of which $5,870 was paid at
closing and the balance of $605,750 represented by a non-recourse promissory
note in favor of the Northcrest Joint Venture (the "Elite Note").

Prior to the Merger, the Company sold its entire interest in the Northcrest
Joint Venture and its interest in the Elite Note to the Former Directors of the
Company as part of the Asset Sale. In such Asset Sale, the Former Directors of
the Company provided certain consideration and assumed all obligations of the
Company existing prior to the Merger including any obligation of the Company
relating to its interest in the Northcrest Joint Venture. See "Item 12.  Certain
Relationships and Related Transactions".



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<PAGE>   13

Golden Prairie Northcrest Joint Venture

During the first quarter of 1995, the Company organized another joint venture to
acquire additional real estate adjoining the Northcrest Development. The Golden
Prairie Northcrest Joint Venture was comprised of the Company and Glacier
Valley, as equal participants, and acquired approximately seven acres of
undeveloped land. During November 1995, the Company sold its 50% interest in
Golden Prairie to affiliates of Glacier Valley for a promissory note in the
amount of $18,000 (the "Golden Prairie Note") and an assumption of liabilities
on the Golden Prairie Joint Venture by the purchaser. As part of the Asset Sale,
the Company sold its interest in the Golden Prairie Note to the Former Directors
of the Company. See "Item 12. Certain Relationships and Related Transactions".

Columbine Homes Sales LLC

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

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

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

Bear Star Limited Liability Company

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

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



                                       -12-
<PAGE>   14

December 31, 1996, Bear Star had also sold 33 lots of the developed portion of
the property, leaving 15 lots unsold.

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

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

ITEM 2.  DESCRIPTION OF PROPERTY

Executive Offices

The Company currently occupies office space at 410 17th Street, Suite 400,
Denver, Colorado 80202. The Company shares its Denver office, consisting of an
aggregate of 7,585 square feet, including office space, conference facilities
and reception area, with The Stone Pine Companies and other affiliated entities.
Stone Pine Atlantic, LLC ("SP Atlantic") and its affiliates provide
administrative, accounting, investor relations and investment banking services
to the Company pursuant to a Services Agreement. See "Item 12. Certain
Relationships and Related Transactions". The Company also maintains executive
offices at Angeles, 4817 East Sheila Street, Los Angeles, California 90040,
consisting of an aggregate of 10,300 square feet, including office space,
conference facilities and reception area, and at Capitol, 20000 South Western
Avenue, Torrance, California 90501 consisting of 20,000 square feet. It is the
intent of the Company to move the executive offices at Angeles to Capitol.
Management is of the opinion that the executive office space in Denver and Los
Angeles is adequate for the needs of the Company for the foreseeable future.

Production Facilities

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

<TABLE>
<CAPTION>
                                                                Approximate
                        Location                               Square Footage                     Lease Term
                        --------                               --------------                     ----------
<S>                                                        <C>                            <C>
Torrance, California                                        Buildings        340,000       01-13-98 through
(Corporate Headquarters, Manufacturing                      Land (14                       12-31-2006*
Plant, Warehouse, Land and Buildings)                        acres)          609,840

*Includes two three-year extension options.
</TABLE>



                                       -13-
<PAGE>   15

The principal production facilities of Angeles, all of which are leased, consist
of the following:


<TABLE>
<CAPTION>
                                                                Approximate
                        Location                               Square Footage                 Lease Term
                        --------                               --------------                 ----------
<S>                                                        <C>                            <C>
Los Angeles, California                                     Buildings         60,000       01-15-97 through
(Corporate Headquarters, Manufacturing                      Land             125,000       01-14-2000
Plant, Warehouse,                                           
Land and Buildings)

Vancouver, Washington                                       Buildings         20,000       01-15-97 through
(Plant, Offices, Warehouse, Land and Buildings)             Land             130,680       01-14-2000

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

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

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

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

All of the Company's facilities are in good or excellent condition and are
adequate for its existing operations. The Company intends to relocate the Los
Angeles, California operations of Angeles to the Torrance, California facility
currently used by Capitol.

ITEM 3.  LEGAL PROCEEDINGS

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



                                       -14-
<PAGE>   16
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

An annual meeting of the Company's security holders was held on October 8, 1997.
The meeting involved the election of the following directors:

                           Paul Bagley
                           L. Wayne Harber
                           Donald R. Jackson
                           John D. McKey, Jr.
                           Thompson H. Rogers
                           Christian W. Wolf

There were no other directors whose term of office continued after the meeting.

The following proposals were voted upon and approved at the meeting.

                  1.   Proposal for election of the following directors:

                           Class I (terms expire in 1998)
                           -----------------------------
                               Paul Bagley
                               Thompson H. Rogers
                           Class II (terms expire in 1999)
                           -----------------------------
                               L. Wayne Harber
                               John D. McKey, Jr.
                           Class III (terms expire in 2000)
                           -----------------------------
                               Donald R. Jackson
                               Chrisitian W. Wolf

<TABLE>
<CAPTION>
                                                   Number                     Percentage of
                                                  of Shares                 Outstanding Shares
                                                  ---------                 ------------------
                           <S>                     <C>                           <C>
                           For                      15,461,268                    97.9%
                           Against                           0                     0.0%
                           Abstain                         175                     *
                           (The vote was the same for all six nominees for director.)
</TABLE>

                  2.  Proposal to ratify the selection, by the Company's Board
                      of Directors, of Grant Thornton LLP as the Company's
                      certifying accountants.

<TABLE>
<CAPTION>
                                                     Number                     Percentage of
                                                    of Shares                 Outstanding Shares
                                                    ---------                 ------------------
                           <S>                     <C>                           <C>
                           For                      15,460,768                     97.9%
                           Against                         500                      *
                           Abstain                         175                      *
</TABLE>



                                       -15-
<PAGE>   17

                  3. Proposal to approve the Company's 1997 Stock Incentive
                     Plan.

<TABLE>
<CAPTION>
                                                      Number                    Percentage of
                                                    of Shares                 Outstanding Shares
                                                    ---------                 ------------------
                           <S>                     <C>                           <C>
                            For                      13,879,388                       87.9%
                           Against                       4,750                        *
                           Abstain                       1,200                        *

                  * Less than 0.1%
</TABLE>




                                       -16-
<PAGE>   18
                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

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

<TABLE>
<CAPTION>
                                                       YEAR ENDED DECEMBER 31,
                                     -------------------------------------------------------
                                              1997                            1996
                                     ---------------------           -----------------------
<S>                                 <C>              <C>            <C>              <C>
                                     HIGH             LOW             HIGH             LOW

1st Quarter.............             $2.75           $1.50           $.30             $.30


2nd Quarter.............             $3.00           $1.00           $.-(1)           $.-(1)


3rd Quarter.............             $3.50           $1.50           $.25(2)          $.25(2)


4th Quarter.............             $2.00           $1.00           $.01(2)          $.01(2)
</TABLE>

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

(1)      No quotations reported by the NASD.
(2)      Sales price reported by the NASD.

The number of record holders of Common Shares of the Company as of March 25,
1998 was 115.

The Company has the following number of Convertible Preferred Shares issued and
outstanding: 744,000 Series A 12% Convertible Preferred Shares ("Series A
Preferred Shares"), 449,000 Series B 12% Convertible Preferred Shares ("Series B
Preferred Shares") and 200 Series C 6% Convertible Preferred Shares ("Series C
Preferred Shares"). Each Series A Preferred Share and each Series B Preferred
Share is convertible into one Common Share at the option of the holder of such
shares. The Series C Preferred Shares are convertible into Common Shares of the
Company commencing on April 20, 1998, at a conversion price per Series C
Preferred Share equal to $10,000 divided by the lesser of (x) $1.75 or (y) 75%
of the arithmetic average of the closing bid prices for each of the five trading
days prior to the exercise date of any such conversion.



                                       -17-
<PAGE>   19

The holders of the Series A Preferred Shares, Series B Preferred Shares and
Series C Preferred Shares are entitled to receive, prior and in preference to
any declaration or payment of any dividend on Common Shares of the Company,
dividends at the rate of, $0.12, $.012 and $600 per share, respectively, per
annum, payable quarterly in cash or at the option of the Company, in Common
Shares. The Company's Loan and Security Agreement with Congress Financial
Corporation (Western) ("Congress Financial") prohibits the payment of cash
dividends on the Common Shares.

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

Recent Sales of Equity Securities

During the fiscal year ended December 31, 1997, the Company issued unregistered
Common Shares in connection with the following transactions.

In the January 21, 1997 Merger, the Company issued to Stone Pine Colorado, LLC
("SP Colorado"), 8,638,003 of the Company's Common Shares.

On June 25, 1997, the Company issued to Stone Pine Financial Group, LLC ("SP
Financial"), 16,666 of the Company's Common Shares in consideration of a loan
made by SP Financial to the Company in June 1997.

On August 21, 1997, the Company issued to SP Financial, 60,000 of the Company's
Common Shares in consideration of a loan made by SP Financial to the Company in
August 1997.

The Company issued to ERB Acquisition Group, LLC ("ERB") a total of 110,000 of
the Company's Common Shares in consideration of a loan made by ERB to the
Company in April 1997. 50,000 shares were issued on June 7, 1997 and 10,000 were
issued on the first of each month from July 1997 through December 1997.

On December 31, 1997, the Company issued to Stone Pine Capital, LLC ("SP
Capital"), Stone Pine Advisors, LLC ("SP Advisors") and Paul Bagley 33,333,
33,333 and 33,334 of the Company's Common Shares, respectively, in consideration
of loans made by SP Capital, SP Advisors and Mr. Bagley to the Company during
December 1997.

On December 31, 1997, the Board of Directors of the Company approved the
issuance of the following number of Convertible Preferred Shares of the Company
in exchange for the forgiveness of outstanding indebtedness and other
obligations of the Company to the following: SP Financial - 360,000 Series A
Preferred Shares; ERB - 384,000 Series A Preferred Shares; SP Atlantic - 131,500
Series B Preferred Shares; SP Colorado - 317,500 Series B Preferred Shares.



                                       -18-
<PAGE>   20

There were no underwriters involved in any of the transactions described above.
The issuances of Common Shares above were deemed to be exempt from registration
under the Securities Act of 1933 by Section 4(2) thereof based on the investor's
suitability and/or representations furnished by the security holders.

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

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

INTRODUCTION

During 1996, the Company's operations were exclusively in the real estate
business. During January 1997, a subsidiary of the Company, merged with Angeles
Acquisition, a privately held company, with Angeles Acquisition surviving the
Merger as a wholly owned subsidiary of the Company. Prior to the Merger, Angeles
Acquisition had acquired Angeles, for a total consideration including the
purchase price for the shares of Angeles, broker fees, acquisition expenses
including legal and other related costs, of approximately $4,300,000. Angeles
and its wholly-owned subsidiary, CBS, fabricate and sell steel framing materials
for commercial and residential structures.

Prior to the Merger, the Company sold certain assets of the Company, including
the Company's interest in the Northcrest Joint Venture described herein, to the
Former Directors of the Company. In the Asset Sale, the Former Directors of the
Company provided certain consideration and assumed all obligations of the
Company that existed prior to the Merger. See "Item 12. Certain Relationships
and Related Transactions" for a description of the Asset Sale.

In the Merger, the Company issued 8,638,003 new Common Shares to the sole
stockholder of Angeles Acquisition. Immediately following the Merger, the
Company sold 5,496,911 Common Shares, in a private transaction to seven
purchasers for an aggregate purchase price of $1,000,000 (the "January 1997
Share Issuance").

In April 1997, the Company sold its interest in Bear Star for $30,000.

On August 22, 1997, Angeles Acquisition transferred all of its assets consisting
mainly of the investment in Angeles and all of its obligations to the Company.
At the date of transfer, the investment in Angeles amounted to $4,309,443, and
liabilities assumed included a note payable to Angeles in the amount of
$3,268,801, including accrued interest. The remaining liabilities included
accounts payable of $31,824 and a note payable to the Company of $1,000,000,
plus accrued interest of $8,818.



                                       -19-
<PAGE>   21

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

In January 1998, in connection with the Capitol Acquisition, the Company assumed
an outstanding note in the amount of $626,000. The Company then issued a new
replacement note, which bears interest at a rate of 10% per annum, is
collateralized by substantially all the assets of Capitol (subordinated to
Congress Financial) and is due in 1998. Also, in connection with the Capitol
Acquisition, Capitol issued to the unsecured creditors of Old Capitol $1,500,000
in promissory notes, bearing interest at 9% per annum, and payable in
installments through 1999.

In January 1998, in connection with the Capitol Acquisition, Capitol and Angeles
entered into a new $20 million borrowing facility with Congress Financial, which
consists of revolving credit facilities, term loans, letter of credit facilities
and equipment facilities.

During January 1998, in connection with the Capitol Acquisition and the
transactions with Congress Financial, Paul Bagley, the Chairman and Chief
Executive Officer of the Company, loaned $1,500,000 to the Company. The loan is
evidenced by a convertible promissory note of the Company in the amount of
$1,750,000, with a 12% annual interest rate, payable monthly in arrears.

PLAN OF OPERATION

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

Management believes that the acquisition of Capitol will provide the Company
with several advantages toward the accomplishment of its business objective of
increasing the Company's profitability. The Company intends to relocate the Los
Angeles, California operations of Angeles to the Torrance, California facility
currently used by Capitol. In addition to the long term reduction in facilities
cost, this relocation will allow management to combine several previously
duplicative functions, creating efficiencies and cost savings. These functions
will include: materials receiving, slitting operations, purchasing, accounting
and other administrative functions. Additionally, as the companies currently use
several common suppliers, the Company 



                                       -20-
<PAGE>   22

believes that the purchasing volume created by the addition of Capitol may
create reduced pricing for materials and services utilized by both Angeles and
Capitol.

The Company's business strategy is to increase its profitability through
expansion of its existing operations and acquisitions of businesses that are
strategically located or positioned to diversify or enhance the Company's
customer base, product range and geographic coverage. The Company is in
preliminary negotiations with two potential acquisition candidates. In order to
facilitate the financing of these acquisitions, the Company has entered into an
engagement agreement with an investment banking firm to act as its agent for the
placement of the Company's securities. There can be no assurance that either of
these acquisitions will be completed or that the Company will issue such
securities.

The Company's Common Shares are currently traded on the NASD OTC Bulletin Board.
The Company intends to qualify for listing on the Nasdaq Stock Market or
American Stock Exchange as soon as possible. In April 1998, the Company retained
an investor relations company to increase the investment community awareness
regarding the Company's investment potential.

RESULTS OF OPERATIONS

Year Ended December 31, 1997

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

The Company reported net sales of $16,989,478 from its steel fabrication
activities during the year ended December 31, 1997. Cost of goods sold totaled
$14,021,110, resulting in a gross profit of $2,968,368, or 17% of net sales.

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

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

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



                                       -21-
<PAGE>   23

Year Ended December 31, 1996

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

Effect of Inflation

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

Seasonality

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

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION

Financial Condition

As of December 31, 1997, the Company had negative working capital of $1,942,872
and stockholders' equity of $7,852. At December 31, 1997, the total assets of
the Company were $7,706,283, consisting of cash of $14,304, net accounts
receivable of $1,587,035, inventories of $1,193,208, prepaid expenses of
$32,879, property and equipment of $2,053,215 (after accumulated depreciation
and amortization) and other assets, including goodwill, of $2,825,642. The total
current liabilities of the Company at December 31, 1997 were $4,770,298,
consisting of $3,872,397 in accounts payable, accrued liabilities of $290,618,
current portion of long-term debt of $320,738, $225,000 notes to affiliates and
other current liabilities of $61,545. See the Company's Financial Statements,
included elsewhere in this report, for detailed financial information regarding
the Company. The bank debt was repaid in January 1998 with funds provided by the
new indebtedness as described below.

As of January 13, 1998, the date of the Capitol Acquisition, Capitol had working
capital of $1,573,285 and stockholders' equity of $2,050,000. At January 13,
1998, the total assets of Capitol were $8,364,162, consisting of accounts
receivable of $1,576,967, inventories of 



                                       -22-
<PAGE>   24

$2,200,947 prepaid and other assets of $160,102, property and equipment of
$3,713,814 and other assets of $712,332. The total current liabilities of
Capitol at January 13, 1998 were $2,364,731 consisting of loans from a financial
institution of $500,000, accrued liabilities of $514,731 and notes and loans
payable of $1,350,000.

Liquidity and Capital Resources

Since January 1997, the Company has primarily financed its operations with cash
available under its credit facilities and funds advanced under loan arrangements
with affiliated entities. The Company has also financed its operations through
the private placement of capital stock, including $1 million from sales of
Common Shares in January 1997 and most recently $2 million from the March 1998
sale of Series C Preferred Shares. The Company expects to consummate a $5
million convertible note placement with institutional investors in the near
future, the proceeds of which will be used for working capital. However, there
can be no assurance that this transaction will be consummated.

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

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

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



                                       -23-
<PAGE>   25

All of the accounts receivable, inventory, equipment and intangibles of Angeles
and Capitol have been pledged as security for the Congress Facility. The
Congress Facility has been guaranteed by the Company and CBS.

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

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

Subsequent to December 31, 1997, the Company has raised additional capital to
meet the Company's needs. During March 1998, the Company sold 200 shares of
Series C Convertible Preferred Shares at $10,000 per share for a total
consideration of $2,000,000. The Series C Convertible Preferred Shares are
convertible into Common Shares of the Company commencing April 20, 1998, at a
conversion price per Series C Preferred Share equal to $10,000 divided by the
lesser of (x) $1.75 or (y) 75% of the arithmetic average of the closing bid
prices for each of the five trading days prior to the exercise date of any such
conversion. Based on the conversion price formula, the Series C Preferred Shares
will be convertible into no less than 1.14 million Common Shares. As part of
this transaction, the Company issued Common Stock Purchase Warrants to purchase
250,000 of the Company's Common Shares at a price of $2.38 per share. The
Warrants can be exercised any time until March 6, 2000.

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

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




                                       -24-
<PAGE>   26

The Company is in preliminary negotiations with two potential acquisition
candidates. In order to facilitate the financing of these acquisitions, the
Company has entered unto an engagement agreement with an investment banking firm
to act as its agent for the placement of the Company's securities. There can be
no assurance that either of these acquisitions will be completed or that the
Company will issue such securities.

The Company believes that the funds raised from the sale of the Series C
Preferred Shares, operating cash flows of the Company and funds available under
the Congress Facility will provide adequate resources to fund ongoing operating
requirements and future capital expenditures related to the development of its
business for the next twelve months. The Company may be required to obtain
additional lines of credit for working capital purposes and make periodic public
offerings or private placements in order to meet the liquidity needs of its
business growth. While the Company does not believe it will be restricted in
financing such growth, there can be no assurances that such sources of financing
will be available to the Company in sufficient amounts or on acceptable terms.
Under such circumstances, the Company would expect to manage its growth within
the financing available.

Readiness for Year 2000

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

RECENT ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board recently issued Statement of Financial
Accounting Standard No. 128 "Earnings Per Share" ("SFAS No. 128"), effective for
years ending after December 15, 1997. Basic loss per share in the accompanying
financial statements is calculated in accordance with SFAS No. 128. Loss per
share for 1996, has been restated to reflect earnings per share calculated in
accordance with SFAS No. 128. SFAS No. 128 requires basic earnings per share to
be calculated based on the number of weighted average shares outstanding for the
period without giving effect to outstanding common stock equivalents, while
diluted earnings per share considers the effect of common stock equivalents on
weighted average shares outstanding. Diluted earnings per share of common stock
is the same as basic earnings per share as the Company reported a loss for 1997
and 1996.

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



                                       -25-
<PAGE>   27


ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Financial Statements beginning on page F-1 are filed as part of this Annual
Report on Form 10-KSB and are incorporated herein by reference.

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

On March 12, 1996, Hein & Associates, LLP was dismissed as the principal
accountants for the Company. The decision was approved by the Board of Directors
of the Company. Hein & Associates, LLP's reports on financial statements of the
Company for the fiscal years ended December 31, 1994 and 1995 contained
unqualified opinions. There were no disagreements on any matter of accounting
principle or practice, financial statement disclosure, or auditing scope or
procedure with Hein & Associates, LLP.

On March 12, 1996, the Company engaged Kish, Leake & Associates, P.C. as its
principal accountants. This decision was approved by the Board of Directors of
the Company. The Company had no discussions with Kish, Leake & Associates
concerning the application of an accounting principle or practice related to a
specific completed or contemplated transaction, or the type of audit opinion
which might be rendered.

Subsequent to the January 1997 Merger, Kish Leake & Associates, P.C., was
dismissed by vote of the Board of Directors, effective February 4, 1997. The
prior accountants' report on financial statements for the fiscal year ended
December 31, 1995 did not contain an adverse opinion or a disclaimer of opinion;
nor was it modified as to uncertainty, audit scope or accounting principles.
Prior to the dismissal of Kish Leake & Associates, P.C., there were no
disagreements between the Company and Kish Leake & Associates, P.C. on any
matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedure, which disagreement, if not resolved to the
satisfaction of the former accountants would have caused it to make reference to
the subject matter of the disagreement in connection with its report.
Furthermore, there were no unresolved issues with the prior accountants.

The Board of Directors of the Company appointed Grant Thornton LLP as the
Company's new certifying accountants to audit the Company's financial
statements, effective February 4, 1997. Grant Thornton LLP was not consulted
concerning the application of accounting principles to any specific transaction,
either completed or proposed or the type of audit opinion that might be rendered
on the Company's financial statements, nor was a written report provided to the
Company nor oral advice given by the new accountants regarding important factors
considered by the Company in reaching its decision as to any accounting,
auditing or financial reporting issue.


                                       -26-
<PAGE>   28

Grant Thornton was dismissed by vote of the Board of Directors, effective
January 21, 1998. This decision to change accountants was approved by the
members of the audit committee of the Board of Directors. The prior accountants'
report on financial statements for the fiscal year ended December 31, 1996 did
not contain an adverse opinion or a disclaimer of opinion; nor was it modified
as to uncertainty, audit scope or accounting principles. Prior to the dismissal
of Grant Thornton LLP, there were no disagreements between the Company and Grant
Thornton LLP on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure, which disagreement, if not
resolved to the satisfaction of the former accountant would have caused it to
make reference to the subject matter of the disagreement in connection with its
report. Furthermore, there were no unresolved issues with the prior accountants.

On January 21, 1998, the Board of Directors of the Company appointed Arthur
Andersen LLP as the Company's new public accountants to audit the Company's
financial statements, effective for the year ended December 31, 1997. Arthur
Andersen LLP was not consulted concerning the application of accounting
principles to any specific transaction, either completed or proposed or the type
of audit opinion that might be rendered on the Company's financial statements,
nor was a written report provided to the Company nor oral advice given by the
new accountants regarding important factors considered by the Company in
reaching its decision as to any accounting, auditing or financial reporting
issue.




                                       -27-
<PAGE>   29

                                    PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS

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

<TABLE>
<CAPTION>
Directors and Executive Officers     Age           Position
<S>                                  <C>          <C>
Paul Bagley                           55           Chairman of the Board and
                                                   Chief Executive Officer
Richard D. Bailey                     40           Director
Carl Casareto                         39           Chief Financial Officer
L. Wayne Harber                       44           Director
Donald R. Jackson                     48           Director, Secretary and
                                                      Treasurer
Ronald F. Martin                      62           President of Angeles Metal
                                                      Trim Co.
John D. McKey, Jr.                    54           Director
Thompson H. Rogers                    44           Director
Christian W. Wolf                     42           Director
</TABLE>


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

Richard D. Bailey, a director of the Company since March 10, 1998, is the
President of RDB Capital Advisers, LLC, a privately held company involved in
investment banking activities. 



                                       -28-
<PAGE>   30

During 1995, Mr. Bailey acquired, restructured and subsequently sold the Rigging
Company, a mail order manufacturer of custom yacht rigging. From 1991 to 1995,
he was a principal of the New England Wire Company, a manufacturer of specialty
shaped wire and cable with primary applications in the defense, electronics,
safety and consumer products industries. From 1986 to 1991, Mr. Bailey was the
Executive Vice President of Pennsylvania Rolling Mills, Inc., a manufacturer of
cold rolled carbon strip steel, supplying the automotive, defense and building
products industries. Mr. Bailey holds a BA degree in Political Science from
Providence College and a MA degree in International Relations from Fairfield
University.

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

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

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



                                       -29-
<PAGE>   31

Ronald F. Martin was elected the President of Angeles Metal Trim Co. on April
10, 1997. Mr. Martin was the President and Chief Executive Officer of Noman
Technology, Inc. from 1994 until April 1997. He was the President and Chief
Executive Officer of Harris Tube from 1989 until 1993 and President of Harris
Tube from 1986 to 1989. For over 25 years prior to 1986, Mr. Martin held a
number of positions with Rheem Manufacturing Co. from entry level to senior
management positions. In June 1993, Harris Tube filed for bankruptcy under
Chapter 11 of the U.S. Bankruptcy Code. Mr. Ronald Martin was serving as an
executive officer of Harris Tube at the time of such filing.

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

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

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

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

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



                                       -30-
<PAGE>   32
Innovest Holdings, Ltd., which purchased Common Shares of the Company in the
January 1997 Share Issuance, has the right to nominate two directors to the
Board of Directors of the Company or, in the alternative, has the right to be
present at all Board meetings. As of the date hereof no such directors have been
nominated to the Board.

Committees of the Board of Directors

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

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

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

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

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of the Forms 3 and 4 furnished to the Company during
1997 and 1998 and written representations furnished to the Company, the Company
has not identified any director, officer or beneficial owner of more than ten
percent of its common stock who failed to file on a timely basis the forms
required by Section 16(a) of the Securities Exchange Act of 1934 for fiscal year
1997, other than those discussed in the following paragraph.

All Forms 3 and 4 that were required to be filed pursuant to the provisions of
Section 16(a) of the Exchange Act have been filed. However, some of the Forms 3
and /or 4 that were required to be filed by Messrs. Bagley (2), DeGrassi (3),
Harber (1), Jackson (1), McKey (1), Rogers (2) and Wolf (1) and Stone Pine
Colorado, LLC (2), Stone Pine Capital, LLC (2) and Stone Pine Atlantic Equities,
LLC (2) were not filed on a timely basis. (The number in parenthesis after each
name represents the number of required forms that were not filed on a timely
basis.)



                                       -31-
<PAGE>   33
ITEM 10. EXECUTIVE COMPENSATION

Summary Compensation Table

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

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

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

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

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

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

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

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

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

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

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

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



                                       -32-
<PAGE>   34

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

(7)  Mr. Martin has served as President of Angeles Metal Trim Co., the major
     operating subsidiary of the Company during 1997, since April 10, 1997.

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

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

Option/SAR Grants in 1997

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

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

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

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

(1)   The 250,000 options may be exercised cumulatively as set forth below:

<TABLE>
<CAPTION>
                         Date                     Number of Options
                         ----                     -----------------
                    <S>                               <C>
                    April 10, 1998                     50,000
                    April 10, 1999                     50,000
                    April 10, 2000                     50,000
                    April 10, 2001                     50,000
                    April 10, 2002                     50,000
</TABLE>



                                       -33-
<PAGE>   35

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

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


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

COMPENSATION OF DIRECTORS

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

EMPLOYMENT AND CONSULTING AGREEMENTS

Raymond E. McElhaney, Bill M. Conrad and Ronald R. McGinnis each served as
officers of the Company pursuant to three-year Employment Agreements with the
Company that had termination dates of November 17, 1997. Messrs. McElhaney,
Conrad and McGinnis resigned from such positions as of January 21, 1997
immediately after the consummation of the Merger. Each Employment Agreement
provided for payment of salary in the amount of $1,000 per month, plus
reimbursement of reasonable and necessary expenses incurred on behalf of the
Company. The Agreements were terminable without liability to the Company
immediately for "cause" and upon 90 days advance written notice in other cases.
No payments were made to Messrs. McElhaney, Conrad or McGinnis under such
Agreements during 1996 or 1997 (the "Accrued Payments"). The Accrued Payments
and future payments due under such Agreements were partial consideration for the
Asset Purchase and such Employment Agreements were terminated in connection with
the Asset Purchase. See "Item 12. Certain Relationships and Related
Transactions".

Ronald F. Martin serves as the President of Angeles Metal Trim Co., the major
operating subsidiary of the Company during 1997, pursuant to a one-year
Employment Agreement entered into on April 10, 1997. The Employment Agreement is
subject to automatic renewals of one year unless either party provides written
notice of non-renewal to the other party at least 60 days prior to the
expiration of the initial or any renewal term of the Employment Agreement. No
such notice has been given under the Agreement. The Employment Agreement
provides for an annual salary of $84,000 and additional bonus payments. As part
of the consideration for services rendered under the Employment Agreement, Mr.
Martin was granted 500,000 options with an 



                                       -34-
<PAGE>   36

exercise price of $2.00 per share to purchase Common Shares. These options vest
over a five year period so long as Mr. Martin remains in the employ of the
Company or one of its subsidiaries. The 500,000 options granted under the
Employment Agreement were canceled and reissued, with identical terms, under the
provisions of the 1997 Stock Incentive Plan following its approval by the
Company's stockholders during October 1997. In the event of termination without
cause, Mr. Martin would receive his annual salary for the remainder of the term
of the Employment Agreement, retain the right to exercise all stock options and
receive other specified benefits.

Christian W. Wolf served as the President and Chief Executive Officer of the
Company from October 8, 1997 until he resigned on March 10, 1998. On January 12,
1998, Mr. Wolf was granted 200,000 options, with an exercise price of $1.22 per
share, to purchase Common Shares. These options are currently vested and have a
ten year term. Mr. Wolf continues to serve as a director of the Company. On
March 10, 1998, the Company entered into a consulting arrangement with Mr. Wolf.
Under the arrangement, Mr. Wolf will provide consulting services in connection
with a potential acquisition by the Company. Mr. Wolf will receive approximately
$40,000, plus 150,000 Common Shares as compensation for these services. If the
target company signs a definitive letter of intent with the Company containing
terms that are acceptable to the Company's Board of Directors, Mr. Wolf will be
issued another 100,000 Common Shares. In addition, if the acquisition is
consummated, Mr. Wolf will receive an additional 100,000 shares of Common Stock
and a cash fee based upon a specified formula.

SERVICES AGREEMENT

The Company entered into a Services Agreement (the "Services Agreement") with SP
Atlantic, effective as of February 1, 1997, pursuant to which SP Atlantic and
its affiliates provide administrative, accounting and investor relations
services to the Company and its subsidiaries as well as investment banking
services and assistance in merger and acquisition transactions, financing
transactions and stock offerings by the Company. In consideration for such
services, the Company is obligated to pay SP Atlantic $10,000 per month, plus
reimbursement for the cost of providing the administrative, accounting and
investor relations services. Messrs. Bagley, Harber, Jackson and Rogers,
directors and officers of the Company, have a financial interest in SP Atlantic.
In addition, Messrs. Bagley and Rogers are beneficial owners of approximately
65% and 51%, respectively, of the outstanding Common Shares.

The Services Agreement has a term of five years, and is subject to automatic
renewals of one year unless either party provides written notice of non-renewal
to the other party at least 90 days prior to the expiration of the initial or
any renewal term of the Services Agreement. SP Atlantic has the option to
terminate the Agreement at any time for any reason upon written notice. The
Company may terminate the Services Agreement at any time upon written notice;
however, in the event this provision is exercised by the Company, SP Atlantic
shall not receive less compensation and benefits that would otherwise be due to
it for the remainder of the term of the Services Agreement. The Company may
terminate the Services Agreement for cause, effective upon written notice, and
upon such a termination the Company shall be obligated to pay SP Atlantic fees
and any expense reimbursements due through the date of termination. "Cause" is
defined to mean that SP Atlantic has: (i) knowingly acted fraudulently in SP
Atlantic's relations 


                                       -35-
<PAGE>   37

with the Company, (ii) misappropriated or done material, intentional damage to
the property of the Company, (iii) willfully and materially failed to follow a
legal and reasonable order or directive by the Chairman of the Board of
Directors of the Company (which order or directive is consistent with the
provisions of the Services Agreement), or (iv) been grossly negligent in the
performance of its duties as provided for by the Services Agreement.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

At December 31, 1997, the Company had outstanding 15,992,121 Common Shares, the
only class of voting securities outstanding. At March 25, 1998, the Company had
17,975,756 Common Shares outstanding.

At December 31, 1997, the Company had outstanding 744,000 Series A Preferred
Shares and 449,000 Series B Preferred Shares. On March 31, 1998, the Company
issued 200 Series C Preferred Shares. All three classes of preferred stock are
non-voting securities.

The following table reflects information concerning the ownership, as of March
25, 1998, of Common Shares by (i) each person who is known by the Company to be
a beneficial owner of more than 5% of the Common Shares; (ii) by all directors;
(iii) by each of the Named Executive Officers, and (iv) by all directors and
Named Executive Officers of the Company as a group.


<TABLE>
<CAPTION>
                                                                                        Percent of
                  Name                                    Number of Shares           Voting Securities
                  ----                                    ----------------           -----------------
<S>                                                        <C>                           <C>
Stone Pine Colorado, LLC(1)                                 8,780,503(2)                   47.99%
Stone Pine Capital, LLC(1)                                  9,409,622(4)                   50.39%
Stone Pine Atlantic Equities, LLC(1)                        9,376,289(5)                   50.21%
Paul Bagley(1)(9)(10)                                      13,662,455(11)                  64.54%
Richard D. Bailey(9)(12)                                          -0-                         --
Thompson H. Rogers(1)(9)                                    9,741,169(13)                  51.17%
W. Duke DeGrassi(1)                                         9,376,289(5)                   50.21%
Carl Casareto(10)(14)                                          50,000(15)                      *
L. Wayne Harber(1)(9)                                             -0-                         --
Donald R. Jackson(1)(9)(10)                                       -0-                         --
Ronald F. Martin(10)(16)                                      100,000(17)                      *
John D. McKey, Jr.(9)(18)                                         -0-                         --
Christian W. Wolf(9)(19)                                      201,000(20)                   1.11%
Berkshire Capital Partners, Ltd.(21)                        3,000,000(22)                  16.69%
Atlantis Holding Corp.(23)                                  1,412,068(24)                   7.86%
Investor Capital Enterprises, Inc.(23)                      1,412,068(24)                   7.86%
Gary Kucher(23)                                             1,412,068(24)                   7.86%
All Directors and Executive Officers
    as a group (9 persons)                                 14,043,455(25)                  65.17%
--------------------------------
</TABLE>


                                       -36-
<PAGE>   38

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

(2)    SP Colorado directly owns 6,481,867 of the Company's outstanding Common
       Shares and 317,500 shares of the Company's Series B Preferred Shares,
       which are convertible into 317,500 Common Shares. SP Colorado holds
       proxies to vote 1,211,568 Common Shares (the "AHC Shares") which are
       owned by Atlantis Holding Corp. and 769,568 Common Shares (the "Herstone
       Shares") that are owned by Richard Herstone, until the earlier of a
       transfer of the AHC Shares and the Herstone Shares and February 4, 2000.
       (The 6,481,867 outstanding Common Shares directly owned by SP Colorado,
       the 317,500 Common Shares that would be received by SP Colorado if the
       Series B Preferred Shares were converted, the AHC Shares and the Herstone
       Shares are collectively referred to as the "SP Colorado Shares"). The
       following persons are members of SP Colorado and each own an equal voting
       interest in SP Colorado: SP Capital, Stone Pine Atlantic Equities, LLC
       ("SP Equities") and Thompson H. Rogers. Paul Bagley and W. Duke DeGrassi
       are the designated voting persons for SP Capital and SP Equities,
       respectively. SP Colorado, SP Capital, SP Equities, Thompson H. Rogers,
       Paul Bagley and W. Duke DeGrassi are referred to herein as the "Stone
       Pine Reporting Persons". Each Stone Pine Reporting Person may be deemed a
       member of a group that shares voting power over the AHC Shares and the
       Herstone Shares and voting and dispositive power over the SP Colorado
       Shares and accordingly may be deemed to beneficially own the SP Colorado
       Shares, including the AHC Shares and the Herstone Shares.

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

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

(5)    This amount includes the SP Colorado Shares (see (2)) and the SP 
       Atlantic Shares (see (3)).

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

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



                                       -37-
<PAGE>   39

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

(9)    Director.

(10)   Executive Officer.

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

       This amount includes (i) the Bagley Shares, (ii) the SP Colorado Shares
       (see (2)), (iii) the SP Atlantic Shares (see (3)), (iv) the SP Capital
       Shares (see (4)), (v) the SP Financial Shares (see (6)), (vi) the ERB
       Shares (see (7)), and (vii) the SP Advisors Shares (see (8)).

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

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

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

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

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

(17)   This amount represents 100,000 Common Shares that are represented by
       stock options that will be exercisable as of April 10, 1998 at a price of
       $2.00 per share (the "Martin Shares").

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

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

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

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



                                       -38-
<PAGE>   40
(22)   As reported in a Schedule 13D filed by Berkshire Capital on March 9,
       1997, Berkshire Capital directly owns 3,000,000 of the Company's
       outstanding Common Shares.

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

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

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

(25)   This amount includes (i) the SP Colorado Shares (see (2)), (ii) the SP
       Atlantic Shares (see (3)), (iii) the SP Capital Shares (see (4)), (iv)
       the SP Financial Shares (see (6)), (v) the ERB Shares (see (7)), (vi) the
       SP Advisors Shares (see (8)), (vii) the Bagley Shares (see (11)), (viii)
       the Rogers Shares (see (13)), (ix) the Casareto Shares (see (15)), (x)
       the Martin Shares (see (17)), and (xi) the Wolf Shares (see (20)).

*      Less than 1%.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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



                                       -39-
<PAGE>   41
The purchase price for the assets sold in the Asset Sale was $99,625 which
consideration consisted of (x) the cancellation of stock options held by the
Former Directors to acquire an aggregate of 455,454 shares of the common stock
of the Company at the exercise price of $.55 per share, (y) the relinquishment
of any interest in and to the salaries which were accrued for the accounts of
the Former Directors and any claim for future salaries pursuant to the
Employment Agreements between the Company and the Former Directors, in the
aggregate amount of $69,000, and the cancellation of such Employment Agreements
and (z) the assumption by the Former Directors of all debts, liabilities and
outstanding accounts of the Company which were outstanding prior to the Merger.

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

The Company paid $80,000 in consideration of services provided by ICE in
connection with the Merger. ICE is the beneficial owner of approximately 8% of
the outstanding Common Shares.

The Company agreed to pay SP Colorado an acquisition structuring fee of $250,000
in connection with the Merger and the related transactions and delivered a
non-interest bearing promissory note for such amount ("the SP Colorado Note").
During December 1997, the Company issued 317,500 Series B Preferred Shares to SP
Colorado in exchange for the forgiveness of the SP Colorado Note and $67,500 of
other obligations of the Company to SP Colorado. SP Colorado is the owner of
approximately 48% of the outstanding Common Shares and Messrs. Bagley, Harber,
Jackson, McKey and Rogers, directors and officers of the Company, have a
financial interest in SP Colorado.

The Company entered into a Services Agreement with SP Atlantic effective as of
February 1997. See "Item 10. Executive Compensation - Services Agreement" for a
discussion of the terms of the Services Agreement. During December 1997, the
Company issued 131,500 Series B Preferred Shares to SP Atlantic in exchange for
the forgiveness of $100,000 of fees due under the terms of the Services
Agreement and $31,500 of other indebtedness owed to SP Atlantic by the Company.
Messrs. Bagley, Harber, Jackson and Rogers, directors and officers of the
Company, have a financial interest in SP Atlantic.

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




                                       -40-
<PAGE>   42
$309,000 loan and $75,000 of other indebtedness owed to ERB by the Company. The
Company issued a total of 110,000 Common Shares to ERB as additional
consideration for the ERB Note during its term.

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

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

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

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

During December 1997, Mr. Bagley loaned $75,000 to the Company, which loan was
evidenced by a 12% promissory note payable to Mr. Bagley (the "Bagley Note"). As
additional consideration for such loan, the Company issued 33,334 Common Shares
to Mr. Bagley. The Company repaid the Bagley Note during March 1998. Mr. Bagley
is a director and officer of the Company and the beneficial owner of
approximately 65% of the outstanding Common Shares.

During 1997, the Company issued to Ronald F. Martin, President of Angeles Metal
Trim Co., options to purchase 500,000 Common Shares at $2.00 per share. The
options vest over a five year period commencing on April 10, 1998.

In January 1998, the Company issued to Christian W. Wolf, who was serving as
President and Chief Executive Officer of the Company at such time, options to
purchase 200,000 Common Shares at $1.22 per share. The options are currently
vested and have a ten year term.



                                       -41-
<PAGE>   43
In January 1998, the Company issued to Carl Casareto, who was appointed the
Chief Financial Officer of the Company in March 1998, options to purchase
200,000 Common Shares at $1.22 per share. 50,000 of the options are currently
vested and 50,000 of the options vest on January 12, 1999, 2000 and 2001,
respectively.

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

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

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

During March 1998, the Company entered into a consulting arrangement with
Christian W. Wolf, a director of the Company. Under the arrangement, Mr. Wolf
will provide consulting services in connection with a potential acquisition by
the Company. Mr. Wolf will receive approximately $40,000, plus 150,000 Common
Shares as compensation for these services. If the target company signs a
definitive letter of intent with the Company containing terms that are
acceptable to the Company's Board of Directors, Mr. Wolf will be issued another
100,000 Common Shares. In addition, if the acquisition is consummated, Mr. Wolf
will receive an additional 100,000 Common Shares and a cash fee based upon a
specified formula.

In March 1998, the Company issued to employees of the Company and employees of
related companies providing services to the Company, stock options to purchase a
total of 625,000 Common Shares at $2.08 per share. These 625,000 options
included 400,000 options granted to Carl Casareto, the Chief Financial Officer
of the Company and 100,000 options granted to 



                                       -42-
<PAGE>   44

Donald R. Jackson, the Secretary and Treasurer of the Company. The options vest
over a four year period commencing on March 10, 1999.

Messrs. Bagley and Rogers, who are directors and officers of the Company and who
are beneficial owners of approximately 65% and 51%, respectively, of the
outstanding Common Shares, have a financial interest in SP Colorado, SP
Atlantic, ERB, SP Financial, SP Advisors and SP Capital.

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



                                       -43-
<PAGE>   45

                                     PART IV

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

(a)  Exhibits. The following documents are filed herewith or incorporated herein
by reference as exhibits:

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

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

     3.1(2)                     Articles of Incorporation of the Company.

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

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

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

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

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

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

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

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



                                       -44-
<PAGE>   46

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

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

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

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

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

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

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

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

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

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


                                       -45-
<PAGE>   47

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

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

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

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

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

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

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

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

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

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

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

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

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


                                       -46-
<PAGE>   48

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

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

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

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

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

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

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

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

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

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

     10.36                      Loan Agreement, dated as of December 31, 1997,
                                between the Company and Stone Pine Capital, LLC.
</TABLE>



                                       -47-
<PAGE>   49

<TABLE>
    <S>                        <C>
     10.37                      Promissory Note, dated as of December 31, 1997,
                                in the principal amount of $75,000 from the
                                Company to Stone Pine Capital, LLC.

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

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

     10.40                      Agreement, dated as of December 31, 1997,
                                between the Company and Stone Pine Financial
                                Group, LLC relating to the issuance of
                                Series A Preferred Shares.

     10.41                      Agreement, dated as of December 31, 1997,
                                between the Company and ERB Acquisition
                                Group, LLC relating to the issuance of
                                Series A Preferred Shares.

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

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

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

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

     10.46(3)                   Offshore Securities Subscription Agreement
                                for 6% Convertible Preferred Shares - Series
                                C, dated March 6, 1998 (Exhibits and
                                Schedules omitted).

     10.47                      Loan Agreement, dated January 9, 1998, by and
                                between Congress Financial Corporation
                                (Western), Angeles Metal Trim Co. and Angeles
                                Acquisition Corp.

     10.48                      Secured Promissory Note, dated January 9, 1998,
                                in the original principal amount of $1,943,000,
                                from Angeles Metal Trim Co. to Congress
                                Financial Corporation (Western).
</TABLE>



                                       -48-
<PAGE>   50


<TABLE>
    <S>                        <C>
     10.49                      Secured Promissory Note, dated January 9, 1998,
                                in the original principal amount of $200,000
                                from Angeles Acquisition Corp. to Congress
                                Financial Corporation (Western).

     10.50                      Secured Promissory Note, dated January 9, 1998,
                                in the original principal amount of $1,500,000
                                from Angeles Acquisition Corp. to Congress
                                Financial Corporation (Western).

     10.51                      Guarantee, dated January 9, 1998 executed by the
                                Company Angeles Metal Trim Co. and California
                                Building Systems, Inc. in favor of Congress
                                Financial Corporation (Western) with respect to
                                Angeles Acquisition Corp. notes.

     10.52                      Guarantee, dated January 9, 1998 executed by the
                                Company Angeles Acquisition Corp. and California
                                Building Systems, Inc. in favor of Congress
                                Financial Corporation (Western) with respect to
                                Angeles Metal Trim Co. notes.

     10.53                      Lease Agreement, dated January 12, 1998, by and
                                between Danat Investment Company and the Company
                                (Re: property at 20000 South Western Avenue,
                                Torrance, California).

     10.54                      Subordination, Nondisturbance and Attornment
                                Agreement, dated January 12, 1998, by and among
                                the Company, Angeles Acquisition Corp., Danat
                                Investment Company and Aid Association for
                                Lutherans.

     10.55                      Mortgage Agreement, dated January 12, 1998,
                                executed by Aid Association for Lutherans in
                                favor of Congress Financial Corporation
                                (Western) with respect to premises at 20000 S.
                                Western Avenue, Torrance, California (Exhibits
                                omitted).

     10.56                      Agreement, dated as of March 3, 1998, by and
                                between RDB Capital Advisors, LLC, Richard D.
                                Bailey, Stone Pine Investment Banking, LLC and
                                the Company.

     16.1(9)                    Letter from Kish Leake & Associates, P.C., dated
                                February 5, 1997, regarding change of certifying
                                accountant.

     16.2(10)                   Letter from Grant Thornton LLP, dated January
                                28, 1998, regarding change of certifying
                                accountant.

     21.                        Subsidiaries of the Company.

</TABLE>



                                       -49-
<PAGE>   51


<TABLE>
    <S>                       <C>
     27.1                       Financial Data Schedule.
</TABLE>

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

(1)  Incorporated by reference from the Company's Report on Form 8-K, dated
     January 23, 1997.

(2)  Incorporated by reference from the Company's Annual Report on Form 10-K for
     the fiscal year ended December 31, 1991.

(3)  Incorporated by reference from the Company's Report on Form 8-K, dated
     March 18, 1998.

(4)  Incorporated by reference from the Company's Quarterly Report on Form
     10-QSB for the period ended September 30, 1997.

(5)  Incorporated by reference from the Company's Annual Report on Form 10-KSB
     for the fiscal year ended December 31, 1996.

(6)  Incorporated by reference from the Company's Quarterly Report on Form
     10-QSB for the period ended March 31, 1997.

(7)  Incorporated by reference from the Company's Quarterly Report on Form
     10-QSB for the period ended June 30, 1997.

(8)  Incorporated by reference from the Company's Report on Form 8-KA, filed on
     January 29, 1998.

(9)  Incorporated by reference from the Company's Report on Form 8-K filed on
     February 7, 1997.

(10) Incorporated by reference from the Company's Report on Form 8-KA, filed on
     January 30, 1998.


(b)  Reports on Form 8-K.

The Company filed a Current Report on Form 8-K on January 27, 1998, as amended
on January 29, 1998 and March 27, 1998, to report the acquisition of
substantially all of the assets of Capitol Metals Co., Inc., a privately held
steel processing and service center located in Torrance, California.

The Company filed a Current Report on Form 8-K on January 28, 1998, as amended
on January 29, 1998, to report a change in certifying accountants.

The Company filed a Current Report on Form 8-K on March 3, 1998 to report a
change in executive officers and the sales of equity securities pursuant to
Regulation S.



                                       -50-
<PAGE>   52

                                   SIGNATURES


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

                                       CONSOLIDATED CAPITAL OF NORTH     
                                       AMERICA, INC.

Date:  March 31, 1998             By:  /s/ Paul Bagley
                                       -----------------------------
                                       Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the registrant
and the capacities and on the dates indicated.

<TABLE>
<CAPTION>
              SIGNATURE                                    TITLE                                  DATE
              ---------                                    -----                                  ----
<S>                                    <C>                                                  <C>
/s/ Paul Bagley                         Chairman and Chief Executive Officer                 March 31, 1998
------------------------------          (Principal Executive Officer)
Paul Bagley                             

/s/ Carl Casareto                       Chief Financial Officer                              March 31, 1998
------------------------------          (Principal Financial and Accounting
Carl Casareto                           Officer)

/s/ Donald R. Jackson                   Director                                             March 31, 1998
------------------------------          
Donald R. Jackson

/s/ Richard D. Bailey                   Director                                             March 31, 1998
------------------------------          
Richard D. Bailey

/s/ L. Wayne Harber                     Director                                             March 31, 1998
------------------------------          
L. Wayne Harber

/s/ John D. McKey, Jr.                  Director                                             March 31, 1998
------------------------------          
John D. McKey Jr.

/s/ Thompson H. Rogers                  Director                                             March 31, 1998
------------------------------          
Thompson H. Rogers

/s/ Christian W. Wolf                   Director                                             March 31, 1998
------------------------------          
Christian W. Wolf
</TABLE>



                                       -51-
<PAGE>   53
                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
                              FINANCIAL STATEMENTS
                                DECEMBER 31, 1997



<PAGE>   54
                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
                          INDEX TO FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                                                         Page

<S>                                                                       <C>
Report of Independent Public Accountants...............................   F-2

Report of Independent Certified Public Accountants.....................   F-3

Consolidated Balance Sheets at December 31, 1997 and 1996..............   F-4

Consolidated Statements of Operations for the Years Ended
  December 31, 1997 and 1996...........................................   F-6

Consolidated Statements of Stockholders' Equity for the Years
  Ended December 31, 1997 and 1996.....................................   F-7

Consolidated Statements of Cash Flows for the Years Ended
  December 31, 1997 and 1996...........................................   F-8

Notes to Consolidated Financial Statements for the Years Ended
  December 31, 1997 and 1996...........................................   F-10
</TABLE>


                                       F-1
<PAGE>   55
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Consolidated Capital of North America, Inc.:

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

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

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



                                               /s/ Arthur Andersen LLP


Los Angeles, California
March 27, 1998


                                       F-2

<PAGE>   56
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors
Consolidated Capital of North America, Inc.

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

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

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



                                                  /s/ Grant Thornton LLP


Los Angeles, California
March 21, 1997


                                       F-3
<PAGE>   57
                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
                           CONSOLIDATED BALANCE SHEETS
                           December 31, 1997 and 1996

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

         Total current assets                                2,827,426              158,062

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

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

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

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

        The accompanying notes are an integral part of these statements.

                                       F-4
<PAGE>   58
                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
                     CONSOLIDATED BALANCE SHEETS - Continued
                           December 31, 1997 and 1996

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

</TABLE>


        The accompanying notes are an integral part of these statements.

                                       F-5

<PAGE>   59
                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 For the Years Ended December 31, 1997 and 1996

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

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

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

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

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

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

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


        The accompanying notes are an integral part of these statements.

                                       F-6

<PAGE>   60
                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 For the Years Ended December 31, 1997 and 1996

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Merger with Angeles Acquisition
  Corp.                                        -               -             864

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

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

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


        The accompanying notes are an integral part of these statements.

                                       F-7
<PAGE>   61
                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the Years Ended December 31, 1997 and 1996

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


        The accompanying notes are an integral part of these statements.

                                       F-8
<PAGE>   62
                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
                 For the Years Ended December 31, 1997 and 1996

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

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

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

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

        The accompanying notes are an integral part of these statements.

                                       F-9
<PAGE>   63
                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1997 and 1996


NOTE A - BUSINESS AND INVESTMENT RISK

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

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

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


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

1.  Principles of Consolidation

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

2.  Inventories

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


                                      F-10

<PAGE>   64
                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
                           December 31, 1997 and 1996


3.  Depreciation and Amortization

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

4.  Goodwill

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

5.  Income Taxes

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

6.  Use of Estimates

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

7.  Concentrations of Risk

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

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



                                      F-11
<PAGE>   65
                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
                           December 31, 1997 and 1996


8.  Investments

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

9.  Marketable Securities Held for Sale

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

10. Basic Loss Per Share

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

11. Financial Instruments

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

12. New Financial Accounting Pronouncements

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


                                      F-12

<PAGE>   66
                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
                           December 31, 1997 and 1996


NOTE C - INVENTORIES

Inventories at December 31, 1997 consist of the following:

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

NOTE D - RELATED PARTY TRANSACTIONS

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

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

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

NOTE E - MARKETABLE SECURITIES

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


                                      F-13

<PAGE>   67

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


NOTE F - STOCKHOLDERS' EQUITY

1.  Preferred Stock

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

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

2.  Common Stock

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

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

3. Stock Options

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

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


                                      F-14

<PAGE>   68

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

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

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

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

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

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

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

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

                                      F-15

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


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

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

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

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

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


NOTE G - ANGELES METAL TRIM CO.

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



                                      F-16

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


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

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

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

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


NOTE H - NOTES PAYABLE

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

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

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


                                      F-17
<PAGE>   71
                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
                           December 31, 1997 and 1996


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

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


NOTE I - INCOME TAXES

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

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

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

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

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

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


                                      F-18

<PAGE>   72
                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
                           December 31, 1997 and 1996


NOTE J - COMMITMENTS

1. Leases

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

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

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

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

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

2. Employment Contract

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


NOTE K - SUBSEQUENT EVENTS

1.  Acquisition

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


                                      F-19

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


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

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

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

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

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

2.  Sale of Series C Preferred Shares

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




                                      F-20
<PAGE>   74
                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
                           December 31, 1997 and 1996


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

3. Consulting Arrangement

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

4.  Related Party Transactions

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

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


                                      F-21
<PAGE>   75
                   CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
                           December 31, 1997 and 1996


5.  Issuance of Warrants

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

6.  Issuance of Stock Options

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

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


                                      F-22
<PAGE>   76
                                 EXHIBIT INDEX

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

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

          3.1(2)         Articles of Incorporation of the Company.

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

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

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

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

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

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

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

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

<PAGE>   77

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

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

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

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

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

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

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

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

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

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

<PAGE>   78

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

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

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

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

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

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

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

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

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

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

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

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

         10.25(8)        First Amendment to Asset Purchase Agreement, dated as of January 8, 1998,
                         among Binhad, Inc. (formerly known as Capitol Metals Co., Inc.), the
                         Company and Angeles Acquisition Corp.
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         <S>             <C>
         10.26(8)        Assignment and Bill of Sale, dated January 9, 1998, from Binhad, Inc.
                         (formerly known as Capitol Metals Co., Inc.) to Angeles Acquisition Corp.

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

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

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

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

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

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

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

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

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

         10.36           Loan Agreement, dated as of December 31, 1997, between the Company and
                         Stone Pine Capital, LLC.
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<PAGE>   80

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         <S>             <C>
         10.37           Promissory Note, dated as of December 31, 1997, in the principal amount of
                         $75,000 from the Company to Stone Pine Capital, LLC.

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

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

         10.40           Agreement, dated as of December 31, 1997, between the Company and Stone Pine
                         Financial Group, LLC relating to the issuance of Series A Preferred Shares.

         10.41           Agreement, dated as of December 31, 1997, between the Company and ERB 
                         Acquisition Group, LLC relating to the issuance of Series A Preferred Shares.

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

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

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

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

         10.46(3)        Offshore Securities Subscription Agreement for 6% Convertible Preferred
                         Shares - Series C, dated March 6, 1998 (Exhibits and Schedules omitted).

         10.47           Loan Agreement, dated January 9, 1998, by and between Congress Financial
                         Corporation (Western), Angeles Metal Trim Co. and Angeles Acquisition Corp.

         10.48           Secured  Promissory Note, dated January 9, 1998, in the original principal
                         amount of $1,943,000, from Angeles Metal Trim Co. to Congress Financial
                         Corporation (Western).
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<PAGE>   81

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         <S>             <C>
         10.49           Secured Promissory Note, dated January 9, 1998, in the original principal
                         amount of $200,000 from Angeles Acquisition Corp. to Congress Financial
                         Corporation (Western).

         10.50           Secured Promissory Note, dated January 9, 1998, in the original principal
                         amount of $1,500,000 from Angeles Acquisition Corp. to Congress Financial
                         Corporation (Western). 

         10.51           Guarantee, dated January 9, 1998 executed by the Company Angeles Metal
                         Trim Co. and California Building Systems, Inc. in favor of Congress Financial
                         Corporation (Western) with respect to Angeles Acquisition Corp. notes.

         10.52           Guarantee, dated January 9, 1998 executed by the Company Angeles Acquisition 
                         Corp. and California Building Systems, Inc. in favor of Congress Financial
                         Corporation (Western) with respect to Angeles Metal Trim Co. notes.

         10.53           Lease Agreement,  dated January 12, 1998, by and between Danat Investment
                         Company and the Company (Re: property at 20000 South Western Avenue, Torrance,
                         California).

         10.54           Subordination, Nondisturbance and Attornment Agreement, dated January 12, 1998,
                         by and among the Company, Angeles Acquisition Corp., Danat Investment Company
                         and Aid Association for Lutherans.

         10.55           Mortgage  Agreement, dated January 12, 1998, executed by Aid Association for
                         Lutherans in favor of Congress Financial Corporation (Western) with respect to
                         premises at 20000 S. Western Avenue, Torrance, California (Exhibits omitted).

         10.56           Agreement, dated as of March 3, 1998, by and between RDB Capital Advisors, LLC,
                         Richard D. Bailey, Stone Pine Investment Banking, LLC and the Company.

         16.1(9)         Letter from Kish Leake & Associates, P.C., dated February 5, 1997, regarding
                         change of certifying accountant.

         16.2(10)        Letter from Grant Thornton LLP, dated January 28, 1998,regarding change of 
                         certifying accountant.

         21.             Subsidiaries of the Company.

         27.1            Financial Data Schedule.
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<PAGE>   82
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(1)  Incorporated by reference from the Company's Report on Form 8-K, dated
     January 23, 1997.

(2)  Incorporated by reference from the Company's Annual Report on Form 10-K for
     the fiscal year ended December 31, 1991.

(3)  Incorporated by reference from the Company's Report on Form 8-K, dated
     March 18, 1998.

(4)  Incorporated by reference from the Company's Quarterly Report on Form
     10-QSB for the period ended September 30, 1997.

(5)  Incorporated by reference from the Company's Annual Report on Form 10-KSB
     for the fiscal year ended December 31, 1996.

(6)  Incorporated by reference from the Company's Quarterly Report on Form
     10-QSB for the period ended March 31, 1997.

(7)  Incorporated by reference from the Company's Quarterly Report on Form
     10-QSB for the period ended June 30, 1997.

(8)  Incorporated by reference from the Company's Report on Form 8-KA, filed on
     January 29, 1998.

(9)  Incorporated by reference from the Company's Report on Form 8-K filed on
     February 7, 1997.

(10) Incorporated by reference from the Company's Report on Form 8-KA, filed on
     January 30, 1998.