CERTAIN TRANSACTIONS

         There were no transactions, or series of transactions, for fiscal 1995,
nor are there any currently proposed transactions, or series of transactions, to
which the Company is a party, in which the amount exceeds $60,000, and in which
to the knowledge of the Company any director, executive officer, nominee, five
percent or greater shareholder, or any member of the immediate family of any of
the foregoing persons, have or will have any direct or indirect material
interest other than as described below.

         Pursuant to an Assets Purchase Agreement and Plan of Reorganization
("Purchase Agreement") dated June 22, 1994 between the Company, nanoTronics
Corporation (nanoTronics) and Helmut Falk (Falk), the Company issued a total of
10,000,000 restricted common shares to nanoTronics, 5,000,000 of which are a
contingent payment subject to the terms of an earnout escrow. These shares were
issued in consideration of technology acquired.

         NanoTronics was formed in 1991 and acquired certain base technology for
a RISC-based (Reduced Instruction Set Computing) 32-bit microprocessor
integrated on a single chip with merged register/stack architecture. NanoTronics
expended in excess of $1.9 million (unaudited) being engaged in development and
produced from the basic architecture an enhanced chip (ShBoom). In connection
with the acquisition, the Company also acquired certain fixed assets including a
Sun Sparc 2 Work Station and various terminals, peripheral devices and software.
A majority of the expenditures by nanoTronics consisted of chip and related
software development costs. The result of these efforts was a successful initial
fabrication of the chip in early 1994 demonstrating technical feasibility of the
chip architecture. NanoTronics also expended funds on the preparation and
prosecution of patent applications.

         The shares were issued to nanoTronics of which Falk was the sole
shareholder. Although 5,000,000 of the shares issued are subject to the terms of
an earnout escrow, as more fully described below, the shares are issued for the
purpose of dividends and voting. Prior to the transaction, Mr. Falk was an
unaffiliated person with respect to the Company. At the time of issuance the
10,000,000 common shares represented approximately 36% of the total issued and
outstanding shares of the Company.

         Although the transaction did not result in a majority change in the
board of directors of the Company or a majority change in stock ownership of
Company, the issuance of new stock resulted in a large percentage ownership
controlled by one entity with the ability to have significant influence over the
Company's future affairs.

         Pursuant to the terms of the Purchase Agreement, 5,000,000 of the
common shares were issued to nanoTronics pursuant to an earnout escrow
arrangement as a contingent purchase price. The terms of the escrow arrangement,
as defined in the Purchase Agreement, provides for the release from escrow of
500,000 common shares for each $500,000 of Patriot revenues commencing June 1,
1994 and ending May 31, 1999. The Purchase Agreement also provides for release
on other major corporate events including a sale of substantially all the assets
of the Company, certain mergers, combinations or consolidations, certain tender
offers and upon a liquidation or dissolution. Any 

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shares not earned by May 31, 1999 would be canceled. The shares may be sold,
assigned or transferred within the escrow arrangement but would still be subject
to the escrow terms.

         Pursuant to the Purchase Agreement, Mr. Falk was to be entitled, for
his efforts in negotiating an agreement within 24 months of the date of the
Purchase Agreement (effectively terminating June 22, 1996), to a payment of 50%
of any up-front license fees and 50% of the first five years of royalties under
the first agreement and 25% of any up-front license fees and 25% of the first
five years of royalties pursuant to the second agreement, respectively, of any
net license and royalty proceeds from the license of the ShBoom to two specific
prospective licensees, in any order. There is no assurance either prospective
licensee will license the ShBoom within 24 months. Due to Mr. Falk's death, it
is unclear whether his legal representatives can perform under the agreement or
if they performed, whether the Company would be obligated to make payments.
Based on the stage of negotiations known to management, it appears unlikely that
a license agreement will result with either party prior to June 22, 1996 and
accordingly it is unlikely that any prospective payments will be due.

         The Company has granted certain registration and information rights
with respect to the shares issued to nanoTronics, such rights being assignable
to Falk and the Fish Family Trust (such trust having certain rights to become a
shareholder in nanoTronics). The Company is obligated to use its best efforts to
effect a registration upon written request up to two times subject to certain
limitations. The Company is also obligated to include the shares, subject to
certain limitations, in any underwriting and in any other registration filed by
the Company.

         Under the terms of an Agreement to Exchange Technology for Stock dated
August 8, 1989 between Mr. Norris and the Company, Mr. Norris is entitled to a
royalty equal to two and one-half percent (2.5%) of the gross revenues received
by the Company directly or indirectly from exploitation of its GPR technology
(up to a maximum royalty of $400,000), against which royalty an advance payment
of $17,000 already has been made. Mr. Norris also is entitled to a cash bonus of
$50,000 within 45 days after the Company successfully demonstrates a working
prototype of a GPR unit meeting specified performance criteria and a request for
such bonus is made to the Board of Directors and approved.
Mr. Norris provided the Company with an independent valuation report to
satisfy the valuation provisions of the Share Escrow Agreement dated August 10,
1989 for the release of all of the 5,000,000 common shares of the Company
therein. However, pursuant to the terms of the Agreement to Exchange Technology
for Stock dated August 8, 1989, the acquisition of the technology from
nanoTronics as described above resulted in a termination of the Share Escrow
Agreement and pursuant to the terms thereof the shares were released to Mr.
Norris on July 8, 1994.

DEF 14A  4/22/1996