U. S. SECURITIES AND EXCHANGE COMMISSION
   --------------------------------------------------------------------------
                             Washington, D.C. 20549

                                 FORM 10 - KSB

     (Mark One)

X    ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 for the Fiscal Year Ended December 31, 1997.

__   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934 for the transition period from to .

Commission File No. 0-18122

                             ANTENNAS AMERICA, INC.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

          UTAH                                              87-0454148
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)

           4860 ROBB ST., SUITE 101, WHEAT RIDGE, COLORADO 80033-2163
           ----------------------------------------------------------
                    (Address of principal executive offices)

                                  303-421-4063
                          ---------------------------
                          (Issuer's telephone number)

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

      Securities registered pursuant to Section 12(g) of the Exchange Act:
      --------------------------------------------------------------------
                         $.0005 par value common stock

Check  whether the issuer (1) filed all reports  required by Section 13 or 15(d)
of the  Securities  Exchange  Act of 1934 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 past 90 days.
                        YES  _X_                     NO  __

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

Issuer's revenues for its most recent fiscal year:  $3,012,266

As of March 12,  1998,  the  aggregate  market value of the voting stock held by
non-affiliates of the issuer was approximately  $6,965,000.  This calculation is
based upon the average of the closing bid price of $.12 and ask price of $.14 of
the stock on March 12, 1998.

The  number  of  shares  of the  Registrant's  $.0005  par  value  common  stock
outstanding as of March 12, 1998 was 73,839,422.

<PAGE>


                                     PART I
Item 1. Business
----------------

     Business  Development.  Antennas  America,  Inc. (the "Company"),  formerly
Westflag Corporation,  which was formerly Westcliff  Corporation,  was organized
under the laws of the State of Utah on  September  30,  1987 for the  purpose of
acquiring one or more  businesses.  In January 1989,  the Company  completed its
initial  public  offering of 10,544,650  units at $.04 per unit resulting in net
proceeds  to the  Company of  approximately  $363,000.  (The number of units and
price per unit have been adjusted to reflect the Company's  one-for-four reverse
split in April 1989 that is described  below).  Each unit consisted of one share
of common  stock,  one Class A Warrant and one Class B Warrant.  All the Class A
and Class B Warrants  expired  without  exercise and no longer  exist.  In April
1989,  the  Company  effected  a  one-for-four  reverse  split so that each four
outstanding  shares of common stock prior to the reverse  split became one share
after the reverse  split.  Unless  otherwise  indicated,  all references in this
report to the number of shares of the Company's  common stock have been adjusted
for the effect of the one-for-four reverse split.

     On April 12,  1989,  the  Company  merged  with  Antennas  America,  Inc. a
Colorado  corporation  ("Antennas  Colorado")  that had been formed in September
1988 and that had developed an antenna  design  technique  that would permit the
building of flat (as compared to  parabolic)  antenna  systems.  Pursuant to the
merger,  Antennas  Colorado  was  merged  into the  Company,  all the issued and
outstanding  stock of Antennas  Colorado was converted into 41,951,846 shares of
the  Company's  common  stock,  and the  Company's  name was changed to Antennas
America, Inc.

     Business  Of  Issuer.  The  Company's  operations  consist  of the  design,
development,  marketing and sale of a  diversified  line of antennas and related
wireless communication systems, including conformal and phased array antennas.

Principal Products
------------------              Conformal Antennas
                                ------------------

     A  conformal  antenna  is one  that is  constructed  so  that  it  conforms
technically  and  physically  to its  product  environment.  The  first  product
introduced  by the Company in this  category was the  disguised  decal  antenna,
which  has been  patented  by the  Company.  This  product,  introduced  in 1989
originally only for conventional  automobile  cellular phones, is an alternative
to the  conventional  wire type  antenna  and has been  expanded  to be used for
numerous mobile  applications,  including  Cellular,  UHF, VHF, ETACS, GSM, PCS,
SMR, Passive Repeaters and GPS. The antenna is approximately 3 1/2" x 3 1/2" and
typically  installs  on the inside of the  vehicle so that it is not  detectable
from the outside of the vehicle.

     Several derivative  products of this antenna design have been developed for
special applications and O.E.M. (original equipment manufacturer) customers. For
the fiscal year ended  December 31, 1997,  the patented  decal antenna and other
conformal  derivatives  of the decal  antenna  accounted  for  approximately  60
percent of the Company's sales.

     The Company began marketing  several new conformal antenna systems in 1997,
including  two off-air  antennas to receive local TV  broadcasts,  a GPS (Global
Positioning  Systems)  antenna,  and the Twinbooster  passive  repeater  antenna
system to improve the performance of a cellular phone signal when used inside an
automobile.

                                       2

<PAGE>


                                  GPS Antennas
                                  ------------

     The Company has  developed a  proprietary  flat GPS system that  integrates
with a GPS  receiver.  GPS  receivers  communicate  with several  globe-circling
satellites that will identify longitude and latitude  coordinates of a location.
These  satellite  systems  have  been used for  years by the  military  and more
recently  for  boats,  planes  surveying  and even  hikers.  Accurate  to within
approximately  100 yards,  there are several  types of GPS systems some of which
are the size of a car phone and are very easy to use.  The  Company  anticipates
marketing its GPS antenna products on an O.E.M.  basis for the purposes of fleet
management and in-vehicle mapping systems.

                      Flat Panel and Phased Array Antennas
                      ------------------------------------

     The flat panel and phased array  antennas are flat antennas that  typically
incorporate a group of constituent  antennas all of which are  equidistant  from
the center point.  These types of antennas are used to receive  and/or  transmit
data, voice and, in some cases, video from microwave transmitters or satellites.
The  Company is  currently  developing  and  selling  various  versions of these
antennas to private,  commercial and governmental  entities. As described below,
the  Company's  three  primary  projects  for this  antenna  design  are (i) the
"off-air"  antennas for local television  reception with satellite and other TV,
(ii) the flat panel receive and transmit antennas for Micron  Communications,  a
subsidiary of Micron  Technologies  Inc.  ("Micron"),  and (iii) the MMDS phased
array antenna systems for the wireless cable market as described below.

     Off-Air  Antennas For Local  Reception  With  Satellite  And Other TV. Home
satellite   television  systems  recently  have  become  extremely  popular  and
affordable.  The single biggest  drawback to the 18" home TV satellite system is
that the viewer cannot  receive local TV broadcasts  from the satellite  system.
U.S.  federal law prohibits  subscribers  to satellite  services from  receiving
local  channels or other  network  programming  if those  networks are available
using a VHF/UHF  antenna.  In order to receive local TV  broadcasts,  the viewer
must resort to installing  outdated receive  equipment which typically  includes
"rabbit ears" or the conventional  "yagi" roofmount  antenna.  In December 1996,
the Company  introduced two new flat conformal  antenna systems to provide local
TV reception  where  digital  satellite  systems are  utilized.  These  antennas
combine the Company's conformal and phased array technology.

     The Company's  FREEDOM(TM) Antenna System is a flat VHF/UHF TV antenna that
provides  local TV reception and attaches to the back of the  satellite  dish so
that it is virtually invisible when installed. Designed to be inconspicuous, the
FREEDOM(TM)  Antenna  is an ideal  solution  to the  problem of local TV program
reception with the popular 18" dishes.

     In July 1997 the Company was licensed by  DIRECTV(R),  a division of Hughes
Electronics  Corporation,  to use the  DSS(R)  trademark  on the  Company's  new
FREEDOM(TM) Antenna system.  Prior to issuing the license,  DIRECTV(R) evaluated
the  FREEDOM(TM)  Antenna  for  performance.  DIRECTV(R),  which is the  largest
provider of direct-to-home (DTH) digital  programming,  broadcasts directly from
satellites to the home via the popular, easily installed 18" satellite dish.

     The WALLDO(TM)  Antenna  System is a flat VHF/UHF TV antenna,  measuring 15
1/2"x 13" x 2",  which  attaches to the house or other  structure  and  provides
local TV  reception.  This antenna is designed so that it conceals the fact that
an outdoor antenna has been  installed.  Both the FREEDOM(TM) and the WALLDO(TM)
antennas are  omnidirectional  and work in locations where a medium gain antenna
is  required,  which  is  generally  within  a 25 mile  radius  of the  local TV
stations'  transmitters.  Because the WALLDO(TM) antennas can be attached to the
side of the

                                       3

<PAGE>


house or to the other structures,  the Company will market it as the solution to
the problem of antenna  installations on rooftops where there may be limitations
due to zoning codes,  covenants, or homeowner restrictions or where there is the
need for a more aesthetically  pleasing solution. The Company has not applied to
DIRECTV(R) for licensing the WALLDO(TM) Antenna.

     In March,  1998,  the  Company  announced  that it had  agreed  with  Jasco
Products,  Inc.  ("Jasco") based in Oklahoma City,  Oklahoma for Jasco to market
the Company's new local TV antennas.  Under the  arrangement,  Jasco will market
the antennas to mass-market  retail  accounts within the United States under the
Emerson(R)  name and will be responsible  for the marketing and  distribution of
the antennas, including product literature, in-store point of purchase displays,
and other related marketing services to these customers.

     Flat Panel  Antennas for Micron  Communications.  By modifying its existing
line of flat panel and phased array antenna  designs,  the Company has developed
and is in the process of submitting  final  prototype  antennas for approval and
possible  incorporation  into  Micron  Communication's   Microstamp(R)  program.
Micron's  Microstamp(R)  product is a small remote  intelligence device that can
store 256 bytes of data and  communicate by remote antennas with a host computer
from up to 40 feet away.  Typical  applications  for the  Microstamp(R)  product
include automatic fuel dispensing, airline baggage tracking, automated warehouse
solutions and personnel ID and access control.

     MMDS Antennas For Wireless Cable. In 1995, the Company introduced three new
phased array antenna systems to the wireless cable market. Known in the industry
as MMDS (Multichannel,  Multipoint Distribution Systems),  these antenna systems
are direct  competitors of cable TV and satellite TV. MMDS  (wireless  cable) is
similar  to  conventional  cable  with the  exception  that it uses a  microwave
frequency to transmit the channels for home viewing.  The signals can usually be
received  approximately  30 miles from the  transmitter  by installing a receive
antenna on the subscriber's home.

     As a result  of the  enactment  of the U.S.  1996  Telecommunications  Act,
telecommunications  companies are now permitted to compete directly in the video
distribution  market  in the  United  States.  This  allows  companies  such  as
BellSouth,  Pacific  Telesis,  BellAtlantic  and Nynex to use this technology to
deliver video programming to selected major markets.

     The Company's MMDS antennas  replace  conventional  grid antennas  commonly
installed as the receiving  antenna on customers'  rooftops.  The product offers
several features over conventional  parabolic antennas in that it is flat, has a
higher  efficiency  allowing for a smaller  size,  and can be mounted in several
locations  in the home such as windows,  an eave or the chimney.  Typically  the
Company's  phased  array  products  perform  on an equal  basis to  conventional
antennas with cost savings and substantial  installation and maintenance savings
to the MMDS service  provider.  The Company sold over 1,000 of its MMDS antennas
through a distributor to BellSouth Corporation in 1997 for a test of BellSouth's
new digital MMDS system and is currently  attempting  to market its flat antenna
to other domestic and international wireless cable customers. The wireless cable
industry in general is experiencing  delays in the roll out of the digital cable
systems.   The  Company  is  currently  allocating  few  of  its  marketing  and
manufacturing resources to this industry until it believes that there is a clear
direction with respect to wireless cable digital programming.  At such time that
this trend reverses,  the Company will aggressively market its existing products
to digital wireless cable providers.

                                       4

<PAGE>


                                 Other Antennas
                                 --------------

The Company is pursuing new business  opportunities for the conformal and phased
array  antennas by  continuing  to broaden and adapt its existing  technologies.
Currently,  the Company  designs or manufactures  antennas  varying in frequency
from 27 MHz to 12 GHz.  These antennas all use the Company's flat antenna design
to  provide  inconspicuous  installation.  All of  the  Company's  antennas  are
designed to be manufactured  using existing design  footprints.  This allows the
Company  to better  use its  engineering  and  technical  staff,  suppliers  and
production staff.  This also allows the Company,  in some cases, to use existing
tools, dies and radomes for more than one product.

Marketing And Distribution
--------------------------

The Company's commercial line of antennas is marketed by the Company directly to
distributors,   installers  and  retailers  of  antenna   accessories.   Current
distribution  consists  of  several  domestic  and  international  distributors,
including  several  hundred  active  retail  dealers.  The  Company  markets its
diversified  proprietary  designs to its existing and potential customers in the
commercial,  government  and  retail  market  places.  Potential  customers  are
identified  through trade  advertising,  phone contacts,  trade shows, and field
visits. The Company also provides individual catalog and specification brochures
describing existing products. The same brochures are utilized to demonstrate the
Company's  capabilities  to  develop  related  products  for  O.E.M.  and  other
commercial customers. The Company introduced its web page, www.antennas.com,  in
late 1997. This web page includes  information about the Company's  products and
background as well as financial and other stockholder-oriented  information. The
web page,  among other  things,  is  designed to  encourage  both  existing  and
potential  customers to view the Company as a potential  source for  diversified
antenna solutions.  The Company expects to receive additional  inquiries through
the web page in 1998  that  will be  pursued  by the  Company's  in-house  sales
personnel. To help customers get answers quickly about its products, the Company
has  established  a toll-free  telephone  number  administered  by our  customer
service  personnel  from 8:00 am to 5:00 pm MST. All the Company's  products are
currently  made in the  U.S.A.,  which the Company  considers  to be a marketing
advantage over most of its  competitors.  Many of the products  developed by the
Company are currently being marketed internationally.  The Company currently has
9 international distributors marketing its products in 12 countries.

Production
----------

The  Company  made  many  changes  to its  production  operations  in  1997.  In
anticipation  of  continued  growth,  investments  were  made  in  manufacturing
equipment  and  facilities  as  well  as  personnel.  The  manufacturing  of the
Company's  products  is now more  under the  control  of the  Company  than ever
before.  The  Company  now  produces  most of the  customized  items  it uses to
manufacture  its  products   excluding  cable,   connectors  and  other  generic
components.  It is  anticipated  that these changes will allow the Company to be
more efficient and more responsive to customers,  will lower the overall cost of
production,  and  will  better  allow  the  Company  to take  advantage  of more
opportunities in the wireless communications market.

Research And Development
------------------------

Research and  development  and  software  costs are charged to  operations  when
incurred  and are  included  in  operating  expenses  except  when  specifically
contracted  by the  Company's  customers.  Except for  salaries  of  engineering
personnel  involved in research  and  development,  the  Company's  research and
development costs were not material in 1996 or 1997. The Company's  research and
development  personnel develop products to meet specific customer,  industry and

                                       5

<PAGE>


market needs that the Company believes will compete effectively against products
distributed by larger companies. Quality assurance programs are implemented into
each  development and  manufacturing  project,  and the Company  enforces strict
quality  requirements  on  components  received from  non-Company  manufacturing
facilities.   There  can  be  no  assurance  that  the  Company's  research  and
development  activities  will  lead  to the  successful  introduction  of new or
improved  products or that the Company will not encounter  delays or problems in
connection therewith. The cost of completing new technologies to satisfy minimum
specification  requirements and/or quality and delivery  expectations may exceed
original  estimates that could  adversely  affect  operating  results during any
financial period.

Employees
---------

The Company  currently  has 47 full time  employees  including  Randall P. Marx,
Chief Executive Officer and Treasurer, Kevin O. Shoemaker, Chairman of the Board
and Chief Scientist,  and Richard L. Anderson,  Vice President of Administration
and Secretary. Each of Messrs. Marx, Shoemaker and Anderson is a director of the
Company.

Competition
-----------

The  antenna and  receiver  industry is highly  competitive,  and the  Company's
current and proposed products compete with products of larger companies that are
better   financed,   have  established   markets,   and  maintain  larger  sales
organizations  and  production  capabilities.  In marketing  its  products,  the
Company has  encountered  competition  from other  companies,  both domestic and
international,  marketing more conventional antenna systems.  Therefore,  at the
present  time the  Company's  market  share of the overall  antenna  business is
small, but is significantly greater for the non-conventional antenna market. The
Company's  antenna  products  are  designed  to be unique  and in some cases are
patented.   The  Company's   products   normally  compete  with  other  products
principally in the areas of price and performance. However, the Company believes
that its unique antenna  products work as well as  conventional  products in the
same design class of products,  usually sell for approximately the same price or
less than competing antennas,  are easier to install, and in most cases are more
desirable, primarily due to being less conspicuous.

Government Regulations
----------------------

The Company is subject to government  regulation  of its business  operations in
general,  and the  telecommunications  industry also is subject to regulation by
federal,  state and local  regulatory and governmental  agencies.  Under current
laws and the regulations administered by the Federal Communications  Commission,
there are no federal  requirements for licensing antennas that only receive (and
do not transmit) signals. Current laws and regulations are subject to change and
the  Company's  operations  may  become  subject  to  additional  regulation  by
governmental  authorities.  A change  in  either  statutes  or rules  may have a
significant effect on government regulation of the Company's business.

Patents
-------

Kevin O. Shoemaker,  the Company's Chief Scientist and Chairman of the Board, is
the record owner of a U.S. patent, subject to annual renewal fees, valid through
the year 2007, for microstrip antennas and multiple radiator array antennas. Mr.
Shoemaker  also is the record  owner of a U.S.  patent for a  serpentine  planar
broadband  antenna  valid  through  the year 2011.  This is the design  that the
Company  uses  for  some of its  conformal  antennas,  including  the  vehicular

                                       6

<PAGE>


disguised decal  antennas,  local  broadcast  antennas and other  products.  Mr.
Shoemaker  and Randall P. Marx,  the Company's  Chief  Executive  Officer,  have
jointly  applied for  additional  patents  which  include  the  process  used to
manufacture  certain  of  the  Company's  flat  planar  antennas  and  conformal
antennas,  the  technology  required  for  certain  of the  Company's  conformal
antennas to function,  and the design of certain of the Company's products.  Mr.
Shoemaker and Mr. Marx each has  permanently  assigned to the Company all of the
rights  in these  and all other  antennas  that have been and will be  developed
while  employed by the  Company.  The Company  seeks to protect its  proprietary
products,   information  and  technology  through  reliance  on  confidentiality
provisions and, when practical, the application of patent trademark or copyright
laws.  There can be no  assurance  that  such  applications  will  result in the
issuance  of  patents,  trademarks  or  copyrights  of the  Company's  products,
information or technology.

Disclosure Regarding Forward-Looking Statements And Cautionary Statements
-------------------------------------------------------------------------

     Forward-Looking  Statements.  This Annual  Report on Form  10-KSB  includes
"forward-looking" statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than
statements of historical facts included in this Annual Report, including without
limitation   statements  under  "ITEM  1.   DESCRIPTION  OF   BUSINESS-Principal
Products",   "Marketing   And   Distribution",   "Production",   "Research   And
Development", "Competition", "Governmental Regulations" and "Patents", and "ITEM
6.  MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS OF
OPERATIONS",  regarding the Company's financial position, business strategy, and
plans and  objectives  of management  of the Company for future  operations  and
capital  expenditures,  and other  matters,  other than  historical  facts,  are
forward-looking statements.  Although the Company believes that the expectations
reflected in the  forward-looking  statements and the assumptions upon which the
forward-looking  statements are based are  reasonable,  it can give no assurance
that  such  expectations  and  assumptions  will  prove  to have  been  correct.
Additional  statements  concerning  important  factors  that could cause  actual
results  to  differ  materially  from the  Company's  expectations  ("Cautionary
Statements")  are disclosed  below in the  "Cautionary  Statements"  section and
elsewhere in this Annual Report. All written and oral forward-looking statements
attributable  to the Company or persons  acting on its behalf  subsequent to the
date of this Annual  Report are  expressly  qualified  in their  entirety by the
Cautionary Statements.

     Cautionary  Statements.  In addition to the other information  contained in
this Annual Report,  the following  Cautionary  Statements  should be considered
when evaluating the forward-looking statements contained in this Annual Report:

     1.  Operating  History.  From its  inception in September  1987 through the
fiscal  year  ended  December  31,  1992,  the  Company   incurred  losses  from
operations.  For the fiscal years ended December 31, 1993,  1994, 1995, 1996 and
1997,  respectively,  the  Company  operated at a profit.  Although  the Company
believes that it will be able to continue to operate profitably, as it has since
1993,  there is no assurance that the operations of the Company will continue to
be profitable.  See the financial  statements included in Item 13 of this Annual
Report on Form 10-KSB.

     2.   Developments  In  Technology.   The   communications   industry,   and
particularly the microwave and satellite  communications and antenna industries,
are characterized by rapidly developing technology.  Changes in technology could
affect  the  market  for  the  Company's  products  and  necessitate  additional
improvements  and  developments  to  the  Company's  products.  There  can be no
assurance that the Company's  research and  development  activities will lead to

                                       7

<PAGE>


the successful introduction of new or improved products or that the Company will
not encounter delays or problems in connection therewith. The cost of completing
new technologies to satisfy minimum  specification  requirements  and/or quality
and delivery  expectations  may exceed  original  estimates that could adversely
affect operating results during any financial period.

     3. Patents. Kevin O. Shoemaker,  the Company's Chief Scientist and Chairman
of the Board,  is the record owner of a U.S.  patent,  subject to annual renewal
fees, valid through the year 2007, for microstrip antennas and multiple radiator
array  antennas.  Mr.  Shoemaker also is the record owner of a U.S. patent for a
serpentine  planar  broadband  antenna valid through the year 2011.  This is the
design that the Company uses for some of its conformal  antennas,  including the
vehicular  disguised  decal  antennas and related  products.  Mr.  Shoemaker and
Randall P. Marx, the Company's Chief Executive Officer, have jointly applied for
a patent for the  process  used to  manufacture  certain of the  Company's  flat
planar antennas. Mr. Shoemaker and Mr. Marx each has permanently assigned to the
Company  all of the  rights in these and all other  antennas  that have been and
will be developed while employed by the Company.  Although, when practical,  the
Company  intends to file for patent  protection on all the products or processes
that it feels are  proprietary  in nature,  it may not be able to obtain  patent
protection  for all its  products.  The  inability  of the Company to be able to
patent all its products or processes may be an  impediment to its  capability to
exploit  certain  expanding  markets.  Even with patents  granted,  they may not
provide effective protection against competitors.


     4. Limited Financial Resources. The Company has limited financial resources
available to it, and this may restrict the Company's ability to grow. Additional
capital  from  sources  other than the  Company's  cash flow may be necessary to
develop new  products,  and there is no assurance  that such  financing  will be
available from any source.  Management  believes that it can sustain its current
business  without  additional  funding,  but it may not be able to increase  the
Company's business as desired without additional funding.

     5. Competition.  The communications industry is highly competitive, and the
Company competes with substantially  larger companies in the production and sale
of antennas.  In addition,  these  competitors have larger sales forces and more
highly developed marketing programs as well as larger  administrative staffs and
more available service personnel.  The larger competitors also will have greater
financial  resources available to develop and market competitive  products.  The
presence of these competitors may be a significant impediment to any attempts by
the Company to develop its business. The Company believes, however, that it will
have  certain  advantages  in  attempting  to develop  and  market its  products
including a more  cost-effective  technology,  the ability to undertake  smaller
projects, and the ability to respond to customer requests more quickly than some
larger  competitors.  There is no assurance  that these  conclusions  will prove
correct.

     6.  Availability Of Labor.  The Company produces and assembles its products
at its own facility and is  dependent  on efficient  workers for this  function.
There is no assurance  that  efficient  workers will continue to be available to
the Company at a cost consistent with the Company's budget.

     7.  Dependence  On Key  Personnel.  The  success of the  Company is largely
dependent  upon the efforts of its executive  management,  including  Randall P.
Marx, the Chief  Executive  Officer of the Company.  The loss of the services of
any of  these  persons  could  be  detrimental  to the  Company  as  there is no
assurance that the Company could replace any of them adequately at an affordable
compensation level.

     8. Government  Regulation.  The Company is subject to government regulation
of its  business  operations  in general.  Antennas  that are  designed  only to
receive signals are not currently  subject to regulation by the FCC, but certain

                                       8

<PAGE>


of the Company's new products are subject to regulation by the FCC.  There is no
assurance that  subsequent  changes in laws or  regulations  will not affect the
Company's operations.

Item 2. Properties
------------------

The  Company is the tenant on a three year lease  which  expires May 31, 1999 on
5,100 square feet of office space and 17,500 square feet of production  space in
Wheat  Ridge,  Colorado  at a cost of  $14,084.23  per  month.  The  Company  is
obligated to pay for all utilities, taxes and insurance on the production space.
The  property  is in good  condition.  The  Company  is  currently  looking  for
additional warehouse and production space to support the continued growth of the
Company's operations.

Item 3. Legal Proceedings
-------------------------

     On February 9, 1998,  Mega  Circuits,  Inc.  ("MCI") filed suit against the
Company for payment of approximately  $33,000 for components allegedly billed to
the Company,  some of which were used for the Company's passive repeater antenna
system  which the  Company  was  forced to recall in 1996.  In its  answer,  the
Company has denied any liability to MCI,  asserted a number of defenses based on
MCI's  failure to  deliver  proper  products  ordered  by the  Company,  and has
asserted a  counterclaim  for damages  for,  among other  things,  the recall of
several thousand of the Company's  passive repeater antennas in fiscal 1996. The
Company  intends  to  vigorously  defend  the  claim  of MCI  and to  press  its
counterclaim.

     On August 6, 1997, the Company filed a lawsuit against a competitor,  three
individuals,  and another  entity for false  and/or  misleading  representations
regarding  the  Company's  local TV  antennas.  The suit was filed in the United
States District Court for the Northern  District of Illinois.  The suit includes
related supplemental claims for consumer fraud under the Illinois Consumer Fraud
and Deceptive Trade Practices Act,  deceptive trade practices under the Illinois
Deceptive  Trade  Practices  Act, and  tortious  interference  with  prospective
economic  advantage,  unfair competition and trade  disparagement under Illinois
common law. The lawsuit  relates to a report which falsely  disparages  Antennas
America,  Inc.'s local TV antennas.  Two distributors of the Company's products,
Jasco  Products  Company,  Inc.  and MITO  Corporation,  joined  the  lawsuit as
plaintiffs. The defendants are in the process of answering the Complaint.

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

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter of the fiscal year covered by this report.


                                    Part II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters
------------------------------------------------------------------------------

Trading in the Company's  securities is very limited. The Company's Common Stock
is traded in the  over-the-counter  market through the "pink sheets" and the OTC
Bulletin Board. The Company's securities are not quoted on any established stock
exchange  or on the  NASDAQ  stock  market.  Because  trading  in the  Company's
securities is so limited, prices are highly volatile.  Quotations provided below
for the past two fiscal years are the  inter-dealer  quotations  provided by the
National Quotations Bureau, without retail markup,  markdown or commission,  and
do not necessarily represent actual transactions.

                                       9

<PAGE>


                                                    Common Stock
                                                    ------------
                                                         Bid
                                                         ---
        Quarter Ended                           High            Low
        -------------                           ----            ---

        March 31, 1996                          .05             .02
        June 30, 1996                           .24             .04
        September 30, 1996                      .14             .03
        December 31, 1996                       .06             .03
        March 31, 1997                          .20             .06
        June 30, 1997                           .06             .04
        September 30, 1997                      .12             .03
        December 31, 1997                       .09             .04

As of March 12, 1998, the reported  closing bid and ask prices for the Company's
common stock were $.12 and $.14  respectively.  The Company had 341 shareholders
of record as of December 31, 1997. The Company has not declared or paid any cash
dividends on its Common Stock and it is not  anticipated  that dividends will be
paid in the foreseeable future.

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

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

The following  table sets forth certain  selected  financial data of the Company
for 1997 and 1996:

                                                            December 31,
                                                            ------------
                                                         1997        1996
Components of Working Capital (deficit)                  ----        ----
---------------------------------------
        Cash                                          $  61,642   $  55,635
        Accounts Receivable                             327,685     166,411
        Inventory                                       508,554     195,848
        Deferred Tax Asset                              102,000           0
        Other Current Assets                             72,469      33,475
        Accounts Payable                               (415,377)   (188,965)
        Notes Payable                                  (504,535)   (224,484)
        Other Current Liabilities                       (29,642)    (22,934)
        Total Working Capital                           122,796      14,986

     The Company had total assets of approximately $1,627,071 as of December 31,
1997 as compared with $944,232 as of December 31, 1996.  Total  liabilities were
$1,147,114  as of December 31, 1997 as compared with $613,775 as of December 31,
1996.  The 72% increase in assets and 87% increase in  liabilities  is primarily
due to the increased sales and operations of the Company in 1997.

     The  Company's  net worth was  $479,957 as of December 31, 1997 as compared
with $330,457 as of December 31, 1996. This increase results  primarily from the
Company's 1997 net income.  As a result of past  operations,  the Company has an
income tax operating loss  carryforward of $563,400.  The Company has determined
the likelihood of continued  profitability for the year ending December 31, 1998
and has  recorded a $197,509  benefit for net  operating  loss  carryforward  as
provided for in FAS-109 that it reasonably expects to utilize.

                                       10

<PAGE>


     The  Company's  ability to generate  sales  revenues is dependent  upon its
ability to pay for  research  and  development  and for  materials  and overhead
required in the  production  process.  On May 23,  1997,  the Company  secured a
credit  facility  with Norwest  Business  Credit,  Inc., a subsidiary of Norwest
Bank, Minneapolis,  Minnesota.  The credit facility is a $500,000 revolving loan
secured by the Company's accounts  receivable,  inventory and equipment which is
now scheduled to terminate May 31, 1999.  The Company is using the proceeds from
the credit facility for working capital,  capital  expenditures  associated with
its product development, and for general corporate purposes.

     The Company's  future capital  requirements  will depend upon many factors,
including the recruitment of key technical and management personnel, the need to
maintain adequate inventory levels to meet projected sales, the expansion of its
marketing and sales efforts, requirements of additional manufacturing equipment,
and the success of the Company's research and development efforts.

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

Fiscal Year Ended  December 31, 1997 Compared To Fiscal Year Ended  December 31,
--------------------------------------------------------------------------------
1996
----

     For the year ended  December 31, 1997,  the Company's  total  revenues were
$3,012,266 as compared with  $1,975,184  for the prior year. The 53% increase in
revenues  is  primarily  attributable  to  introduction  of  the  Company's  new
FREEDOM(TM) and WALLDO(TM) off-air antenna products and the increase in sales of
the Company's mobile line of antenna solutions.

     The  Company's net income  increased to $134,500  from $9,346 in 1996.  The
sales of the Company's  FREEDOM(TM) and WALLDO(TM)  antennas and the increase in
international  sales of the mobile  line of antenna  solutions  are the  primary
contributing factors to this increase.

     The increase in selling,  general and administrative expenses to $1,081,386
in 1997 from  $744,673  in 1996 is  attributable  to the  Company's  increase in
operations  and  personnel  related to the  increase in revenue and  development
activity  for fiscal  1997 and 1998,  a decrease in the  outsourcing  of certain
production  functions of the Company,  adding  production space and personnel to
production and administrative  positions,  and the related costs associated with
these positions.

     Interest expense increased by $14,212 for fiscal 1997 over fiscal 1996. The
increase is primarily  attributable  to the costs  associated with the Company's
increase in revenues,  inventory and development activity in 1997 and the use of
the Company's line of credit to finance these activities.

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

     The Financial  Statements  and  schedules  that  constitute  Item 7 of this
Annual Report on Form 10-KSB are included in Item 13 below.

Item  8.  Changes  In and  Disagreements  With  Accountants  On  Accounting  and
--------------------------------------------------------------------------------
          Financial Disclosure
          --------------------

Not applicable.

                                       11

<PAGE>


                                    PART III

Item 9. Directors, Executive Officers, Promoters And Control Persons: Compliance
--------------------------------------------------------------------------------
With Section 16(a) Of the Exchange Act
--------------------------------------

The Officers and Directors of the Company are as follows:

Name                       Age                    Title
----                       ---                    -----

Randall P. Marx            45                     Chief Executive Officer;
                                                  Treasurer; and Director

Kevin O. Shoemaker         43                     Chairman of the Board; Chief
                                                  Scientist; and Director

Richard L. Anderson        49                     Vice President; Secretary; and
                                                  Director

Bruce Morosohk             39                     Director

Sigmund A. Balaban         56                     Director

James H. Shook             59                     Director

     Randall P. Marx has served as Chief Executive  Officer since November 1991,
as a director  since May 1990, and as Treasurer  since  December 1994.  From May
1990 until November 1991, Mr. Marx advised the Company with respect to marketing
matters.  From 1989 to 1991,  Mr. Marx served as a consultant to three  domestic
and international electronic companies. His responsibilities consisted primarily
of administration,  finance,  marketing and other matters.  From 1983 until 1989
Mr. Marx served as President of THT Lloyd's Inc., Lloyd's  Electronics Corp. and
Lloyd's  Electronics  Hong  Kong  Ltd.,   international   consumer   electronics
companies.  THT Lloyd's Inc.  purchased  the Lloyd's  Electronics  business from
Bacardi  Corp.  in 1986.  Prior to 1983,  Mr.  Marx owned a sales and  marketing
company involved in the consumer electronics business.

     Kevin O.  Shoemaker  has served as the Chairman of the Board of the Company
since the merger with  Antennas  Colorado in 1989.  He also served as  Executive
Vice  President from May 1990 until November 1991 and as President from November
1991 until April 1994. Mr. Shoemaker held the positions of Chairman of the Board
and Chief  Executive  Officer with Antennas  Colorado from its inception in 1988
until the merger. Mr. Shoemaker's employment prior to 1988 included serving as a
design engineer for Martin Marietta Aerospace,  an aerospace defense contractor,
and  as  a  technical  specialist  for  Ball  Aerospace  Systems,  an  aerospace
contractor.

     Richard L. Anderson has served as a director of the Company since  December
1994.  From March 1, 1995 until  December  31,  1995,  he served as a  part-time
consultant to assist with the general  operations of the Company.  Since January
1, 1996,  Mr.  Anderson has served as Vice President of  Administration  for the
Company,  and as of March 2, 1998 he has held the  position of  Secretary.  From
1990 to  1995,  Mr.  Anderson  served  as an  independent  financial  contractor
underwriting  residential  and  commercial  real estate  first  mortgage  credit
packages. From October 1985 until March 1990, Mr. Anderson served as Senior Vice

                                       12

<PAGE>


President,  Administration of Westline Mortgage Corporation,  a Denver, Colorado
based  mortgage  loan  company that was a  subsidiary  of Bank  Western  Federal
Savings.  Prior to October 1985, Mr. Anderson  served as Vice  President,  Human
Resources for Midland Federal Savings.

     Bruce  Morosohk  has served as a director of the  Company  since the merger
with Antennas Colorado in 1989 and has held this position since its inception in
1988, and Mr.  Morosohk served as Secretary from 1988 until 1998. He also served
as Treasurer  from November  1991 to December  1994.  From 1980 until 1991,  Mr.
Morosohk was employed by R. Greenberg and Associates,  a private film production
firm,  serving as a  cameraman  from 1981 to 1991,  as manager of the  Animation
Department from 1988 to 1989, and as Director of Animation from 1989 to 1991.

     Sigmund A.  Balaban has served as director  of the Company  since  December
1994. Mr. Balaban has served as Vice President, Credit of Teknika Electronics of
Fairfield,  New  Jersey,  since 1986 and as Senior  Vice  President  and General
Manager of Teknika  Electronics since 1992. Teknika  Electronics is a subsidiary
of Fujitsu General, a Japanese multiline manufacturer.

     James H. Shook has been a Director of the Company  since May of 1990.  From
May of 1990  until  June of 1991,  Mr.  Shook  also  served  as Chief  Executive
Officer,  President  and  Treasurer of the Company.  At various  times from 1973
through 1989 Mr. Shook was a business consultant to a number of companies.

     Each of the  Company's  officers  serves at the  pleasure of the  Company's
Board of  Directors.  There are no  family  relationships  among  the  Company's
officers  and  directors   except  that  Messrs.   Shoemaker  and  Morosohk  are
brothers-in-law.

Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------

     Section  16(a) of the  Securities  Exchange  Act of 1934,  as amended  (the
"Exchange  Act"),  requires  the  Company's  directors,  executive  officers and
holders  of more  than  10% of the  Company's  common  stock  to file  with  the
Securities and Exchange  Commission  initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the Company.
The Company believes that during the year ended December 31, 1997, its officers,
directors  and holders of more than 10% of the Company's  common stock  complied
with all Section 16(a) filing  requirements,  except that Richard L. Anderson, a
Vice  President  and director of the Company,  did not timely file a Form 4 or a
Form 5 with respect to the  following  transactions:  (i) the receipt of a stock
bonus of 350,000 shares in March 1996, (ii) the receipt in March 1996 of options
to  purchase  up to  350,000  shares  for $.05 per  share  for two years and the
purchase in April 1997 of 300,000 shares upon the exercise of that option, (iii)
the purchase of 29,500 shares for $.115 per share and 36,500 shares for $.13 per
share in January 1997 by Mr. Anderson's  individual  retirement account and by a
trust (the "Trust") for which Mr. Anderson serves as trustee,  respectively, and
(iv) the purchase of 100,000  shares for $.067 per share in December 1997 by the
Trust.  In making  these  statements,  the  Company  has relied upon the written
representations  of its directors  and officers and the Company's  review of the
monthly  statements  of changes  filed  with the  Company  by its  officers  and
directors.

                                       13

<PAGE>


Item 10. Executive Compensation
-------------------------------

Summary Compensation Table
--------------------------

The following table sets forth in summary form the compensation  received during
each of the Company's three successive completed fiscal years ended December 31,
1997 by the Chief Executive Officer and Chairman Of The Board of the Company. No
executive officer of the Company,  including the Chief Executive Officer and the
Chairman Of The Board, received total salary and bonus exceeding $100,000 during
any of the three successive fiscal years ending December 31, 1997.

                           Summary Compensation Table
                           --------------------------
<TABLE>
<CAPTION>

                                                                        Long Term Compensation
                                Annual Compensation             Awards                          Payouts

                                                                            Restricted
                                                            Other Annual       Stock                       LTIP      All other
Name and Principal Position     Fiscal   Salary    Bonus    Compensation     Awards ($)      Options      Payouts   Compensation
                                 Year    ($)(1)    ($)(2)      ($)(3)                          (#)        ($)(4)       ($)(5)
--------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>    <C>       <C>            <C>            <C>            <C>          <C>          <C>
Randall P. Marx                  1997   $75,000   $10,100        -0-            -0-            -0-          -0-          -0-
Chief Executive Officer,
Treasurer and a Director         1996    75,000      -0-         -0-            -0-            -0-          -0-          -0-

                                 1995    75,000    10,030        -0-            -0-            -0-          -0-          -0-

Kevin O. Shoemaker               1997   $54,000      -0-         -0-            -0-            -0-          -0-          -0-
Chairman Of The Board,
Chief Scientist, and a           1996    54,000      -0-         -0-            -0-            -0-          -0-          -0-
Director
                                 1995    54,000      -0-         -0-            -0-            -0-          -0-          -0-
</TABLE>

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

     (1) The dollar value of base salary (cash and non-cash) received during the
year indicated.

     (2) The dollar value of bonus (cash and non-cash)  received during the year
indicated.

     (3) During  the  period  covered by the  Summary  Compensation  Table,  the
Company did not pay any other annual  compensation  not properly  categorized as
salary or bonus,  including perquisites and other personal benefits,  securities
or property.

     (4) The Company  does not have in effect any plan that is intended to serve
as incentive for  performance to occur over a period longer than one fiscal year
except for the Company's 1997 Stock Option And Compensation Plan.

     (5) All other  compensation  received  that the Company  could not properly
report in any other column of the Summary  Compensation  Table including  annual
Company  contributions  or other  allocations  to vested  and  unvested  defined
contribution  plans, and the dollar value of any insurance  premiums paid by, or
on behalf of, the Company with respect to term life insurance for the benefit of
the named executive officer,  and, the full dollar value of the remainder of the
premiums paid by, or on behalf of, the Company.

     1997 Stock Option And  Compensation  Plan. In November  1997,  the Board of
Directors  approved the Company's 1997 Stock Option And  Compensation  Plan (the
"Plan").  Pursuant to the Plan,  the  Company  may grant  options to purchase an
aggregate of 5,000,000  shares of the Company's  Common Stock to key  employees,
directors,  and other persons who have or are contributing to the success of the
Company.  The  options  granted  pursuant to the Plan may be  incentive  options

                                       14

<PAGE>


qualifying  for  beneficial  tax  treatment  for the  recipient  or they  may be
non-qualified  options.  With respect to options  granted to persons  other than
directors  of the Company who are not also  employees  of the Company  ("Outside
Directors"), the Plan is administered by an option committee that determines the
terms of the  options  subject  to the  requirements  of the  Plan.  The  option
committee may be the entire Board or a committee of the Board. Outside Directors
automatically receive options to purchase 250,000 shares pursuant to the Plan at
the time of their election as an Outside Director. These options held by Outside
Directors  are not  exercisable  at the time of grant,  but  options to purchase
50,000  shares  become  exercisable  for each  meeting of the Board of Directors
attended by each Outside Director  following the date of grant of the options to
that  Outside  Director.  The  exercise  price for  options  granted  to Outside
Directors is equal to the fair market value of the Company's Common Stock on the
date of grant.  All options granted to Outside  Directors expire five years from
the date of grant.  On the date that all of an Outside  Director's  options have
become exercisable,  options to purchase an additional 250,000 shares, which are
not exercisable at the time of grant, shall be granted to that Outside Director.
The Plan  also  covers  options  previously  granted  to the  Outside  Directors
commencing in January 1995. The first options to purchase 250,000 shares granted
to Outside  Directors  in January  1995  provided an exercise  price of $.05 per
share at a time that the  closing  bid price for the Common  Stock was $.001 per
share.  Grants of options pursuant to the Plan are conditioned upon the approval
of the Plan by the  Company's  shareholders  on or before  November 18, 1998. No
options granted under the Plan may be exercised until 60 days after  shareholder
approval.

     Compensation Of Outside Directors. Outside Directors are paid $250 for each
meeting of the Board of Directors  that they  attend.  For meetings in excess of
four meetings per year, Outside Directors will receive $50 per meeting. Pursuant
to the Plan,  Outside  Directors may elect to receive payment of the meeting fee
in the form of the Company's  restricted  Common Stock at a rate per share equal
to the  fair  market  value  of the  Company's  Common  Stock on the date of the
meeting by informing the Company's Secretary or President of that election on or
before the date of the meeting.  Directors  also will be reimbursed for expenses
incurred in attending  meetings and for other expenses incurred on behalf of the
Company.  In  addition,  each  director  who is not  an  employee  automatically
receives  options to purchase  shares of Common Stock  pursuant to the Plan. See
above, "- 1997 Stock Option And Compensation Plan".

     Option  Grants.  In  addition  to the  automatic  grants of  options to the
Outside  Director  described  above under " -1997 Stock Option And  Compensation
Plan",  stock options have been granted  pursuant to the  Company's  Plan on one
occasion in November  1997.  Each of three  employees  were  granted  options to
purchase  100,000  shares,  for an aggregate of 300,000  shares,  at an exercise
price of $.10 per share,  contingent  upon  certain  corporate  goals being met.
These options expire on November 19, 1999.  These options are  conditioned  upon
the approval of the Plan by the Company's stockholders on or before November 18,
1998.

Employment  Contracts  And  Termination  of  Employment  And  Change-In  Control
--------------------------------------------------------------------------------
Arrangements
------------

     Effective as of March 19,  1998,  the Company  entered  into an  Employment
Agreement with Kevin O. Shoemaker, the Chairman of the Board and Chief Scientist
of the Company.  The  Employment  Agreement  provides for a two-year  term at an
annual  salary  rate of not less than  $66,000  per year.  Also  pursuant to the
Agreement,  the Company  agreed to increase Mr.  Shoemaker's  annual salary rate
pursuant to the  Employment  Agreement by $4,000 in 1999 and made Mr.  Shoemaker
eligible for a bonus of $10,000,  $20,000 and $30,000.  The salary  increase and
the bonus  eligibility are based on certain  personal  performance  criteria and

                                       15

<PAGE>


1998 net profits of the Company  amounting to $300,000,  $600,000 and  $900,000,
respectively.  In connection with the Employment Agreement, Mr. Shoemaker agreed
not to dispose of any shares of Common  Stock owned by him prior to December 31,
1999 without the prior written consent of the Company.

     The Company does not have any written employment  contracts with respect to
any of its other  executive  officers.  However,  the  Company  does  anticipate
entering into a written employment agreement with Randall P. Marx, the Company's
Chief Executive Officer and Richard L. Anderson, Vice President, Administration.
Both Messrs. Marx and Anderson's employment contracts expired December 31, 1997.
The Company has no compensatory  plan or arrangement that results or will result
from the  resignation,  retirement,  or any other  termination  of an  executive
officer's employment with the Company or from a change-in-control of the Company
or  a  change  in  an   executive   officer's   responsibilities   following   a
change-in-control.

Item 11.  Security Ownership Of Certain Beneficial Owners And Management
------------------------------------------------------------------------

The following  table  summarizes  certain  information as of March 12, 1998 with
respect  to the  beneficial  ownership  of the  Company's  Common  Stock  by the
Company's  directors,  by all  officers and  directors  as a group,  and by each
person  known by the  Company  to be the  owner of five  percent  or more of the
Company's common stock:

Name And Address Of                 Number Of Shares
Beneficial Owner                    Beneficially Owned      Percent of Class
-------------------                 ------------------      ----------------

Richard L. Anderson                     1,481,000 (1)             2.0
Antennas America Inc.
4860 Robb Street, Suite 101
Wheat Ridge, CO  80033

Sigmund A. Balaban                        681,676 (2)             0.9
10 Grecian Street
Parsippany, NJ  07054

Randall P. Marx                         7,005,000 (3)             9.5
Antennas America Inc.
4860 Robb Street, Suite 101
Wheat Ridge, CO  80033

Bruce Morosohk                          5,491,117 (4)             7.4
Antennas America Inc.
4860 Robb Street, Suite 101
Wheat Ridge, CO  80033

Kevin O. Shoemaker                      6,434,474 (5)             8.7
Antennas America Inc.
4860 Robb Street, Suite 101
Wheat Ridge, CO  80033

                                       16

<PAGE>


Rocky Mountain Gastroenterology         4,500,000                 6.1
  P.C. Profit Sharing Trust
6550 West 38th Ave., Suite 300
Wheat Ridge, CO 80033

Millenium Holdings Group, Inc.          6,000,000 (6)             7.5
2200 Corporate Boulevard, N.W.
Suite 311, Boca Raton, FL 33431

All Officers and Directors             21,093,267 (1)(2)         28.2
  as a group (five persons)

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

(1) Includes  636,500 shares owned by the Lloyd  Anderson  Marital Trust B Dated
June 21, 1990, for which Richard L. Anderson serves as trustee, 15,000 shares to
be issued under the Plan for Board meeting  attendance fees at the time that Mr.
Anderson was an Outside Director, and options under the Plan to purchase 150,000
shares for $.05 per share that expire on January 3, 2000. The shares and options
under the Plan are contingent upon shareholder approval of the Plan on or before
November 18, 1998.

(2)  Consists  of 31,676  shares to be issued  under the Plan for Board  meeting
attendance  fees as an  Outside  Director,  options  under the Plan to  purchase
250,000  shares at $.05 per share until January 3, 2000,  options under the Plan
to purchase  250,000  shares at $.0475 per share until  December 26,  2001,  and
options  under the Plan to  purchase  150,000  shares  at $.08 per  share  until
November 19, 2002.  The shares and options  under the Plan are  contingent  upon
shareholder approval of the Plan on or before November 18, 1998.

(3) Includes 835,000 shares owned by the Harold and Theora Marx Living Trust, of
which Mr. Marx's parents are trustees.  Mr. Marx disclaims  beneficial ownership
of these shares.

(4) Does not include the  following  shares as to which Mr.  Morosohk  disclaims
beneficial  ownership:  (a)  6,434,474  shares  owned  by Kevin  Shoemaker,  Mr.
Morosohk's  brother-in-law,  and (b) an aggregate of 191,780 shares owned by Mr.
Morosohk's siblings and their respective spouses.

(5) Does not include 5,491,117 shares owned by Bruce Morosohk,  Mr.  Shoemaker's
brother-in-law, as to which shares Mr. Shoemaker disclaims beneficial ownership.

(6) Consists of currently exercisable options to purchase 2,000,000 shares for $
 .06 per share  until the  earlier  to occur of January 2, 2000 or 120 days after
the effective date of a registration  statement  covering the sale of the shares
underlying that option (the  "Registration  Statement"),  2,000,000 shares for $
 .10 per share  until the  earlier  to occur of January 2, 2002 or 365 days after
the effective date of the Registration Statement, and 2,000,000 shares for $ .30
per share  until the  earlier  to occur of January 2, 2002 or 365 days after the
effective date of the Registration Statement.


Item 12. Certain Relationships And Related Transactions
-------------------------------------------------------

Not applicable.

Item 13.  Exhibits And Reports On Form 8-K
------------------------------------------

     (a) Financial Statements And Financial Statement Schedules.

          Index To Financial Statements And Financial Statement Schedules.

     Independent Auditor's Report . . . . . . . . . . . . . . . . . . . . . .F-1

                                       17

<PAGE>


     Consolidated Balance Sheet At December 31, 1997 . . . . . . . . . . . . F-2


     Consolidated Statements Of Income For The Years Ended
      December 31, 1997 and 1996 . . . . . . . . . . . . . . . . . . . . . . F-3

     Consolidated Statements Of Changes In Stockholders' Equity
      For The Years Ended December 31, 1997 and 1996 . . . . . . . . . . . . F-4

     Consolidated Statements Of Cash Flows For The Years Ended
      December 31, 1997 and 1996 . . . . . . . . . . . . . . . . . . . F-5 - F-6

     Notes To Consolidated Financial Statements . . . . . . . . . . . F-7 - F-12

        (a)(2)  Exhibits.

                                 EXHIBIT INDEX

Exhibit
Number    Description
-------   -----------

3.1a      Articles  of  Incorporation  of  Westcliff  Corporation,  now known as
          Antennas  America,  Inc. (the "Company"),  are incorporated  herein by
          reference from the Company's Form S-18  Registration  Statement  dated
          December 1, 1987 (File No. 33-18854-D).

3.1b      Articles  of  Amendment  of the  Company  dated  January  26, 1988 are
          incorporated  herein by reference  from the  Company's  Post-Effective
          Amendment No. 3 to From S-18 Registration  Statement dated December 5,
          1989 (File No. 33-18854-D)

3.1c      Articles  And  Agreement  Of Merger  between the Company and  Antennas
          America,  Inc. a  Colorado  corporation,  dated  March 22,  1989,  are
          incorporated  herein by reference  from the  Company's  Post-Effective
          Amendment No. 3 to Form S-18 Registration  Statement dated December 5,
          1989 (File No. 33-18854-D).

3.2       Bylaws of the Company as amended and restated on March 25, 1998.

10.1a     Industrial  Lease dated April 20, 1995  between the Company and Five K
          Investments.*

10.1b     Office  Lease  dated  May 8,  1995  between  the  Company  and  Five K
          Investments.*

10.1c     Industrial  Lease dated December 12, 1995 between the Company and Five
          K Investments.*

10.1d     Industrial  Lease dated April 29, 1996  between the Company and Five K
          Investments.*

10.2      Employment  Agreement  dated as of March 19, 1998  between the Company
          and Kevin O. Shoemaker.

27.1      Financial Data Schedule.

                                       18

<PAGE>


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

*  Incorporated  herein by reference from the Company's Form 10-KSB for the year
ended December 31, 1996.

(b)  Reports  On Form 8-K.  During the last  quarter  of the  fiscal  year ended
December  31,  1997,  the  Company  filed  one  report  on Form 8-K for an event
occurring November 26, 1997.

                                       19

<PAGE>


                         INDEPENDENT AUDITOR'S REPORT


Board of Directors and Stockholders
Antennas America, Inc.

We have audited the consolidated  balance sheet of Antennas America,  Inc. as of
December 31, 1997, and the related consolidated statements of income, changes in
stockholders'  equity,  and cash  flows for each of the two years in the  period
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 audits.

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

In our opinion, the consolidated financial statements referred to above, present
fairly, in all material  respects,  the financial  position of Antennas America,
Inc. as of December  31, 1997 and the results of its  operations  and cash flows
for each of the two years in the period then ended, in conformity with generally
accepted accounting principles.



                                      James E. Scheifley & Associates, P.C.
                                           Certified Public Accountants

Englewood, Colorado
March 6, 1998

                                      F-1

<PAGE>

                             Antennas America, Inc.
                           Consolidated Balance Sheet
                                December 31, 1997

                    ASSETS
                    ------
Current assets:
  Cash                                                $61,642
  Accounts receivable, trade                          327,685
  Inventories                                         508,554
  Prepaid expenses                                     72,469
  Deferred tax asset                                  102,000
                                                      -------
      Total current assets                          1,072,350
Property and equipment, at cost, net of
  accumulated depreciation of $163,272                407,355
Other assets:
  Deferred tax asset, non-current                      95,509
  Intangible assets net of accumulated
    amortization of $40,259                            41,245
  Deposits                                             10,612
                                                       ------
                                                   $1,627,071
     LIABILITIES AND STOCKHOLDERS' EQUITY
     ------------------------------------
Current liabilities:
  Note payable - bank                                $250,730
  Notes payable - others                              128,569
  Current portion of long term debt                   100,295
  Current portion of leases payable                    24,941
  Accounts payable                                    415,377
  Accrued expenses                                     29,642
                                                       ------
      Total current liabilities                       949,554
Long term debt                                          3,127
Leases payable                                         57,328
Notes payable - officer                               137,105
Commitments (Note 11)
Stockholders' equity:
 Common stock, $.0005 par value,
     250,000,000 shares authorized,
     73,189,422 shares issued and outstanding          36,595
 Additional paid-in capital                           801,039
 Common stock subscriptions                            18,500
 Accumulated deficit                                 (376,177)
                                                     --------
      Total stockholders' equity                      479,957
                                                      -------
                                                   $1,627,071
                                                   ==========

See accompanying notes to consolidated financial statements.

                                      F-2

<PAGE>


                             Antennas America, Inc.
                        Consolidated Statements of Income
                 For The Years Ended December 31, 1997 and 1996


                                                      1997           1996
                                                   ----------     ----------

Sales, net                                         $3,012,266     $1,975,184

Cost of sales                                       1,660,552      1,223,287
                                                   ----------     ----------
     Gross profit                                   1,351,714        751,897

Selling, general and administrative expenses        1,080,641        744,673
                                                   ----------     ----------
     Income from operations                           271,073          7,224

Other income and (expense):
  Interest expense                                   (72,230)       (58,018)
  Other income                                          3,810            917
                                                   ----------     ----------
                                                     (68,420)       (57,101)
                                                   ----------     ----------
     Net income before income taxes
       and extraordinary item                         202,653       (49,877)
Provision for income taxes (benefit)                   68,153       (10,439)
                                                   ----------     ----------
     Net income before extraordinary item             134,500       (39,438)
Extraordinary item:
   Gain from debt cancellation net of income
    taxes of $12,667                                        -         48,784
                                                   ----------     ----------
     Net income                                      $134,500         $9,346
                                                   ==========     ==========

Basic earnings per share
 Net income before extraordinary item                   $0.00         $(0.00)
 Extraordinary item                                         -              -
 Net income                                             $0.00          $0.00

 Weighted average shares outstanding               73,189,422     73,135,255

See accompanying notes to consolidated financial statements.

                                      F-3

<PAGE>


                             Antennas America, Inc.
            Consolidated Statement of Changes in Stockholders' Equity
                 For The Years Ended December 31, 1997 and 1996
<TABLE>
<CAPTION>

                                                        Additional
                                Common Stock              Paid-in    Accumulated       Stock
       ACTIVITY                    Shares      Amount     Capital     (Deficit)     Subscriptions    Total
---------------------           ------------  --------  ----------   -----------    -------------    -----

<S>                              <C>           <C>        <C>         <C>              <C>         <C>
Balance, December 31, 1995       71,139,422    $35,570    $616,090    $(520,023)       $13,750     $145,387

Shares issued for:
  Subscriptions                   1,375,000        687      13,063                     (13,750)        -
  Cash, net of $8,027 of costs    1,650,000        825     156,148                                  156,973

  Exercise of warrants            1,025,000        513      44,738                                   45,251

Shares reacquired and cancelled  (2,000,000)    (1,000)    (29,000)                       -         (30,000)

Shares subscribed for services                                                           3,500        3,500

Net income for the year                -          -           -           9,346           -           9,346
                                 ----------     ------     -------    ---------       --------      -------
Balance, December 31, 1996       73,189,422     36,595     801,039     (510,677)         3,500      330,457

Exercise of stock option                                                                15,000       15,000

Net income for the year                -          -           -         134,500           -         134,500
                                 ----------     ------     -------    ---------       --------      -------
Balance, December 31, 1997       73,189,422     36,595     801,039     (376,177)        18,500      479,957
                                 ==========     ======     =======    =========       ========      =======
</TABLE>


See accompanying notes to consolidated financial statements.

                                      F-4

<PAGE>


                             Antennas America, Inc.
                      Consolidated Statements of Cash Flows
                 For The Years Ended December 31, 1997 and 1996

                                                       1997           1996
                                                   ------------    ----------

Net income                                           $134,500         $9,346
  Adjustments to reconcile net income to net
   cash provided by operating activities:
   Depreciation and amortization                       54,735         35,467
   Gain from debt cancellation                              -        (48,784)
   Interest added to note payable                      10,323         14,397
   Subscriptions for services                               -          3,500
Changes in assets and liabilities:
    (Increase) decrease in accounts receivable       (161,274)       157,944
    (Increase) decrease in inventory                 (312,705)       (33,533)
    (Increase) decrease in deferred tax asset          68,153          2,228
    (Increase) decrease in prepaid expenses           (38,996)       (29,828)
    (Increase) decrease in other assets                13,500         (2,037)
    Increase (decrease) in accounts payable and
       accrued expenses                               233,120        (94,490)
                                                   ----------     ----------
       Total adjustments                             (133,144)         4,864
                                                   ----------     ----------
  Net cash provided by operating activities             1,356         14,210
                                                   ----------     ----------

Cash flows from investing activities:
   Patent acquisition costs                           (12,940)        (8,996)
   Acquisition of plant and equipment                (245,315)       (89,689)
                                                   ----------     ----------
Net cash (used in) investing activities              (258,255)       (98,685)
                                                   ----------     ----------

Cash flows from financing activities:
  Stock issued for cash                                     -        202,224
  Common stock subscriptions                           15,000              -
  Cost of share cancellation                                -        (30,000)
  Repayment of officer loans                           (8,500)       (14,745)
  Proceeds from officer loan                            9,500              -
  Proceeds of new borrowing                           293,330         36,000
  Repayment of notes and leases payable               (46,425)       (69,279)
                                                   ----------     ----------
  Net cash provided by (used in)
   financing activities                               262,905        124,200
                                                   ----------     ----------

                                      F-5

<PAGE>


Increase (decrease) in cash                             6,006         39,725
Cash and cash equivalents,
 beginning of period                                   55,636         15,911
                                                   ----------     ----------
Cash and cash equivalents,
 end of period                                        $61,642       $ 55,636
                                                   ==========     ==========

Supplemental cash flow information:
   Cash paid for interest                             $61,907       $ 62,290
   Cash paid for income taxes                         $  -          $   -

Non-cash investing and financing activities:
   Conversion of accounts payable to notes payable    $  -          $145,059
   Abandonment of leasehold improvements              $  -          $  1,677


See accompanying notes to consolidated financial statements.

                                      F-6

<PAGE>


                             Antennas America, Inc.
                   Notes to Consolidated Financial Statements

Note 1.  Organization and summary of significant accounting policies

Organization

The  Company  was  incorporated  in  Colorado  on  September  6,  1988  and  was
reorganized  as a Utah  corporation on April 12, 1989. The Company is engaged in
the business of manufacture and sale of antennas used for various purposes.  The
consolidated  financial  statements  include the accounts of the Company and its
wholly owned subsidiary,  Antennas America Distributing Company. All significant
inter-company items have been eliminated.

Inventory

Inventory  is valued at the  lower of cost or  market on a  first-in,  first-out
basis.  Inventories are reviewed annually and items considered to be slow-moving
or obsolete are reduced to estimated net realizable value. Adjustments to reduce
inventories  to net  realizable  value  have  not  been  significant.  Inventory
consists of the following at December 31, 1997

            Raw materials        $282,308
            Work in progress      156,936
            Finished goods         69,310
                                 --------
                                 $508,554

Property and equipment

Property and  equipment are stated at cost.  Depreciation  is provided for using
the  straight  line method over  estimated  useful lives of five to seven years.
When  assets are  retired or  otherwise  disposed  of, the cost and the  related
accumulated  depreciation are removed from the accounts,  and any resulting gain
or loss is  recognized  in  operations  for the period.  The cost of repairs and
maintenance  is charged to  operations as incurred and  significant  renewals or
betterments are capitalized.

Patent costs

Patent  costs are  stated  at cost and are  amortized  over ten years  using the
straight-line method. Amortization expense amounted to $8,272 and $7,397 for the
years ended December 31, 1997 and 1996.

Research and development

Research and  development  costs are charged to expense as incurred.  Such costs
were not material for the years ended December 31, 1997 and 1996.

Revenue

Revenue is recorded  when goods are shipped.  Sales returns and  allowances  are
recorded  after  returned  goods are  received  and  inspected.  The Company has
several  major  commercial  customers  who  incorporate  its products into other
manufactured goods and returns therefrom have not been significant.  The Company
began sales of consumer  goods in 1997 and has provided  currently for estimated
product returns arising therefrom.

                                      F-7

<PAGE>


Income taxes

The Company  records the income tax effect of transactions in the same year that
the transactions enter into the determination of income,  regardless of when the
transactions  are  recognized  for tax purposes.  Income tax credits are used to
reduce the  provision  for income  taxes in the year in which such  credits  are
allowed for tax purposes.

Deferred  taxes are  provided  to  reflect  the  income  tax  effects of amounts
included  for  financial  purposes in different  periods than for tax  purposes,
principally accelerated  depreciation for income tax purposes. Such amounts have
not been significant.

Cash

For purposes of the  statement of cash flows,  the Company  considers all highly
liquid debt instruments  purchased with a maturity of three months or less to be
cash equivalents.

Earnings per share

In February 1997, the Financial  Accounting Standards Board ("FASB") issued SFAS
No. 128,  "Earnings  Per Share."  SFAS No. 128  supersedes  and  simplifies  the
existing  computational  guidelines  under  Accounting  Principles Board ("APB")
Opinion No. 15, "Earnings Per Share."

The statement is effective for financial  statements  issued for periods  ending
after  December 15,  1997.  Among other  changes,  SFAS No. 128  eliminates  the
presentation  of primary  earnings per share and replaces it with basic earnings
per  share  for  which  common  stock  equivalents  are  not  considered  in the
computation.  It also revises the computation of diluted earnings per share. The
Company  has  adopted  SFAS No.  128 and  there  is no  material  impact  to the
Company's earnings per share, financial condition, or results of operations. The
Company's  earnings per share have been restated for all periods presented to be
consistent with SFAS No. 128.

The basic  income per share is computed by dividing  the net loss for the period
by the weighted average number of common shares outstanding for the period. Loss
per share is unchanged on a diluted basis.

Earnings  per share is  computed  using the  weighted  average  number of shares
outstanding during the period.

Fair value of financial instruments

The  Company's  short-term  financial  instruments  consist  of  cash  and  cash
equivalents,  accounts and loans receivable,  and accounts payable and accruals.
The carrying  amounts of these  financial  instruments  approximates  fair value
because of their short-term  maturities.  Financial instruments that potentially
subject the Company to a  concentration  of credit risk consist  principally  of
cash and accounts receivable, trade.

During  the year  the  Company  did not  maintain  cash  deposits  at  financial
institutions  in excess of the  $100,000  limit  covered by the Federal  Deposit
Insurance Corporation. The Company has several major customers, (see Note 8) the
loss of any one of which could have a material negative impact upon the Company.
Additionally,  the  Company  maintains  a line  of  credit  with  one  financial
institution.   The  maintenance  of  a  satisfactory   relationship   with  this
institution  is of significant  importance to the Company.  The Company does not
hold or issue  financial  instruments  for trading  purposes nor does it hold or
issue interest rate or leveraged derivative financial instruments.

                                      F-8

<PAGE>


Estimates

The preparation of the Company's  financial  statements  requires  management to
make estimates and assumptions that affect the amounts reported in the financial
statements  and  accompanying  notes.  Actual  results  could  differ from these
estimates.  For the years ended  December  31,  1997 and 1996 the  Company  made
estimates of the future  utilization  of its net  operating  loss  carryforward.
These  estimates  account for the  deferred tax asset of $197,509 at the balance
sheet date.

Advertising costs

Advertising costs are charged to operations when the advertising is first shown.
Advertising  costs  charged to  operations  were $40,940 and $39,713 in 1997 and
1996, respectively.

Stock-based Compensation

The Company  adopted  Statement  of Financial  Accounting  Standard No. 123 (FAS
123), Accounting for Stock-Based Compensation beginning with the Company's first
quarter of 1996.  Upon  adoption of FAS 123,  the Company  continued  to measure
compensation expense for its stock-based  employee  compensation plans using the
intrinsic value method  prescribed by APB No. 25, Accounting for Stock Issued to
Employees, and has provided in Note 5 pro forma disclosures of the effect on net
income and earnings per share as if the fair  value-based  method  prescribed by
FAS 123 had been applied in measuring compensation expense.

New Accounting Pronouncements

SFAS No. 130, "Reporting  Comprehensive Income",  establishes guidelines for all
items that are to be  recognized  under  accounting  standards as  components of
comprehensive income to be reported in the financial  statements.  The statement
is  effective   for  all  periods   beginning   after   December  15,  1997  and
reclassification  of financial  statements of financial  statements  for earlier
periods will be required for comparative  purposes. To date, the Company has not
engaged in transactions which would result in any significant difference between
its reported net loss and comprehensive net loss as defined in the statement.

Note 2. Property and Equipment.

Property and equipment consist of the following at December 31, 1997:

Machinery and equipment   $  431,781
Furniture and fixtures       115,068
Leasehold improvements        23,778
                          ----------
                             570,627

Accumulated depreciation     163,272
                          ----------
                          $  407,355
                          ==========


Depreciation  expense  amounted to $49,934 and $28,070  respectively  during the
years ended December 31, 1997 and 1996.

Substantially all of the Company's fixed assets secure debt described in Notes 3
and 4.

                                      F-9

<PAGE>


Note 3.  Notes payable and long-term debt

Notes  payable to bank  consists  of a  revolving  credit  line having a maximum
borrowing  amount of $500,000.  The line bears interest at prime plus 4.5% (13%)
at December 31, 1997, and is  collateralized by accounts  receivable,  inventory
and otherwise  unencumbered  machinery and  equipment.  The line has $249,270 of
unused credit at December 31, 1997.

Notes  payable  to others at  December  31,  1997  consist  of  uncollateralized
obligations to individuals and vendors as follows:

   Amount due vendor with interest at 8% per annum
    due on January 31, 1998                                  $108,690
   Amount due vendor with interest at 10% per annum
    due on demand                                              71,795
   Amount due individual without interest
    due on demand                                              13,236
   Other                                                          619
                                                             --------
                                                             $194,340
Long term debt consists of the following:

Note payable to an individual for prior salary
 and expenses due in weekly installments of
 $625 without interest                                       $ 21,489

Note payable for equipment purchase, due in
 monthly installments of $1,161 including
 interest at 9.5% per annum                                    16,163
                                                             --------
                                                               37,652
Less Current portion                                           34,525
                                                             --------
                                                             $  3,127

Maturities of long-term debt are as follows: 1998 - $3,127

Note 4.  Leases payable

During 1997 the Company  entered into  financing  type lease  transactions  with
leasing  companies whereby the Company leased certain  manufacturing  equipment.
Scheduled maturities of the obligations as of December 31, 1997 are as follows:

            Year                   Amount
            1998                 $ 34,329
            1999                   34,329
            2000                   30,700
                                ---------
Minimum future lease payments      99,358
Less interest component           (17,089)
Present value of future net     ---------
  minimum lease payments           82,269
Less current portion              (24,941)
                                ---------
Due after one year               $ 57,328

                                      F-10

<PAGE>


Property recorded under capital leases includes the following as of December 31,
1997:

Machinery and equipment                    $  86,678
Less accumulated amortization                 (6,191)
                                           ---------
Net assets subject to capital leases       $  80,487

Note 5.  Notes payable, officers

Notes payable to officers  includes  unpaid  advances and salary accruals due to
two of the Company's  officers  including  Randall P. Marx, the chief  executive
officer,  (see Note 9) who accounts for  approximately  65% of the balance owed.
The  advances  accrue  no  interest  and are not  expected  to be  repaid in the
forthcoming year.

Note 6.  Stockholders' equity

Effective  January  1996,  the  Company  authorized  a stock bonus to one of its
officers for 350,000  shares of  restricted  common stock having a fair value of
$3,500.  Additionally,  the  Company  granted  the officer an option to purchase
350,000 additional shares of restricted common stock at $.05 per share for a two
year period.  The  weighted  average fair value at the date of grant for options
granted  during 1996 was $.00 per  option.  The fair value of the options at the
date of grant was estimated using the  Black-Scholes  model with  assumptions as
follows:

Market value                                    $.01
Expected life                                   2
Interest rate                                   5.15%
Volatility                                       .25%
Dividend yield                                  0.00%

No stock based  compensation  costs would be recorded by the Company as a result
of the foregoing.

During  June  and  July of  1996,  the  Company  sold  1,650,000  shares  of its
restricted common stock to three  individuals for cash aggregating  $156,973 net
of associated costs of $8,027.  Additionally  during the year the Company issued
1,375,000  shares  subscribed  in the prior  year and  issued  1,025,000  shares
pursuant  to option  agreements  entered  into in prior  years.  Proceeds to the
Company for the option  shares  amounted  to $45,250 or $.044 per share.  During
June 1996 the Company  purchased from an officer and retired 2,000,000 shares of
restricted common stock for $30,000 or $.015 per share.

During the year ended December 31, 1997, the Company accepted stock subscription
from an officer for 300,000 of its  restricted  common stock.  The fair value of
the stock subscribed at the subscription date amounted to $.05 per share.

Note 7.  Income taxes

The  Company has not  recorded a liability  for  federal  income  taxes  payable
currently or deferred to future periods due to the existence of substantial  net
operating loss carryforward amounts available to offset taxable income.

A  reconciliation  of federal income taxes  computed by multiplying  pre tax net
income by the  statutory  rate of 34% to the  provision  for income  taxes is as
follows at December 31, 1997 and 1996:

                                      F-11

<PAGE>


                                            1997      1996
  Tax computed at statutory rate         $ 68,902   $ 3,935
  State income tax                          6,687       579
  Surtax exemption                         (7,436)   (2,286)
                                         --------   -------
Provision for income taxes (benefit)     $ 68,153   $ 2,228

The Company has a net operating loss carryforward of approximately $563,400 that
will expire in years beginning in 2004 as follows:

         2004             $  39,400
         2005               336,000
         2006               188,000
                          ---------
                          $ 563,400

The Company has determined  that the likelihood of continued  profitability  for
the year ended  December  31,  1998 and beyond is  reasonably  possible  and has
recorded the benefit of the carryforward  ($197,509) as provided for in FAS-109.
The determination of the current portion of the deferred tax asset is based upon
the  Company's  estimate  of the  expected  utilization  of the  operating  loss
carryforward during the 1998 fiscal year.

Note 8.  Sales to major customers

The Company  made sales in excess of 10% of its net sales to  unrelated  parties
for the year ended  December 31, 1997 to two  companies  aggregating  $2,279,467
(76%) and in 1996 to one company aggregating $1,126,312 (57%). Additionally, the
Company  had open  uncollateralized  accounts  receivable  from these  customers
aggregating $144,377 and $87,295 at December 31, 1997 and 1996, respectively.

Note 9.  Gain from debt extinguishment

During the year ended  December  31, 1996 the Company  settled an  aggregate  of
$61,451 of outstanding trade accounts payable,  salary and expenses without cash
expenditure.

Note 10. Commitments

Operating leases

The Company leases its facilities  under operating  leases through May 31, 1999.
Minimum future rentals payable under the leases are as follows:

         Year            Amount
         ----            ------
         1998            56,218
         1999            12,000
                         ------
                       $ 68,218

Additionally, the Company rents certain equipment pursuant to short-term leasing
arrangements.

Rent expense  amounted to $190,217 and $173,763 for the years ended December 31,
1997 and 1996, respectively.

                                      F-12

<PAGE>


                                   SIGNATURES

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

                                    ANTENNAS AMERICA, INC.


Date:   March 30, 1998      By: /s/ Randall P. Marx
        --------------------        --------------------------------------------
                                    Randall P. Marx, Chief Executive Officer and
                                    Principal Financial Officer

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


Date:   March 30, 1998          /s/ Richard L. Anderson
        --------------------        --------------------------------------------
                                    Richard L. Anderson, Director


Date:   March 30, 1998          /s/ Sigmund A. Balaban
        --------------------        --------------------------------------------
                                    Sigmund A. Balaban, Director


Date:   March 30, 1998          /s/ Randall P. Marx
        --------------------        --------------------------------------------
                                    Randall P. Marx, Director


Date:   March 30, 1998          /s/ Bruce Morosohk
        --------------------        --------------------------------------------
                                    Bruce Morosohk, Director


Date:   March 30, 1998          /s/ Kevin O. Shoemaker
        --------------------        --------------------------------------------
                                    Kevin O. Shoemaker, Director


Date:
        --------------------        --------------------------------------------
                                    James H. Shook, Director

                                       20