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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 2
to Form SB-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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CRYOCON, INC.
(Exact name of registrant as specified in its charter)
COLORADO
(State or other jurisdiction of incorporation or organization)
84-1O26503
(I.R.S. Employer Identification No.)
James M. Retallick
2250 North 1500 West, Ogden Utah 84404 2250 North 1500 West, Ogden Utah 84404
(801) 395-2796 (801) 395-2796
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(Address and telephone number of (Name,
address and telephone Registrant's Principal
Executive Offices) number of agent for service)
Copies of all communications to:

Marcus A. Sanders, Esq.,
22 Battery Street, Ste. 701
San Francisco, CA 94105
Tel. (415) 986-7114 Fax.(415)986-7028

Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]

CALCULATION OF REGISTRATION FEE

Proposed maxi- Proposed maxi-
Title of each class Amount to be mum offering mum aggregate Amount of
of securities to be registered registered price per share (1) offering price registration fee
- ----------------------------------------------------------------------------------------------------------

Common Stock (1),
no par value 10,059,578 $2.00 $20,119,156 $ 5,030.00

Common Stock (2),
no par value 139,100 $2.00 $ 278,200 $ 69.55

Option to Purchase
Shares of Common Stock (2) 1,500,000 (3) $ 250 $ .04

Warrants to Purchase
Shares of Common (2) 1,238,195 (4) $ 6,191 $ 1.55

Common Stock issuable
upon the exercise of
Options (1) 1,500,000 (5) $2.00 $ 3,000,000 $ 750.00

Common Stock issuable
upon the exercise of
Shareholder Warrants (1) 3,714,585 (6) $2.00 $ 7,429,170 $ 1,857.00

Total fee (7) $ 7,708.14

1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 (c) and (g) under the Securities Act of 1933, as
amended, based on the average of the closing bid and asked prices for
the Registrant's Common Stock as reported on the OTC Electronic
Bulletin Board on May 11, 2001.

2) Each of these securities is the subject of a rescission offer to be
commenced following the effectiveness of the Registration Statement, as
more fully described in the prospectus that is a part of this
Registration Statement.

3) The Options that are subject to the rescission offer were issued
without consideration of cash or services from the holder of the
option. As consideration for the offer of rescission the issuer will
offer a total of $150.00 for all of the options.

4) The Warrants that are subject to the rescission offer were issued
without consideration of cash or services from the holders of the
warrants. As consideration for the offer of rescission the issuer will
offer each warrant holder $.005 per warrant for an aggregate of
$6,191.00.

5) Represents shares of Common Stock issuable upon the exercise of the
options if the holders elect to reject the offer of rescission.

6) Represents shares of Common Stock issuable upon the exercise of
warrants for the warrant holders that elect not to accept the offer of
rescission.

7) Previously paid $8,666.00

The registrant hereby amends this registration statement on the date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on the date as the Commission, acting pursuant to said Section 8(a),
may determine.

P R O S P E C T U S
CRYOCON, INC.

Common Shares Offered by Selling Shareholders: 10,059,578 Shares of Common Stock

Securities Subject to Rescission Offer To Purchase: 139,100 Shares of
Common Stock

Options to Purchase Up to 1,500,000 shares of Common Stock: 1,238,195
Warrants to Purchase Up to 3,714,585

Common Shares to be Issued upon the Exercise of Warrants and Options: 5,214,585

Cryocon is registering 8,499,578 shares of common stock presently held by
shareholders, and 1,560,000 shares of common stock that may be issued upon the
exercise of certain outstanding warrants and options. Shareholders named in this
prospectus as selling shareholders may offer and sell these shares in the
over-the-counter market at the prevailing market price or in negotiated
transactions. Cryocon is also registering up to 5,214,585 shares of common stock
issuable upon the exercise of warrants and options held by shareholders that
reject the offer of rescission. Cryocon will not receive proceeds from the sale
of the shares of common stock. Cryocon will receive proceeds from the exercise
of the warrants and options, if the warrants or options are exercised.

Cryocon is offering, to rescind the issuance or sale of (i) 139,100 shares
common stock originally sold at the price of $2.00 per share, (ii) Options to
purchase 1,500,000 shares of common, originally issued to Millennium Capital
Group, LLC without consideration from the option holders, and (iii) 1,238,195
warrants to purchase up to 3,714,585 shares of common stock (the warrants were
issued to the shareholders without consideration from the warrant holders). See
"rescission offer" and "Description of Capital Stock." Cryocon believes the
issuance or sale of these securities may have been in violation of the
Securities Act of 1933, as amended. Accordingly, the Cryocon may be liable to
the offerees in the aggregate amount of $278,200, plus interest from the date of
issuance. Cryocon hereby offers to rescind such the prior sales and issuances by
offering to repurchase the securities from the offerees at the price per share
paid by the offerees, plus an amount equal to the interest thereon, at the
appropriate statutory rate from the date of issuance of the securities to the
expiration of the rescission offer. The rescission offer will expire on the
later of (1) June 30, 2001 (30 days after the Effective Date of the
Registration), or 30 days after the date each offeree receives this Prospectus
(the "Expiration Date"). The rescission offer does not apply to any of Cryocon's
other securities.

Cryocon will not receive proceeds from the resale of any stock
registered; however, Cryocon will receive the proceeds from the purchase of
1,500,000 shares being registered as part of a stock purchase agreement assuming
a rejection of the rescission offer. Cryocon will also be receiving funds from
the sale of 3,714,585 shares which are being offered through warrants to the
existing shareholders of ISO Block Products USA, Inc. as of the date of the
acquisition of Cryocon by ISO Block on August 16, 2000, again assuming rejection
of the rescission offer by the offerees. Cryocon will also be receiving funds
upon the exercise of warrants and upon the exercise of options if the holders of
these options and warrants elect to exercise them

Cryocon's common shares trade "over-the-counter". Dealer "bid" and "asked"
prices for the Common Stock are quoted on the OTC Electronic Bulletin Board
maintained by the National Association of Securities Dealers, Inc. (the "OTC
Bulletin Board") under the symbol "CRYQ". On May 15, 2001, the average of the
closing bid and ask prices for the Common Stock was $2.15.

ALL OFFEREES RECEIVING THE RESCISSION OFFER ARE URGED TO READ THE RESCISSION
OFFER CAREFULLY.

THESE SHARES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. PURCHASERS OF
SHARES SHOULD CAREFULLY CONSIDER THE MATTERS DESCRIBED UNDER "RISK FACTORS"
BEGINNING AT PAGE 3, AND "DILUTION".

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR BY ANY STATE SECURITIES COMMISSION, NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is __________________ ____, 2001

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS.....................................................3

PROSPECTUS SUMMARY.............................................................3

RISK FACTORS...................................................................5

USE OF PROCEEDS...............................................................20

DETERMINATION OF OFFERING PRICE...............................................20

DILUTION......................................................................20

PLAN OF DISTRIBUTION..........................................................21

LEGAL PROCEEDINGS.............................................................23

DESCRIPTION OF SECURITIES.....................................................23

BUSINESS ORGANIZATION WITHIN THE LAST FIVE YEARS..............................24

DESCRIPTION OF BUSINESS.......................................................25

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.................................27

DESCRIPTION OF PROPERTY.......................................................29

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS..................30

EXECUTIVE COMPENSATION........................................................32

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................33

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................................34

COUNSEL AND EXPERTS...........................................................35

INTEREST OF NAMED EXPERTS & COUNSEL...........................................35

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS......................35

SELLING STOCKHOLDERS..........................................................36

CHANGES IN ACCOUNTANTS........................................................44

ADDDITIONAL INFORMATION.......................................................44

DISCLOSURE OF COMMISSION POSITION
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES................................44

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS....................................44

EXHIBIT A: RESCISSION ELECTION FORM..........................................61

EXHIBIT B: INDEX TO EXCEPTS FROM STATE SECURITY LAWS.........................64

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve risks and
uncertainties. These statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential" or "continue" or the negative
of these terms or other comparable terminology. These statements are only
predictions and involve known and unknown risks, uncertainties and other
factors, including the risks in the section entitled "Risk Factors," that may
cause our or our industry's actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements.

We believe these forward-looking statements are reasonable; however,
you should not unduly rely on any forward-looking statements, which are based on
current expectations. Further, forward-looking statements speak only as of the
date they are made, and we undertake no obligation to update publicly any of
them in light of new information or future events.

PROSPECTUS SUMMARY

Cryocon, Inc.

Cryocon is a Colorado Corporation organized for the purpose of
providing deep cryogenic tempering services to end users, retailers and
manufacturers of materials that can be enhanced in durability and wear
resistance through the cryogenic process. Deep cryogenic tempering is a process
that includes the application of extremely low temperatures (at approximately
minus 300F) utilizing a computer-controlled process.

Cryocon's process can be used for treating tooling (drill bits, dies,
and punches), wear parts (forming dies, extrusion equipment, and hammer mills),
and many other items including motor parts, razor blades, firearms, pantyhose,
musical instruments, and softball bats. Cryocon's process has numerous
applications in the aerospace, mining, energy, electronics, medical, and
manufacturing industries.

Cryocon's principal executive offices are located at 2250 North 1500
West, Ogden, Utah 84404. It's telephone number is 801-395-2796 and it's
facsimile number is 801-399-4000. It's website is www.cryocon.org.

The Offering

Common stock offered by selling stockholders . . 10,059,578 shares of common
stock See "Selling
Stockholders"

Common stock issuable upon exercise of
options and warrants by option and warrant
holders rejecting the rescission offer . . . . . Up to 1,500,000 shares of
common issuable upon exercise
of options by Millennium
Capital and 3,714,585 shares
of common stock upon exercise
of warrants issued to Cryocon
shareholders

Use of Proceeds . . . . . . . . . . . . . . . . . Cryocon will not receive any
proceeds from the sale of the
common stock offered by the
selling stockholders. Cryocon
will use proceeds from the
exercise of the options and
warrants, if any, for working
capital purposes.

OTC Bulletin
Board symbol . . . . . . . . . . . . . . . . . . Cryocon's common shares trade
on the OTC Bulletin Board
under the symbol "CRYQ."

There are 21,756,460 shares of common stock outstanding as of May 15,
2001. This number includes 139,100 issued shares that are subject to the
rescission offer.

The Rescission Offer

Subject to the terms and conditions of the rescission offer, Cryocon is
offering to rescind the issuance of (i) 139,100 shares common stock originally
sold at the price of $2.00 per share, (ii) Options to purchase 1,500,000 shares
of common, originally issued to Millennium Capital Group, LLC, without
consideration being paid by the option holder for the issuance of the option,
and (iii) 1,238,195 warrants to purchase up to 3,714,585 shares of common stock,
without any consideration being paid by the warrant holders in exchange for the
issuance of the warrants. Collectively the securities described in this
paragraph will be referred to as rescission securities through the remainder of
this prospectus.

Cryocon believes the issuance or sale of these securities may have been
in violation of the Securities Act of 1933, as amended. Accordingly, Cryocon may
be liable to the offerees. Cryocon hereby offers to rescind the prior sales and
issuances by offering to repurchase the securities from the offerees as follows:

o Since the warrants were issued without payment of cash, or any
other consideration, Cryocon will pay the option holders, which
elect to accept the rescission offer, $.005 per warrant. Cryocon's
aggregate liability for the rescission offer of the warrants is
$6,191.00.

o Since the option to purchase the shares of common stock executed
with Millennium Capital Group was issued without payment of cash
or any other consideration, Cryocon offers to pay Millennium
Capital Group, if it elects to accept the rescission offer, a
total of $150.00 for all of the options.

The rescission offer will expire on the later of (1) June 30, 2001 (30
days after the Effective Date of the Registration), or 30 days after the date
each offeree receives this Prospectus (the "Expiration Date"). The rescission
offer does not apply to any of Cryocon's other securities.

The holders of rescission securities who reject the rescission offer
will own freely tradable shares under the Securities Act. There is no market for
Cryocon's warrants and options.

Financing the Rescission Liabilities

While Cryocon's management believes that it will be able to arrange for
financing or underwriting of the rescission offer Cryocon shall retain the
right, on or before the expiration date, to declare the entire rescission offer
ineffective and return all completed elections, together with the certificates
or other instruments representing the rescission securities, to the offerees who
accepted the rescission offer. See "Risk Factors - Cryocon lacks of sufficient
capital to fund the rescission offer and potential rescission liability."

Acceptance or Rejection

To indicate whether an offeree accepts or rejects the rescission offer,
Cryocon request that offerees complete the form of Election set forth on EXHIBIT
A attached hereto accompanying this Prospectus and return it to the Cryocon
(Attention: James Retallick, Vice President and Corporate Counsel), 2250 North
1500 West, Ogden, Utah 84404, as soon as practicable, but in no event should the
Election be delivered to Cryocon later than the Expiration Date. offerees that
accept the rescission offer must enclose with the Election their original
certificate or other instrument representing the rescission securities, properly
endorsed for transfer. Any offeree who has not delivered a completed Election by

the Expiration Date shall be conclusively deemed to have rejected the rescission
offer, except to the extent applicable state laws provide otherwise. The
Election and the stock certificates or other instruments representing the
rescission securities may be delivered by hand or courier service, or by mail.
The method of delivery of all documents is at the election and risk of the
offeree. If an offeree desires to make use of the mails to deliver a completed
Election to Cryocon, delivery will be deemed to have occurred on the date the
Election is postmarked. Moreover, if using the mails, Cryocon recommends
registered mail or certified mail, return receipt requested, that is properly
insured.

Effect of Rejection

For purposes of applicable federal and state securities laws, offerees
who reject the rescission offer will be deemed to hold registered shares that
are freely tradable. Rejection of the rescission offer by offerees will not
necessarily bar the offerees from rescission or other rights that they may have
under federal or state securities laws if Cryocon in fact violated such laws.
However, federal law does provide that an offeree may, under certain
circumstances, lose any rescission rights under federal securities laws one year
from the date of purchase of such shares. In addition, most state securities
laws provide that an offeree may lose any rescission rights by rejecting or
failing to respond to a valid rescission offer.

RISK FACTORS:

Cryocon's inability to obtain additional investments or debt capital will limit
its ability to continue its operations and the operation of its subsidiaries,
Cryocon Utah and XTool.

If Cryocon does not obtain additional capital through third party
investments in its capital stock or through commercial loans, Cryocon will not
have sufficient working capital to maintain its operations. Cryocon will, also,
not have sufficient capital to operate its subsidiaries Cryocon, Utah and Xtool,
or sufficient capital to acquire new equipment to maintain sufficient operating
capacities for both subsidiaries. If Cryocon cannot obtain additional
investments or debt capital, Cryocon may not be able to continue its business
operations, as a result of its limited capital.

Cryocon Utah has had an accumulated loss of $3,767,208, since its
inception in January 2000. For the fiscal year-ending March 31, 2001, Cryocon
Utah experienced a net operating loss of 2,697,079, and for the fiscal year to
date, net operating losses of $164,126. During the same period, Cryocon Utah
experienced a working capital deficit of $382,126, and $461,000, respectively.
For the same period, Cryocon experienced a net operating loss of 1,499,045.

Xtool has had an accumulated loss of $10,399, since its inception in
January 1, 2001. For its fiscal year-ending December 31, 2001, Xtool experienced
a net operating loss of 10,399, and for the operating year to date, a net
operating loss of $10,399. During the same period, Xtool experienced a working
capital deficit of $125,499, and $125,499, respectively.

These historical losses severely limit Cryocon's and its subsidiaries'
ability to borrow money from commercial lenders. Although Cryocon has assets in
the form of cryogenic processors, tempering ovens, forklifts, computers, office
furnishings, and other equipment, neither Cryocon nor its subsidiaries may have
sufficient tangible assets to secure a commercial loan. Cryocon must, therefore,
rely upon investments in exchange for its equity to raise working capital until
it has sufficient assets and experiences earnings to secure a commercial loan.
Cryocon may not be able to continue to obtain capital from third party
investors.

Cryocon will not be able to continue business operations if it fails to
significantly increase revenues.

If Cryocon is unable to significantly increase its sales
revenues, Cryocon will continue to realize operating losses. Because of
Cryocon's continued operating losses, Cryocon may not be able to pay its
operating expenses, and its short-term and long-term debt obligations, nor will
Cryocon be able to borrow money from commercial lenders, or raise money from
investors needed to continue its business operations. While Cryocon does have
assets in the form of cryogenic processors, tempering ovens, fork lifts,
computers, office and other general equipment, an increase in revenues will
still be necessary before a commercial lender will extend funds, even with these
assets used as collateral.

Cryocon believes that growth in its sales revenues depends on broad
commercial acceptance of its cryogenic tempering process, in conjunction with
traditional tempering processes using heat. Cryocon also believes that it's
success in generating revenues will also heavily depend upon the development of
a products, such as tools by it's subsidiary XTool. Cryocon is currently

providing cryogenic services for users across the United States and from some
foreign countries, primarily through it's Cryo-Accurizing Division and is
engaged in a testing program with a manufacturer in Australia.

Cryocon believe that an increase in revenues will also be dependent
upon it's ability to provide cryogenic services at the customer's location to
meet the customer's quantity, size and frequency requirements. Cryocon's
inability to develop and provide on site services may significantly limit it's
ability to increase revenues.

Cryocon lacks sufficient capital to fund the rescission offer and
potential rescission liability.

The rescission offer is being made to all persons who acquired or
received the rescission securities from Cryocon. If all of the offerees holding
the rescission securities accept the rescission offer, Cryocon will be required
to make payments aggregating $284,491 plus the aggregate amount of interest at
the statutory interest rates from the date of issuance to the expiration date of
the rescission offer. On June 30, 2001, the aggregate accrued interest (on the
total liability of $284,491) will be $9,711 and will continue to accrue,
assuming the full liability is incurred, at the rate of approximately $72.44 per
day.

Cryocon has not contractually arranged financing, by underwriters or
otherwise, of the repurchase of the subject securities from offerees who accept
the rescission offer. Upon acceptance of the rescission offer by the offerees,
Cryocon will attempt to arrange financing of the rescission or purchase back the
subject securities with operating capital. Assuming the rejection of the
rescission offer by Millennium Capital, Cryocon is confident that it will have
sufficient capital necessary to fund the rescission offer. There can be no
assurance that sufficient financing can be obtained on terms acceptable to
Cryocon. In addition, Cryocon will, also have the right (but not the obligation)
to declare the entire rescission offer ineffective. See "rescission offer --
Funding the rescission offer." If Cryocon is unable to obtain additional
financing to complete the rescission offer or declares the entire rescission
offer ineffective, Cryocon will continue to be subject to claims from the
offerees holding the rescission securities for possible violations of applicable
state and federal securities laws.

There can be no assurance that claims asserting violations of state or
federal securities laws will not be asserted notwithstanding the rescission
offer. Furthermore, there can be no assurance that Cryocon will not be subject
to penalties or fines relating to past securities issuances or that the offerees
or other holders of the rescission securities will not assert or prevail in
claims against Cryocon for rescission or damages under federal or state
securities laws. The staff of the Securities and Exchange Commission (the
"Commission") takes the position that a person's right of rescission under
federal securities law may, under certain circumstances, survive a rescission
offer. Even if the Cryocon were successful in defending any securities law
claims, the assertion of such claims against Cryocon could result in costly
litigation and significant diversions of effort by its management. In addition,
the rescission offer will not prevent the Commission or any state securities
commission from pursuing enforcement action against Cryocon with respect to any
alleged violations of federal or state securities laws. The occurrence of any of
the foregoing could have a material adverse effect on Cryocon's business,
financial condition and results of operations. See "rescission offer -- Effect
of rescission offer" and Note 2 of the Notes to Consolidated Financial Statement
for December 31, 2000.

Most state securities laws provide that a person may lose any
rescission rights by rejecting or failing to respond to a valid rescission
offer. Generally, the statute of limitations for noncompliance with the
requirement to register securities under the Securities Act is one year, while
under the various state securities laws, the statute of limitations ranges from
one to seven years from the date of the transaction. Cryocon is also subject to
the anti-fraud provisions of applicable securities law or rights under common
law or equity in respect of the issuance of the Registration Securities.

Cryocon may face potential liability in regard to Paragon Venture Funds' offer
of rescission.

Paragon Marketing and Management of Decatur, Illinois, organized
several venture funds that raised money through each funds' members. These
venture funds loaned money to Cryocon through several convertible debentures.
After conversion of the debentures, each of the Paragon Venture funds received
shares of Cryocon's common stock. Each of the Paragon Venture funds issued their
shares of common stock to each of the funds' members. Between November 1, 2000
and February 14, 2001, each of the Paragon Venture Funds extended an offer of
rescission to their members. Prior to the expiration of Paragon's offer to
rescission, five of the fund members accepted Paragon's rescission offer. The
investors invested $182,000 and own 92,000 shares of Cryocon stock. Paragon has

asked Cryocon to return the $182,000 invested by the Paragon Funds. To date no
litigation has been initiated by any of the investors or the Paragon Venture
Funds; however, there is no guarantee that litigation will not be instituted if
the investments are not repaid. Cryocon may found liable pursuant an action for
damages by the investor or Paragon Fund.

Cryocon has not made a rescission offer with regards to the shares sold
to Paragon. If Cryocon makes a rescission offer or is liable for the Paragon
shares, Cryocon will be required to make payments in the aggregate of
$182,000.00 plus the aggregate amount of interest at the statutory interest
rates from the date of issuance to the expiration date of the rescission offer.

Generally, the statute of limitations for noncompliance with the
requirement to register securities under the Securities Act is one year, while
under the various state securities laws, the statute of limitations ranges from
one to seven years from the date of the transaction.

Cryocon may face potential liability related to other private placements.

Cryocon has raised substantial amounts of capital in private placements
from time to time. The securities offered in such private placements were not
registered with the Securities and Exchange Commission or any state agency in
reliance upon exemptions from such registration requirements. Such exemptions
are highly technical in nature and if the Cryocon inadvertently failed to comply
with the requirements of any of such exemption, investors would have the right
to rescind their purchase of the securities or sue for damages.

If one or more investors successfully rescinds the purchase or
institutes such a law suit for damages, Cryocon faces severe financial demands
that could material and adversely affect our financial position.

Continued Control by Certain Shareholders

Assuming 100% rejection of the rescission Offer, Robert W. Brunson and
his spouse Debra L. Brunson will hold in excess of 50.0% of Cryocon's common
stock. As a result, they will be able to exercise significant influence on the
business and affairs of Cryocon, including election of Cryocon's directors and
the authorization of other corporate actions requiring shareholder approval.
See "Principal Shareholders."

Cryocon's failure or success in negotiating a contract with Venture 2000 may
materially effect Cryocon's stock value and/or composition of Cryocon's Board.

Cryocon has reached and agreement in principal with Venture 2000, LLC,
a Minnesota Limited Liability Company, for the providing of consulting, patent
and trademark assistance, marketing and other services. Dr. Lindstrom is a
member of Venture 2000 and has agreed to his Board position and directorship of
Cryocon's medical division in anticipation of the successful consummation of the
relationship with Venture 2000. As compensation for the proposed services,
Venture 2000 would receive 4,500,000 shares to be extended to them through a
warrant that will vest incrementally over a five year period. The exercise price
would be set at $0.10 per share. A final agreement has not been executed.

If Cryocon and Venture 2000 fails to consummate the Venture 2000
relationship, there is no guarantee that Dr. Lindstrom will remain on Cryocon's
Board of Directors or that he will remain as the Director of Cryocon's medical
division. If Cryocon is successful consummating an agreement with Venture 2000,
the market may react negatively at the prospect of one group obtaining
approximately 21% of shareholder control despite the fact that said control
would vest over a five year period. This may ultimately effect Cryocon's ability
to obtain future equity financing.

The exercise of the warrants and options by the selling shareholders may lower
Cryocon's common stock market price.

Several Shareholders pursuant to options and warrants have the right to
purchase up to 5,214,585 shares of Cryocon's common stock at a price that is
twenty percent (20%) below the market price for Cryocon's common stock on the
business day prior to the date that they give Cryocon written notice of their
intent to purchase the common stock. If the market price for Cryocon's common
stock becomes lower, the price to be paid per share decreases. Cryocon will
receive less money per share of the common stock sold to these shareholders.
Assuming the exercise of one hundred percent (100%) of the options and warrants,
the common shares will represent 24% of the total issued and outstanding shares
of Cryocon's common stock.

Several shareholders can purchase up to 1,500,000 shares of Cryocon's
common stock at $.10 per share, which is below the current market price for
Cryocon's common stock. Assuming the exercise of one hundred percent (100%) of
the options, the common shares will represent 7% of the total issued and
outstanding shares of Cryocon's common stock.

Several shareholders can purchase up to 60,000 shares of common stock
at $1.00 per share, which is below the current market price for Cryocon's common
stock. Assuming the exercise of one hundred percent (100%) of the options and
warrants, the common shares will represent less that one percent of the total
issued and outstanding shares of Cryocon's common stock.

Sales of these shares may depress the market value of Cryocon's common
stock. If the market price for Cryocon's common stock becomes lower Cryocon's
ability to sell its equity securities or equity-related securities in the future
may become more difficult.

Cryocon's inability to recruit, hire and retain key personnel and management
will have a material adverse effect on current and future operations.

Cryocon's future success depends in part on its ability to recruit and
retain certain key personnel, including J. Brian Morrison, Chief Executive
Officer and Chairman of the Board and Robert W. Brunson, founder and President
of the Intellectual Property Division. The loss of the services of certain
members of management, or other key personnel, would have a material adverse
effect on Cryocon effecting future business. Cryocon is the beneficiary of
key-man life insurance policies in the amount of $1,000,000, on Robert W.
Brunson, but there can be no assurance that the benefits under these policies
will be sufficient to compensate Cryocon for the loss of the services of any of
such persons.

Cryocon must also hire additional managers as the business grows, that
are able to address the needs for manufacturing, distribution, sales and
marketing capabilities. If Cryocon is not able to hire managers with these
skills, or develop expertise in these areas, its business prospects could
suffer.

Limited manufacturing experience could limit Cryocon's ability to develop and
manufacture new products.

Cryocon lacks experience in manufacturing, which could hamper its
ability to manufacture new products being developed. Cryocon has two options to
address this issue. First, it can expand its internal ability to manufacture
products. Second, Cryocon may contract with third parties to manufacture
products based upon the Cryocon's technology. If the Cryocon is unable to expand
its own manufacturing capability or that of it's subsidiary or maintain a
contract with suitable manufacturers, on acceptable terms and in a timely
manner, Cryocon may be delayed in introducing new products to the market. Delays
in introducing new products could harm Cryocon's market share, business and
financial condition.

Cryocon's inability to protect trade secrets and proprietary information, obtain
intellectual property protections such as patents, trademarks and copyrights and
to enforce these rights could adversely effect market share, business and
financial condition.

Cryocon needs to obtain intellectual property protection on it's
processes and future products to gain market share, and effect business and
profitability on a larger scale. At present there are very few patents issued
for cryogenic processing in specific applications. However, competitors may have
filed applications for or have been issued patents and may obtain additional
patents and proprietary rights related to products or processes competitive with
or similar to those of Cryocon. Since patent applications are secret until
patents are issued in the United States, or published, in other countries,
Cryocon cannot be sure that it is first to file any patent application. Further,
the laws of certain foreign countries do not provide the protection to

intellectual property provided in the United States, and may limit Cryocon's
ability to market its processes and products overseas. Cryocon cannot give any
assurance that the scope of the rights that may be granted to Cryocon's
processes and products are broad enough to fully protect those rights from
infringement.

Litigation regarding intellectual property is common because there can
be no assurance that any registration or any patent application will
significantly protect an owner's rights to intellectual property. Litigation or
regulatory proceedings, therefore, may be necessary to protect Cryocon's
intellectual property rights. Such litigation and regulatory proceedings are
very expensive, can be a significant drain on Cryocon's resources, diverts
resources from product development, and involves substantial commitments of
management time. There is no assurance that Cryocon will have the financial
resources to defend its intellectual property rights from infringement or claims
of invalidity. Failure to successfully defend the its rights with respect to its
intellectual property can have a materially adverse effect on Cryocon's business
and financial condition.

Cryocon also relies on business trade secrets, know-how and other
proprietary information. If this information were disclosed to competitors, the
business would suffer. Cryocon protects this information, in part, by entering
into confidentiality agreements with licensees, employees and consultants, which
prohibit these parties from disclosing its confidential information. Despite
these agreements, Cryocon cannot be sure that the agreements will provide
adequate protection for its trade secrets, know-how and other proprietary
information or that the information shared with others during the course of its
business will remain confidential. Nor can Cryocon be certain that it would have
sufficient legal remedies to correct or be compensated for unauthorized
disclosures or sufficient resources to seek redress.

Cryocon's operation may suffer if it is unable to negotiate a satisfactory
extension of or roll over of a trust deed note which was due February 28, 2001.

Cryocon's current administrative and operational facility is located at
2250 North 1500 West, in Ogden, Weber County, Utah and consists of 39,828 sq ft
of which approximately 10,000 sq ft is finished office space. Cryocon is
currently the owner with Bourns Inc., holding a trust deed note payable for a
balance of $1,350,000. The trust deed note was due in full on February 28, 2001.
Cryocon has paid approximately $700,000 against the principal of $2,050,000.
Cryocon is currently in negotiations with Bourns to effect a roll over of the
note for a one year period or reach some other mutual agreement. Failure to
reach such agreement will result in a default of the building, loss of the
invested capital and a disruption of operations during a move from the facility.
Additionally, there is no guarantee that Cryocon could lease facilities that
would meets it's needs to expand operations as currently planned.

Trading in Cryocon's common stock may be limited.

Cryocon's common stock is quoted on the OTC Bulletin Board. The OTC
Bulletin Board is not, however, an exchange, and trading in securities on the

OTC Bulletin Board is often more sporadic than trading in securities listed on
an exchange or NASDAQ. Consequently, you may have difficulty reselling any
shares that you purchase from the selling stockholders.

Because "penny stock" rules apply to trading in Cryocon's common stock,
you may find it difficult to sell Cryocon's shares of common stock. Cryocon's
common stock is a "penny stock," as it is not listed on an exchange and trades
at less than $5.00 a share. Broker-dealers who sell penny stocks must provide
purchasers of these stocks with a standardized risk-disclosure document prepared
by the SEC. This document provides information about penny stocks and the nature
and level of risks involved in investing in the penny-stock market. A broker
must also give a purchaser, orally or in writing, bid and offer quotations and
information regarding broker and salesperson compensation, make a written
determination that the penny stock is a suitable investment for the purchaser,
and obtain the purchaser's written agreement to the purchase. Consequently, the
penny stock rules may make it difficult for you to sell your shares of our
stock.

If Cryocon fails to maintain a current prospectus the Selling Shareholders will
not be able to resell their shares of common stock

Cryocon must maintain a current prospectus in order for the Selling
Shareholders to sell their shares of the common stock to which this prospectus
relates. In the event that Cryocon is unable to maintain a current prospectus
due to lack of sufficient financial resources or for other reasons, the Selling
Shareholders may be unable to resell their shares of the common stock.

Cryocon may lose sales and market placement if other companies develop superior
tempering processes which may prevent Cryocon from Remaining in business.

Other companies may develop better tempering processes that directly
compete with Cryocon, and may render Cryocon's tempering process obsolete or
noncompetitive. If that happens, Cryocon may not be able to generate sufficient
sales to remain in business.

Since Cryocon has a limited number of vendors, if Cryocon's suppliers are unable
to deliver needed components, Cryocon's business may be interrupted.

Cryocon's processors contain components manufactured by third-party
vendors, and some of these components are supplied by a limited number of
vendors. If these vendors fail to supply these components on a commercially
reasonable basis, Cryocon may not be able to build its processors to meet with
sales demand or replace damaged components. Cryocon could lose sales and
customers if can not operate is processors.

The volatility of Cryocon's stock price may result in the loss of the
shareholders' value

The market price of Cryocon's common stock has historically been
subject to price volatility. A loss in the Cryocon's stock price could occur and
result in a shareholder losing significant value. Volatility may recur in the
future.

RESCISSION OFFER

Background

On January 12, 2001, Cryocon issued warrants to 327 of its shareholders
to purchase up to 3,714,585 shares of Cryocon's common stock. The exercise price
for the warrants is eighty (80%) percent of the market price of Cryocon's common
stock on the day immediately prior to the day that the shareholders elect to
exercise their warrants, with a minimum exercise price of $2.00 dollars per
share. The warrants were issued to Cryocon's shareholders without cost or
consideration from the shareholders. Cryocon's management believes that the
issuance of the warrants is exempt from the registration. The Securities and
Exchange Commission, however, indicated in its comments to the second amendment
to the registration statement that they think that the issuance of the warrants
was not made pursuant to a valid exemption from registration. The shares to be
issued pursuant to the exercise of the warrants are not to be issuable until
after the effective date of the registration statement original filed February
9, 2001, which includes the issuance of the underlying shares of common stock.
None of the shares of common stock have been issued, and none of the
shareholders have given written notice of their intent to exercise their warrant
rights. Cryocon did not pay fees or commissions in connection with the issuance
of the warrants.

On February 16, 2001, Cryocon entered into a written agreement with
Millennium Capital, granting Millennium the right to purchase up to 1,500,000
shares of Cryocon's common stock, at a price that is eighty percent (80%) of the
market price for Cryocon's common stock on the business day immediately prior to
the day that Millennium purchases the shares. The written agreement was executed
after the filing of the registration statement originally filed on February 9,
2001. Cryocon's management believes that the written offer to sale of the shares
of common stock was exempt from registration under the Securities Act pursuant
to Section 4(2) thereof. The Securities and Exchange Commission, however,
indicated in its comments to the first amendment to the registration statement
that the written offer to sell the shares to Millennium Capital may have been
made in violation of section 5. To Cryocon's knowledge, management of the
investor is sophisticated in financial investments and received a variety of
financial and other information about Cryocon in connection with its due
diligence. No public solicitation or general advertising was done in connection
with the issuance of options. Cryocon did not pay any fees or commissions in
connection with this sale.

From February 16, 2001 to March 1, 2001, Cryocon sold 139,100
restricted shares of common stock to eight individuals, five current
shareholders and three new investors at the price of $2.00 per share. Cryocon
received $278,200 in gross proceeds from the sale of the restricted shares.
Cryocon's management believes that the sale of these shares was exempt from
registration under the Securities Act pursuant to Section 4(2) thereof. The sale
of the shares occurred after filing of the registration statement on February 9,
2001. No public solicitation or general advertising was done in connection with
this sale. Cryocon did not pay any fees or commissions in connection with this
sale. The Securities and Exchange Commission, however, indicated in its comments
to the second amendment to the registration statement that the sell the shares
after filing the registration statement may have been made in violation of
section 5.

The Rescission Offer

o Cryocon will pay the shareholders owning the 139,100 shares common
stock, which elect to accept the rescission offer, $2.00 per
share, plus an amount equal to the interest thereon, at the
appropriate statutory rate from the date of issuance of the
securities until the expiration of the rescission offer.
o Since the warrants were issued without payment of cash, or any
other consideration, Cryocon will pay the option holders, which
elect to accept the rescission offer, $.005 per warrant. Cryocon's
aggregate liability for the rescission offer of the warrants is
$6,191.00.
o Since the option to purchase the shares of common stock executed
with Millennium Capital Group was issued without payment of cash
or any other consideration, Cryocon offers to pay Millennium
Capital Group, if it elects to accept the rescission offer, a
total of $150.00 for all of the options.

The holders of the rescission securities who reject the rescission
offer will own freely tradable shares under the Securities Act. There is no
market for Cryocon's warrants and options.

The following table sets forth information regarding (i) the states in
which the offerees, that own the 139,100 shares of common reside, (ii) the

statutory interest rates applicable in such states, (iii) the aggregate amount
of rescission securities issued by Cryocon, (iv) the aggregate amount of accrued
interest calculated through June 30, 2001, and (v) the aggregate amount of
liability calculated through June 30, 2001.

- ------------------------------------------------------------------------------------------
States Aggregate Aggregate Total of
Where offerees Statutory Amount of Amount of Aggregate Sold
Reside Interest Rates Securities Sold Accrued Interest and Accrued interest
- ------------------------------------------------------------------------------------------

Arizona 10% $124,100 $9,222.40 $133,322.40
Colorado 8% $7,500 $444.00 $7,944.00
Texas 6% $6,000 $44.40 $6,044.40

The rescission securities were not registered under the federal and
state securities laws, but were issued in reliance upon the exemptions from
registration including (i) 4(2) of the Act and Regulation D promulgated
thereunder and (ii) various state limited offering exemptions, respectively.

However, Cryocon has formed the belief that either:

(1) Under the "integration" provisions of Regulation D, the offerings may be
viewed as one continuous "public" offering which was not in compliance with
Regulation D;

(2) Because of the frequency and number of sales of the rescission securities,
including the number of persons who received offers and who purchased Cryocon's
securities, the issuances may not have been eligible for the exemptions from
registration pursuant to Section 4(2) of the Securities Act as transactions by
an issuer not involving any public offering; or

(3) The rescission securities may have been issued in violation of state
securities laws.

If the Offerings were not conducted in compliance with applicable
securities laws, Cryocon may incur liability to the holders of the rescission
securities of See "Risk Factors -- Cryocon lacks sufficient capital to fund the
rescission offer and potential rescission liability" and Notes 2, 3 and 4 of the
Notes to the Consolidated Financial Statements for December 31, 2000.

Cryocon has elected to offer to all of the offerees the right to
rescind their acquisitions of the rescission securities and to receive in
exchange therefore, a payment of cash in the amounts set forth herein, or, if
the rescission securities have been disposed of at a loss, the difference
between the purchase price of such rescission securities and the price received
upon disposition plus interest at the Statutory Rate from the date of
disposition.

The rescission offer is being made in order to limit, so far as may be
permitted under applicable federal and state securities laws, Cryocon's
potential liability with respect to the issuances of the rescission securities.
The rescission offer is not an admission that Cryocon did not comply with the
registration provisions of applicable federal and state laws nor is it a waiver
of any applicable statutes of limitations.

Notwithstanding the rescission offer, there can be no assurance that
Cryocon will not be subject to penalties or fines relating to past securities
issuances or that other holders of Cryocon's securities will not assert or
prevail in claims against the Cryocon for rescission or damages under state or
federal securities laws. See "Risk Factors -- "Cryocon lacks sufficient capital
to fund the rescission offer and potential rescission liability" and Note 2 of
the Notes to the Consolidated Financial Statements for December 31, 2000.

Acceptance Or Rejection

Any offeree may accept or reject the rescission offer, in whole, but
not in part, by completing the pertinent part of, and signing, the election
accompanying this prospectus (a form of which is attached hereto as EXHIBIT A)
and returning it to Cryocon (Attention: James Retallick, Vice President and
Corporate Counsel), 2250 North 1500 West, Ogden, Utah 84404, as soon as
practicable, but in no event should the Election be delivered to Cryocon later

than the Expiration Date. The election should be completed to indicate whether
the offeree accepts or rejects the rescission offer. Any offeree accepting the
rescission offer must enclose with the election the original certificates or
other instruments representing the rescission securities, properly endorsed for
transfer, with the signature(s) guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program). All
acceptances of the rescission offer will be deemed to be effective on the
Expiration Date and, unless the offer is accepted on or before such date, the
right to accept the rescission offer shall terminate. Nevertheless, Cryocon
shall have the right (but not the obligation) to declare the rescission offer
ineffective and return the certificates or other instruments representing the
rescission securities to the offerees who have accepted the rescission offer.
Acceptances or rejections may be revoked in a written notice received by Cryocon
prior to the Expiration Date. Payment for rescission securities as to which the
rescission offer has been accepted will be made within five business days after
the expiration date.

Any offeree who has not delivered a completed Election by the
Expiration Date shall be conclusively deemed to have rejected the rescission
offer, except to the extent applicable state laws provide otherwise. See "--
State Law Notices To Certain offerees" and "EXHIBIT B" attached to this
Prospectus.

The Election and the stock certificates or other instruments
representing the rescission securities may be delivered by hand or courier
service, or by mail. The method of delivery of all documents is at the election
and risk of the offeree. If delivery is by mail, delivery will be deemed to have
occurred on the date the Election is postmarked.

IF OFFEREES DESIRING TO ACCEPT THIS RESCISSION OFFER INTEND TO MAKE USE OF THE
MAILS TO RETURN THEIR STOCK CERTIFICATES OR OTHER INSTRUMENTS EVIDENCING THE
RESCISSION SECURITIES TO CRYOCON, INSURED REGISTERED MAIL, RETURN RECEIPT
REQUESTED, IS RECOMMENDED.

Funding The Rescission Offer

Other Terms And Conditions

Cryocon has not retained, nor does it intend to retain, any person to
make solicitations or recommendations to the offerees in connection with the
rescission offer.

If a fully completed and executed election is not delivered by the
Expiration Date by each person actually receiving notice of the rescission offer
through this Prospectus, the rescission offer will be deemed to have been
rejected by such person, except to the extent applicable state laws provide
otherwise.

Neither Cryocon, nor its officers and directors, may make any
recommendations to any holders of the rescission securities with respect to the
rescission offer contained herein. Each person is urged to read this Prospectus
carefully and to make an independent evaluation with respect to the rescission
offer.

Cryocon will determine all questions regarding the validity, form,
eligibility (including time of delivery) and proper completion of the election.
Cryocon's determination will be final and binding. Cryocon reserves the absolute
right to reject any election not properly completed or if the completed
election, in the opinion of Cryocon's counsel, would be unlawful. Cryocon
reserves the right to waive any irregularity in the election. Cryocon's
interpretation of the terms and conditions of the rescission offer will be final
and binding. Cryocon will not be under any duty to give notification of defects
in connection with Elections or incur any liability for failure to give such
information.

Effect Of Rescission Offer

Cryocon has been advised by its counsel that it is unclear whether the
rescission offer will terminate Cryocon's liability, if any, for failure to
register the issuances of the rescission securities under the Securities Act or
applicable state and foreign securities laws. The staff of the Commission takes
the position that a person's right of rescission under federal securities law
may, under certain circumstances, survive a rescission offer, while most state
securities laws provide that a person may lose any rescission rights by
rejecting or failing to respond to a valid rescission offer. Generally, the
statute of limitations for noncompliance with the requirement to register
securities under the Securities Act is one year, while under the various state
securities laws, the statute of limitations ranges from one to seven years from
the date of the transaction. Cryocon is also subject to the anti-fraud
provisions of applicable securities law or rights under common law or equity in
respect of the issuance of the rescission securities. Rescission securities held
by offerees who choose not to accept the rescission offer will, for purposes of
applicable federal and state securities laws, be registered securities as of the
Expiration Date and, unless held by persons who may be deemed to be "affiliates"
of Cryocon, will be freely tradable in the public market. Rescission securities
held by Cryocon's affiliates will be subject to certain restrictions on resale
contained in Rule 144 under the Securities Act.

Specific provisions of the laws of certain states in which the offerees
now reside or resided at the time they were issued the rescission securities are
set forth in EXHIBIT B attached hereto.

Tax Considerations Of The Rescission Offer

The following discussion is a general summary of certain United States
federal income tax consequences associated with the rescission offer. No attempt
has been made to comment on all United States federal tax matters relevant to
the rescission offer. The summary is based on existing provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), the Treasury Department
regulations promulgated thereunder, published revenue rulings and revenue
procedures of the Internal Revenue Service ("IRS"), applicable legislative
history, and judicial decisions. All such authorities are subject to change at
any time, either prospectively or retroactively, and any such change could
adversely affect the federal income tax consequences associated with the
rescission offer. No ruling has been requested from the IRS regarding any of the
matters discussed in this summary.

This summary represents the judgment of Cryocon and its advisors
regarding the United States federal income tax consequences of the rescission
offer. However, there is no assurance that the tax consequences discussed in
this summary will be accepted by the IRS or the courts if the rescission offer
becomes the subject of administrative or judicial proceedings. Realization of
the tax consequences discussed in this summary with respect to the rescission
offer is subject to the risk that the IRS may challenge the tax treatment and
that a court could sustain such challenge. In such case, the federal income tax
consequences of the rescission offer could be materially and adversely affected.

This summary does not attempt to specifically address the United States
federal income tax consequences of each offeree who accepts the rescission
offer. Additionally, this summary does not discuss all of the tax consequences,
including state, local, and foreign tax consequences, which may be significant
to particular offerees, such as dealers in securities, foreign persons, offerees
who are not individuals, and offerees who are subject to the alternative minimum
tax.

ACCORDINGLY, ALL OFFEREES WHO ACCEPT THE RESCISSION OFFER ARE STRONGLY URGED TO
CONSULT, AND MUST RELY UPON, THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX
CONSEQUENCES TO THEM WITH RESPECT TO AN ACCEPTANCE OF THE RESCISSION OFFER,
INCLUDING THE APPLICABILITY OF FEDERAL, STATE, LOCAL, AND FOREIGN TAX LAWS.

The transaction resulting from an acceptance of the rescission offer
should be analyzed as a taxable redemption of the shares of Cryocon's stock
involved in the transaction. In such case, the redemption will be treated as a
sale or exchange of the shares only if the redemption satisfies the requirements
of one or more of the provisions of Section 302(b) of the Code. This
determination is made separately for each offeree who accepts the rescission
offer. Assuming that a redemption satisfies the requirements of one or more of
the provisions of Section 302(b)of the Code, the offeree recognizes gain or loss
on the redemption in an amount equal to the difference between the offeree's
adjusted basis in the shares immediately prior to the redemption and the
proceeds that the offeree receives in connection with the redemption (including
the portion of the proceeds measured by applying an interest factor to the
offeree's original purchase price for the shares). The character of any such
gain or loss will depend on whether the shares constitute a capital asset in the
hands of the offeree.

If a redemption does not satisfy the requirements of one or more of the
provisions of Section 302(b) of the Code, it will be treated as a distribution
by Cryocon that is subject to Section 301 of the Code. In such case, the
proceeds will be treated first as a dividend (taxed as ordinary income) to the
extent of Cryocon's current and accumulated earnings and profits, if any, at the
time of the redemption (on a pro rata basis taking into account other Section
301 distributions made by Cryocon during the year, including other redemptions
resulting from the rescission offer that are treated as Section 301
distributions), next as a non-taxable return of the offeree's adjusted basis in
the shares immediately prior to the redemption, and finally as amounts received
from the sale or exchange of the shares. Cryocon should not have either current
or accumulated earnings and profits for these purposes.

Under Section 302(b) of the Code, a redemption will be treated as a
sale or exchange of the shares if it either: (i) results in a "complete
redemption" of the offeree's interest in Cryocon; (ii) is "substantially
disproportionate" with respect to the offeree; or (iii) is "not essentially
equivalent to a dividend" with respect to the offeree. These three tests, which
are more fully described below, are collectively referred to as the "Redemption
Tests" for purposes of this summary. The Redemption Tests are applied on an
offeree-by-offeree basis. As a result, it is possible that some redemptions will
satisfy the requirements of one or more of the Redemption Tests, while other
redemptions do not satisfy the requirements of one or more of the Redemption
Tests. Accordingly, it is possible that some persons will receive sale or
exchange treatment under Section 302(b) with respect to their redemptions while
other persons will be subject to Section 301 with respect to their redemptions.

In determining whether the requirements of any of the Redemption
Tests are satisfied, an offeree must take into account not only shares of
Cryocon stock that are actually owned by the offeree but also shares of
Cryocon's stock that the offeree is deemed to own within the meaning of the
constructive ownership rules under Section 318 of the Code. Under Section 318,
an offeree may constructively own shares of Cryocon stock actually owned (and,
in some cases, constructively owned) by certain individuals or entities that are
considered related to the offeree for this purpose, as well as shares of Cryocon
stock that the offeree has the right to acquire by exercise of an option,
warrant or a conversion right. Additionally, contemporaneous or related
transactions involving the stock, or rights to acquire the stock, of the Cryocon
may affect an offeree's ability to satisfy one or more of the Redemption Tests.

A redemption will constitute a "complete redemption" of all shares of
Cryocon stock owned by an offeree for purposes of the first Redemption Test
specified above if all shares of Cryocon stock owned by such offeree are sold
pursuant to the rescission offer. For this purpose, an individual offeree can
disregard shares of Cryocon stock that he or she constructively owns by
attribution from family members if certain requirements specified in Section
302(c) of the Code are satisfied. A redemption will be considered "substantially
disproportionate" with respect to an offeree if the following requirements are
satisfied: (i) the percentage of the voting stock of Cryocon owned by the
offeree immediately after the redemption (taking into account all transactions
consummated pursuant to the rescission offer) equals less than 80 percent of the
percentage of the voting stock of Cryocon owned by such offeree immediately
before the redemption; (ii) the percentage of the common stock of Cryocon
(whether voting or nonvoting) owned by the offeree immediately after the
redemption (taking into account all transactions consummated pursuant to the
rescission offer) equals less than 80 percent of the percentage of the common
stock of Cryocon owned by such offeree immediately before the redemption; and
(iii) the offeree owns, immediately after the redemption (taking into account
all transactions consummated pursuant to the rescission offer), less than 50% of
the total combined voting power of all classes of stock of Cryocon entitled to
vote. A redemption will satisfy the "not essentially equivalent to a dividend"
test with respect to an offeree if, in light of the particular facts and
circumstances surrounding the offeree's ownership of Company stock, the
redemption results in a "meaningful reduction" of the offeree's interest in
Cryocon (taking into account all transactions consummated pursuant to the
rescission offer).

THE FOREGOING SUMMARY IS FOR GENERAL INFORMATION ONLY, AND IS NOT INTENDED TO
CONSTITUTE, AND SHALL NOT BE CONSTRUED TO ANY EXTENT AS, LEGAL, TAX, OR
FINANCIAL ADVICE. EACH OFFEREE IS STRONGLY URGED TO CONSULT THE OFFEREE'S OWN
TAX ADVISOR TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THE OFFEREE FROM THE
RESCISSION OFFER IN LIGHT OF THE OFFEREE'S SPECIFIC CIRCUMSTANCES,INCLUDING THE
TRANSACTION(S) IN WHICH THE OFFEREE ACQUIRED OWNERSHIP OF SHARES OF CRYOCON'S
STOCK.

STATE LAW NOTICES TO CERTAIN OFFEREES

NOTICE TO ARIZONA RESIDENTS

THESE SECURITIES ARE NOT REGISTERED UNDER THE SECURITIES ACT OF
ARIZONA, BUT EVEN REGISTRATION IS NOT TO BE DEEMED A FINDING BY THE ARIZONA
CORPORATION COMMISSION OR THE DIRECTOR OF THE SECURITIES DIVISION THAT THIS
PROSPECTUS IS TRUE OR ACCURATE, NOR DOES THE REGISTRATION MEAN THAT THE
COMMISSION OR THE DIRECTOR HAS PASSED ON THE MERITS OF OR OTHERWISE APPROVED THE
SECURITIES DESCRIBED IN THIS PROSPECTUS.

NOTICE TO CALIFORNIA RESIDENTS

THIS OFFER OF REPURCHASE HAS NOT BEEN APPROVED BY THE CALIFORNIA
COMMISSIONER OF CORPORATIONS IN ACCORDANCE WITH SECTION 25507(B) OF THE
CORPORATE SECURITIES LAW OF 1968 ONLY AS TO ITS FORM. SUCH APPROVAL DOES NOT
IMPLY A FINDING BY THE COMMISSIONER THAT ANY STATEMENTS MADE HEREIN OR IN ANY
ACCOMPANYING DOCUMENTS ARE TRUE OR COMPLETE NOR DOES IT IMPLY A FINDING THAT THE
AMOUNT OFFERED BY THE SELLER IS EQUAL TO THE AMOUNT RECOVERABLE BY THE BUYER OF
THE SECURITY IN ACCORDANCE WITH SECTION 25503 IN A SUIT AGAINST THE SELLER, AND
THE COMMISSIONER DOES NOT ENDORSE THE OFFER AND MAKES NO RECOMMENDATION AS TO
ITS ACCEPTANCE OR REJECTION.

The Company may have incurred liability under Section 25503 by failing
to qualify the Subject Securities under Section 25110. If the Company violated
Section 25110, it is liable to the purchasers of such securities for an amount
equal to the consideration paid with interest thereon at the legal rate, less
the amount of any income received therefrom, upon tender of such security. The
Company's liability, if any, may be terminated by this Rescission Offer under
Section 25507(b).

An Offeree's right of action, if any, under Sections 25500, 25501 and
25502 and under common law, is not necessarily foreclosed by acceptance or
rejection of the Rescission Offer.

Under Section 25534, if the Commissioner determines that the Subject
Securities were offered or sold in violation of Section 25110, the Commissioner
may, by written order to the Company and the holders of such securities, require
certificates evidencing such securities to have stamped or printed prominently
on their face a legend, in the form prescribed by rule of the Commissioner,
restricting the transfer of such securities.

The complete text of the foregoing sections of the Corporate Securities
Law of 1968 is set forth in EXHIBIT B attached hereto.

NOTICE TO HAWAII RESIDENTS

NEITHER THIS PROSPECTUS NOR THE SECURITIES DESCRIBED HEREIN HAVE BEEN
APPROVED OR DISAPPROVED BY THE COMMISSIONER OF SECURITIES OF THE STATE OF HAWAII
NOR HAS THE COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS.

NOTICE TO ILLINOIS RESIDENTS

On January 7, 2001, Cryocon extended warrants to certain residents of
Illinois. The warrant offered for sale shares in Cryocon at a 20% discount to
the market price with a minimum exercise price of $2.00 per share. The offer was
not registered under applicable state law. The offer of these securities may not
have been in compliance with the Illinois Securities Law of 1953 (the "1953
Act"), in which case the offer is voidable at the buyer's option in accordance
with the provisions of Section 13 of the 1953 Act. Therefore, the Company hereby
offers to rescind and set aside such offers, to release each buyer from all
contractual obligations the Company required each buyer to undertake in order to
effectuate such sales and to refund the full amount paid for the securities,
plus interest at the rate of 10% per annum from the date of payment for the
securities to the date of refund. This sum will be reduced by any income or
other amount received due to ownership of such securities.

Should you decide to accept this offer of rescission, please offer, in
writing, to return the securities or return the securities to the Company
together with a written notice of your election to accept such offer of
rescission. The election form attached hereto as EXHIBIT A may be used to
indicate your acceptance of this offer. Upon receipt of these materials, the
amount paid for the securities, plus interest, will be refunded to you and you
will be released from any and all contractual obligations the Company required
that you undertake in order to effectuate the sale.

This Rescission Offer is only good for thirty (30) days after your
receipt of this Prospectus. If you fail to accept this offer within that period,
your rights to recover under the 1953 Act may be extinguished. You should also

note that any decision to reject this offer is not binding until thirty (30)
days have elapsed from the date of receipt of this Prospectus. However, failure
to accept this offer within thirty (30) days of receipt shall constitute a
non-acceptance of this offer.

The complete text of Section 13 of the 1953 Act is set forth in EXHIBIT
B attached hereto.

NOTICE TO INDIANA RESIDENTS

Pursuant to Order No. 90-0019 of the Indiana Securities Commission,
failure to respond to this Rescission Offer will be deemed an ACCEPTANCE of the
offer.

NOTICE TO IOWA RESIDENTS

THIS IS A RESCISSION OFFER MADE PURSUANT TO SECTION 502.504(4) OF THE
IOWA UNIFORM SECURITIES ACT AND A COPY IS ON FILE WITH THE IOWA SECURITIES
BUREAU. THE BUREAU MAKES NO RECOMMENDATION AS TO WHETHER THE OFFER SHOULD BE
ACCEPTED OR REJECTED NOR HAS THE BUREAU PASSED UPON THE ADEQUACY OF THIS OFFER.

The Company may have incurred liability under Section 502.501 of the
Iowa Uniform Securities Act by failing to register the Subject Securities in
accordance with Section 502.201. An Offeree purchasing such securities may sue
under Section 502.501 to recover the consideration paid for the securities,
together with interest at the legal rate from the date of payment, less the
amount of any income received on the security, upon tender of the securities. An
Offeree's right to sue under Section 502.501 may be lost unless the Offeree
accepts the Rescission Offer within 30 days after receipt thereof.

The complete text of the foregoing sections of the Iowa Uniform
Securities Act is set forth in EXHIBIT B attached hereto.

NOTICE TO LOUISIANA RESIDENTS

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES
COMMISSIONER OF THE STATE OF LOUISIANA BUT QUALIFY UNDER APPLICABLE EXCEPTIONS.
THE SECURITIES COMMISSIONER, DOES NOT IN ANY WAY ENDORSE OR RECOMMEND THE
PURCHASE OF ANY OF THESE SECURITIES.

NOTICE TO MARYLAND RESIDENTS

Failure to respond to this Rescission Offer will be deemed an
ACCEPTANCE of the Rescission Offer.

NOTICE TO MICHIGAN RESIDENTS

As required by Section 410(e) of the Michigan Uniform Securities Act,
the entire text of Section 410(e) is included in EXHIBIT B attached hereto.

NOTICE TO MISSISSIPPI RESIDENTS

The Company may have incurred liability under Section 75-71-717 of the
Mississippi Securities Act by failing to register the Subject Securities in
accordance with Section 75-71-401. A buyer of such securities may sue under
Section 75-71-717 to recover the consideration paid for the securities, together
with interest at eight percent (8%) from the date of payment, less the amount of
any income received on the securities, upon tender of the securities.

A buyer's right to sue under Section 75-71-717 may be lost if, before
suit is commenced, the buyer receives a written offer (i) to repurchase such
securities for cash payable on delivery of the securities equal to the
consideration paid, together with interest at six percent (6%) from the date of
payment, less the amount of any income received on the securities, (ii) stating
that the offer may be accepted by the buyer at any time within thirty (30) days
of its receipt and (iii) the buyer fails to accept such offer in writing within
the specified period.

The complete text of the foregoing sections of the Mississippi
Securities Act is set forth in EXHIBIT B attached hereto.

NOTICE TO NEVADA RESIDENTS

The Company may have incurred liability under Section 90.660 of the
Nevada Uniform Securities Act by failing to register the Subject Securities in
accordance with Section 90.460. An Offeree purchasing such securities may sue
under Section 90.660 to recover the consideration paid for the securities,
together with interest at the legal rate from the date of payment, less the
amount of any income received on the securities, upon tender of the securities.

An Offeree's right to sue under Section 90.660 may be lost unless the
Offeree accepts the Rescission Offer within 30 days after receipt thereof.

The complete text of the foregoing sections of the Nevada Uniform
Securities Act is set forth in EXHIBIT B attached hereto.

NOTICE TO NEW HAMPSHIRE RESIDENTS

The Company may have incurred liability under NH RSA 421-B:25 of the
New Hampshire Uniform Securities Act by failing to register the Subject
Securities in accordance with NH RSA 421-B:11. An Offeree purchasing such
securities may sue under NH RSA 421-B:25 to recover the consideration paid for
the securities, together with interest at 10% from the date of payment, less the
amount of any income received on the securities, upon tender of the securities.

The complete text of NH RSA 421-B:25 of the New Hampshire Uniform
Securities Act is set forth in EXHIBIT B attached hereto.

NOTICE TO NORTH CAROLINA RESIDENTS

The Company may have incurred liability under Section 78a-56 of the
North Carolina Securities Act by failing to register the Subject Securities in
accordance with Section 78a-24. An Offeree purchasing such securities may sue
under Section 78a-56 to recover the consideration paid for the securities,
together with interest at the legal rate from the date of payment, less the
amount of any income received on the securities, upon tender of the securities.
An Offeree's right to sue under Section 78a-56 may be lost unless the Offeree
accepts the Rescission Offer within 30 days after receipt thereof.

The complete text of the foregoing sections of the North Carolina
Securities Act is set forth in EXHIBIT B attached hereto.

NOTICE TO OREGON RESIDENTS

Under Section 59.125 of the Oregon Securities Law, an Offeree's right
to sue under Section 59.115 may be lost unless (i) the Offeree accepts the
Rescission Offer within 30 days after receipt thereof and has not been paid the
full amount offered or (ii) the Offeree no longer owns the Subject Securities
and gives the Company written notice of the inability to tender such securities
to the Company.

The complete text of the foregoing sections of the Oregon Securities
Law is set forth in EXHIBIT B attached hereto.

NOTICE TO PENNSYLVANIA RESIDENTS

It appears the provisions of Section 201 of the Pennsylvania Securities
Act of 1972 ("1972 Act") relating to registration of securities may not have
been complied with in connection with the offer or sale of these securities.
Accordingly, the Company is offering to repurchase these securities from you for
your purchase price for cash plus 6% interest from the date of purchase less any
dividends, interest payment or cash distributions paid to date. The enclosed
disclosure materials should be reviewed carefully before deciding whether to
accept or reject the offer to repurchase your securities. This Rescission Offer
remains open for 30 days from the date you received this Notice. During such
time you may either accept or reject the offer.

If you no longer own the securities which are the subject of this offer
to repurchase, the Company offers to pay you, upon acceptance of the offer, an
amount in cash equal to the damages, if any, computed in accordance with Section
502 of the 1972 Act as more fully described in the accompanying disclosure
materials.

If you affirmatively REJECT the offer or fail to affirmatively ACCEPT
the offer within 30 days in the manner described in the accompanying disclosure

materials, any rights you may have with respect to any failure to comply with
Section 201 of the 1972 Act will be terminated.

The complete text of the foregoing sections of the 1972 Act is set
forth in EXHIBIT B attached hereto.

NOTICE TO TENNESSEE RESIDENTS

The Company may have incurred liability under Section 48-2-122 of the
Tennessee Securities Act of 1980 by failing to register the Subject Securities
in accordance with Section 48-2-104. An Offeree purchasing such securities may
sue under Section 48-2-122 to recover the consideration paid for the securities,
together with interest at the legal rate from the date of payment, less the
amount of any income received on the securities, upon tender of the securities.

Unless the Rescission Offer is accepted within 30 days after receipt
thereof, the offer of rescission will be deemed to have been rejected.

Offerees may wish to consult with independent counsel before deciding
to accept or reject the Rescission Offer so as to be fully informed about the
risks and the consequences attached to either choice.

The complete text of the foregoing sections of the Tennessee Securities Act
of 1980 is set forth in EXHIBIT B attached hereto.

NOTICE TO TEXAS RESIDENTS

The Company may have incurred liability under Section 33 of the Texas
Securities Act of 1957 by failing to register the Subject Securities in
accordance with Section 7A. An Offeree purchasing such securities may sue under
Section 33 to recover the consideration paid for the securities, together with
interest at the legal rate from the date of payment, less the amount of any
income received on the securities, upon tender of the securities.

AN OFFEREE'S RIGHT TO SUE WILL BE LOST UNLESS THE OFFEREE (i)
ACCEPTS THE OFFER BUT DOES NOT RECEIVE THE AMOUNT OF THE OFFER, IN WHICH CASE HE
MAY SUE WITHIN THE TIME ALLOWED BY SECTION 33H(1)(a) OR 33H(2)(a) OR (b), AS
APPLICABLE; OR (ii) REJECTS THE OFFER IN WRITING WITHIN 30 DAYS OF ITS RECEIPT
AND EXPRESSLY RESERVES IN THE REJECTION HIS RIGHT TO SUE, IN WHICH CASE HE MAY
SUE WITHIN ONE YEAR AFTER HE SO REJECTS.

The complete text of the foregoing sections of the Texas Securities Act
of 1957 is set forth in EXHIBIT B attached hereto.

NOTICE TO WISCONSIN RESIDENTS

The Company may have incurred liability under Section 551.59 of the
Wisconsin Uniform Securities Law by failing to register the Subject Securities
in accordance with Section 551.21. An Offeree purchasing such securities may sue
under Section 551.59 to recover the consideration paid for the securities,
together with interest at the legal rate under Section 138.04 from the date of
payment, less the amount of any income received on the securities, upon tender
of the securities. An Offeree's right to sue under Section 551.59 may be lost
unless the Offeree accepts the Rescission Offer within 30 days after receipt
thereof.

The complete text of Sections 551.21 and 551.59 of the Wisconsin
Uniform Securities Law is set forth in EXHIBIT B attached hereto.

USE OF PROCEEDS

Cryocon will not receive proceeds from the shares being offered by the
selling shareholders under this prospectus. Cryocon will receive $210,000 upon
the exercise of the options and warrants held by Bourns, Inc., Todd Moore and J.
Brian Morrison. Cryocon will also receive $7,429,170, assuming a 100% rejections
of the rescission offer and assuming the exercise of the original ISO Block
shareholder's warrants at the minimum exercise price of $2.00 a share. Cryocon
will also receive $2,580,000 from the stock purchase agreement with Millennium
Capital, assuming the rejection of the rescission offer and assuming a purchase
price at a 20% discount to the market price as of May 15, 2001 of $2.15 a share.
If the selling shareholders exercise their warrants or purchase shares of common
stock pursuant to their agreements with Cryocon, Cryocon will receive an
aggregate of $10,009,170. The proceeds Cryocon receives, if any, will be used
for Cryocon's debt reduction, general working capital, partial or complete
retirement of the trust deed note with Bourns and for the development of

Cryocon's subsidiary, XTool. Until Cryocon uses the net proceeds, it intends to
invest the funds in short-term, investment-grade, interest-bearing instruments.

DETERMINATION OF OFFERING PRICE

The Selling Shareholders named in this Prospectus under the "Selling
Shareholders" may sell their shares at market price.

Cryocon's Common Stock is currently traded on the NASDAQ OTC
Bulletin Board, under the symbol "CRYQ." On May 15, 2001, the ask price of the
common stock was $2.15 per share and the bid price was $2.10

DILUTION

On May 15, 2001, Cryocon had a net tangible book value of (217,077) or
approximately ($0.010) per share. The net tangible book value per share equals
Cryocon's total tangible assets, less Cryocon's total liabilities divided by the
total number of shares of common stock outstanding. As of May 15, 2001, there
were 21,756,640 outstanding shares. Excluding the 6,774,585 shares of common
stock to be issued upon the exercise of certain warrants and options (described
below) and assuming that the selling shareholders of the 8,499,578 shares,
issued pursuant to the conversion of Cryocon's convertible debentures and
pursuant to the issuance of shares in a private placement sell their shares at
the market price of $2.15 per share, as of May 15, 2001, the new shareholders
will realize an immediate dilution in the shares purchased of $2.16 per share or
100.01%. The following table illustrates this per share dilution:

o Market price per share (as of May 15, 2001). . . . . . . .$2.15

o Net Tangible Book Value (as of May 15, 2001) . . . . .($O.010)

o Dilution per share to new investors . . . . . . . . . . . $2.16

Cryocon will issue 3,714,585 shares of common stock to selling
shareholders at a per share price of eighty percent (80%)of the market price at
the time of the exercise of the warrant (with a minimum exercise price of $2.00
per share), assuming 100% rejection of the rescission offer and assuming the
exercise of all of the warrants issued to certain selling shareholders, and
assuming the market price of $2.15 per share, as of May 15, 2001 Cryocon will
receive approximately $7,429,170 in additional cash investments from the selling
shareholders upon the full exercise of those outstanding warrants.

Cryocon will issue 1,500,000 shares of common stock to certain selling
shareholders at a per share price of $0.10 per share, and will receive
approximately $150,000 in additional cash investments from the selling
shareholders upon the full exercise of those outstanding warrants.

Cryocon will issue 60,000 share of common stock to certain selling
shareholders, and will receive approximately $60,000 in additional cash
investments from the selling shareholders upon the full exercise of those
outstanding warrants.

Cryocon will issue 1,500,000 shares of common stock to certain selling
shareholders, and will receive $2,580,000 in additional cash investments from
the selling shareholders assuming a rejection of the rescission offer, at a 20%
discount to the market price of $2.15 per share and upon full exercise of those
outstanding warrants.

Based upon these assumptions (and assuming no change in the net
tangible value as of May 15, 2001), Cryocon's net tangible book value would
become $10,002,093 or approximately $0.35 per share.

Assuming that the selling shareholders sells their shares at the market
price, as of May 15, 2001, of $2.15 per share to new shareholders, the new
shareholders will realize an immediate dilution in the shares purchased of $1.80
or 84%. Since Cryocon will not receive any proceeds from the resale of these
common shares by the selling shareholders, there will no increase in net
tangible book value per share attributable to cash payments made by purchasers
of the shares sold. The following table illustrates this per share dilution:

Market price per share (as of May 15, 2001) . . . . . . . . . . . .$2.15

Net Tangible Book Value (assuming exercise of all warrants) . . . .$0.35

Dilution per share to new investors . . . . . . . . . . . . . . . .$1.80

PLAN OF DISTRIBUTION

The selling stockholders may from time to time sell all or a portion of
their shares in the over-the-counter market, or on any other national securities
exchange on which the common stock is or becomes listed or traded, in negotiated
transactions or otherwise, at prices then prevailing or related to the then
current market price or at negotiated prices. The Shares will not be sold in an
underwritten public offering. The Shares may be sold directly or through brokers
or dealers. The methods by which the Shares may be sold include:

(a) A block trade (which may involve crosses) in which the broker or
dealer so engaged will attempt to sell the securities as agent but
may position and resell a portion of the block as principal to
facilitate the transaction;

(b) Purchases by a broker or dealer as principal and resale by the
such broker or dealer for its account pursuant to this prospectus;

(d) Privately selling stockholders may arrange for other brokers or
dealers to participate.

Brokers or dealers may receive commissions or discounts from selling
stockholders (or, if any broker-dealer acts as agent for the purchaser of the
shares, from the purchaser) in amounts to be negotiated that are not expected to
exceed those customary in the types of transactions involved. Broker-dealers may
agree with the selling shareholders to sell a specified number of the shares at
a stipulated price per share, and, to the extent the purchase as principal any
unsold shares at the price required to fulfill the broker-dealer commitment to
the selling shareholders. Broker-dealers who acquire shares as principal may
thereafter resell the shares from time to time in transactions (which may
involve crosses and block transactions and sales to and through other
broker-dealers (including transactions of the nature described above) in the
over-the-counter market or otherwise at prices and on terms then prevailing at
the time of sale, at prices then related to the then-current market price or in
negotiated transactions and`, in connection with the re-sales, may pay to or
receive from the purchasers of the shares commissions as described above.

In connection with the distribution of the Shares, the selling
shareholders may enter into hedging transactions with broker-dealers. In
connection with these transactions, broker-dealers may engage in short sales of
the shares in the course of hedging the positions they assume with the selling
stockholders. The selling stockholders may also sell the shares short and
redeliver the shares to close out the short positions. The selling stockholders
may also loan or pledge the shares to a broker-dealer and the broker-dealer may
sell the shares so loaned or upon a default the broker-dealer may effect sales
of the pledged shares. In addition to the foregoing, the selling stockholders
may enter into, from time to time, other types of hedging transactions.

The selling stockholders and any broker-dealers participating in the
distributions of the shares may be deemed to be "underwriters" within the
meaning of Section 2(11) of the 1933 Act and any profit on the sale of shares by
the selling stockholders and any commissions or discounts given to any such
broker-dealer may be deemed to be underwriting commissions or discounts under
the 1933 Act. The shares may also be sold pursuant to Rule 144 under the 1933
Act beginning one year after the shares were issued.

We have filed the registration statement, of which this prospectus
forms a part, with respect to the sale of the shares. There can be no assurance
that the selling shareholders will sell any or all of the shares they desire to
sell, or that we will sell any of the share we desire to sell.

Under the Securities Exchange Act of 1934 and the regulations
thereunder, any person engaged in a distribution of the shares offered by this
Prospectus may not simultaneously engage in market making activities with
respect to the common stock of Cryocon during the applicable "cooling off"
periods prior to the commencement of the such distribution. In addition, and
without limiting the foregoing, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, which provisions may limit the timing of purchases and sales of
common stock by the selling shareholders. We will pay all of the expenses
incident to the offering and sale of the Shares, other than commissions,
discounts and fees of underwriters, dealers, or agents.

We have advised the selling shareholders that, during the time that
they may be engaged in a distribution of any of the shares we are registering by
this Registration Statement, they are required to comply with Regulation M
promulgated under the Securities Exchange Act. In general, Regulation M
precludes any selling shareholder, any affiliated purchasers and any
broker-dealer or other person who participates in the distribution from bidding
for or purchasing, or attempting to induce any person to bid for or purchase,
any security which is the subject of the distribution until the entire
distribution is complete. Regulation M defines a "distribution" as an offering
of securities that is distinguished from ordinary trading activities by the
magnitude of the offering and the presence of special selling efforts and
selling methods. Regulation M also defines a "distribution participant" as an
underwriter, prospective underwriter, broker, dealer, or other person who has
agreed to participate or who is participating in a distribution.

Regulation M prohibits any bids or purchases made in order to stabilize
the price of a security in connection with the distribution of that security,
except as specifically permitted by Rule 104 of Regulation M. These stabilizing
transactions may cause the price of the common stock to be higher than it would
otherwise be in the absence of those transactions. We have advised the selling
shareholders that stabilizing transactions permitted by Regulation M allow bids
to purchase our common stock so long as the stabilizing bids do not exceed a
specified maximum, and that Regulation M specifically prohibits stabilizing that
is the result of fraudulent, manipulative, or deceptive practices. selling
shareholders and distribution participants will be required to consult with
their own legal counsel to ensure compliance with Regulation M.

LEGAL PROCEEDINGS

Cryocon is not a party to any legal proceedings. Cryocon is currently
in negotiations with Bourns Inc. to prevent default on a trust deed note on real
property owned by Cryocon, but which Bourns holds a note in the amount of
$1,350,000. See "Description of Property."

DESCRIPTION OF SECURITIES

Common Stock

The common stock is the only class of voting securities of Cryocon
outstanding.

The holders of common stock are entitled to one vote for each share
held. The Certificate of Incorporation provides that the affirmative vote of a
majority of the votes cast at a shareholder's meeting is sufficient to effect
any corporate action upon which shareholders may or must vote. Common stock do
not carry cumulative voting rights, thus holders of more than 50% of the common
stock have the power to elect all directors if they wish and, as a practical
matter, to control Cryocon. Holders of common stock are not entitled to
preemptive rights, and the common stock is not subject to redemption.

Cryocon's bylaws provide for a board of no less than three nor more
than seven directors, all of whom are elected for one, two or three year term at
the annual meeting of shareholders. The affirmative vote of a simple majority of
the outstanding Common Stock is necessary to remove a director. A special
meeting of shareholders may be called by the Chairman of the Board, the
President, a majority of the Board of Directors, or shareholders owning in the
aggregate 10% or more of the common stock. Holders of common stock are entitled
to receive, pro rata, dividends if, when, and as declared by the Board of
Directors out of funds legally available therefore.

Upon liquidation, dissolution or winding up of Cryocon, holders of
common stock are entitled to share ratably in Cryocon's assets legally available
for distribution to its shareholders after payment of liquidation preference and
outstanding redemption rights (if any) on any preferred stock outstanding and
are not subject to further calls or assessments.

Warrants and Contractual Rights to Purchase Shares of Cryocon's Common Stock

Bourns, Inc.

Pursuant to a written agreement between Cryocon and Bourns, Inc.
executed on October 6, 2000, Bourns has the right to purchase 30,000 shares of
Cryocon's common stock at the price of $1.00 per share. Pursuant to a second
written agreement between Cryocon and Bourns, Inc. executed on December 15,
2000, Bourns has the right to purchase an additional 30,000 shares of Cryocon's
common stock at the price of $1.00 per share. If Cryocon's common stock is
subdivided into a greater number of shares or a dividend is paid in common
stock, the exercise price shall be proportionately reduced. If Cryocon's common
stock is combined into a smaller number of shares, then the exercise price shall
be proportionally increased. Cryocon has the right of first refusal on the
resale of any shares of common stock held by Bourn, if Bourn elects to purchase
the shares.

J. Brian Morrison

Pursuant to a written agreement between Cryocon and J. Brain Morrison,
executed on February 1, 2001, Mr. Morrison may purchase up to 500,000 shares of
Cryocon's common stock at the price of $0.10 per share. If Cryocon's common
stock is subdivided into a greater number of shares or a dividend is paid in
common stock, or combined into a smaller number of shares, the exercise price
and the number of shares of capital stock issuable upon the exercise of any the
warrants shall be adjusted so that the holder shall be entitled to receive the
number of shares of capital stock that the holder would have owned prior the
corporate action had the warrants been exercised.

Todd Moore

Pursuant to a written agreement between Cryocon and Todd Moore,
executed on December 20, 2000, Mr. Moore may purchase up to 1,000,000 shares of
Cryocon's common stock at the price of $0.10 per share. If Cryocon's common
stock is subdivided into a greater number of shares or a dividend is paid in
common stock, or combined into a smaller number of shares, the exercise price
and the number of shares of capital stock issuable upon the exercise of any the
warrants shall be adjusted so that the holder shall be entitled to receive the
number of shares of capital stock that the holder would have owned prior the
corporate action had the warrants been exercised.

Millennium Capital Partners, LLC.(Subject to a Rescission Offer)

Pursuant to a written agreement between Cryocon and Millennium,
executed on February 16, 2001, Millennium has the right to purchase 1,500,000
shares of Cryocon's common stock. Millennium's purchase price per share is
eighty percent (80%) of the market price for Cryocon's common stock on the
business day immediately prior to the day that Millennium purchases the shares.

Cryocon Shareholder Warrants (Subject to a Rescission Offer)

The warrants Cryocon issued to its shareholders allows the shareholders
to purchase up to 3,714,585 shares of Cryocon's common stock. The warrants were
issued to Cryocon's shareholders without costs to the shareholders. The exercise
price for the warrants is eighty percent (80%) of the market price of Cryocon's
common stock on the day immediately prior to the day that the shareholder
holding the warrants elects to exercise its warrants. The minimum exercise price
for each warrant is $2.00 per share.
The warrants expire April 30, 2002

BUSINESS ORGANIZATION WITHIN THE LAST FIVE YEARS

ISO Block Products USA, Inc. was incorporated in the State of Colorado,
on April 28, 1986, under the name Champion Computer Rentals, Inc. Champion
obtained funding from a public offering in order to engage in the sale and
leasing of computers and related equipment. Champion's principal business
operations through March 31, 1992 consisted of leasing out computers, peripheral
products and software. Champion realized only nominal revenues through March 31,
1992. As March 31, 1992, Champion ceased its computer sale and leasing
operation.

On March 28, 1994, the Champion entered into an Agreement and Plan of
Reorganization and was acquired by R-S Iso-Block Produktions GmbH, a German
limited liability company, Josef Ratey, an individual, Helge Seidel, an
individual, and R-S Plus Investment Corp., a Florida corporation. Pursuant to
the Reorganization Agreement, on March 31, 1995 the Champion purchased from
Ratey and Seidel all of the equity interest in Iso-Block GmbH, and purchased
from R-S Plus all of its right, title and interest in and to Iso-Block GmbH,
including all R-S Plus property heretofore contributed to Iso-Block GmbH and all
R-S Plus's rights to Iso-Block profits, in exchange for the issuance of an
aggregate of 2,000,000 shares of Champion's authorized but heretofore unissued
common stock, no par value. In 1995, Iso-Block GmbH changed its name to R-S
ISO-Block Produktions und Bautrager GmbH, which permitted it to engage in the
business of constructing buildings as well as manufacture and production of
building materials.

In fiscal years ended 1995 and 1996, Iso-Block GmbH had certain
operations in Germany. Iso-Block wound down these operations in the closing
months of 1996. Beginning 1996, Iso Block functioned entirely as a US company
engaged in the business of residential home construction as general contractor.

On January 24, 1997, Iso Block acquired 100% of the stock of Franchise
Connection, Inc. and its wholly owned subsidiary Brilliant Marketing, Inc., a
strategic conglomerate of new and emerging franchise companies and a team of
franchise experts that work together to match the aspirations of entrepreneurs
with viable analogous franchise concepts.

Franchise Connection, Inc. was incorporated in Colorado in 1996 with
headquarters in Denver, Colorado. Franchise Connection attempted to form
strategic partnerships with prospective or existing franchise operations under
which Franchise Connection planned to provide marketing and sales services plus
business and legal services in return for an equity interest in, and/or a
portion of their royalties. Franchise Connection targeted private companies that
sought to franchise expertise or financial capacity to successfully engage in
franchising. Franchise Connection offered comprehensive franchise marketing and
consulting services to its franchisers companies including operations,
personnel, management, training, legal and financial advice. In addition,
Franchise Connection assumed total responsibility for the recruitment of
franchisees, including national media advertising, trade show attendance, and
other forms of promotion supported by a commissioned sales staff.

Franchise Connection, Inc. developed Magna Dry LLC. Franchise
Connection, Inc. formed a Colorado Limited Liability Company "Magna-Dry USA,
LLC" of which was the sole member. Magna-Dry USA purchased the exclusive license
to operate and franchise the Magna-Dry concept in total cleaning throughout the
United States. Franchise Connections, Inc. executed a five-year license
agreement with renewal options and paid a master franchise fee. The principal
business was manufacturing, re-packaging, distribution and licensing of leading
edge environmentally safe-cleaning services developed by an Australian
formulator Charles C. Borg. Franchise Connection, Inc. had exclusive territorial
rights to manufacture and distribute Magna-Dry products in the United States.

On August 31, 1999 Cryocon, Franchise Connection, Magna Dry, Brilliant
Marketing and certain individuals entered into a Unwinding Agreement due to the
lack of cash on hand and lack of operating income. The discontinued operations
resulted in $86,232 of liabilities that are no longer a responsibility of Iso
Block.

Iso Block entered into an Agreement and Plan of Reorganization, dated July
20, 1999, with MedScan Technologies, Inc., an Oklahoma corporation, and the
shareholders of MedScan. In that agreement, Cryocon agreed to issue, at closing,
10 million shares of its common stock in exchange for all of the outstanding
common stock of MedScan, all of the issued Class A common stock of American
Capital Corporation, a Nevada corporation and all of the common stock of Star
Insurance Company, Ltd., an insurance company domiciled and licensed in the
Federation of St. Kitts and Nevis, British West Indies.

Iso Block terminated the agreement, based on failure of the closing to take
place by the time required in the agreement, based on the fact that the selling
holder of the STAR common stock repudiated the Exchange Agreement and announced
its refusal to consummate the Exchange, and based on the failure or untruth of
certain representations and warranties of MedScan made in the Exchange
Agreement. Iso Block, by letter faxed to MedScan , notified MedScan of the
termination. No person associated with MedScan, AMCAP or STAR ever become an
officer or director of Iso Block.

Until August of 1999, Iso Block's principal operations consisted of
residential home construction as general contractor.

Neither Cryocon nor any of it's predecessors have been involved in any
bankruptcy, receivership, or similar proceeding.

DESCRIPTION OF BUSINESS

On August 16, 2000, Cryocon, a developmental stage company, acquired
all of the issued and outstanding stock of the stock of Cryocon Utah. Cryocon
Utah is one of the operating subsidiaries of Cryocon. Cryocon Utah was organized
to provide deep cryogenic tempering of materials to relieve stress and enhance
durability and wear. Deep cryogenic tempering is a process that includes the
application of extremely low temperatures (at approximately minus 300F)
utilizing a computer-controlled process.

Recent Changes in Capital Structure

On September 21, 2000, Cryocon held a special meeting of its
shareholders. At the special shareholder's meeting, the majority of the
shareholders, approved a Board resolution to reverse split of each of the issued
and outstanding shares of Cryocon's common stock into one fourth share (1/4)
share of common stock. In conjunction with the reverse split, the shareholders
authorized an increase in the total number of common shares of capital stock to
50,000,000 shares.

Acquisitions and Nature of Cryocon's Business

On November 10, 1999, Mr. Brunson executed an agreement to purchase
Cryo-Accurizing Division and the Tri-Lax Process from 300 Below Inc. On December
10, 1999, Cryocon acquired Cryo-Accurizing Division and the Tri-Lax Process from
Robert W. Brunson along with Mr. Brunson's interests in a patent on the
Cryo-Accurizing Division. Mr. Brunson developed both the Cryo-Accurizing
Division and the Tri-Lax Process while President of 300 Below, Inc. and was a
co-holder of the patent on the Cryo-Accurizing Process, which was awarded on
February 2, 1999.

Cryo-Accurizing is the patented process that Cryocon uses to perform
deep cryogenic tempering, material stabilization and stress relief to firearms
to improve accuracy, longevity and increase ease of cleaning. The Tri-Lax
Process is a combination of cryogenic, electromagnetic and sonic treatment.

Cryocon, using its proprietary process provides its customers with deep
cryogenic processing. Deep cryogenic processing is the process of applying
extremely low temperatures, approximately -300F, in a tempering process to
improve the wear and durability characteristics of the treated materials.

Cryocon's principal business consists primarily of cryogenically
treating gun barrels, brake rotors and drums, directional drilling bits,
machining tools, cutting tools, and a wide variety of other materials. Cryocon's
primary customers thus far have been private individuals, gun dealers, law
enforcement and truck fleet facilities, machine shops, parties in the
construction and mining industries, manufacturers of custom racing components
and other customers. Testing is currently underway with firearm manufacturers,
OEM brake component manufacturers, the US Department of Energy and other
manufacturing organizations.

On March 16, 2001, a division of intellectual property was organized to
specifically focus efforts on patent, trademark, copyright and other
intellectual property protections for Cryocon's processes, technology and those
of it's subsidiary, XTool.

On April 3, 2001, Cryocon acquired all the outstanding shares in XTool,
Inc. a privately held Utah corporation, with principal offices in Salt Lake
City, Utah. The acquisition was accomplished through a stock for stock exchange.
XTool, which was organized in November of 2000, is in the business of designing,
manufacturing and marketing boring bits and recovery tools for the petroleum
exploration, construction and mining industry. XTool has operations in
Bakersfield, CA, Farmington, NM, and Salt Lake City, UT.

On April 25, 2001, Cryocon announced the creation of a new medical
division and the appointment of Dr. Richard L. Lindstrom, a newly appointed
board member, as director of the division. The new medical division will focus
on the application of Cryocon's proprietary deep cryogenic tempering process to
the medical instruments, surgical instruments and medical devices.

Cryocon is currently in negotiation with Venture 2000, a Minnesota
Limited Liability Company, for the providing of consulting, patent and trademark
assistance, marketing and other services. Dr. Lindstrom is a member of Venture
2000 and has agreed to his Board position and directorship of Cryocon's medical
division in anticipation of the successful completion of negotiations with
Venture 2000. As compensation for the proposed services, Venture 2000 is

requesting 4,500,000 shares to be extended to them through a warrant which will
vest incrementally over a five year period. The exercise price would be set at
$0.10 per share. Certain affiliates within Cryocon have agreed to utilize shares
in their respective possessions to contribute to the ultimate compensation of
Venture 2000 so that Cryocon will only be required to contribute between 500,000
and 1,000,000 shares of it's capital stock during the five year period. To date
a final agreement has not been reached and there is no guarantee that a final
agreement will be reached. If Cryocon and Venture 2000 fails to reach a final
agreement there are no guarantees that Dr. Lindstrom will remain on Cryocon's
Board of Directors or that he will remain as the Director of Cryocon's medical
division.

To date in-house research and development has been focused on the
development of more efficient cryogenic processors, including a table top model
and custom, portable processing technology that can be implemented on the
customer's site meeting the customer's size and quantity requirements. Cryocon
estimates that, during the last fiscal year 2001, it has spent approximately
$124,533 in research and development costs. None of these costs have been passed
on to customers. No research and development costs were incurred for fiscal year
2000.

Cryocon's distribution of services occurs primarily through sales
contacts with end users and retailers. Efforts are currently underway to access
potential markets through OEM providers and manufacturers. Cryocon also intends
to offer a line of directional drilling bits, custom designed boring instruments
and recovery tools which will be directly marketed to the construction,
petroleum exploration and mining industries.

There are currently dozens of companies that provide cryogenic services
in one fashion or another. Many focus on a specialty product or service area.
Fewer offer the broad range of services provided by Cryocon. To the best
knowledge of Cryocon, no cryogenic companies are publicly traded. The primary
methods of competition in the industry are through direct sales contacts and
advertising. Cryocon has made significant contacts into targeted markets and is
currently testing with several manufacturers as well as engaged in a Cooperative
Research and Testing Agreement with the US Department of Energy at it's Rocky
Mountain Oil Field Testing Center.

The main component used in the cryogenic process is liquid nitrogen.
Several suppliers exist in the area with the primary supplier to Cryocon being
Praxair. Cryogenic processors can be built from components available from a wide
variety of specialized sources. Materials necessary for the development and
manufacture of products for XTool are also available from a wide variety of
sources.

To date Cryocon has not operated profitably nor signed any significant
contracts for services. Therefore, Cryocon does not have a dependence on one or
a few major customers.

As previously mentioned, Cryocon currently holds the patent for the
cryogenic treatment of firearms, presently known as the "Cryo-Accurizing"
process. Cryocon currently has two additional patents filed with the US Patent
and Trademark Office: one for surgical blade improvement through deep cryogenic
tempering, and one for the deep cryogenic tempering of brake components. Cryocon
anticipates having several additional patents filed within the next few months.

Cryocon also holds the trademark the Cryo-Accurizing logo and has
several trademarks pending.

Cryocon currently does not have any license agreements, franchise
programs, concessions, royalty agreements or labor contracts.

At the present time Cryocon does not need governmental approval for the
application of it's services to it's current clientele nor are there any
existing or probable governmental regulations on the business of Cryocon above
and beyond traditional governmental business regulations. Cryocon currently does
not incur any expenses nor has it's business been effected due to compliance
with environmental laws.

Cryocon currently has 17 full time employees and no part time employees.

MANAGEMENT'S DISCUSSION AND ANALYSIS

Management's Discussion and Analysis of Financial Condition and Results of
Operations

The following discussion of Cryocon's past and future financial condition
and results of operations should be read in conjunction with the financial
statements and the notes to those statements, other financial information
included elsewhere in this prospectus and in light of the Risk Factors at page
7.

Past Financial Condition:

For fiscal year 2000 Cryocon operated under the name of the acquiring
entity of ISO Block Products USA, Inc., a Colorado Corporation. ISO Block
reported revenues from operations for that year of $118,460 with net income from
operations of $55,370 and net gains on sales of $86,378 for a total net income
of $141,748. These proceeds were from the sale of assets and residential
construction. ISO Block discontinued operations in August of 1999. The
acquisition of Cryocon of Utah by ISO Block occurred August 16, 2000.

Cryocon's loses for fiscal year 2001 are $2,697,079. These losses are
attributable to start-up and operational costs, market development penetration,
costs incurred in capital acquisition and asset expenditures. Unusually high
capital outlays include $700,000 for shop equipment, land and building;
approximately $313,274 in equipment (computers and printers), approximately
$275,000 for the purchase of the Cryo-Accurizing patent and related equipment
and $282,937 in advertising.

On December 15, 2000, Cryocon announced corporate restructuring aimed
at achieving administrative and operational cost savings. Cryocon estimated cost
savings in excess of 50% through outsourcing key functions and redefining
departmental and employee functions. As a result of this action, Cryocon's
management reduced Cryocon's full time employees by 10 employees to a total of
17 full time personnel. At the present time here is no anticipated significant
changes in the number of employees; however, management reserves the right to
further redefine employee positions anticipates that it may need to hire
personnel specifically in the research and development area. These changes have
resulted in significant material changes in several line items of Cryocon's
financial statements. Additional steps taken to reduce company expenditures
include the sale of company owned vehicles and excess equipment.

Future Financial Condition

In March of 2001 Cryocon appointed a new chairman and chief executive
officer, J. Brian Morrison, who, in conjunction with the board of directors, has
identified several potential acquisitions and/or mergers. The stated goal is to
merge Cryocon's technology into mainstream processes to generate superior
results for the customer and expand the technology into traditional heat
treating markets.

In furtherance of these goals, Cryocon acquired XTool. Cryocon has
committed to obtain funding and make the capital expenditures necessary to
develop XTool's business and production and promote it's expansion into the
petroleum exploration, construction and mining industries. Cryocon is also
moving forward with patent development and seeking trademark and other
protections for XTool's designs, logos, words and proprietary processes. Cryocon
believes this is an excellent opportunity for development in these areas given
the recent national trends in energy consumption, shortages and the present
emphasis within the government for increased exploration and domestic
production.

Most of the principals of XTool have extensive experience in the
petroleum exploration, construction and/or mining industries. Many of the
principals have experience in tool design, manufacturing and marketing in these
areas. XTool currently has two different prototypes in field tests. With
financing of approximately $350,000, it is projected that XTool has the
potential to bring in revenues of $3,500,000 during it's first 12 months of
funded operations with a positive cash flow being achieved by the 11th month.

Additional funding is necessary for Cryocon to satisfy it's cash
requirements. Currently Cryocon does not have sufficient cash reserves to meet
it's obligations for the next 30 days. However, management is confident in it's
abilities to raise short term funding to meet it's current needs. Upon the
effectiveness of this prospectus and registration statement, Cryocon has a stock
purchase agreement with a company for 1,500,000 shares of common stock which
should produce sufficient revenues for operations and expansion for
approximately six months. Thereafter it is anticipated that revenues would
substantially increase, but further capital will need to be raised to implement
management's stated goal to merge Cryocon's technology into mainstream processes
to generate superior results for the customer and expand the technology into
traditional heat treating markets.

In-house research and development has been focused on the success of
Cryocon's proprietary process with different materials and the development of
more efficient cryogenic processors, including a table top model and custom,
portable processing technology that can be implemented on the customer's site
meeting the customer's size, dimensional and quantity requirements. Research and

development planned for the next 12 months includes design enhancement and
production of high quality tools and bits for the petroleum exploration,
construction and mining industries.

Cryocon will also focus efforts in the it's new medical division (See
Description of Business) through research and development in the application of
Cryocon's technology in the medical field and the patenting of the successful
applications, as well as obtaining trademark, copyright and other intellectual
property protections as appropriate.

At the present there are no expected purchases or sale of plant and/or
significant equipment. However, upon additional funding Cryocon anticipates
making the capital expenditures necessary to allow XTool to either purchase
and/or lease equipment necessary to begin production of tools to meet expected
purchase orders and the development of additional prototypes for it's targeted
industries. Until these capital expenditures are made, XTool will outsource
production and prototype development.

Liquidity and Capital Resources.

Cryocon Utah commenced operations on January 3, 2000. Since start of
operations January 2000, Cryocon has realized $141,562 in gross sales and had
$36,127 in accounts receivable. Of those gross sales $82,223 resulted from the
treatment of firearm components through the Cryo-Accurizing Division and $59,339
has resulted from deep cryogenic tempering of miscellaneous parts for various
individuals and manufacturers. Cryocon's cumulative operating loss through March
31, 2001 is $3,766,158. The loss is attributable to pre-organizational, start-up
and operating costs of its subsidiary Cryocon Utah, and costs incurred in
Cryocon's financing efforts.

Cryocon's operation to date has consumed substantial amounts of cash.
As of March 31, 2001, Cryocon had a working capital deficit of $382,126. Since
inception the net cash loss from operations is $2,689,449 and is expected to
continue and may accelerate in the foreseeable future. The consumption of
capital during the start-up phase included $700,000 for a building purchase,
equipment purchases of $313,274, and a patent purchase of $275,000. The rate in
which Cryocon expends its resources is variable and may accelerate, depending on
many factors. Many of the factors are outside of Cryocon's control, including:

o the continued progress of Cryocon's research and development of
new process applications; the cost, the timing, and outcome of
further regulatory approvals;

o the expenses of establishing a sales and marketing force, the
timing and cost of establishing or procuring additional requisite
production and other manufacturing capacities,

o the cost; if any, the cost of preparing, filing, prosecuting,
maintaining, defending and enforcing patent claims; and

o the status of competitive products and the availability of other
financing.

Because Cryocon is still in the development stage, it has limited
working capital and limited internal financial resources. Cryocon's limited cash
flows have prevented Cryocon from borrowing funds from conventional lending
institutions. Since the Cryocon has not been able to secure funding from
commercial lenders, Cryocon has relied on private investments from
third-parties, including Cryocon's management, to meet its current obligations.
As of May 1, 2001, Cryocon will not have sufficient cash on hand to fund another
month of operations at the current run rate; however, Management is confident of
being able to obtain operational funds through various means.

Cryocon's financial information is prepared using generally accepted
accounting principles applicable to a going concern that contemplates the
realization of assets and liquidation of liabilities in the normal course of
business.

DESCRIPTION OF PROPERTY

Cryocon's current administrative and operational facility is located at
2250 North 1500 West, in Ogden, Weber County, Utah. The building consists of
39,828 sq ft of which approximately 10,000 sq ft is finished office space.
Cryocon is currently the owner with Bourns Inc., holding a trust deed note
payable for a balance of $1,350,000. Cryocon has paid approximately $700,000
against the principal of $2,050,000. Cryocon is currently in negotiations with
Bourns to effect a roll over of the note for a one year period or reach some
other mutual agreement.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

The following table sets forth the name, age, and position of each
executive officer and director and the term of office of each director of
Cryocon, as of May 15, 2001.

Director and Officers Age Position Since

J. Brian Morrison 43 Chairman/CEO March 2001
Director December 2000

Robert W. Brunson 45 President, March 2001
Intellectual
Property Division August 2000
Lyndell Parks 43 Director December 2000

James S. Cundiff 55 Director/ March 2001
Secretary

Sterling Redfern 67 Director March 2001

Richard L. Lindstrom, MD 54 Director/ April 2001

Vaughn P. Griggs 58 Chief Financial
Officer March 2001

James M. Retallick 43 VP., Corporate Counsel July 2000

Matt Kammeyer 31 Senior VP., Marketing December 2000

Biographical Information

Set forth below is certain biographical information for each of Cryocon's
Officers and Directors:

J. Brian Morrison

Mr. Morrison has over 21 years of experience in sales, management,
investment banking, and has been directly involved with the management of nearly
one hundred employees. Mr. Morrison was appointed as chairman and chief
executive officer in March of 2001/ Most recently, Mr. Morrison retired from
Stephens, Inc.; the largest investment-banking firm in the world off Wall
Street, was Vice-president Bank of Oklahoma, BOSC Securities (1998 - 2000) Mr.
Morrison has spent time acting as a private consultant. Mr. Morrison volunteered
his time and talents to the youth of St. James United Methodist Church from May
1997 to May 1998. He has specialized in fixed income security sales, municipal
and governmental financing with institutions, banks, and trust departments, as
well as the development of Arkansas and national markets. Additionally, Mr.
Morrison has been directly involved with placement and/or underwriting of equity
with many Fortune 500 Companies.

Robert W. Brunson

Mr. Brunson founded Cryocon, Inc., the Utah Corporation, in January of
2000, together with his spouse Debra L. Brunson. Previously, Mr. Brunson had
been the president of a major cryogenics firm in the Midwest (September 1994 to
May 1999). From May 1999 to January 2000, Mr. Brunson developed the business
plan and presented the plan to potential investors. Mr. Brunson has worked as an
engineer and consultant in the area of nuclear, chemical and electrical
engineering since 1980, as well as cryogenic technology. He authored and held
the patent for the deep-cryogenic tempering of firearm barrels and components,
known throughout the country as Cryo-Accurizing, which is now a division of
Cryocon.

Mr. Brunson is the founding co-chairman of the National Small Public
Company Leadership Council, as well as a member of its Executive Committee.
Robert is also currently the chairman of the Cryogenic Standards Committee and
serves as an expert panel member of Heat Treating On-Line and operates as
chairman of the ASM Cryogenic Roundtable Committee.

Lyndell Parks

Mr. Parks has recruiting, marketing, and management experience covering
the past 18 years. This includes the organization of project teams, recruitment
of professionals, team projects, and assisting corporations in both managerial

structure and product development. He has owned and operated several private
companies and has also served on many councils and board of directors.

Mr. Parks is currently General Manager of Paragon Marketing (September
1998) that provides a wide variety of corporate marketing and consulting. Mr.
Parks is also the President and Founder of the Senior Citizens Relief Fund
(1998). He is the Interim Chairman/CEO for Floran International, Inc (January
2000). Mr. Parks co-founded and is the Co-Chairman of the Executive Committee
with the Small Public Company Leadership Council (May 2000). Prior to Paragon
Marketing, Mr. Parks co-founded and was the Senior Vice President and Chief
Operations Officer for Natures Wealth, Inc. and VitaCost.com, Inc. (January 1994
- - February 1998.

James S. Cundiff

Mr. Cundiff has an extensive background in marketing both domestically
and internationally. He graduated from the University of California, Humbolt in
1971 with a degree in Business Administration. Mr. Cundiff is the founder and
current Vice President of Qwestar Resources (2001). Mr. Cundiff is also the
founder and Vice-President of Telequest, Inc. since 1995.

Sterling Redfern

Mr. Redfern is the former president/chief executive officer for the
Educational Employees Credit Union (EECU) in Bridgeton, Missouri. Mr. Redfern
was the first full-time employee of EECU in 1960 and helped develop EECU into
one of the leading credit unions in the country with assets of over 200 million,
38,000 members, and 120 employees. Mr. Redfern retired from EECU in 1994.

A graduate of Arkansas State University, Mr. Redfern has also attended
the Army Security Agency School, St. Louis University, the Credit Union National
Association School of Business Management, and the University of Wisconsin. Mr.
Redfern was a member of the Credit Union Executive Society for 34 years, served
as Director of the Missouri Credit Union League for 30 years, and was the Credit
Union National Association Director for 20 years. Mr. Redfern has served several
years as a board volunteer for a number of educational organizations including
15 years with the Missouri White House Conference on Education. Mr. Redfern is
married with three children and six grandchildren.

Richard L. Lindstrom

Dr. Lindstrom has previously been awarded 29 patents and 15 research
grants. He is currently the attending surgeon and managing partner of Minnesota
Eye Consultants in Minneapolis (1998). Dr. Lindstrom also serves as an attending
surgeon and medical director for the Center for Teaching and Research at the
Phillips Eye Institute (January 1989). He is the medical director for Laser
Vision Centers, Inc. (August 1995) and Midwest Surgical Services (September
1994), and is the chief medical editor for Ocular Surgery News. Dr. Lindstrom
frequently consults with industry leaders and serves as president of
Ophthalmology Consultants (zksmistu 1983). He is the associate director for the
Minnesota Lions' Eye Bank (January 1987) and a clinical professor of
Ophthalmology at the University of Minnesota (January 1989). Dr. Lindstrom is
married with two children.

Vaughn P. Griggs

Mr. Griggs has over 30 years experience in corporate finance and
operations. Mr. Griggs obtained a B.S. in Accounting with an emphasis in
Business Management and Economics from Brigham Young University. Mr. Griggs has
been with Cryocon since April, 2000. He served Cryocon as a controller and a
cryogenic consultant. Mr. Griggs has previously worked for Precision Tool, Inc.
(1993 to April 2000), American Apparel, Inc., and Integrated Systems
Engineering, Inc. Mr. Griggs also worked as a staff auditor for Arthur Andersen
& Co., he was Vice President of Property Management with Price Management
Company, served as Controller for the Grossmont Shopping Center and Huish
Management Company, and CFO/Product Development for Nutrition Management
Company. Mr. Griggs served as Recorder for the City of Nibley, Utah for three
years. He was Chairman of the Transportation Committee in the La Mesa,
California Chamber of Commerce and was the Charter Member and Treasurer of the
Grossmont Kiwanis International Club.

James M. Retallick

Mr. Retallick graduated from the J. Reuben Clark Law School at Brigham
Young University in 1987. Mr. Retallick served in the U.S. Army Judge Advocate
General's Corps attaining the rank of Major. His assignments took him all over

the world and included positions as prosecutor, instructor and doctrine writer
for the US Army Intelligence Community and military magistrate. Mr. Retallick
began private practice in 1992 with an emphasis in case negotiation and
litigation. Mr. Retallick later join the firm of Snider, Pace & Retallick, P.C.
in 1996 and later created the firm of Retallick & Pace, P.C. in 1997. Mr.
Retallick left his position as shareholder and managing attorney of Retallick &
Pace, P.C. in January 2000 to accept a position with Cryocon, Inc. Mr. Retallick
worked closely with founder Robert W. Brunson in the development of Cryocon,
from business plan formulation to the establishment of Cryocon. Mr. Retallick
brings a varied background in legal projects execution and personnel management
which has lent itself well to the demands of a public company and management of
professionals of various disciplines. Mr. Retallick is Debra L. Brunson's
brother and Robert W. Brunson's brother-in-law.

Matthew A. Kammeyer

Mr. Kammeyer has over 10 years of effective managerial experience in
the areas of marketing, advertising, and corporate communications. He has
received a M.S. degree in Sport Administration (emphasis in marketing & media
relations) from Georgia Southern University and a B.S. degree in Communication
(emphasis in journalism & public relations) from Weber State University. Mr.
Kammeyer has experience in multiple aspects of advertising including print,
television, radio, direct mail, and Internet. Mr. Kammeyer has managed local and
national media relations, event relations, marketing, and advertising projects
for the U.S. Ski & Snowboard Teams (1995 - 1996 season), the Atlanta Committee
for the Olympic Games (1995), Georgia Department of Transportation(1996), Weber
State University (1993 - 1994), Pacific Rim Financial Group (July 1996 - 1997),
Newgate Mortgage Company (May 1997 - January 1998), Bank One (January 1998 -
January 2000), and Franklin Quest (February 1996 - July 1996). Mr. Kammeyer has
been with Cryocon, Inc. since its inception in January 2000. He has served
Cryocon as Sales Manager, Marketing & Advertising Manager, and currently as Vice
President of Marketing & Advertising.

EXECUTIVE COMPENSATION

The following table set forth certain summary information concerning
the compensation paid or accrued for each of the Cryocon's last three completed
fiscal years to Cryocon's or its principal subsidiaries Chief Executive Officer
and each of its other executive officers as of March 31, 20001 regardless of
compensation:

SUMMARY COMPENSATION TABLE

Other Restricted Securities LTIP All Other
Name and Annual Stock underlying payouts Compensation
Principal Position Year Salary Bonus Compensation award(s) options/SARs ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i)

ROBERT W. BRUNSON, CEO 2001 125,000 00 00 00 00 00 00 (1)
J. BRAIN MORRISON, CEO 2001 150,000 00 00 00 750,000 00 00 (2)
D. CLARK CARLILE, VP 2001 105,000 00 00 00 (3) 00 00 00 (5)
MATT A. KAMMEYER,VP 2001 N/A 00 00 00 00 00 00 (3)(4)
JAMES M. RETALLICK, VP 2001 N/A 00 00 00 (3) 250,000 00 00 (6)
VAUGHN P. GRIGGS, CFO 2001 N/A 00 00 00 00 00 00 (7)
EGIN BRESNIG, CEO 2000 00 00 00 00 500,000 00 00
EGIN BRESNIG, CEO 1999 00 00 00 00 00 00 00
EGIN BRESNIG, CEO 1998 45,000 00 00 00 00 00 00

(1) Robert W. Brunson was appointed chairman and CEO upon the closing of the
acquisition of Cryocon of Utah by ISO Block Products USA, Inc on August
16, 2000. Mr. Brunson served in that capacity until his resignation March
16, 2001.
(2) J. Brian Morrison was appointed chairman and CEO on March 16, 2001. Mr.
Morrison was appointed as a director December 15, 2000, at which time he
received an option for 250,000 shares, only 100,000 of which has vested.
On February 5, 2001 Mr. Morrison received warrants for 500,000 shares
which vested immediately.
(3) All Vice-Presidents have stock options in the total amount of 250,000
shares which vest at 50,000 shares each year on the anniversary of their
hire and/or promotion date. To date no option shares have vested for any
current vice president.
(4) Matthew A. Kammeyer was promoted to Vice President, Marketing, January 3,
2001. His annual salary was increase at that time.
(5) D. Clark Carlile was hired in July, 2000 with an annual salary of
$105,000. He has not received in excess of $100,000 for 2000 because of
his hire date.
(6) James M. Retallick was promoted to Vice President in July 2000, with an
annual salary of $78,750. On October 16, 2000, the Board of Directors
voted to grant to Mr. Retallick an option on 250,000 founder shares for
his participation in the start up of Cryocon. The shares vested
immediately; however, as of the date of this registration statement none
of the options have been exercised.
(7) Vaughn P. Griggs was appoint CFO on March 16, 2001 and is entitled to a
stock option plan as a vice president. (see note 3).

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the
Cryocon's Common Stock owned as of March 27, 2001 by (i) each person who is
known by Cryocon to own beneficially more than five percent (5%) of Cryocon's
Common Stock; (ii) each of Cryocon's directors and nominees; (iii) all officers
and directors as a group:

(i) BENEFICIAL OWNERS OF MORE THAN 5%:

Amount and
Title of Name and Nature of Percentage of
Class Address Beneficial Ownership Shares (1)

Common Apollo Holdings 1,450,000 6.7% (2)
PO Box 793
Dartford, Kent UK
DA27ZY
Common Millennium Capital
Partners, LLC 1,500,000 6.9% (3)
330 South Pineapple Ave.
Ste 203
Sarasota, FL 34236
Common Todd Moore 3,000,000 13.7% (4)
728 Georgia Street
Blaine, WA 98230

(ii) DIRECTORS AND NOMINEES:

Amount and
Title of Name and Nature of Percentage of
Class Address Beneficial Ownership Shares (1)

Common Robert W. Brunson 12,163,893 56.0%
2250 North 1500 West
Ogden, UT 84404

Common J. Brian Morrison 600,000 2.7.0% (5)
2250 North 1500 West
Ogden, UT 84404

Common Lyndell Parks 2,000,000 9.2.0% (6)
2250 North 1500 West
Ogden, UT 84404

Common James S. Cundiff 500,000 2.3%
2250 North 1500 West
Ogden, UT 84404

Common James M. Retallick 270,000 1.2% (7)
2250 North 1500 West
Ogden, UT 84404

All officers and directors as a group 13,533,893 62.6%

(1) The percentage of shares is calculated based upon the total outstanding
shares as of May 15, 2001.

(2) Apollo Holdings is a consulting group. The shares are held in the
company's name The sole beneficial owner of Apollo Holdings is Chris
Bonvini, a citizen of Great Britain.

(3) Assuming a rejection of the rescission offer, these shares are purchasable
under a Stock Purchase Agreement executed between Cryocon and Millennium
Capital assuming the effectiveness of the registration of 1,500,000 shares
designated for Millennium Capital in this prospectus.

(4) Mr. Moore holds a fully vested option to 2,000,000 shares currently owned
by Mr. Brunson. Mr. Moore also holds a fully vested warrant for 1,000,000
shares. To date Mr. Moore has not exercised either his option or warrant.
If Mr. Moore exercised his option for Mr. Brunson's shares, Mr. Brunson's
percent of ownership would be reduced to 47%. If both Mr. Moore and Mr.
Parks exercised their options, Mr. Brunson's percent of ownership would be
reduced to 37.8%.

(5) Mr. Morrison holds a fully vested warrant for 500,000 shares. Mr. Morrison
also holds an option for 250,000 shares, only 100,000 shares of which may
be exercise within the next 60 days.

(6) Mr. Parks currently holds an option on 2,000,000 shares of shares
currently held by Robert W. Brunson. If Mr. Parks exercised his option for
Mr. Brunson's shares, Mr. Brunson's percent of ownership would be reduced
to 47%. If both Mr. Parks and Mr. Moore exercised their options, Mr.
Brunson's percent of ownership would be reduced to 37.8%.

(7) Mr. Retallick owns 20,000 shares. Mr. Retallick has a fully vested option
for 250,000 founder shares.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Robert W. Brunson, (former Chief Executive Officer) President of the
Intellectual Property Division holds an outstanding promissory note with an
interest rate of twelve percent (12%) per annum. The remaining outstanding
principal amount of the loan is $149,744.00. Cryocon is not currently making
periodic payments on the outstanding principal and interest on this loan. Mr.
Brunson has not demanded repayment of the principal or interest due on the loan.

Robert W. Brunson sold to Cryocon Utah, the assets relating to the
Cryo-Accurizing Division and the Tri-Lax Process on November 10, 1999. In
consideration, Cryocon Utah originally gave Mr. Brunson 9,700,000 shares of
common stock, Seventy Thousand Dollars ($70,000), and a convertible debenture in
the principal amount of $50,000. The debenture had an interest rate of ten
percent (10%) per annum. At Mr. Brunson's election the amount of any outstanding
principal and unpaid interest were convertible into Cryocon Utah's common stock.
At the time of Cryocon's (Iso-Block's) acquisition of Cryocon Utah, Cryocon
assumed the obligation of the promissory note, and agreed to allow the debenture
to be convertible into Cryocon's common shares. The 2,002,523 shares of common
stock described in this prospectus were issued to Mr. Brunson upon conversion of
the debenture. Pursuant to the terms of the convertible debenture, Mr. Brunson
exercised his right to demand registration of the common shares issued upon
conversion of the debenture.

Lyndell Parks became a director on December 15, 2000. Mr. Parks
executed a consulting agreement with Cryocon in November 2000, wherein Cryocon
agreed to pay Mr. Parks $200,000 for his services, in addition to reimbursing
his expenses. Paragon Marketing and Management employees Mr. Parks as its
general manager. Cryocon has an agreement with Paragon Marketing and Management
to pay $3,000 per month to provide Cryocon investor relation services. Cryocon
is not currently paying Paragon Marketing and Management for those services.
Paragon Marketing and Management was the general managing member of each of the
Paragon Venture Funds I, II, III, IV and V. As a member of each venture fund,
Paragon Marketing and Management received 389,400 shares of Cryocon common
stock, upon the conversion of the debenture and the liquidation of each of the
Paragon Venture Funds.

Robert Wickerschiem was appointed to the Board of Directors in October
2000. Mr. Wickerschiem was limited in his participation on the Board due to
health matters. Mr. Wickersheim resigned from the Board due to health reasons
effective March 29, 2001. Mr. Wickerschiem loaned Cryocon $100,000 without
interest. The principal amount of the loan becomes due on April 30, 2001.

J. Brain Morrison became a Director on December 15, 2000. Mr. Morrison
became Cryocon's Chairman and Chief Executive Officer on March 3, 2001. On
February 5, 2001, Mr. Morrison executed a warrant agreement with Cryocon wherein
Cryocon agreed to sell to Mr. Morrison 500,000 shares of Cryocon's common stock
at the purchase price of $0.10 per share. Mr. Morrison's right to purchase the
500,000 shares of common stock expires on December 31, 2005. The 500,000 shares
of common stock issuable upon the exercise of the warrant agreement are included
in this prospectus. Additionally, Mr. Morrison received a stock option for
common shares to vest as follows: 100,000 shares vesting on January 2, 2001;
75,000 shares vesting on January 2, 2002; and, 75,000 shares vesting on January
2, 2003.

COUNSEL

The validity of the issuance of the warrants and shares of the common
stock offered by this prospectus will be passed upon for the Company by Marcus
A. Sanders, Esq. Mr. Sanders, who has provided advice with respect to this
matter, owns no shares of Cryocon stock. Mr. Sanders is not an "affiliate" of
the Cryocon and does not have any interest in the registrant.

EXPERTS

Cryocon's consolidated financial statements as of March 31, 2000 and
for the year ended March 31, 1999 included in this prospectus have been included
herein in reliance upon the reports of, Larry O'Donnell, CPA, P.C., independent
certified public accountants, which appear elsewhere in this prospectus, and are
included upon the authority of this firm as experts in accounting and auditing.

The financial statements of Cryocon Utah, the operating subsidiary, as
March 31, 2000, included as part of this prospectus have been audited by HJ &
Associates, L.L.C., independent auditors, as stated in their report dated March
31, 2000, and have been included in this prospectus in reliance upon the report
of HJ & Associates appearing elsewhere herein, and upon authority of this firm
as experts in accounting and auditing.

Effective September 21, 2000, Cryocon retained HJ & Associates to act
as its auditors. In this regard, HJ & Associates replaced Larry O'Donnell's
firm, which audited Cryocon's financial statements for the fiscal years ended
March 31, 2000 and for the year ended March 31, 1999. The reason for the change
in accountants was due to the change of Cryocon's principle place of business
from Colorado to Utah. The reports of Larry O'Donnell for these fiscal years did
not contain an adverse opinion, or disclaimer of opinion and were not qualified
or modified as to uncertainty, audit scope or accounting principles.

During Cryocon's two most recent fiscal years, there were no
disagreements with Larry O'Donnell on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedures, which
disagreements, if not resolved to the satisfaction of Larry O'Donnell would have
caused Larry O'Donnell to make reference to such disagreements in its reports.

Cryocon has authorized Larry O'Donnell to discuss any matter relating
to Cryocon's operations with HJ & Associates. The change in auditors was
recommended and approved by Cryocon's board of directors, and a majority of its
shareholders. Cryocon does not have an audit committee.

During the two most recent fiscal years, Cryocon did not consult with
HJ & Associates on the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion that
might be rendered on Cryocon's financial statements, or any matter that was the
subject of a disagreement or what is defined as a reportable event by the
Securities and Exchange Commission.

INTEREST OF NAMED EXPERTS AND COUNSEL

No "expert" as that term is defined pursuant to Regulation S-B, or the
"counsel" of Cryocon as that term is defined pursuant to regulation S-B, was
hired on a contingent basis, or will receive a direct or indirect interest in
Cryocon, or was a promoter, underwriter, voting trustee, director, officer, or
employee of Cryocon at any time prior to the filing of this registration
statement.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's Common Stock is currently traded on the OTC Bulletin
Board, under the symbol "CRYQ." There are approximately 790 shareholders.

On March 27, 2001, Cryocon's common stock was quoted on the OTC
Electronic Bulletin Board at the price of $2.50. The following sets for the
quarterly fluctuations in the reported bid prices for the period from March 31,
1998 through December 31, 2000.

High Bid Low Bid
Fiscal Year Ending March 31, 1999
First Quarter $ n/a $ n/a
Second Quarter $ 0.030 $ 0.020
Third Quarter $ 0.020 $ 0.020
Fourth Quarter $ 1.062 $ 0.040

Fiscal Year Ending March 31, 2000
First Quarter $ 0.750 $ 0.250
Second Quarter $ 0.750 $ 0.125
Third Quarter $ 0.187 $ 0.093
Fourth Quarter $ 1.625 $ 0.062

Fiscal Year Ending March 31, 2001
First Quarter $ 1.680 $ 0.625
Second Quarter $ 5.500 $ 0.750
Third Quarter $ 7.312 $ 2.500
Fourth Quarter $ 4.500 $ 2.125

SELLING STOCKHOLDERS

Cryocon issued the shares of common stock offered for resale by this
prospectus to the selling shareholders upon either the conversion of debentures,
shares issued pursuant to a private placement or the exercise of warrants and
options.

The table below sets forth information known to us with respect to
beneficial ownership of the common stock as of February 28, 2001 by each selling
stockholder. The table below assumes that the selling stockholders will exercise
all of the warrants, and that all of the selling shareholders will sell their
shares. Since each stockholder may choose not to sell his shares, we are unable
to state the exact number of shares that actually will be sold.

Information with respect to "beneficial ownership" shown below is based
on information supplied by the respective beneficial owner. For purposes of
calculating the percentage beneficially owned, the shares of common stock deemed
outstanding include:

- the shares outstanding as of March 27, 2001; and

- the shares issuable by us pursuant to the conversion of the
debentures and the exercise of warrants held by the respective person that may
be exercised within 60 days following the date of this prospectus.

The shares are deemed to be outstanding and to be beneficially owned by
the person holding the securities for the purpose of computing the percentage
ownership of that person but are not treated as outstanding for the purpose of
computing the percentage ownership of any other person. The mailing address of
each beneficial owner is c/o 2250 North 1500 West, Ogden, Utah 84401,
(801)395-2796.

====================================================================================================================================
(1) (2) (3) (4)
====================================================================================================================================
NAME OF BENEFICIAL OWNER AMOUNT OF SHARES OF COMMON STOCK NUMBERS OF COMMON SHARES NUMBER OF SHARES OF COMMON
OWNED BEFORE OFFERING OFFERED BY SELLING STOCK OWNED AFTER THE OFFERING
SHAREHOLDERS NUMBER PERCENTAGE
====================================================================================================================================

SELLING SHAREHOLDERS THAT RECEIVED SHARES FROM THE CONVERSION OF CONVERTIBLE
NOTES ISSUED TO PARAGON VENTURE FUNDS I - V.

Alvaro & Nanette Fay Adame, Jr. 1,500 1,500 0 *
John F. & Louise R. Adams 2,000 2,000 0 *
Kyle R. & Nadine W. Adams 4,500 4,500 0 *
Apollo Holdings, LTD. 1,450,000 1,450,000 0 *
Timothy Brent Arnold 9,500 9,500 0 *
Frederick H. Ashby 50,000 50,000 0 *
Danny A. Ashinhurst 1,000 1,000 0 *
BD&F Enterprises, Inc. 38,500 38,500 0 *
Dan Duckworth & Carol Beals 1,000 1,000 0 *
Patrick P. & Merrilee Beals 2,500 2,500 0 *
Robert Nelson Bertoldo 10,000 10,000 0 *
Michael & Dana Bigelow 50 50 0 *

James H. Billingsley 1,000 1,000 0 *
Lee P. Blake 1,750 1,750 0 *
Blue Ocean LLC 550,000 550,000 0 *
James Raymond & Marie A. Boblett 1,000 1,000 0 *
Brent Bohlen 5,000 5,000 0 *
Angela Bonazza 600 600 0 *
William A. Bonner, Jr. 500 500 0 *
Danny P. Boyle 20,000 20,000 0 *
Claiborne H. Braswell 1,000 1,000 0 *
D. Brett Brewer 4,000 4,000 0 *
Deborah E. Brotherton 400 400 0 *
Travis Nathaniel & Sandra Dee Brown 1,000 1,000 0 *
Jason MacPhee & Leah Pauline Brown 7,000 7,000 0 *
Brown Brothers Harriman, NY 100,000 100,000 0 *
Marc Alan Bruno 2,000 2,000 0 *
Yevetta Gail Buchanan 1,000 1,000 0 *
Donald James & Joyce Elaine Burke 5,000 5,000 0 *
David P. & Carolyn Vickers Butler JTWROS 6,500 6,500 0 *
Bruce Call 10,000 10,000 0 *
Lawrence & Charleen Capek 1,000 1,000 0 *
Capital Ideas, Inc. 100,000 100,000 0 *
Center for Health Psychology, P.C. 66,000 66,000 0 *
Cannon Christensen 4,000 4,000 0 *
John D. & Constance J. Clemens 2,500 2,500 0 *
Tom G. & Sharon L. Cole 3,000 3,000 0 *
Jason A. Collier 100 100 0 *
Crystal City Restaurant 11,000 11,000 0 *
Rollie J. & Madelyn F. Cundiff 100,000 100,000 0 *
Larry E. Cunningham 10,000 10,000 0 *
Christopher D. Curran 15,000 15,000 0 *
Curvelo Trade and Finance 50,000 50,000 0 *
D&H Marriott Family Limited Partnership 252,787 252,787 0 *
Dain Rauscher 100,000 100,000 0 *
Linda Elizabeth Davenport 1,000 1,000 0 *
Henry De La Rosa 2,000 2,000 0 *
John S. & Mele P. DeLeon 1,500 1,500 0 *
Rose Delgado 500 500 0 *
Daniel H. Deng 4,000 4,000 0 *
Dennis & Michelle Porter Family Trust 25,000 25,000 0 *
Michael E. & Kathleen E. Duvall 25,000 25,000 0 *
Michael G. & Brandy L. Eckert 12,000 12,000 0 *
Michael Lee & Joan M. Elder 20,000 20,000 0 *

Lynn or Elaine Ellsworth 5,000 5,000 0 *
Michael Emmons 5,000 5,000 0 *
Paul & Becky Espinoza 100 100 0 *
Jared R. & Jenny R. Evans 1,000 1,000 0 *
Danielle G. Ewing 1,000 1,000 0 *
David L. Fawcett 1,000 1,000 0 *
Wallace Fisk 100,000 100,000 0 *
David Fowler 250 250 0 *
David Wayne & Gaylene H. Fusselmann 4,000 4,000 0 *
Gary L. & Lynell L. Fusselmann 1,000 1,000 0 *
Douglas K. Gardner 2,000 2,000 0 *
Gary & Alana Porter Family Trust 5,000 5,000 0 *
Steven Gelsomini 2,000 2,000 0 *
Mark W. Gillespie 2,000 2,000 0 *
Allen P. Goodmansen CPA, PC 25,000 25,000 0 *
Kevin Eugene Griffel 1,000 1,000 0 *
Louise Gulartie 50 50 0 *
Coltin Roy & Julia Adele Hall 8,500 8,500 0 *
Scott Hall 2,000 2,000 0 *
Ryan Kent Hall 2,000 2,000 0 *
William Brad & Shawna Hall 1,000 1,000 0 *
George K. & Denise Hall 10,000 10,000 0 *
Clarence Kent & Ava Lynn Hall 10,500 10,500 0 *
Brett & Lisa R. Hallows 2,000 2,000 0 *
David W. Hallum 5,000 5,000 0 *
Steven Keith & Barbara M. Hallum 5,000 5,000 0 *
Glen D. & D. Gayle Hammons 5,000 5,000 0 *
Steven G. & Jennifer M. Hammons 200 200 0 *
Travis Hammons 500 500 0 *
Trevor G. Hammons 500 500 0 *
Jeff D. Hancock 2,000 2,000 0 *
Jay B. Hancock 1,000 1,000 0 *
Daniel Thomas Hardwick 2,500 2,500 0 *
Matthew Keith Hardwick 2,500 2,500 0 *
Michele Hardwick 2,500 2,500 0 *
Derwin & Donna Harper 15,768 15,768 0 *
Steve & Leslie Hatch 5,000 5,000 0 *
John Robert Heap 14,100 14,100 0 *
Theo J. & Gloria J. Heap 2,500 2,500 0 *
Joe A. & Kimberly B. Hernandez 1,000 1,000 0 *
John R. Hoopes 2,250 2,250 0 *
Deron Brent Horne 5,000 5,000 0 *
Dona Hornstein 5,000 5,000 0 *

Timothy R. Huseman 10,000 10,000 0 *
Adam & Wendy Hutton 2,500 2,500 0 *
HWSW Family Partnership, LTD 4,000 4,000 0 *
Investments Unlimited 500 500 0 *
Russell F. James II 3,250 3,250 0 *
Frederick J. Jarosz 4,000 4,000 0 *
Rachel John 600 600 0 *
Lawrence Johnson 40,000 40,000 0 *
Robert C. Johnson, Sr. 1,000 1,000 0 *
James C. Joyce 2,000 2,000 0 *
Tim & Judith A. Kelly 30,000 30,000 0 *
Steve Kerr 50,000 50,000 0 *
Fred C. Krause 2,000 2,000 0 *
Sheldon R. Kroner, Jr. 56,500 56,500 0 *
Victor Russell Lanzotti 20,000 20,000 0 *
Wade Lee 2,500 2,500 0 *
Edward Lee 1,000 1,000 0 *
Mark Letel 500 500 0 *
Richard D. & Karen K. Lincoln 5,000 5,000 0 *
Harry J.H. Lindgren 1,000 1,000 0 *
Teri S. Litwiller 2,000 2,000 0 *
Jeffrey L. Loftus 1,000 1,000 0 *
Diego Lopez 1,000 1,000 0 *
Adam Love 5,000 5,000 0 *
David A. & Staci E. Loyd 8,000 8,000 0 *
James J. Lutz 1,500 1,500 0 *
Mark W. & Jenny L Mabry 20,000 20,000 0 *
Bhikkhu T. & Diane Mahinda 20,000 20,000 0 *
J. Scott Malone 2,000 2,000 0 *
Martin Manriquez 2,500 2,500 0 *
Celeste L. Manriquez 2,500 2,500 0 *
Sharla L. Marrott 1,000 1,000 0 *
Trevor Dwayne Marrott 1,600 1,600 0 *
Heather Marrott 30,900 30,900 0 *
Jesse John Marrott 1,000 1,000 0 *
Rachel Lylene Lokelani Marrott 1,000 1,000 0 *
Zachary Todd Marrott 1,000 1,000 0 *
Nathan Lee McLaws 2,750 2,750 0 *
Jeremy D. Mecham 5,000 5,000 0 *
Mary Mendel 1,000 1,000 0 *
Greg Mendel 1,000 1,000 0 *
Steve & Jonene Middleton 500 500 0 *
Phillip & Dolly Miller 500 500 0 *

Roger L. & Lesley M. Miller 6,100 6,100 0 *
Bradley R. & Clarissa C. Myers 1,000 1,000 0 *
Sidney T. Myers 50,000 50,000 0 *
Revy Leora Neely 10,000 10,000 0 *
Paula J. Neely 2,500 2,500 0 *
John A. & Lori Ann Nelson 1,500 1,500 0 *
Donald L. Nelson 10,000 10,000 0 *
Trevor William & Lauralee Arnold Newby 500 500 0 *
Justin Alfred & Alisha Anne Newman 1,000 1,000 0 *
Denis Ng 5,000 5,000 0 *
James Charles O'Brien III 750 750 0 *
Orion Medical Supply 100,000 100,000 0 *
Scott G. Ormond 1,000 1,000 0 *
Miriam & Joseph Oswald 500 500 0 *
Philip R. Ott 30,000 30,000 0 *
Earl J. & RaQuelle Owens 1,500 1,500 0 *
Kevin Earl & Jennifer Boblett Owens 2,000 2,000 0 *
Dalton Robert Owens, Jr. 4,000 4,000 0 *
Pacific Rim Bancorp 25,000 25,000 0 *
Paragon Management 389,000 389,000 0 *
Perry Paraskevas 500 500 0 *
Lyle F. & JoAnn Parks 2,400 2,400 0 *
David C. & Tawna J. Petersen 10,000 10,000 0 *
William A. Phillips, Jr. 6,000 6,000 0 *
Steve Poorman 2,000 2,000 0 *
Donna Jean Porter 2,100 2,100 0 *
Prominent Development 125,000 125,000 0 *
Rudy Quesada 1,000 1,000 0 *
Dave & Lana Rasmussen 4,600 4,600 0 *
Frank Rebarber 2,500 2,500 0 *
Steven Robert Reynolds 2,100 2,100 0 *
Montie M. & Sally J. Reynolds 10,000 10,000 0 *
Teresa Richard 1,000 1,000 0 *
R. Norton & Ann R. Richards 15,000 15,000 0 *
Jim E. & Cynthia A. Rives 10,000 10,000 0 *
Thomas Neil Rooke 10,000 10,000 0 *
Joseph Victor Saccaro 3,000 3,000 0 *
Tony Lee Saccaro 1,000 1,000 0 *
Sensational Sound 23,000 23,000 0 *
Javaid I. Sheikh 10,000 10,000 0 *
Ann Cytree Shomidie 5,000 5,000 0 *
Joseph R. & E. Susan Shook JTWROS 2,500 2,500 0 *
Robert Elias Simon, Jr. 1,000 1,000 0 *

Nelsen D. Simonsen 1,000 1,000 0 *
David W. Skeen 2,750 2,750 0 *
Michael W. Menasco & Susan K. Slaughter 500 500 0 *
Ronald Kay Smith 412,200 412,200 0 *
Kristi Kae Smith 1,000 1,000 0 *
Dustin E. Smith 500 500 0 *
Jerome C. Smith 50,000 50,000 0 *
Steven Mark Smith 3,000 3,000 0 *
Michael & Eileen Smith JTROS 30,000 30,000 0 *
Fred Spangler, Jr. 1,000 1,000 0 *
Frank P. & Connie L. Staben 100,000 100,000 0 *
Timothy Patrick Starkey 2,000 2,000 0 *
Stephen R & Donna D. Meyers Family Trust 10,000 10,000 0 *
Zelda I. Stephens 1,000 1,000 0 *
Blake Robert Stephens 9,000 9,000 0 *
John L. Stich 5,000 5,000 0 *
Mark A. & Shanna J. Stich 1,000 1,000 0 *
Romano Stulic 5,000 5,000 0 *
Superfly Financial 5,000 5,000 0 *
Peter Matthew Sweeney 600 600 0 *
Technology Partners 1, LLC 160,000 160,000 0 *
Travis Tenney 10,000 10,000 0 *
Kalee Tenney 2,000 2,000 0 *
The CAPPS Trust 50,000 50,000 0 *
The David G & Sandra L. Decker Family
Trust 10,000 10,000 0 *
G. Bryan Thomas 49,500 49,500 0 *
Thomas E. Richards Trust 6,000 6,000 0 *
Bill Thompson 3,000 3,000 0 *
Harry W. & Mary K. Tierney 1,000 1,000 0 *
Justin Uhd 200 200 0 *
Brandi & Matthew Vanderwalker 250 250 0 *
Robert L. Vernam 1,000 1,000 0 *
Marlene Victor 2,000 2,000 0 *
Victor & Hall, LLC 15,000 15,000 0 *
Steven Wald 5,000 5,000 0 *
F. Todd Warner 25,000 25,000 0 *
H. Craig & Martha P. Watson 12,500 12,500 0 *
Elizabeth Weaver 500 500 0 *
Bruce E. & Vicki Pauline Westover 300,000 300,000 0 *
Joseph Erickson Westover 1,500 1,500 0 *
Danny White 5,000 5,000 0 *
Wilford P. White 30,000 30,000 0 *
Wilford D. & Jolynn White 30,000 30,000 0 *

Chad White 2,500 2,500 0 *
Murray R. & Susan B. White II 5,000 5,000 0 *
Duane R. & Ranona Wiehl 5,000 5,000 0 *
Frederick Bryan & Ila H. Wilberg 2,000 2,000 0 *
William L. Richards Trust 6,000 6,000 0 *
Lavanda R. Williams 1,500 1,500 0 *
Ronald A. Willis 17,175 17,175 0 *
Keevin L. Willis 8,100 8,100 0 *
Mark A. Willis 16,325 16,325 0 *
Witan, LTD 100,000 100,000 0 *
John David Wright 3,000 3,000 0 *
Patrick H. Kenny 20,000 20,000 0 *

SELLING SHAREHOLDERS RECEIVING COMMON SHARES AS A RESULT OF WARRANTS OR OPTIONS.

Todd Moore 1,000,000 1,000,000 0 *
J. Brian Morrison 500,000 500,000 0 *
Bourns, Inc. 60,000 60,000 0 *

SELLING SHAREHOLDER THAT RECEIVED SHARES OF COMMON STOCK BY CONVERSION OF PROMISSARY NOTES PRIVATELY PLACED

Robert W. Brunson 12,163,893 2,002,523 10,161,370 47%

SELLING SHAREHOLDERS THAT PURCHSED SHARES FROM CRYOCON FROM FEBRUARY 16, 2001, TO MARCH 1, 2001.
(SUBJECT TO RESCISSION OFFER)

Prominent Development 25,000 25,000 0 *
Revy L. Neely 37,500 37,500 0 *
Frederick H. Ashby 23,000 23,000 0 *
John Frederick Ashby 5,000 5,000 0 *
Andrew N. Ashby 5,000 5,000 0 *
April A. Ashby 4,000 4,000 0 *
Preston F. Ashby 4,000 4,000 0 *
Benjamin J. Ashby 2,500 2,500 0 *
Samuel S. Ashby 2,500 2,500 0 *
Adam M. Ashby 2,500 2,500 0 *
Annie M. Ashby 1,500 1,500 0 *
The Capps Trust 12,500 12,500 0 *
Anessa Alderman 600 600 0 *
Richard E. Rhodes 5,000 5,000 0 *
Sheldon Fisher 7,500 7,500 0 *
William A. Phillips, Jr. 1,000 1,000 0 *

Robert W. Brunson is the founder, former president and Chief Executive
Officer of Cryocon, Inc. Mr. Brunson is currently President of Cryocon's
Intellectual Property Division. Mr. Brunson is the beneficial holder of
12,163,893 shares of Cryocon's common stock (including shares registered in this
Prospectus). His wife, Debra L. Brunson owns 500,000 shares of Cryocon's stock.
The shares registered in this prospectus are 2,002,523 shares Mr. Brunson
received upon conversion of a debenture in the principal amount of $50,000.00.
Mr. Brunson owns 63% of the Cryocon's issued and outstanding shares of common
stock.

J. Brian Morrison is President and Chief Executive Officer, and
Chairman of Cryocon, Inc. Mr. Morrison has options and warrants on 750,000
shares of Cryocon's common stock (including the shares registered in this
Prospectus). 250,000 option shares vest over time with 100,000 vesting January
2, 2001, 75,000 shares vesting January 2, 2002, and 75,000 shares vesting
January 2, 2003. Assuming the exercise of all his options and warrants, Mr.
Morrison owns 3.88% of Cryocon's issued and outstanding shares of common stock.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

On September 21, 2000, a majority of Cryocon's shareholders ratified a
Board of Directors resolution, on August 17, 2000, selecting H J & Associates as
independent public accountants to audit the Cryocon's books, records and
accounts and those of its subsidiary for the year 2000. Larry O'Donnell, CPA,
PC, Aurora, Colorado audited Cryocon's consolidated financial statements during
fiscal year ending March 31, 2000. Cryocon filed a form 8-K with the Securities
and Exchange Commission on September 21, 2000, notifying the shareholders of the
change. Larry O'Donnell, CPA provided a letter agreeing to the facts and
circumstances regarding the change.

ADDITIONAL INFORMATION

Additional information regarding Cryocon and the shares offered hereby
is contained in the Registration Statement on Form SB-2 and the exhibits thereto
filed with the Commission under the Securities Act of 1933, as amended. We file
annual, quarterly and special reports, proxy statements and other information
with the Securities and Exchange Commission. You may read and copy any document
we file at the SEC's public reference room located at 450 Fifth Street, N.W.,
Washington, D.C. 20549, or at its Regional Offices located at 7 World Trade
Center, Suite 1300, New York, New York 10048, and 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, and copies of the materials can be obtained from
the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. You may call the SEC at 1-800-732-0330 for
further information on the operation of the public reference rooms. You also can
request copies of the documents, upon payment of a duplicating fee, by writing
to the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, or obtain copies
of the documents from the SEC's web site at http://www.sec.gov. The reports,
proxy statements and other information concerning us can also be inspected at
the offices of the OTC Electronic Bulletin Board maintained by the National
Association of Securities Dealers, Inc., at 1735 K Street, NW, Washington, DC
20006-1500, (202) 738-8000.

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES

Cryocon's indemnification policy covering officers and directors, as
contained in the by-laws, provides that Cryocon may indemnify at its discretion
any officer or director for costs reasonably incurred in connection with civil,
criminal, administrative and investigative proceedings if he or she acted in
good faith, whether brought by or in the right of Cryocon or not; provided that
if a proceeding is brought by or on behalf of Cryocon and the officer or
director is adjudged to be liable, then no indemnification shall be made with
respect thereto; and provided further that no indemnification shall be paid if
it has been determined that under the circumstances such officer or director did
not meet the standard of conduct relevant to the proceeding. Cryocon may advance
costs to an officer or director in connection with proceedings against an him or
her as long as he or she undertakes to repay if it is determined that he or she
is not entitled to the indemnification. Cryocon may purchase indemnification
insurance for officers and directors.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission the
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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

Consolidated Balance Sheets as of March 31, 2000 . . . . . . . . . . . . . . F-2

Consolidated Statement of Operations as of March 31, 1999 and 2000 . . . . .F-3

Consolidated Comparative Statement of Stockholder's Equity for
Years Ended March 31, 1999 and 2000 . . . . . . . . . . . . . . . . . . .. . F-4

Statement of Cash Flows for the Years Ended March 31, 1999 and 2000 . . . . F-5

Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . .F-6

Consolidated Balance Sheet as of December 31, 2000 (unaudited) . . . . . . . F-9

Consolidated Statements of Operations for the Three and Nine
Months ended December 31, 1999 and 2000 (unaudited) . . . . . . . . . . . . F-10

Consolidated Statement of Cash Flows for the Three and Nine
Months ended December 31, 1999 and 2000 (unaudited) . . . . . . . . .. . . .F-11

Consolidated Statement of Stockholder's Equity (Deficit) as
Of December 31, 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . .F-12

Notes to Financial Statements (unaudited). . . . . . . . . . . . . . . . . .F-13

INDEPENDENT AUDITOR'S REPORT

Board of Directors
ISO BLOCK PRODUCTS USA, INC.

I have audited the accompanying balance sheets of ISO Block Products USA Inc.,
as of March 31, 2000 and 1999 and the related statements of operations,
shareholder's equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally accepted auditing standards.
These standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on 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.
I believe that my audit provides a reasonable basic for my opinion.

In my opinion, the financial statements referred to above, present fairly, in
all material respects, the financial position of ISO Block Products USA, Inc.,
at March 31, 2000 and 1999 and the results of its operations and cash flows for
the years then ended in conformity with generally accepted accounting
principles.

/s/ Larry O'Donnell, CPA, PC
- ----------------------------
Larry O'Donnell, CPA, PC
April 28, 2000
Aurora, Colorado

F-1

ISO BLOCK PRODUCTS USA, INC.
CONSOLIDATED COMPARATIVE BALANCE SHEET

ASSETS

March 31,
Current Assets 2000 1999
- -------------- ---- ----
Cash $ 458 $ 5,135
Mortgage receivable 16,200 16,200
Inventory-work in progress -- 34,540
----------- -----------
Total Current Assets 16,658 55,875

Property & Equipment
- --------------------
Office equipment -- 9,071
Vehicle -- 14,273
Less: accumulated depreciation -- (4,333)
----------- -----------
Net Property & equipment -- 19,011

TOTAL ASSETS $ 16,658 $ 74,886

LIABILITIES & STOCKHOLDERS' EQUITY

Current Liabilities
- -------------------
Accounts payable 26,304 54,383
Notes payable -- 150,360
Accrued interest payable -- 26,304
----------- -----------
Total Current Liabilities 26,304 231,047

Stockholders' Equity
- --------------------
Preferred Stock, No Par Value,
10,000,000 Shares Authorized,
116,370 Shares Outstanding 114,690 114,690
Common Stock, 50,000,000 Shares
Authorized, 4,083,984 and
4,041,484 Shares Outstanding,
respectively 2,898,306 2,897,764
Contributed capital 4,225 --
Accumulated deficit (3,026,867) (3,168,615)
----------- -----------
Total Stockholders' Equity (9,646) 156,161

TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY 16,658 74,886

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

F-2
46

ISO BLOCK PRODUCTS USA, INC.
CONSOLIDATED COMPARATIVE
STATEMENT OF OPERATIONS

March 31,
INCOME 2000 1999
- ------ ---- ----
Sales $ 118,460 $ 286,000

Operating Expenses
- ------------------
Cost of Goods Sold 55,406 254,440
General and Administrative 7,684 32,365
----------- -----------
63,090 286,805
----------- -----------

Income (Loss) From Operations 55,370 (805)

Loss from operations of
discontinued subsidiaries Other -- (307,301)
Gain on disposal of subsidiaries 86,378 --
----------- -----------

Net Income (Loss) $ 141,748 $ (308,106)

Earnings (Loss) Per Common Share $ 0.04 $ (0.08)

Weighted Average Shares 4,046,457 3,996,292

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

F-3
47

ISO BLOCK PRODUCTS USA, INC.
CONSOLIDATED COMPARATIVE STATEMENT OF
STOCKHOLDERS' EQUITY

Preferred Common Contr- Accumu-
Stock Stock ibuted lated
Shares Amount Shares Amount Capital Deficit Total
------ ------ ------ ------ ------- ------- -----

Balance at

March 31, 1998 116,370 $ 114,690 3,854,730 $ 2,867,464 -- $(2,860,509) $ 121,645

Issue of
Common
Shares 186,754 30,300 30,300

Net (loss)
for Year -- -- -- -- -- (308,106) (308,106)

Balance at
March 31, 1999 116,370 $ 114,690 4,041,484 $ 2,897,764 -- $(3,168,615) $ 156,161

Common
Stock
issued for
Services 42,500 542 542

Services
paid by
Officer 4,225 4,225

Net income
for Year -- -- -- -- -- 141,748 141,748

Balance at
March 31, 2000 116,370 $ 114,690 4,083,984 $ 2,898,306 $ 4,225 $(3,026,867) $ (9,646)

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

F-4
48

ISO BLOCK PRODUCTS USA, INC.
CONSOLIDATED COMPARATIVE
STATEMENT OF CASH FLOWS

March 31,
Cash Flow From Operating Activities 2000 1999
- ----------------------------------- ---- ----
Net Income (loss) $ 141,748 $(308,106)
Depreciation 500 2,000
Write down of investment franchise -- 114,233
Gain on discontinued operations (86,378) --
Services paid by officer 4,225 --
Common stock issued for expenses 542 30,300
(Increase) Decrease in:
Accounts receivable- trade -- 135,850
Accounts receivable- officer -- 2,000
Inventory-work in process 34,540 200,954
Deposits -- 2,551
Increase (Decrease) in:
Accounts payable 146 (26,998)
Accrued interest-payable -- 8,117
--------- ---------
Net Cash Used in Operating
Activities 95,323 160,901

Cash Flows From Financing Activities
- ------------------------------------
Proceeds From Notes Payable -- 24,300
Payments on Notes Payable (100,000) (184,300)
--------- ---------
Net Cash Provided by (used in)
Financing activities (100,000) (160,000)

Net Increase (decrease) in Cash (4,677) 901

Cash-Beginning of Year $ 5,135 $ 4,234

Cash-End of Year $ 458 $ 5,135

Supplemental disclosure of cash flow information

Cash paid during the year for Interest $ -- $ 16,101

Noncash investing and financing activities:
Common stock issued for expenses $ 542 $ 30,300

Service paid by capital contributions $ 4,225 $ --

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

F-5
49

ISO Block Products USA, Inc.
Notes to the Consolidated Financial Statements
For the Years ended March 31, 2000 and 1999

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Company Description

The Company was incorporated on April 28, 1986 under the laws of the State of
Colorado under the name of Champion Computer Rentals, Inc. The Company's
Articles of Incorporation were amended to change the name of the corporation to
ISO Block Products USA, Inc. from Champion Computer Rentals, Inc. effective on
September 21, 1994.

Franchising Operations

Effective January 24, 1997, ISO acquired 100% stock of Franchise Connection,
Inc. and its wholly owned subsidiary Brilliant Marketing, Inc. The Acquisition
was accounted for as a purchase by ISO and the accompanying financial statements
present historical results of ISO and include Franchise Connection, Inc. and
Brilliant Marketing, Inc. activities from the effective date of the acquisition.

Franchise Connection, Inc. was incorporated in Colorado in 1996 with
headquarters in Denver, Colorado. The Company plans to form strategic
partnerships with prospective or existing franchise operations (Franchisers)
under which it will provide them with marketing and sales services plus business
and legal services in return for an equity interests in, and/or a portion of
their royalties. On August 31, 1999, the Company transferred all of its
subsidiaries to a shareholder for relief of their debt.

Consolidation

The financial statements include the accounts of ISO and its wholly-owned
subsidiaries Franchise Connection, Inc., Brilliant Marketing, Inc., and Magna
Dry, Inc. All significant inter-company balances have been eliminated in
consolidation.

Concentrations of Credit Risk

The Company's financial instruments that are exposed to concentrations of credit
risk consist primarily of mortgages receivable.

The Company's mortgages receivable are concentrated in German real estate and
are concentrated in a limited number of borrowers. The mortgages are from high
quality entities and secured by high value real estate to limit the Company's
exposure to concentrations of credit risk.

During 1998, the Company began foreclosure proceedings in Germany on most of its
mortgages receivable. Although legal counsel handling the case for the Company
believes that a favorable outcome will be reached, no one can say when or if all
of the approximately $1,153,000 will be recovered. Therefore the Company has
decided to treat the mortgages as bad debts until such time as the foreclosure
has been settled.

Cash

All amounts are stated in U.S. dollars. For purposes of statement of cash flows,
the Company considers all short term debt securities purchased with a maturity
of three months on loss to be cash equivalents.

Property & Equipment

Property & equipment are recorded at cost. Depreciation is provided over the
estimated useful lives of the assets.

F-6
50

ISO Block
Products USA, Inc.
Notes to the Consolidated Financial Statements
For the Years ended March 31, 2000 and 1999

Foreign Currency Translation

The functional currency for the Company's foreign operations is the applicable
local currency. The translation of the applicable foreign currency into U.S.
Dollars is performed for the balance sheet accounts using current exchange rates
in effect at the balance sheet date and for revenue and expense accounts using a
weighted average exchange rate during the period. The gains or losses resulting
from such translation are included in shareholders, equity.

Income (Loss) Per Common Stock

Income (loss) per common share is based upon the weighted average number of
common shares outstanding during each period.

Use of Estimates

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

NOTE 2. STOCKHOLDERS' EQUITY

Effective December 31, 1993, the Company adopted a 1993 Compensatory Stock
Option Plan with 1,000,000 common shares reserved for issuance and a 1993
Employee Stock Compensation Plan with 500,000 common shares reserved for
issuance. As of March 31, 2000, the Compensatory Stock Option Plan has 600,000
shares outstanding.

NOTE 3. NOTE RECEIVABLE -OFFICER

The Company loaned the President of the Company, Egin Bresnig, $2,000 The note
bears interest at 6% per annum and was retired on March 1, 1999.

NOTE 4. INVENTORY WORK IN PROCESS

Inventory is recorded at cost, on a first-in, first-out basis. Inventory
consists of lots and construction costs located in Broomfield, Colorado where
the Company has constructed and sold one home.

NOTE 5. NOTES PAYABLE

The Company had notes payable with interest at 15% per annum payable to Mr. Hal
Schavet. The notes were due upon completion of the house constructed by the
Company in Broomfield, Colorado, The notes were secured by property and house.
The balance outstanding at March 31, 1998 was $135,000. The note was retired
during the year ended March 31, 1999.

On December 1, 1997 The Company executed a promissory note payable with interest
at 3.5% per annum payable to Mr. Hal Schavet and Phillis Schavet. The Company
commits to the payment of $50,000 of the first $125,000 received from the sale
of any country, area or local Magna Dry franchises as principle payment. The
Company also commits to the payment to the payee of 10% of the net proceeds
received from the sale of any country, area or local Magna-Dry franchise until
these payments total 20% or $20,000 which shall be designated as interest
payments. After such event, the Promisor commits to the payment of 5% of the net
proceeds received from the sale of any country area or local Magna-Dry franchise
until these payments total 10% of $10,000 which shall be designated as interest
payments. The note was due in full on November 30, 1998.

F-7
51

ISO Block Products USA, Inc.
Notes to the Consolidated Financial Statements
For the Years ended March 31, 2000 and 1999

The total principal outstanding at March 31, 1999 was $100,000. On March 1, 2000
the Company transferred its lot to Hal and Phillis Schavet, plus 40,000 common
shares, to retire this note.

On October 6, 1997, the Company signed a promissory note payable to Elaine
Wicker with interest payable at 20% Per annum. The note is secured by the house
and lot the Company constructed in Broomfield, Colorado. The note was due upon
the completion and sale of the house. The balance outstanding at March 31, 1998
was $25,000. The note was retired during the year ended March 31, 1999.

On October 1, 1997, the Company signed a letter of agreement payable to Elaine
Wicker. The letter of agreement provides that for advance sum of $25,000 to
Magna-Dry, USA, LLC, Magna-Dry USA, LLC will be obligated to paying to Elaine
Wicker 50% of any franchise fees received by Magna Dry USA, LLC until the amount
of $25,000 is repaid.

Magna-Dry, USA, LLC also grants to Elaine Wicker an interest equal to 50% in any
franchise operated by Magna-Dry, USA, LLC in the greater Denver Metro Area. This
obligation was assumed by the shareholder who acquired the subsidiaries.

The Company has executed two notes payable to Ada Wilson totaling $50,360
payable with interest at 15% per annum. These notes were assumed by the
shareholder who acquired the subsidiaries.

Note 6. DISCONTINUED OPERATIONS, DISPOSAL OF SUBSIDIARIES

On August 31, 1999 the Company transferred its holdings in Franchise Connection
and Magna Dry, LLC to a stockholder in exchange for the assumption of all debts
of Franchise Connection and Magna-Dry, USA, LLC.

Since the Company had consolidated these subsidiaries, its recognized a gain for
the excess of the liabilities over the assets of the subsidiaries of $86,378.

Note 7. INCOME TAXES

The Company has no current or deferred income tax liability due to accumulated
losses during the development stage. The Company has net operating losses
totaling $3,026,417 which are available to offset future taxable income. These
NOL's expire through 2008. Since realization of the tax benefits of these net
operating losses is not assured beyond any reasonable doubt, no recognition has
been given to possible future tax benefits in the financial statements. A
deferred tax benefit is of $1,170,000 has been offset by a valuation allowance.

During the year ended March 31, 2000, the Company utilized a portion of its net
operating loss carryover recognizing a benefit of approximately $40,000 which
reduced the entire amount of its income tax expense.

F-8
52

CRYOCON, INC.
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Consolidated Balance Sheets

ASSETS

December 31, March 31,
2000 2000
------------------ -----------------
(Unaudited)

CURRENT ASSETS

Cash $ 6,013 $ 71,771
Accounts receivable, net 25,696 12,611
Prepaid expenses 9,535 -
------------------ -----------------

Total Current Assets 41,244 84,382
------------------ -----------------

PROPERTY AND EQUIPMENT, NET 2,363,846 2,260,585
------------------ -----------------

OTHER ASSETS

Other assets 8,448 -
Patents, trademarks and licenses, net 396,617 419,067
------------------ -----------------

Total Other Assets 405,065 419,067
------------------ -----------------

TOTAL ASSETS $ 2,810,155 $ 2,764,034
================== =================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

Accounts payable $ 237,582 $ 75,705
Accrued expenses 181,581 80,320
Current portion long-term debt 1,146,555 2,863,149
------------------ -----------------

Total Current Liabilities 1,565,718 3,019,174
------------------ -----------------

LONG-TERM LIABILITIES

Note payable, related party 110,000 50,000
Long-term debt 539,554 187,291
------------------ -----------------

Total Long-Term Liabilities 649,554 237,291
------------------ -----------------

TOTAL LIABILITIES 2,215,272 3,256,465
------------------ -----------------

STOCKHOLDERS' EQUITY (DEFICIT)

Common stock: 50,000,000 shares authorized of no
par value, 20,860,702 and 11,000,000 shares issued
and outstanding, respectively 5,007,477 577,500
Deficit accumulated during the development stage (4,412,594) (1,069,931)
------------------ -----------------

Total Stockholders' Equity (Deficit) 594,883 (492,431)
------------------ -----------------

TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 2,810,155 $ 2,764,034
================== =================

F-9
53

CRYOCON, INC.
(Formerly ISO Block Products USA, Inc.)
Consolidated Statement of Operations
(Unaudited)

From
Inception on
For the For the October 20,
Nine Months Ended Three Months Ended 1999 Through
December 31, December 31, December 31,
-------------------------------------------------------------------------------------
2000 1999 2000 1999 2000
---------------- --------------- -------------- -------------- ----------------

REVENUES

Sales $ 117,762 $ - $ 36,351 $ - $ 140,267
---------------- --------------- -------------- -------------- ----------------

COST OF SALES

Supplies and materials 17,871 - 3,230 - 24,850
---------------- --------------- -------------- -------------- ----------------

GROSS MARGIN 99,891 - 33,121 - 115,417
---------------- --------------- -------------- -------------- ----------------

EXPENSES

Advertising 264,872 - 65,325 - 318,396
Depreciation and amortization 113,358 - 37,273 - 155,657
General and administrative 2,818,519 - 1,743,469 - 3,782,009
---------------- --------------- -------------- -------------- ----------------

Total Expenses 3,196,749 - 1,846,067 - 4,256,062
---------------- --------------- -------------- -------------- ----------------

OPERATING LOSS (3,096,858) - (1,812,946) - (4,140,645)
---------------- --------------- -------------- -------------- ----------------

OTHER (EXPENSE)

Interest expense (245,805) - (30,672) - (271,949)
---------------- --------------- -------------- -------------- ----------------

Total Other (Expense) (245,805) - (30,672) - (271,949)
---------------- --------------- -------------- -------------- ----------------

NET LOSS $ (3,342,663) $ - $ (1,843,618) $ - $ (4,412,594)
================ =============== ============== ============== ================

BASIC LOSS PER SHARE $ (0.29) $ - $ (0.12) $ -
================ =============== ============== ==============

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 11,545,094 - 14,885,571 -
================ =============== ============== ==============

F-10

CRYOCON, INC.
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)

From
For the Inception on
Nine Months Ended October 20,
December 31, 1999 Through
-------------------------------------- December 31,
2000 1999 2000
------------------ ------------------ ------------------

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss) $ (3,343,663) $ - $ (4,412,594)
Adjustments to reconcile net loss to
net cash used by operating activities:
(Increase) decrease in accounts receivable (23,086) - (35,696)
Decrease (increase) in allowance for bad debt 10,000 - 10,000
Amortization and depreciation 113,358 - 155,857
(Increase) decrease in other assets (17,983) - (17,983)
Common stock issued for service 8,400 - 543,900
Options granted below market 341,220 - 341,220
Changes in operating assets and liabilities:
Increase (decrease) in accounts
payable and accrued expenses 197,948 - 353,972
------------------ ------------------ ------------------

Net Cash Used by Operating Activities (2,712,806) - (3,061,324)
------------------ ------------------ ------------------

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase or development of intangibles - - (449,000)
Equipment purchases (194,170) - (417,121)
Purchase of building - - (2,050,000)
------------------ ------------------ ------------------

Net Cash (Used) by Investing Activities (194,170) - (2,916,121)
------------------ ------------------ ------------------

CASH FLOWS FROM FINANCING ACTIVITIES

Issuance of common stock for cash 25,075 - 67,075
Issuance of notes payable 3,186,099 - 6,291,945
Payments made on notes payable (369,956) - (375,362)
------------------ ------------------ ------------------

Net Cash Provided by Financing Activities 2,841,218 - 5,983,658
------------------ ------------------ ------------------

NET INCREASE IN CASH AND CASH
EQUIVALENTS (65,758) - 6,213

CASH AT BEGINNING OF PERIOD 71,771 - -
------------------ ------------------ ------------------

CASH AT END OF PERIOD $ 6,013 $ - $ 6,213
================== ================== ==================

CASH PAID FOR:

Interest $ 86,502 $ - $ 59,776
Income taxes $ - $ - $ -

Schedule of Non-Cash Financing Activities:

Common stock issued for services $ 8,400 $ - $ 543,900
Common stock issued for debt $ 4,126,544 $ - $ 4,126,544

F-11
55

CRYOCON, INC.
(Formerly ISO Block Products, USA, Inc.)
(A Development Stage Company)
Consolidated Statement of Stockholder's Equity (Deficit)

Common Stock Accumulated
Shares Amount Deficit
-------------------------------------------------------

Balance at March 31, 2000 11,000,000 577,500 (1,069,931)

September 21, 2000 Recapitalization 1,248,974 (71,292)
(unaudited)

Stock issued for cash at $0.50 15,000 7,500
per share (unaudited)

Common Stock issued for conversion of 8,596,728 4,152,549
debt to equity

Options granted below market value (unaudited) 341,220

Net loss for the nine months ended
December 31, 2000 (unaudited) (3,342,663)

-------------------------------------------------------
Balance, December 31, 2000 (unaudited) 20,860,702 5,007,477 (4,412,594)
-------------------------------------------------------

See Note 4

F-12
56

CRYOCON, INC.
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General Information
-------------------

Cryocon, Inc. (the Company) is a privately held corporation
organized under the laws of the State of Utah in October 1999. The
Company is engaged in the study of extremely low temperatures and
how materials react to those temperatures and treating various
materials with those temperatures to improve their
characteristics.

The financial statements presented are those of Cryocon, Inc.
(Company). The company was incorporated in the State of Utah on
October 20, 1999. On September 21, 2000, ISO Block Products, USA,
Inc., a Colorado Corporation, (ISO) changed its name to Cryocon,
Inc. in conjunction with the merger with Cryocon, Inc. Prior to
the acquisition of the Company, ISO had been seeking to merge with
an existing, operating company.

On August 16, 2000, ISO and the Company completed and Agreement
and Plan of Reorganization whereby ISO issued 11,000,000 shares of
its common stock in exchange for all of the outstanding common
stock of Cryocon. Immediately prior to the Agreement and Plan or
Reorganization, the Company had 1,248,974 shares of common stock
issued and outstanding.

The acquisition was accounted for as a recapitalization of Cryocon
because the shareholders of Cryocon controlled the Company after
the acquisition. Therefore, Cryocon is treated at the acquiring
entity. There was no adjustment to the carrying value of the
assets or liabilities of Cryocon in the exchange. ISO is the
acquiring entity for legal purposes and Cryocon is the surviving
entity for accounting purposes. On September 21, 2000, the
shareholders of the Company authorized a reverse stock split of
1-for-4. All references to shares of common stock have been
retroactively restated. The surviving entity is a Colorado
Corporation.

Unaudited Financial Statements
------------------------------
The accompanying unaudited financial statements include all of the
adjustments which, in the opinion of management, are necessary for
a fair presentation. Such adjustments are of a normal recurring
nature.

NOTE 2 - GOING CONCERN

The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the Company
does not have significant cash or other material assets, nor does
it have an established source of revenues sufficient to cover its
operating costs and to allow it to continue as a going concern. It
is the intent of the Company to use the acquired publicly traded
shell to facilitate the raising of equity capital. Until that
time, the stockholders have committed to covering the operating
costs of the Company.

F-13
57

Additionally, Cryocon is registering a rescission offer
concerning certain securities that may have been offered or
issued in violation with state and/or federal securities laws
(see Note 3: Subsequent events). The potential liability of
this rescission offer, excluding interest is $284,491 as of
May 15, 2001. The potential liability including interest to
June 30, 2001, is $294,420.

There are no assurances that (1) the existing stockholders and
warrant holders subject to rescission will elect to retain
their stock ownership and stock warrants and (2) Cryocon will
be able to raise additional working capital through either
private placements or public
offerings. To the extent that funds generated from operations,
stand-by investors and any private placements or public
offerings are insufficient, Cryocon will have to raise
additional working capital. No assurance can be given that
additional financing will be available, or if available, will
be on terms acceptable to Cryocon. If adequate working capital
is not available Cryocon may be required to curtail its
operations.

This rescission raises substantial doubt about Cryocon's
ability to continue as a going concern. This consolidated
financial statements do not include any adjustments relating
to the recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that
might be necessary should Cryocon be unable to continue as a
going concern.

NOTE 3 - SUBSEQUENT EVENTS

On February 9, 2001, the Company entered into an agreement
with Citizen Asia Pacific, LTD out of Hong Kong, wherein they
will promote our Company in Asia and other non US markets.
They have received 300,000 shares of common stock for their
consulting fees.

On February 9, 2001, the Company entered into an agreement
with Hans Balz to promote the Company in Europe. He will
receive 20,000 shares of common stock for his services. These
shares will be issued form the 1,000,000 shares authorized by
the board on May 31, 2000 to issue for compensation.

On February 9, 2001 the Company entered into an agreement for
Consulting work from Mr. J. Brian Morrison. He will receive
500,000 shares of common stock for his services.

On January 12, 2001, Cryocon issued warrants to 327 of its
shareholders to purchase up to 3,714,585 shares of Cryocon's
common stock. The exercise price for the warrants is eighty
(80%) percent of the market price of Cryocon's common stock on
the day immediately prior to the day that the shareholders
elect to exercise their warrants, with a minimum exercise
price of $2.00 dollars per share. The warrants were issued to
Cryocon's shareholders without cost or consideration from the
shareholders. Cryocon's management believes that the issuance
of the warrants is exempt from the registration. The
Securities and Exchange Commission, however, indicated in its
comments to the second amendment to the registration statement
that they think that the issuance of the warrants was not made
pursuant to a valid exemption from registration. The shares to
be issued pursuant to the exercise of the warrants are not to
be issuable until after the effective date of the registration
statement original filed February 9, 2001, which includes the
issuance of the underlying shares of common stock. None of the
shares of common stock have been issued, and none of the
shareholders have given written notice of their intent to
exercise their warrant rights. Cryocon did not pay fees or
commissions in connection with the issuance of the warrants.

F-14
58

written agreement was executed after the filing of the
registration statement originally filed on February 9, 2001.
Cryocon's management believes that the written offer to sale
of the shares of common stock was exempt from registration
under the Securities Act pursuant to Section 4(2) thereof. The
Securities and Exchange Commission, however, indicated in its
comments to the second amendment to the registration statement
that the written offer to sell the shares to Millennium
Capital may have been made in violation of section 5. To
Cryocon's knowledge, management of the investor is
sophisticated in financial investments and received a variety
of financial and other information about Cryocon in connection
with its due diligence. No public solicitation or general
advertising was done in connection with the issuance of
options. Cryocon did not pay any fees or commissions in
connection with this sale.

From February 16, 2001 to March 1, 2001, Cryocon sold 139,100
restricted shares of common stock to eight individuals, five
current shareholders and three new investors at the price of
$2.00 per share. Cryocon received $278,200 in gross proceeds
from the sale of the restricted shares. Cryocon's management
believes that the sale of these shares was exempt from
registration under the Securities Act pursuant to Section 4(2)
thereof. The sale of the shares occurred after filing of the
registration statement on February 9, 2001. As shareholders
prior to the investment, these investors received Cryocon's
reports filed pursuant to the Exchange Act, and were familiar
with Cryocon's operations and financial condition. No public
solicitation or general advertising was done in connection
with this sale. Cryocon did not pay any fees or commissions in
connection with this sale. The Securities and Exchange
Commission, however, indicated in its comments to the second
amendment to the registration statement that the sell the
shares after filing the registration statement may have been
made in violation of section 5.

Based on comments received by the SEC, Cryocon believes the
issuance or sale of these securities may have been in
violation of the Securities Act of 1933, as amended.
Accordingly, Cryocon may be liable to the offerees. Cryocon
hereby offers to rescind the prior sales and issuances by
offering to repurchase the securities from the offerees as
follows:

o Cryocon will pay the shareholders owning the 139,100 shares
common stock, which elect to accept the rescission offer,
$2.00 per share, plus an amount equal to the interest thereon,
at the appropriate statutory rate from the date of issuance of
the securities until the expiration of the rescission offer.
o Since the warrants were issued without payment of cash, or any
other consideration, Cryocon will pay the option holders,
which elect to accept the rescission offer, $.005 per warrant.
Cryocon's aggregate liability for the rescission offer of the
warrants is $6,191.00.
o Since the option to purchase the shares of common stock
executed with Millennium Capital Group was issued without
payment of cash or any other consideration, Cryocon offers to
pay Millennium Capital Group, if it elects to accept the
rescission offer, a total of $150.00 for all of the options.

The rescission offer will expire on the later of (1) June 30,
2001 (30 days after the Effective Date of the Registration),
or 30 days after the date each offeree receives this
Prospectus (the "Expiration Date"). The rescission offer does
not apply to any of Cryocon's other securities.

F-15
59

While Cryocon's management believes that it will be able to
arrange for financing or underwriting of the rescission offer
the Cryocon shall retain the right, on or before the
expiration date, to declare the entire rescission offer
ineffective and return all completed elections, together with
the certificates or other instruments representing the
rescission securities, to the offerees who accepted the
rescission offer.

Note 4 - CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY (DEFICIT)

Cryocon is registering a rescission offer concerning certain
securities that may have been offered or issued in violation
with state and/or federal securities laws (see Note 2: Going
Concern and Note 3: Subsequent Events). The securities
transactions involved in the rescission offer, either offered
or sold, occurred subsequent to December 31, 2001. As such,
there will be no impact on the information provided in the
Consolidated Statement of Stockholder's Equity (Deficit).

F-16

EXHIBIT A

RESCISSION ELECTION FORM
CRYOCON, INC.
ELECTION FOR RESCISSION
OR
AFFIRMATION OF SUBSCRIPTION AND RELEASE

==============================================================================
THE RESCISSION OFFER WILL EXPIRE AT THE LATER OF (A) 12:00 MIDNIGHT, PACIFIC
COAST TIME, ON JUNE 30, 2001, OR (B) THIRTY DAYS AFTER THE DATE ON WHICH THE
UNDERSIGNED ACTUALLY RECEIVED THIS ELECTION FORM.
==============================================================================

Please complete and sign this document and return it to Cryocon, Inc. at
the address set forth below, on or before midnight, Mountain Standard Time, on
June 30, 2001, the Expiration Date of the rescission offer.

Please indicate your election by INITIALING either (i) the space
immediately preceding paragraph A below to ACCEPT the rescission offer or (ii)
the space immediately preceding paragraph B to REJECT the rescission offer and
affirm your subscription.

Mr. James Retallick
Cryocon, Inc.
2250 North 1500 West
Ogden Utah 84404

Dear Mr. Retallick:

The undersigned hereby acknowledges having received and carefully read the
rescission offer (the "rescission offer") described in the prospectus dated May
__, 2001 (the "Prospectus"), by Cryocon, Inc. (the "Company") to repurchase the
rescission securities hereinafter identified which were previously acquired by
the undersigned from Cryocon (the "Securities"). Capitalized terms not otherwise
defined herein shall have the meanings given to them in the Prospectus.

As indicated below, the undersigned hereby (i) elects to accept the
rescission offer and requests that Cryocon repurchase the Securities in
accordance with the terms of the rescission offer, or (ii) affirms the
undersigned's subscription for all of such Securities.

PLEASE SELECT "A" OR "B" BELOW BY CHECKING THE APPROPRIATE BOX BELOW

_____ A. ACCEPTANCE OF RESCISSION OFFER; REQUEST FOR RESCISSION

1. The undersigned hereby irrevocably elects to accept Cryocon's offer to
repurchase all of the Securities and to pay the undersigned an amount equal to
the consideration which the undersigned paid to Cryocon for the Securities
together with interest from the date of purchase to the date of repayment at the
rate specified by the undersigned's place of residence and/or domicile.

2. The undersigned hereby encloses the certificates identified below,
representing all of the Securities that the undersigned acquired from Cryocon,
duly endorsed for transfer or accompanied by an assignment separate from the
applicable stock certificate in either case with the signature(s)guaranteed by
an eligible guarantor institution. The enclosed represents all, and not less
than all, of the Securities that the undersigned acquired from the Company. The

undersigned hereby represents that the undersigned is conveying all interests in
the Securities free and clear of all liens and encumbrances of any kind, and
that no such interest has been previously or concurrently transferred in any
manner to any other person or entity.

Number rescission
Class of Certificate of Consideration Interest Dividends Offer
Security Number Shares Paid Due Received Amount
-------- ----------- ------ ------------- -------- -------- ----------

_____ B. REJECTION OF RESCISSION OFFER; AFFIRMATION OF SUBSCRIPTION

The undersigned hereby affirms the undersigned's subscription or
subscriptions to purchase all Securities of Cryocon, and elects NOT to accept
Cryocon's offer to repurchase such Securities.

RELEASE

In consideration of the offer to repurchase the undersigned's
Securities, the receipt and sufficiency of which is hereby acknowledged, the
undersigned hereby irrevocably releases, remises and discharges Cryocon and its
past, current and future officers, directors, employees, affiliates,
representatives and agents, of and from all claims which the undersigned and the
undersigned's successors and assigns have, ever had or might have in connection
with the sales and issuances by Cryocon of its Securities including, but not
limited to, any violation of federal and/or state security laws or regulations,
to the maximum extent permitted by applicable law.

THE UNDERSIGNED:

- -------------------------------------------------
Print name of the undersigned and, (a) if Securities are held by a partnership,
corporation, trust or entity, the name and capacity of the individual signing on
its behalf, and (b) if Securities are held as joint tenants or as community
property, name(s) of co-purchaser(s).

Dated: ________________, 2001

- -------------------------------------------
Signature

- --------------------------------------------
Tax I.D./Soc. Sec. No.

Dated: ________________, 2001

- -------------------------------------------
Signature

- --------------------------------------------
Tax I.D./Soc. Sec. No.

Residence Address:
Street Address:
City, State and Zip Code

Mailing Address (if different
from residence):
Street Address:
City State and Zip Code:

EXHIBIT B

INDEX TO EXCERPTS FROM STATE SECURITIES LAWS

ARIZONA......................................................................B-2
ARKANSAS.....................................................................B-2
CALIFORNIA...................................................................B-3
COLORADO.....................................................................B-6
CONNECTICUT..................................................................B-8
DISTRICT OF COLUMBIA.........................................................B-9
FLORIDA......................................................................B-9
GEORGIA.....................................................................B-10
HAWAII......................................................................B-12
IDAHO.......................................................................B-12
ILLINOIS....................................................................B-13
INDIANA.....................................................................B-15
IOWA........................................................................B-16
KANSAS......................................................................B-18
KENTUCKY....................................................................B-19
LOUISIANA...................................................................B-20
MAINE.......................................................................B-21
MARYLAND....................................................................B-23
MASSACHUSETTS...............................................................B-25
MICHIGAN....................................................................B-26
MINNESOTA...................................................................B-27
MISSISSIPPI.................................................................B-28
MISSOURI....................................................................B-29
NEVADA......................................................................B-30
NEW HAMPSHIRE...............................................................B-31
NEW JERSEY..................................................................B-32
NEW YORK....................................................................B-34
NORTH CAROLINA..............................................................B-34
OHIO........................................................................B-35
OKLAHOMA....................................................................B-36
OREGON......................................................................B-37
PENNSYLVANIA................................................................B-39
SOUTH CAROLINA..............................................................B-40
TENNESSEE...................................................................B-40
TEXAS.......................................................................B-42
UTAH........................................................................B-46
VERMONT.....................................................................B-47
VIRGINIA....................................................................B-48
WASHINGTON..................................................................B-49
WISCONSIN...................................................................B-51

B-1

ARIZONA SECURITIES ACT

SECTION 44-1841. SALE OF UNREGISTERED SECURITIES PROHIBITED;
CLASSIFICATION.

A. It is unlawful to sell or offer for sale within or from this state
any securities unless such securities have been registered by description under
sections 44-1871 through 44-1875 or registered by qualification under sections
44-1891 through 44-1902 or are securities for which a notice filing has been
made under section 44-3321, except securities exempt under section 44-1843 or
44-1843.01 or securities sold in exempt transactions under section 44-1844.

B. A person violating this section is guilty of a class 4 felony.

SECTION 44-2001. VOIDABLE SALE OR CONTRACT FOR SALE OF SECURITIES;
REMEDY.

A. A sale or contract for sale of any securities to any purchaser in
violation of any provision of section 44-1841 or 44-1842 or article 13 of this
chapter is voidable at the election of the purchaser, who may bring an action in
a court of competent jurisdiction to recover the consideration paid for the
securities, with interest thereon, taxable court costs and reasonable attorneys'
fees, less the amount of any income received by dividend or otherwise from
ownership of the securities, upon tender of the securities purchased or the
contract made, or for damages if he no longer owns the securities.

B. A person against whom an action for a violation of section 44-1991
is brought is not liable under subsection A of this section if the person
sustains the burden of proof that the person did not know and in the exercise of
reasonable care could not have known of the untrue statement or misleading
omission.

SECTION 44-2004. LIMITATION OF CIVIL ACTIONS.

A. No civil action shall be maintained under this article to enforce
any liability based on a violation of section 44-1841 or 44-1842 unless brought
within one year after the violation occurs.

B. Except as provided in subsection C of this section, no civil action
shall be brought under this article to enforce any liability based on a
violation of article 13 unless brought within two years after discovery of the
fraudulent practice on which the liability is based, or after the discovery
should have been made by the exercise of reasonable diligence.

C. No civil action shall be brought under this article to enforce any
liability based on a violation of section 44-1997 or 44-1998 unless brought
within one year after the discovery of the untrue statement or the omission or
after the discovery should have been made by the exercise of reasonable
diligence. No action shall be brought to enforce a liability created under
section 44-1997 more than three years after the security was bona fidely offered
to the public or under section 44-1998 more than three years after the sale.

SECTION 44-2005. REMEDY NOT EXCLUSIVE.

Nothing in this article shall limit any statutory or common law right
of any person in any court for any act involved in the sale of securities.

ARKANSAS SECURITIES ACT

SECTION 23-42-106. CIVIL LIABILITY.

(a)(1) Any person who commits the following acts is liable to the
person buying the security from him, who may sue either at law or in equity to
recover the consideration paid for the security, together with interest at six
percent (6%) per year from the date of payment, costs, and reasonable attorney's
fees, less the amount of any income received on the security, upon the tender of
the security, or for damages if he no longer owns the security:

(A) Offers or sells a security in violation of Section 23-42-301,
23-42-212(b), 23-42-501(1) or (2), or of any rule or order under Section
23-42-502 which requires the affirmative approval of sales literature before it
is used, or in violation of any condition imposed under Section 23-42-403(d),
23-42-404(g), or 23-42-404(i); or

(B) Offers or sells a security by means of any untrue statement of a
material fact or any omission to state a material fact necessary in order to
make the statements made, in the light of circumstances under which they are
made, not misleading, the buyer not knowing of the untruth or omission, and who
does not sustain the burden of proof that he did not know, and in the exercise
of reasonable care could not have known, of the untruth or omission;

(2) Damages are the amount that would be recoverable upon a tender less
the value of the security when the buyer disposed of it and interest at six
percent (6%) per year from the date of disposition.

B-2

(b)(1) Any person who purchases a security in violation of Section
23-42-301, 23-42-307, 23-42-507, and 23-42-508, or otherwise by means of any
untrue statement of a material fact or any omission to state a material fact
necessary in order to make the statements made, in light of the circumstances
under which they are made, not misleading, the seller not knowing of the untruth
or omission, and who shall not sustain the burden of proof that he did not know,
and in the exercise of reasonable care could not have known, of the untruth or
omission, shall be liable to the person selling the security to him, who may sue
either at law or in equity to recover either the security or the security plus
any income or other distributions in cash or other property received directly or
indirectly by the purchaser, upon tender of the consideration the seller
received or for damages together with interest at six percent (6%) from the date
of purchase plus costs and reasonable attorneys' fees.

(2) Damages may be for out-of-pocket losses or for the benefit of the
bargain.

(3) Notice of willingness to pay the amount specified in exchange for
the security shall constitute valid tender pending acceptance thereof by the
purchaser.

(c) Every person who controls a seller liable under subsection (a) of
this section or a purchaser liable under subsection (b) of this section; every
partner, officer, or director of such a seller or purchaser; every person
occupying a similar status or performing a similar function; every employee of
such a seller or purchaser who materially aids in the sale; and every
broker-dealer or agent who materially aids in the sale or also liable jointly
and severally with, and to the same extent as, the seller or purchaser, unless
the nonseller or nonpurchaser who is so liable sustains the burden of proof that
he did not know, and in the exercise of reasonable care could not have known, of
the existence of the facts by reason of which the liability is alleged to exist.
There is contribution as in cases of contract among the several persons so
liable.

(d) Any tender specified in this section may be made at any time before
entry of judgment.

(e) Every cause of action under this section survives the death of any
person who might have been a plaintiff or defendant.

(f) No person may sue under this section after five (5) years from the
effective date of the contract of sale. No person may sue under this section:

(1) If the buyer received a written offer, before suit and at a time
when he owned the security, to refund the consideration paid together with
interest at six percent (6%) per year from the date of payment less the amount
of any income received on the security, and he failed to accept the offer within
thirty (30) days of its receipt; or

(2) If the buyer received such an offer before suit and at a time when
he did not own the security unless he rejected the offer in writing within
thirty (30) days of its receipt.

(g) No person who has made or engaged in the performance of any
contract in violation of any provision of this chapter or any rule or order
hereunder, or who has acquired any purported right under any such contract with
knowledge of the facts by reason of which its making or performance was in
violation, may base any suit on the contract.

SECTION 23-42-501. SALE OF UNREGISTERED NONEXEMPT SECURITIES.

It is unlawful for any person to offer or sell any security in this
state unless:

(1) It is registered under this chapter;

(2) The security or transaction is exempted under Section 23-42-503
or 23-42-504; or

(3) It is a covered security.

CALIFORNIA CORPORATE SECURITIES LAW OF 1968

SECTION 25110. It is unlawful for any person to offer or sell in this
state any security in an issuer transaction (other than in a transaction subject
to Section 25120), whether or not by or through underwriters, unless such sale
has been qualified under Section 25111, 25112 or 25113 (and no order under
Section 25140 or subdivision (a) of Section 25143 is in effect with respect to
such qualification) or unless such security or transaction is exempted under
Chapter 1 (commencing with Section 25100 of this part. The offer or sale of such
a security in a manner that varies or differs from, exceeds the scope of, or
fails to conform with either a material term or material condition of
qualification of the offering as set forth in the permit or qualification order,
or a material representation as to the manner of offering which is set forth in
the application for qualification, shall be an unqualified offer or sale.

SECTION 25500. Any person who willfully participates in any act or
transaction in violation of Section 25400 shall be liable to any other person
who purchases or sells any security at a price which was affected by such act or
transaction for the damages sustained by the latter as a result of such act or
transaction. Such damages shall be the

B-3

difference between the price at which such other person purchased or sold
securities and the market value which such securities would have had at the time
of his purchase or sale in the absence of such act or transaction, plus interest
at the legal rate.

SECTION 25501. Any person who violates Section 25401 shall be liable to
the person who purchases a security from him or sells a security to him, who may
sue either for rescission or for damages (if the plaintiff or the defendant, as
the case may be, no longer owns the security), unless the defendant proves that
the plaintiff knew the facts concerning the untruth or omission or that the
defendant exercised reasonable care and did not know (or if he had exercised
reasonable care would not have known) of the untruth or omission. Upon
rescission, a purchaser may recover the consideration paid for the security,
plus interest at the legal rate, less the amount of any income received on the
security, upon tender of the security. Upon rescission, a seller may recover the
security, upon tender of the consideration paid for the security plus interest
at the legal rate, less the amount of any income received by the defendant on
the security. Damages recoverable under this section by a purchaser shall be an
amount equal to the difference between (a) the price at which the security was
bought plus interest at the legal rate from the date of purchase and (b) the
value of the security at the time it was disposed of by the plaintiff plus the
amount of any income received on the security by the plaintiff. Damages
recoverable under this section by a seller shall be an amount equal to the
difference between (1) the value of the security at the time of the filing of
the complaint plus the amount of any income received by the defendant on the
security and (2) the price at which the security was sold plus interest at the
legal rate from the date of sale. Any tender specified in this section may be
made at any time before entry of judgment.

SECTION 25502. Any person who violates Section 25402 shall be liable to
the person who purchases a security from him or sells a security to him, for
damages equal to the difference between the price at which such security was
purchased or sold and the market value which such security would have had at the
time of the purchase or sale if the information known to the defendant had been
publicly disseminated prior to that time and a reasonable time had elapsed for
the market to absorb the information, plus interest at the legal rate, unless
the defendant proves that the plaintiff knew the information or that the
plaintiff would have purchased or sold at the same price even if the information
had been revealed to him.

SECTION 25503. Any person who violates Section 25110, 25130 or 25133,
or a condition of qualification under Chapter 2 (commencing with Section 25110)
of this part, imposed pursuant to Section 25141, or an order suspending trading
issued pursuant to Section 25219, shall be liable to any person acquiring from
him the security sold in violation of such section, who may sue to recover the
consideration he paid for such security with interest thereon at the legal rate,
less the amount of any income received therefrom, upon the tender of such
security, or for damages, if he no longer owns the security, or if the
consideration given for the security is not capable of being returned. Damages,
if the plaintiff no longer owns the security, shall be equal to the difference
between (a) his purchase price plus interest at the legal rate from the date of
purchase and (b) the value of the security at the time it was disposed of by the
plaintiff plus the amount of any income received therefrom by the plaintiff.

Damages, if the consideration given for the security is not capable of
being returned, shall be equal to the value of that consideration plus interest
at the legal rate from the date of purchase, provided the security is tendered;
and if the plaintiff no longer owns the security, damages in such case shall be
equal to the difference between (a) the value of the consideration given for the
security plus interest at the legal rate from the date of purchase and (b) the
value of the security at the time it was disposed of by the plaintiff plus the
amount of any income received therefrom by the plaintiff. Any person who
violates Section 25120 or a condition of qualification under Chapter 3
(commencing with Section 25120) of this part imposed pursuant to Section 25141,
shall be liable to any person acquiring from him the security sold in violation
of such section who may sue to recover the difference between (a) the value of
the consideration received by the seller and (b) the value of the security at
the time it was received by the buyer, with interest thereon at the legal rate
from the date of purchase. Any person on whose behalf an offering is made and
any underwriter of the offering, whether on a best efforts or a firm commitment
basis, shall be jointly and severally liable under this section, but in no event
shall any underwriter (unless such underwriter shall have knowingly received
from the issuer for acting as an underwriter some benefit, directly or
indirectly, in which all other underwriters similarly situated did not share in
proportion to their respective interest in the underwriting) be liable in any
suit or suits authorized under this section for damages in excess of the total
price at which the securities underwritten by him and distributed to the public
were offered to the public. Any tender specified in this section may be made at
any time before entry of judgment. No person shall be liable under this section
for violation of Section 25110, 25120 or 25130 if the sale of the security is
qualified prior to the payment or receipt of any part of the consideration for
the security sold, even though an offer to sell or a contract of sale may have
been made or entered into without qualification.

B-4

SECTION 25504. Every person who directly or indirectly controls a
person liable under Section 25501, or 25503, every partner in a firm so liable,
every principal executive officer or director of a corporation so liable, every
person occupying a similar status or performing similar functions, every
employee of a person so liable who materially aids in the act or transaction
constituting the violation, and every broker-dealer or agent who materially aids
in the act or transaction constituting the violation, are also liable jointly
and severally with and to the same extent as such person, unless the other
person who is so liable had no knowledge of or reasonable grounds to believe in
the existence of the facts by reason of which the liability is alleged to exist.

SECTION 25507. (a) No action shall be maintained to enforce any
liability created under Section 25503 (or Section 25504 or Section 25504.1
insofar as they relate to that section) unless brought before the expiration of
two years after the violation upon which it is based or the expiration of one
year after the discovery by the plaintiff of the facts constituting such
violation, whichever shall first expire.

(b) No buyer may commence an action under Section 25503 if, before suit
is commenced, such buyer shall have received a written offer approved as to form
by the commissioner (1) stating the respect in which liability under such
section may have arisen, (2) offering to repurchase the security for a cash
price payable upon delivery of the security or offering to pay the buyer an
amount in cash equal in either case to the amount recoverable by the buyer in
accordance with Section 25503, or, offering to rescind the transaction by
putting the parties back in the same position as before the transaction, (3)
providing that such offer may be accepted by the buyer at any time within a
specified period of not less than 30 days after the date of receipt thereof
unless rejected earlier during such period by the buyer, (4) setting forth the
provisions of this subdivision (b), and (5) containing such other information as
the commissioner may require by rule or order, and such buyer shall have failed
to accept such offer in writing within the specified period after receipt
thereof.

(c) The commissioner may by rule or order impose as a condition to
approval of an offer under subdivision (b) of this section, if the commissioner
finds such action is necessary and appropriate for the protection of investors,
conditions requiring:

(1) That equivalent and concurrent offers be made to all investors as
to whom liability may have arisen and still exists under Section 25503 (or
Section 25504 or Section 25504.1 insofar as they relate to that section) in
connection with the distribution or transaction;

(2) That the offer be made subject to a condition voiding such offer if
the issuer, by reason of acceptances, is disabled from commencing or continuing
business;

(3) That the offer be made within a specific period after approval
thereof by the commissioner;

(4) If the consideration paid by the offeree was other than monetary or
if the offer is of rescission, and if the offer is rejected by the offeree on
the ground that it does not accord him the damages payable under Section 25503
or that the rescission offered does not place the parties back in the same
position as before the transaction, that an offer so rejected shall not bar the
commencement of an action by the offeree under Section 25503 (or Section 25504
or Section 25504.1 insofar as they relate to that section); or

(5) That the offeror file a report or reports with the commissioner
containing such information as he may require concerning the making of the
offer, its acceptance or rejection, and compliance with its terms and conditions
or with conditions imposed under this subdivision.

(d) Each person who files a repurchase offer with the commissioner
pursuant to subdivision (b) shall file with the commissioner, in such form as
the commissioner by rule prescribes, an irrevocable consent appointing the
commissioner or the commissioner's successor in office to be such person's
attorney to receive service of any lawful process in any noncriminal suit,
action or proceeding against such person or such person's successor, executor or
administrator, which arises under this law or any rule or order hereunder after
the consent has been filed, with the same force and validity as if served
personally on the person filing the consent. A person who has filed such a
consent in connection with a qualification under this law (or application for a
permit under any prior law if the application under this law states that such
consent is still effective) need not file another. Service may be made by
leaving a copy of the process in the office of the commissioner but it is not
effective unless (1) the plaintiff, who may be the commissioner in a suit,
action or proceeding instituted by him, forthwith sends notice of the service
and a copy of the process by registered or certified mail to the defendant or
respondent at such person's last address on file with the commissioner, and (2)
the plaintiff's affidavit of compliance with this section is filed in the case
on or before the return day of the process, if any, or within such further time
as the court allows.

SECTION 25534. Whenever any securities are issued which the
commissioner determines were offered or sold in violation of Section 25110,
25120, or 25130, the commissioner may, by written order to the issuer and notice
to the holders of such securities, require certificates evidencing such
securities to have stamped or printed prominently on their face a legend, in the
form prescribed by rule of the commissioner, restricting the transfer of such
securities. Upon receipt of the order, the issuer shall stamp or print such
legend prominently on the face of all outstanding certificates subject to

B-5

the order. If, after such order or notice has been given, a request for a
hearing is filed in writing by the person or persons to whom such order or
notice was addressed, a hearing shall be held in accordance with the provisions
of the Administrative Procedure Act, Chapter 5 (commencing with Section 11500)
of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner
shall have all the powers granted thereunder; unless such hearing is commenced
within 15 business days after the request for hearing is received by the
commissioner (or the person or persons affected and the issuer consent to a
later date), such order and notice are rescinded.

COLORADO SECURITIES ACT

SECTION 11-51-301. REQUIREMENT FOR REGISTRATION OF SECURITIES.

It is unlawful for any person to offer to sell or sell any security in
this state unless it is registered under this article or unless the security or
transaction is exempted under sections 11-51-307, 11-51-308, or 11-51-309.

SECTION 11-51-604. CIVIL LIABILITIES.

(1) Any person who sells a security in violation of section 11-51-301
is liable to the person buying the security from such seller for the
consideration paid for the security, together with interest at the statutory
rate from the date of payment, costs, and reasonable attorney fees, less the
amount of any income received on the security, upon the tender of the security,
or is liable for damages if the buyer no longer owns the security. Damages are
deemed to be the amount that would be recoverable upon a tender, less the value
of the security when the buyer disposed of it, and interest at the statutory
rate from the date of disposition. No person is liable under this subsection (1)
for a violation of section 11-51-301 due solely to a failure to file the
prescribed notification of exemption or to pay the required exemption fee for an
exemption under section 11-51-308(1)(p).

(2)(a) Except as provided in paragraph (b) of this subsection (2), any
broker-dealer or sales representative who sells a security in violation of
section 11-51-401 is liable to the person buying the security from such seller
for the consideration paid for the security, together with interest at the
statutory rate from the date of payment, costs, and reasonable attorney fees,
less the amount of any income received on the security, upon the tender of the
security, or is liable for damages if the buyer no longer owns the security.
Damages are deemed to be the amount that would be recoverable upon a tender,
less the value of the security when the buyer disposed of it, and interest at
the statutory rate from the date of disposition.

(b) No broker-dealer or sales representative is liable under this
subsection (2) for a sale of a security exempt from registration under section
11-51-307(1)(g) to (1)(j) or for a sale of a security in a transaction exempt
from registration under section 11-51-308 (1)(a), (1)(e) to (1)(l), (1)(o), or
(1)(p); but this paragraph (b) does not apply if at the time of such sale:

(I) In the case of a violation of section 11-51-401 arising from the
failure of a broker-dealer to be licensed under this article, such broker-dealer
was registered as a broker-dealer under the federal "Securities Exchange Act of
1934", licensed as a broker-dealer or its equivalent under the laws of another
state, or held a limited license under this article; or

(II) In the case of a violation of section 11-51-401 arising from the
failure of a sales representative to be licensed under this article, such sales
representative was licensed as a sales representative or its equivalent under
the laws of another state, held a limited license under this article, or in
connection with such sale was acting for a broker-dealer which was registered as
a broker-dealer under the federal "Securities Exchange Act of 1934", licensed as
a broker-dealer or its equivalent under the laws of another state, or licensed
under this article.

(3) Any person who recklessly, knowingly, or with an intent to defraud
sells or buys a security in violation of section 11-51-501 is liable to the
person buying or selling a security in connection with the violation for such
legal or equitable relief which the court deems appropriate, including
rescission, actual damages, interest at the statutory rate, costs, and
reasonable attorney fees.

(4) Any person who sells a security in violation of section
11-51-501(1)(b) (the buyer not knowing of the untruth or omission) and who does
not sustain the burden of proof that such person did not know, and in the
exercise of reasonable care could not have known, of the untruth or omission is
liable to the person buying the security from such person, who may sue to
recover the consideration paid for the security, together with interest at the
statutory rate from the date of payment, costs, and reasonable attorney fees,
less the amount of any income received on the security, upon the tender of the
security, or is liable for damages if the buyer no longer owns the security.
Damages are deemed to be the amount that would be recoverable upon a tender,
less the value of the security when the buyer disposed of it, and interest at
the statutory rate from the date of disposition.

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(5)(a) Every person who, directly or indirectly, controls a person
liable under subsection (1) or (2) of this section is liable jointly and
severally with and to the same extent as such controlled person, unless the
controlling person sustains the burden of proof that such person did not know,
and in the exercise of reasonable care could not have known, of the existence of
the facts by reason of which the liability is alleged to exist.

(b) Every person who, directly or indirectly, controls a person liable
under subsection (3) or (4) of this section is liable jointly and severally with
and to the same extent as such controlled person, unless such controlling person
sustains the burden of proof that such person acted in good faith and did not,
directly or indirectly, induce the act or acts constituting the violation or
cause of action.

(c) Any person who knows that another person liable under subsection
(3) or (4) of this section is engaged in conduct which constitutes a violation
of section 11-51-501 and who gives substantial assistance to such conduct is
jointly and severally liable to the same extent as such other person.

(6) Any tender specified in this section may be made at any time before
entry of judgment.

(7) Every cause of action under this article survives the death of any
individual who might have been a plaintiff or defendant.

(8) No person may sue under subsection (1) or (2) or paragraph (a) of
subsection (5) of this section more than two years after the contract of sale.
No person may sue under subsection (3) or (4) or paragraph (b) or (c) of
subsection (5) of this section more than three years after the discovery of the
facts giving rise to a cause of action under subsection (3) or (4) of this
section or after such discovery should have been made by the exercise of
reasonable diligence and in no event more than five years after the purchase or
sale.

(9)(a) No buyer may sue under this section:

(I) If the buyer received a written rescission offer, before suit and
at a time when the buyer owned the security, to refund the consideration paid
together with interest at the statutory rate from the date of payment, less the
amount of any income received on the security, and the buyer failed to accept
the offer within thirty days of its receipt; or

(II) If the buyer received such an offer before suit and at a time when
the buyer did not own the security, unless the buyer rejects the offer in
writing within thirty days of its receipt.

(b) If, after acceptance, a rescission offer is not performed in
accordance with its terms, the buyer may obtain relief under this section
without regard to the rescission offer.

(10) No person who has made or engaged in the performance of any
contract in violation of any provision of this article or any rule or order
under this article or who has acquired any purported right under any such
contract with knowledge of the facts by reason of which the making or
performance of any such contract was in violation may base any suit on the
contract.

(11) Any condition, stipulation, or provision binding any person
acquiring or disposing of any security to waive compliance with any provision of
this article or any rule or order under this article is void.

(12) The rights and remedies provided by this article may be pleaded
and proved in the alternative and are in addition to any other rights or
remedies that may exist at law or in equity, but this article does not create
any cause of action not specified in this section or section 11-51-602.

(13) Any person liable under this section may seek and obtain
contribution from other persons liable under this section, directly or
indirectly, for the same violation. Contribution shall be awarded by the court
in accordance with the actual relative culpabilities of the various persons so
liable.

(14) In the case of a willful violation of or a willful refusal to
comply with or obey an order issued by the securities commissioner to any person
pursuant to section 11-51-410 or 11-51-606, the district court of the city and
county of Denver, upon application by the securities commissioner, may issue to
the person an order requiring that person to appear before the court regarding
such violation or refusal. If the securities commissioner establishes by a
preponderance of the evidence that the person willfully violated or willfully
refused to comply with or obey the order, the court may impose legal and
equitable sanctions as are available to the court in the case of contempt of
court and as the court deems appropriate upon such person.

B-7

CONNECTICUT UNIFORM SECURITIES ACT

SECTION 36b-16. REGISTRATION OF SECURITY PRIOR TO OFFER OR SALE
REQUIRED; EXEMPTION.

No person shall offer or sell any security in this state unless (1) it
is registered under sections 36b-2 to 36b-33, inclusive, as amended by this Act,
(2) the security or transaction is exempted under section 36b-21, as amended by
section 11 of this Act, or (3) the security is a covered security provided such
person complies with any applicable requirements in subsections (c), (d) and (e)
of section 36b-21, as amended by section 11 of this Act.

SECTION 36b-29. BUYER'S REMEDIES.

(a) Any person who: (1) Offers or sells a security in violation of
subsection (a) of section 36b-6, 36b-16 or subsection (b) of section 36b-24 or
of any regulation or order under section 36b-22 which requires the affirmative
approval of sales literature before it is used, or of any condition imposed
under subsection (d) of section 36b-18 or subsection (g) or (h) of section
36b-19; or (2) offers or sells or materially assists any person who offers or
sells a security by means of any untrue statement of a material fact or any
omission to state a material fact necessary in order to make the statements
made, in the light of the circumstances under which they are made, not
misleading, who knew or in the exercise of reasonable care should have known of
the untruth or omission, the buyer not knowing of the untruth or omission, and
who does not sustain the burden of proof that he did not know, and in the
exercise of reasonable care could not have known, of the untruth or omission, is
liable to the person buying the security, who may sue either at law or in equity
to recover the consideration paid for the security, together with interest at
eight per cent per year from the date of payment, costs and reasonable
attorneys' fees, less the amount of any income received on the security, upon
the tender of the security, or for damages if he no longer owns the security.

(b)(1) Any person who violates subsection (a) of section 36b-5 and (2)
any investment adviser who violates subsection (b) or (c) of section 36b-5, the
registration requirement in subsection (c) of section 36b-6, or subsection (b)
of section 36b-24, shall be liable to the recipient of investment advisory
services for any consideration paid by the recipient for those services and any
loss resulting from the investment advisory services provided, less any profits
earned by the recipient through transactions effected as a result of the advice
rendered, plus interest at the rate of eight per cent per year from the date of
payment of the consideration, costs and reasonable attorney's fees.

(c) Every person who directly or indirectly controls a person liable
under subsections (a) and (b) of this section, every partner, officer or
director of such a person, every person occupying a similar status or performing
similar functions, every employee of such a person who materially aids in the
act or transaction constituting the violation and every broker-dealer or agent
who materially aids in the act or transaction constituting the violation are
also liable jointly and severally with and to the same extent as such person,
unless the person who is so liable sustains the burden of proof that he did not
know, and in exercise of reasonable care could not have known, of the existence
of the facts by reason of which the liability is alleged to exist. There shall
be contribution as in cases of contract among the several persons so liable.

(d) Any tender specified in this section may be made at any time before
entry of judgment.

(e) Every cause of action under sections 36b-2 to 36b-33, inclusive,
survives the death of any person who might have been a plaintiff or defendant.

(f) No person may bring an action under this section more than two
years after the date of the contract of sale or of the contract for investment
advisory services, except that (1) with respect to actions arising out of
intentional misrepresentation or fraud in the purchase or sale of any interest
in any limited partnership not required to be registered under the Securities
Act of 1933, no person may bring an action more than one year from the date when
the misrepresentation or fraud is discovered, except that no such action may be
brought more than five years from the date of such misrepresentation or fraud
provided, with respect to an action pending on July 1, 1993, that asserts facts
upon which a claim could be asserted under this section on and after July 1,
1993, and which claim is asserted prior to January 1, 1994, no such action may
be brought for intentional misrepresentation or fraud that occurred more than
five years prior to the date of the filing of the complaint in such action, and
(2) with respect to actions arising out of intentional misrepresentation or
fraud in the purchase or sale of securities other than securities described in
subdivision (1) of this subsection, no person may bring an action more than one
year from the date when the misrepresentation or fraud is discovered or in the
exercise of reasonable care should have been discovered, except that no such
action may be brought more than three years from the date of such
misrepresentation or fraud.

(g) No person may bring an action under subsection (a) of this section:
(1) If the buyer received a written offer, before suit and at a time when he
owned the security, to refund the consideration paid together with interest at
six percent per year from the date of payment, less the amount of any income
received on the security, and he failed to accept

B-8

the offer within thirty days of its receipt, or (2) if the buyer received such
an offer before bringing a cause of action and at a time when he did not own the
security, unless he rejected the offer in writing within thirty days of its
receipt.

(h) No person who has made or engaged in the performance of any
contract in violation of any provision of sections 36b-2 to 36b-33, inclusive,
or any regulation or order thereunder, or who has acquired any purported right
under any such contract with knowledge of the facts by reason of which its
making or performance was in violation, may base any cause of action on the
contract.

(i) Any condition, stipulation or provision binding any person
acquiring any security or receiving investment advice to waive compliance with
any provision of sections 36b-2 to 36b-33, inclusive, or any regulation or order
thereunder is void.

(j) The rights and remedies provided by sections 36b-2 to 36b-33,
inclusive, are in addition to any other rights or remedies that may exist at law
or in equity.

DISTRICT OF COLUMBIA SECURITIES ACT

[NO PROVISION REQUIRING REGISTRATION OF SECURITIES.]

FLORIDA SECURITIES AND INVESTOR PROTECTION ACT

SECTION 517.07. REGISTRATION OF SECURITIES.

(1) It is unlawful and a violation of this chapter for any person to
sell or offer to sell a security within this state unless the security is exempt
under section 517.051, is sold in a transaction exempt under section. 517.061,
is a federal covered security, or is registered pursuant to this chapter.

(2) No securities that are required to be registered under this chapter
shall be sold or offered for sale within this state unless such securities have
been registered pursuant to this chapter and unless prior to each sale the
purchaser is furnished with a prospectus meeting the requirements of rules
adopted by the department.

(3) The department shall issue a permit when registration has been
granted by the department. A permit to sell securities is effective for 1 year
from the date it was granted. Registration of securities shall be deemed to
include the registration of rights to subscribe to such securities if the
application under section 517.081 or section 517.082 for registration of such
securities includes a statement that such rights are to be issued.

(4) A record of the registration of securities shall be kept in the
office of the department, in which register of securities shall also be recorded
any orders entered by the department with respect to such securities. Such
register, and all information with respect to the securities registered therein,
shall be open to public inspection.

(5) Notwithstanding any other provision of this section, offers of
securities required to be registered by this section may be made in this state
before the registration of such securities if the offers are made in conformity
with rules adopted by the department.

SECTION 517.211. REMEDIES AVAILABLE IN CASES OF UNLAWFUL SALE.

(1) Every sale made in violation of either section 517.07 or section
517.12 may be rescinded at the election of the purchaser; and the person making
the sale and every director, officer, partner, or agent of or for the seller, if
the director, officer, partner, or agent has personally participated or aided in
making the sale, is jointly and severally liable to the purchaser in an action
for rescission, if the purchaser still owns the security, or for damages, if the
purchaser has sold the security. No purchaser otherwise entitled will have the
benefit of this subsection who has refused or failed, within 30 days of receipt,
to accept an offer made in writing by the seller, if the purchaser has not sold
the security, to take back the security in question and to refund the full
amount paid by the purchaser or, if the purchaser has sold the security, to pay
the purchaser an amount equal to the difference between the amount paid for the
security and the amount received by the purchaser on the sale of the security,
together, in either case, with interest on the full amount paid for the security
by the purchaser at the legal rate, pursuant to section 55.03, for the period
from the date of payment by the purchaser to the date of repayment, less the
amount of any income received by the purchaser on the security.

(2) Any person purchasing or selling a security in violation of section
517.301, and every director, officer, partner, or agent of or for the purchaser
or seller, if the director, officer, partner, or agent has personally
participated or aided in making the sale or purchase, is jointly and severally
liable to the person selling the security to or purchasing the

B-9

security from such person in an action for rescission, if the plaintiff still
owns the security, or for damages, if the plaintiff has sold the security.

(3) In an action for rescission:

(a) A purchaser may recover the consideration paid for the security or
investment, plus interest thereon at the legal rate, less the amount of any
income received by the purchaser on the security or investment upon tender of
the security or investment.

(b) A seller may recover the security upon tender of the consideration
paid for the security, plus interest at the legal rate, less the amount of any
income received by the defendant on the security.

(4) In an action for damages brought by a purchaser of a security or
investment, the plaintiff shall recover an amount equal to the difference
between:

(a) The consideration paid for the security or investment, plus
interest thereon at the legal rate from the date of purchase; and

(b) The value of the security or investment at the time it was disposed
of by the plaintiff, plus the amount of any income received on the security or
investment by the plaintiff.

(5) In an action for damages brought by a seller of a security, the
plaintiff shall recover an amount equal to the difference between:

(a) The value of the security at the time of the complaint, plus the
amount of any income received by the defendant on the security; and

(b) The consideration received for the security, plus interest at the
legal rate from the date of sale.

(6) In any action brought under this section, including an appeal, the
court shall award reasonable attorneys' fees to the prevailing party unless the
court finds that the award of such fees would be unjust.

GEORGIA SECURITIES ACT OF 1973

SECTION 10-5-5. REGISTRATION OF SECURITIES; WHEN AND HOW REQUIRED;
DELIVERY OF PROSPECTUS; PURCHASER'S RIGHT OF RESCISSION.

(a) Generally. It shall be unlawful for any person to offer for sale
or to sell any securities to any person in this state unless:

(1) They are subject to an effective registration statement under
this chapter;

(2) The security or transaction is exempt under Code Section 10-5-8
or Code Section 10-5-9, respectively; or

(3) The security is a federal covered security.

SECTION 10-5-12. UNLAWFUL PRACTICES.

(a) It shall be unlawful for any person:

(1) To offer to sell or to sell any security in violation of Code
Section 10-5-3, 10-5-5, or 10-5-19 or any rule, regulation, or order promulgated
or issued by the commissioner under this chapter;

SECTION 10-5-14. CIVIL LIABILITIES FROM SALES OF SECURITIES.

(a) Any person who violates subsection (a) of Code Section 10-5-12
shall be liable to the person buying such security; and such buyer may sue in
any court of competent jurisdiction to recover the consideration paid in cash
(or the fair value thereof at the time the consideration was paid if such
consideration was not paid in cash) for the security with interest thereon from
the date of payment down to the date of repayment as computed in paragraph (1)
of subsection (d) of this Code section (less the amount of any income received
thereon), together with all taxable court costs and reasonable attorney's fees,
upon the tender, where practicable, of the security at any time before the entry
of judgment, or for damages if he no longer owns the security. Damages are the
amount which equals the difference between the fair value of the consideration
the buyer gave for the security and the fair value of the security at the time
the buyer disposed of it, plus interest thereon from the date of payment down to
the date of repayment as computed in paragraph (2) of subsection (d) of this
Code section. A person who offers or sells a security in violation of paragraph
(2) of subsection (a) of Code Section 10-5-12 is not liable under this
subsection if:

B-10

(1) The purchaser knew of the untrue statement of a material fact or
omission of a statement of a material fact; or

(2) The seller did not know and in the exercise of reasonable care
could not have known of the untrue statement or misleading omission.

(b) Every contract between a certified public accountant who holds
himself out as a "financial planner" or an "investment adviser" and an advisory
client or between an investment adviser and an advisory client made in violation
of any provision of this chapter and every such contract heretofore or hereafter
made, the performance of which involves the violation of or continuance of any
relationship or practice in violation of any provision of this chapter or any
rule, regulation, or order thereunder, shall be void:

(1) As regards the rights of any person who, in violation of any such
provision, rule, regulation, or order shall have made or engaged in the
performance of any such contract; and

(2) As regards the rights of any person who, not being a party to such
contract, shall have acquired any right thereunder with actual knowledge of the
facts by reason of which the making or performance of such contract was in
violation of any such provision.

The advisory client who is a party to such a contract may sue to
recover the consideration paid under such contract to such investment adviser or
investment adviser representative, together with interest thereon at the annual
rate of 6 percent from the date of payment of the consideration, plus costs and
reasonable attorney's fees.

(c) Every person who directly or indirectly controls a person liable
under subsection (a), (b), or (h) of this Code section, every general partner,
executive officer, or director of such person liable under subsection (a), (b),
or (h) of this Code section, every person occupying a similar status or
performing similar functions, and every dealer, limited dealer, salesman, or
limited salesman who participates in any material way in the sale is liable
jointly and severally with and to the same extent as the person whose liability
arises under subsection (a), (b), or (h) of this Code section unless the person
whose liability arises under this subsection sustains the burden of proof that
he did not know and in the exercise of reasonable care could not have known of
the existence of the facts by reason of which liability is alleged to exist.
There is contribution as in the case of contract among several persons so
liable.

(d) With respect to the purchase, sale, or offer to purchase or sell a
security, no person may sue under this Code section more than two years from the
date of the contract for sale or sale, if there is no contract for sale. With
respect to the purchase, sale, or offer to purchase or sell a security, no
person may sue under this Code section:

(1) If the buyer received a written offer, before suit and at a time
when he owned the security, to repay in cash or by certified or official bank
check, within 30 days from the date of acceptance of such offer in exchange for
the securities, the fair value of the consideration paid (determined as of the
date such payment was originally paid by the buyer), together with interest on
such amount for the period from the date of payment down to the date of
repayment, such interest to be computed in case the security consists of an
interest-bearing obligation at the same rate as provided in the security or, in
case the security consists of other than an interest-bearing obligation, at the
rate of 6 percent per annum, less, in every case, the amount of any income
received on the security, and:

(A) Such offeree does not accept the offer within 30 days of its
receipt; or

(B) If such offer was accepted, the terms thereof were complied with
by the offeror; or

(2) If the buyer received a written offer before suit and at a time
when he did not own the security to repay in cash or by certified or official
bank check, within 30 days from the date of acceptance of such offer, an amount
equal to the difference between the fair value of the consideration the buyer
gave for the security and the fair value of the security at the time the buyer
disposed of it, together with interest on such amount for the period from the
date of payment down to the date of repayment, such interest to be computed in
case the security consists of an interest-bearing obligation at the same rate as
provided in the security or, in case the security consists of other than an
interest-bearing obligation, at the rate of 6 percent per annum, less, in every
case, the amount of any income received on the security, and:

(A) Such offeree does not accept the offer within 30 days of its
receipt; or

(B) If such offer was accepted, the terms thereof were complied with by
the offeror, provided no written offer shall be effective within the meaning of
this subsection unless it would be exempt under Code Section 10-5-9 or, if
registration would have been required, then unless such rescission offer has
been registered and effected under a subsection of Code Section 10-5-5. Any
person who is paid for his security in the amount provided by this subsection
shall be foreclosed from asserting any remedies under this chapter regardless of
whether the other requirements of this subsection have been complied with.

(e) With respect to the activities of a certified public accountant who
holds himself out as a "financial planner" or an "investment adviser" or an
investment adviser or investment adviser representative, no person may sue under
this Code section more than two years from the date of the transaction upon
which the suit is based.

B-11

(f) Every cause of action under this chapter survives the death of any
person who might have been a plaintiff or defendant.

(g) Nothing in this chapter shall limit any statutory or common-law
right of any person in any court for any act involving the sale of a security.

(h) Any designated dealer or designated salesman who materially
violates Code Section 10-5-4 or 10-5-5 or subsection (a) or (d) of Code Section
10-5-12 with respect to a transaction involving a designated security shall be
liable to the person buying such security for:

(1) The consideration paid in cash (or the fair value of the
consideration paid at the time it was paid if such consideration was not paid in
cash) for such security with interest thereon from the date of payment to the
date of repayment as computed under paragraph (1) of subsection (d) of this Code
section, less the amount of any income paid thereon, upon the tender of the
security at any time before the entry of judgment;

(2) An additional amount equal to three times the amount calculated
pursuant to paragraph (1) of this subsection; and

(3) Court costs and reasonable attorney's fees.

(i) The form of action provided by Code Section 9-11-23 may be used in
any action brought pursuant to subsection (h) of this Code section, and, in such
case, it shall be conclusively presumed that a class of persons numbering ten or
more who purchased the same designated security from or through the same
designated dealer or designated salesman shall constitute a class so numerous as
to make it impracticable to bring them all before the courts.

HAWAII UNIFORM SECURITIES ACT

SECTION 485-8. REGISTRATION OF SECURITIES.

It shall be unlawful for any person to sell or offer to sell in the
state, any securities except of a class exempt under section 485-4 or unless
sold or offered in any transaction exempt under section 485-6 or unless it is
federal covered security, unless the security has been registered by
notification or by qualification as hereinafter provided. Registration of stock
shall be deemed to include the registration of rights to subscribe to the stock
if the notice under section 485-9 or the application under section 485-10
includes a statement that the rights are to be issued. A record of the
registration of securities shall be kept in a register of securities to be kept
in the office of the commissioner of securities in which register also shall be
recorded any notice filings made pursuant to section 485-A and any orders
entered by the commissioner with respect to the securities. The register and all
information with respect to the securities registered therein shall be open to
public inspection.

SECTION 485-20. REMEDIES.

(a) Sales voidable when and by whom. Every sale made in violation of
this chapter shall be voidable at the election of the purchaser; and the person
making the sale and every director, officer, or agent of or for the seller, if
the director, officer, or agent has personally participated or aided in any way
in making the sale, shall be jointly and severally liable to the purchaser in an
action at law in any court of competent jurisdiction upon tender of the
securities sold or of the contract made for the full amount paid by the
purchaser, with interest, together with all taxable court costs (and reasonable
attorney's fees); provided that notwithstanding any law to the contrary, no
action shall be brought for the recovery of the purchase price after five years
from the date of sale or after two years from the discovery of facts
constituting the violations, but in any event after seven years from the date of
the sale; and provided further that no purchaser otherwise entitled shall claim
or have the benefit of this section who has refused or failed within thirty days
from the date thereof to accept an offer in writing of the seller to take back
the security in question and to refund the full amount paid by the purchaser,
together with interest on the amount for the period from the date of payment by
the purchaser down to the date of repayment, such interest to be computed:

(1) In case the securities consist of interest-bearing obligations,
at the same rate as provided in the obligations; and

(2) In case the securities consist of other than interest-bearing
obligations, at the rate of ten percent a year; less, in every case, the amount
of any income from the securities that may have been received by the purchaser.

(b) Action on bond. Any person having a right of action against a
dealer or salesperson under this section shall have a right of action under the
bond provided in section 485-14.

(c) Registration in good faith. A registration by notification made in
good faith and after the commissioner of securities, on application, has given
tentative consent to such registration, shall not, as to sales made prior to
revocation

B-12

of the registration, result in the liabilities prescribed in this section,
although the securities may not be entitled to such registration.

IDAHO SECURITIES ACT

SECTION 30-1446. CIVIL LIABILITIES -- SURVIVAL AND LIMITATION OF
ACTIONS WAIVER OF ACT VOID.

(1) Any person who offers or sells a security in violation of any
provisions of sections 30-1416 through 30-1431, Idaho Code, transacts business
in violation of the provisions of section 30-1406, Idaho Code, except section
30-1406(4), Idaho Code, or offers to sell or sells a security by means of any
untrue statement of a material fact or any omission to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they are made, not misleading (the buyer not knowing
of the untruth or omission) and who does not sustain the burden of proof that he
did not know, and in the exercise of reasonable care could not have known, the
untruth or omission is liable to the person buying the security from him, who
shall be entitled to sue either at law or in equity to recover the consideration
paid for the security, together with interest at six per cent (6%) per annum
from the date of payment, costs, and reasonable attorneys' fees, less the amount
of any income received on the security, upon the tender of the security, or for
damages if he no longer owns the security. Damages shall be the amount that
would be recoverable upon a tender less (a) the value of the security when the
buyer disposed of it, and (b) interest at six per cent (6%) per annum from the
date of disposition.

(2) Every person who directly or indirectly controls a seller liable
under subsection (1) of this section, every partner, officer or director or
person occupying a similar status or performing similar functions or employee of
such a seller and every broker-dealer or salesman who participates or materially
aids in the sale is liable jointly and severally with and to the same extent as
the seller if such person knew, or in the exercise of reasonable care could have
known, of the existence of the facts by reason of which the liability is alleged
to exist. There shall be contribution among the several persons so liable.

(3) Any tender specified in this section may be made at any time before
entry of judgment. A cause of action under this statute survives the death of
any person who might have been a plaintiff or a defendant. No person may sue
under this section more than three (3) years after the contract of sale. No
person may sue under this section (a) if the buyer has received a bona fide
offer in writing at a time when he owned the security, to refund the
consideration paid together with interest at six percent (6%) per annum from the
date of payment, less the amount of any income received on the security, and
failed to accept such offer within thirty (30) days of its receipt, or (b) if
the buyer has received a bona fide offer in writing at a time when he did not
own the security in the amount that would be recoverable under this section upon
a tender less; (i) the value of the security when the buyer disposed of it and,
(ii) interest at six percent (6%) per annum from the date of disposition, and
failed to accept such offer within thirty (30) days of its receipt.

(4) No person who has made or engaged in the performance of any
contract in violation of any provision of this chapter or any rule or order
hereunder or who has acquired any purported right under any such contract with
knowledge of the facts by reason of which its making or performance was in
violation, may base any suit on such contract. Any condition, stipulation or
provision binding any person acquiring any security to waive compliance with any
provision of this chapter or any rule or order hereunder is void as against
public policy and in the public interest.

ILLINOIS SECURITIES LAW OF 1953

SECTION 5. REGISTRATION OF SECURITIES.

All securities except those set forth under Section 2a of this Act, or
those exempt under Section 3 of this Act, or those offered or sold in
transactions exempt under Section 4 of this Act, or face amount certificate
contracts required to be registered under Section 6 of this Act, or investment
fund shares required to be registered under Section 7 of this Act, shall be
registered either by coordination or by qualification, as hereinafter in this
Section provided, prior to their offer or sale in this State.

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SECTION 13. PRIVATE AND OTHER CIVIL REMEDIES; SECURITIES.

A. Every sale of a security made in violation of the provisions of this
Act shall be voidable at the election of the purchaser exercised as provided in
subsection B of this Section; and the issuer, controlling person, underwriter,
dealer or other person by or on behalf of whom said sale was made, and each
underwriter, dealer or salesperson who shall have participated or aided in any
way in making the sale, and in case the issuer, controlling person, underwriter
or dealer is a corporation or unincorporated association or organization, each
of its officers and directors (or persons performing similar functions) who
shall have participated or aided in making the sale, shall be jointly and
severally liable to the purchaser as follows:

(1) for the full amount paid, together with interest from the date of
payment for the securities sold at the rate of the interest or dividend
stipulated in the securities sold (or if no rate is stipulated, then at the rate
of 10% per annum) less any income or other amounts received by the purchaser on
the securities, upon offer to tender to the seller or tender into court of the
securities sold or, where the securities were not received, of any contract made
in respect of the sale, or

(2) if the purchaser no longer owns the securities, for the amounts set
forth in clause (1) of this subsection A less any amounts received by the
purchaser for or on account of the disposition of the securities.

If the purchaser shall prevail in any action brought to enforce any of
the remedies provided in this subsection, the court shall assess costs together
with the reasonable fees and expenses of the purchaser's attorney against the
defendant. Any provision of this subsection A to the contrary notwithstanding,
the civil remedies provided in this subsection A shall not be available against
any person by reason of the failure to file with the Secretary of State, or on
account of the content of, any report of sale provided for in subsection G or P
of Section 4, paragraph (2) of subsection D of Sections 5 and 6 or paragraph (2)
of subsection F of Section 7 of this Act.

B. Notice of any election provided for in subsection A of this Section
shall be given by the purchaser within 6 months after the purchaser shall have
knowledge that the sale of the securities to him or her is voidable, to each
person from whom recovery will be sought, by registered mail or certified mail,
return receipt requested, addressed to the person to be notified at his or her
last known address with proper postage affixed, or by personal service.

C. No purchaser shall have any right or remedy under this Section who
shall fail, within 15 days from the date of receipt thereof, to accept an offer
to repurchase the securities purchased by him or her for a price equal to the
full amount paid therefore plus interest thereon and less any income thereon as
set forth in subsection A of this Section. Every offer of repurchase provided
for in this subsection shall be in writing, shall be delivered to the purchaser
or sent by registered mail or certified mail, return receipt requested,
addressed to the purchaser at his or her last known address, and shall offer to
repurchase the securities sold for a price equal to the full amount paid
therefore plus interest thereon and less any income thereon as set for in
subsection A of this Section. Such offer shall continue in force for 15 days
from the date on which it was received by the purchaser, shall advise the
purchaser of his or her rights and the period of time limited for acceptance
thereof, and shall contain such further information, if any, as the Secretary of
State may prescribe. Any agreement not to accept or refusing or waiving any
offer made during or prior to said 15 days shall be void.

D. No action shall be brought for relief under this Section or upon or
because of any of the matters for which relief is granted by this Section after
3 years from the date of sale; provided, that if the party bringing the action
neither know nor in the exercise of reasonable diligence should have known of
any alleged violation of subsection E, F, G, H, I or J of Section 12 of this Act
which is the basis for the action, the 3 year period provided herein shall begin
to run upon the earlier of:

(1) the date upon which the party bringing the action has actual
knowledge of the alleged violation of this Act; or

(2) the date upon which the party bringing the action has notice of
facts which in the exercise of reasonable diligence would lead to actual
knowledge of the alleged violation of this Act; but in no event shall the period
of limitation so extended be more than 2 years beyond the expiration of the 3
year period otherwise applicable.

E. The term purchaser as used in this Section shall include the
personal representative or representatives of the purchaser.

F. Anything in this Act to the contrary notwithstanding and in addition
to all other remedies, the Secretary of State through the Office of the Attorney
General may bring an action in any circuit court of the State of Illinois in the
name and on behalf of the State of Illinois against any person or persons
participating in or about to participate in a violation of this Act to enjoin
those persons who are continuing or doing any act in violation of this Act or to
enforce compliance with this Act. Upon a proper showing the court may grant a
permanent or preliminary injunction or temporary restraining order without bond,
and may order the defendant to make an offer of rescission of any sales or
purchases of securities determined by the court to be unlawful under this Act.
The court shall further have jurisdiction and authority, in addition to the
other penalties and remedies in this Act provided, to act or appoint another
person as a receiver,

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conservator, ancillary receiver or ancillary conservator for the defendant or
the defendant's assets located in this State and may assess costs against the
defendant for the use of the State.

G.
(1) Whenever any person has engaged or is about to engage in any act or
practice constituting a violation of this Act, any party in interest may bring
an action in the circuit court of the county in which the party in interest may
bring an action in the circuit court of the county in which the party in
interest resides, or where the person has his, her or its principal office or
registered office or where any part of the transaction has or will take place,
to enjoin that person from continuing or doing any act in violation of or to
enforce compliance with this Act. Upon a proper showing, the court shall grant a
permanent or preliminary injunction or temporary restraining order or rescission
of any sales or purchases of securities determined to be unlawful under this
Act, and may assess costs of the proceedings against the defendant.

(2) A copy of the complaint shall be served upon the Secretary of State
within one business day of filing in the form and manner prescribed by the
Secretary of Sate by rule or regulation; provided, that the failure to comply
with this provision shall not invalidate the action which is the subject of the
complaint.

H. Any provision of this Section 13 to the contrary notwithstanding,
neither the civil remedies provided in subsection A of this Section 13 nor the
remedies of rescission and appointment of a receiver, conservator, ancillary
receiver or ancillary conservator provided in subsection I of Section 11 of this
Act and in subsections F and G of this Section 13 of this Act nor the remedies
of restitution, damages or disgorgement of profits provided in subsection I of
Section 11 of this Act shall be available against any person by reason of the
failure to file with the Secretary of State, or on account of the contents of,
any notice filing under Section 2a of the Act or subsection C-5 of Section 8 of
this Act or any report of sale provided for in subsection G or P of Section 4,
paragraph (2) of subsection D of Sections 5 and 6, or paragraph (2) of
subsection F of Section 7 of this Act.

INDIANA CODE

SECTION 23-2-1-3. It is unlawful for any person to offer or sell any
security in Indiana unless:

(1) it is registered under this chapter;

(2) the security or transaction is exempted under section 2 of this
chapter; or

(3) it is a federal covered security.

SECTION 23-2-1-19. (a) A person who offers or sells a security in
violation of this chapter, and who does not sustain the burden of proof that the
person did not know and in the exercise of reasonable care could not have known
of the violation, is liable to any other party to the transaction who did not
knowingly participate in the violation or who did not have, at the time of the
transaction, knowledge of the violation, who may sue either at law or in equity
to rescind the transaction or to recover the consideration paid, together, in
either case, with interest as computed in subsection (g)(1), plus costs, and
reasonable attorney's fees, less the amount of any cash or other property
received on the security upon the tender of the security by the person bringing
the action or for damages if the person no longer owns the security. Damages are
the amount that would be recoverable upon a tender less:

(1) the value of the security when the buyer disposed of the
security; and

(2) the interest as computed in subsection (g)(1) on the value of the
security from the date of disposition.

(b) A person who purchases a security in violation of this chapter, and
who does not sustain the burden of proof that the person did not know and in the
exercise of reasonable care could not have known of the violation, is liable to
any other party to the transaction who did not knowingly participate in the
violation or who did not have, at the time of the transaction, knowledge of the
violation. The other party to the transaction may bring an action to rescind the
transaction or for damages, together, in either case, with reasonable attorney's
fees, upon the tender of the consideration received by the person bringing the
action.

(c) A person who, for compensation, engages in the business of advising
others, either directly or through publications or writings, as to the value of
securities or as to the advisability of investing in, purchasing, or selling
securities, or who, for compensation and as a part of a regular business, issues
analyses or reports concerning securities and:

(1) violates section 8, 12.1(b), or 14 of this chapter;

(2) employs a device, scheme, or artifice to defraud a person; or

(3) engages in an act that operates or would operate as fraud or
deceit upon a person;

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is liable to the other person, who may bring an action to recover any
consideration paid for advice, any loss due to advice, interest at eight percent
(8%) each year from the date consideration was paid, costs, and reasonable
attorney's fees less the value of cash or property received due to the advice.
It is a defense to an action brought for a violation of section 12.1(b) of this
chapter that the person accused of the violation did not know of the violation
and, exercising reasonable care, could not have known of the violation.

(d) A person who directly or indirectly controls a person liable under
subsection (a), (b), or (c), a partner, officer, or director of the person, a
person occupying a similar status or performing similar functions, an employee
of a person who materially aids in the conduct creating the liability, and a
broker-dealer or agent who materially aids in the conduct are also liable
jointly and severally with and to the same extent as the person, unless the
person who is liable sustains the burden of proof that the person did not know,
and in the exercise of reasonable care could not have known, of the existence of
the facts by reason of which the liability is alleged to exist. There is
contribution as in cases of contract among the several persons liable.

(e) A tender specified in this section may be made at any time before
entry of judgment.

(f) A cause of action under this statute survives the death of a person
who might have been a plaintiff or defendant.

(g) Action under this section shall be commenced within three (3) years
after discovery by the person bringing the action of a violation of this
chapter, and not afterwards. No person may sue under this section:

(1) if that person received a written offer, before suit and at a time
when the person owned the security, to refund the consideration paid together
with interest on that amount from the date of payment to the date of repayment,
with interest on:

(A) interest-bearing obligations to be computed at the same rate as
provided on the security; and

(B) all other securities at the rate of eight percent (8%) per year;
less the amount of any income received on the security, and the person failed to
accept the offer within thirty (30) days of its receipt; or

(2) if the person received an offer before suit and at a time when the
person did not own the security, unless the person rejected the offer in writing
within thirty (30) days of its receipt.

(h) No person who has made or engaged in the performance of a contract
in violation of this chapter or a rule or order under this chapter, or who has
acquired a purported right under a contract with knowledge of the facts by
reason of which its making or performance was in violation, may base a suit on
the contract.

(i) A condition, stipulation, or provision binding a person acquiring a
security to waive compliance with this chapter or a rule or order under this
chapter is void.

(j) The rights and remedies specifically prescribed by this chapter are
the only rights and remedies created by this chapter, but are in addition to any
other rights or remedies that exist at law or in equity.

IOWA UNIFORM SECURITIES ACT

SECTION 502.201. REGISTRATION REQUIREMENT.

It is unlawful for any person to offer or sell any security in this
state unless

1. It is registered under this chapter; or

2. The security or transaction is exempted under section 502.202 or
502.203.

3. It is a federal covered security.

SECTION 502.501. VIOLATION OF REGISTRATION AND RELATED REQUIREMENTS.

1. Any person who:

a. Violates section 502.201, subsection 1 or 2, or section 502.208,
subsection 12, or section 502.406, subsection 2, paragraph "b", or

b. Violates any material condition imposed under section 502.208, or

c. Offers or sells a security at any time when such person has
committed a material violation of section 502.301, or

d. Commits a material violation of any order issued by the
administrator under this chapter, shall be liable to the person purchasing
the security offered or sold in connection with such violation, who may sue
either at law or in

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equity to recover the consideration paid for the security, together with
interest at the legal rate from the date of payment, costs and reasonable
attorneys' fees, less the amount of any income or distributions, in cash or in
kind, received on the security, upon the tender of the security, or for damages
if the purchaser no longer owns the security. Damages shall be the amount that
would be recoverable upon a tender less

(1) The value of the security when the purchaser disposed of it and

(2) Interest on said value at the legal rate from the date of
disposition. Any person on whose behalf an offering is made and any underwriter
of the offering, whether on a best efforts or a firm commitment basis, shall be
jointly and severally liable under this section, but in no event shall any
underwriter be liable in any suit or suits authorized under this section for
damages in excess of the total price at which the securities underwritten by it
and distributed to the public were offered to the public. Tender requires only
notice of willingness to exchange the security for the amount specified. Any
notice may be given by service as in civil actions or by certified mail
addressed to the last known address of the person liable.

2. Any person who violates section 502.211 shall be liable to the
person selling the security to such violator, which seller may sue either at law
or in equity to recover the security, costs and reasonable attorney's fees, plus
any income or distributions, in cash or in kind, received by the purchaser
thereon, upon tender of the consideration received, or for damages if the
purchaser no longer owns the security. Damages shall be the excess of the value
of the security when the purchaser disposed of it, plus interest at the legal
rate from the date of disposition, over the consideration paid for the security.
Tender requires only notice of willingness to pay the amount specified in
exchange for the security. Any notice may be given by service as in civil
actions or by certified mail to the last known address of the person liable.

3. In addition to other remedies provided in this chapter, in a
proceeding alleging a violation of sections 502.211 through 502.218 the court
may provide that all shares acquired from a resident of this state in violation
of any provision of this chapter or rule or order issued pursuant to this
chapter be denied voting rights for one year after acquisition, that the shares
be nontransferable on the books of the target company, or that during this
one-year period the target company have the option to call the shares for
redemption either at the price at which the shares were acquired or at book
value per share as of the last day of the fiscal quarter ended prior to the date
of the call for redemption, which redemption shall occur on the date set in the
call notice but not later than sixty days after the call notice is given.

SECTION 502.504. TIME LIMITATIONS ON RIGHTS OF ACTION.

1. No action shall be maintained to enforce any liability created under
either section 502.501 or section 502.503, subsection 1 insofar as it relates to
section 502.501 unless brought within two years after the violation upon which
it is based.

2. No action shall be maintained to enforce any liability created under
either section 502.502 or section 502.503, subsection 1, insofar as it relates
to section 502.502, unless brought within the shorter of the following two
periods:

a. Five years after the act or transaction constituting the
violation; or

b. Two years after the plaintiff receives actual notice of, or upon the
exercise of reasonable diligence should have known of, the facts constituting
the violation.

3. No Action shall be maintained to enforce any right of
indemnification or contribution created by section 502.503, subsection 2 unless
brought within one year after final judgment based upon the liability for which
the right of indemnification or contribution exists.

4. No purchaser may commence an action under sections 502.501,
502.502 or 502.503 if:

a. Before suit is commenced, the purchaser has received a written
offer:

(1) Stating in reasonable detail why liability under such section may
have arisen and fairly advising the purchaser of the purchaser's rights;

(2) Offering to repurchase the security for cash, payable on delivery
of the security, equal to the consideration paid, together with interest at the
legal rate from the date of payment, less the amount of any income or
distributions, in cash or in kind, received thereon or, if the purchaser no
longer owns the security, offering to pay the purchaser upon acceptance of the
offer an amount in cash equal to the damages computed in accordance with section
502.502, subsection 1; and

(3) Stating that the offer may be accepted by the purchaser at any time
within a specified period of not less than thirty days after the date of receipt
thereof, or such shorter period as the administrator may by rule prescribe; and

b. The purchaser has failed to accept such offer in writing within
the specified period.

5. No seller may commence an action under sections 502.501, 502.502
or 502.503 if:

a. Before suit is commenced, the seller has received a written offer:

B-17

(1) Stating in reasonable detail why liability under such section may
have arisen and fairly advising the seller of the seller's rights;

(2) Offering to return the security plus the amount of any income or
distributions, in cash or in kind, received thereon upon payment of the
consideration received, or, if the purchaser no longer owns the security,
offering to pay the seller upon acceptance of the offer an amount in cash equal
to the damages computed in accordance with section 502.502, subsection 2; and

(3) Stating that the offer may be accepted by the seller at any time
within a specified period of not less than thirty days after the date of receipt
thereof, or such shorter period as the administrator may by rule prescribe; and

b. The seller has failed to accept the offer in writing within the
specified period.

6. Offers under subsections 4 or 5 shall be in the form and contain the
information the administrator by rule prescribes. Every offer under either
subsection shall be delivered to the offeree personally or sent by certified
mail addressed to the offeree at the offeree's last known address. If an offer
is not performed in accordance with its terms, suit by the offeree under
sections 502.501, 502.502 or 502.503 shall be permitted without regard to
subsections 4 and 5 of this section.

KANSAS SECURITIES ACT

SECTION 17-1255. UNLAWFUL TO SELL OR OFFER FOR SALE CERTAIN
UNREGISTERED SECURITIES; PENALTY.

(a) It is unlawful for any person to offer or sell any security in this
state, unless:

(1) It is registered under this act;

(2) the security or transaction is exempt under K.S.A. 17-1261 or
17-1262, and amendments thereto; or

(3) it is a federal covered security for which the fee has been paid
and documents have been filed as required by K.S.A. 1997 Supp. 17-1270a.

(b) A conviction for an intentional violation of this section is a
severity level 7, nonperson felony. Any violation of this section committed on
or after July 1, 1993, resulting in a loss of $25,000 or more, regardless of its
location on the sentencing grid block, shall have a presumptive sentence of
imprisonment.

SECTION 17-1268. CIVIL LIABILITIES.

(a) Any person, who offers or sells a security in violation of K.S.A.
17-1254 or 17-1255, and amendments thereto, or offers or sells a security by
means of any untrue statement of a material fact or any omission to state a
material fact necessary in order to make the statements made in the light of the
circumstances under which they are made not misleading (the buyer not knowing of
the untruth or omission) and who does not sustain the burden of proof that such
person did not know and in the exercise of reasonable care could not have known
of the untruth or omission, is liable to the person buying the security from
such person, who may sue either at law or in equity to recover the consideration
paid for the security, together with interest at 15% per annum from the date of
payment, costs, and reasonable attorney fees, less the amount of any income
received on the security, upon the tender of the security, or for damages if the
buyer no longer owns the security. Damages are the amount that would be
recoverable upon a tender less:

(1) The value of the security when the buyer disposed of it; and (2)
interest at 15% per annum from the date of disposition.

(b) Every person who directly or indirectly controls a seller liable
under subsection (a), every partner, officer, or director (or person occupying a
similar status or performing similar functions) or employee of such a seller who
materially aids in the sale, and every broker-dealer or agent who materially
aids in the sale is also liable jointly and severally with and to the same
extent as the seller, unless the nonseller who is so liable sustains the burden
of proof that such nonseller did not know, and in the exercise of reasonable
care could not have known, of the existence of the facts by reason of which the
liability is alleged to exist. There is contribution as in cases of contract
among the several persons so liable.

(c) Any tender specified in this section may be made at any time before
entry of judgment. Every cause of action under this statute survives the death
of any person who might have been a plaintiff or defendant. No person may sue
under this section if:

(1) The buyer received a written offer, before suit and at a time when
the buyer owned the security, to refund the consideration paid, together with
interest at 15% per annum from the date of payment, less the amount of any

B-18

income received on the security, and the buyer failed to accept the offer within
30 days of its receipt; or (2) the buyer received such an offer before suit and
at a time when the buyer did not own the security, unless the buyer rejected the
offer in writing within 30 days of its receipt.

(d) No person who has made or engaged in the performance of any
contract in violation of any provision of this act or any rule and regulation or
order hereunder, or who has acquired any purported right under any such contract
with knowledge of the facts by reason of which its making or performance was in
violation, may base any suit on the contract. Any condition, stipulation, or
provision binding any person acquiring any security or receiving any investment
advice to waive compliance with any provision of this act or any rule and
regulation or order hereunder is void.

SECURITIES ACT OF KENTUCKY

SECTION 292.340. REGISTRATION OF SECURITIES.

It is unlawful for any person to offer or sell any security in this
state, unless the security is registered under this chapter, or the security or
transaction is exempt under this chapter, or the security is a covered security.

SECTION 292.480. CIVIL LIABILITIES.

(1) Any person, who offers or sells a security in violation of this
chapter or of any rules or orders promulgated hereunder or offers or sells a
security by means of any untrue statement of a material fact or any omission to
state a material fact necessary in order to make the statements made in the
light of the circumstances under which they are made not misleading (the buyer
nor knowing of the untruth or omission) and who does not sustain the burden of
proof that he did not know and in the exercise of reasonable care could not have
known of the untruth or omission is liable to the person buying the security
from him, who may sue either at law or in equity to recover the consideration
paid for the security, together with interest at the legal rate from the date of
payment costs and reasonable attorneys' fees, less the amount of any income
received on the security, upon the tender of the security, or for damages if he
no longer owns the security. Damages are the amount that would be recoverable
upon a tender less (a) the value of the security when the buyer has disposed of
it and (b) interest at the legal rate from the date of disposition.

(2) Any person who purchases a security in violation of the chapter or
of any administrative regulations or orders promulgated under this chapter or
who purchases a security by means of any untrue statement of a material fact or
any omission to state a material fact necessary in order to make the statements
made in light of the circumstances under which they are made not misleading, the
seller not knowing of the untruth or omission, and who does not sustain the
burden of proof that he did not know and in the exercise of reasonable care
could not have known of the untruth or omission is liable to the person selling
the security to him, who may sue either at law or in equity for:

(a) A return of the security, together with any income received by the
purchaser on the security, costs, and reasonable attorney's fees, upon a tender
of the full amount of the consideration received for the security; or

(b) If the purchaser no longer owns the security, the difference
between the fair value of the security at the date of the transaction and the
consideration received for the security, together with interest on the
difference at the legal rate compounded annually from the date of the
transaction, and costs and reasonable attorney's fees.

(3) For purposes of paragraph (b) of subsection (2) of this section,
when the purchaser no longer owns the security, if a seller seeking relief under
paragraph (b) of subsection (2) of this section offers and presents admissible
evidence of the highest intermediate value of the subject security as of some
specific date occurring within a reasonable period of time after the date of the
sale of the security but no later than the date an action under paragraph (b) of
subsection (2) of this section is filed, or of the total consideration received
by the purchaser in a subsequent sale of that security, it shall be presumed
until rebutted by a preponderance of evidence to the contrary that the value or
sale price, as applicable, is the fair value of the security at the date of the
transaction as those terms are used in paragraph (b) of subsection (2) of this
section to measure damages. For purposes of subsections (1) and (2) of this
section and all other provisions of this chapter, statements and omissions may
be either oral or written.

(4) Every person who directly or indirectly controls a seller or
purchaser liable under subsection (1) or (2) of this section, every partner,
officer or director (or person occupying a similar status or performing similar
functions) or employee of a seller or purchaser who materially aids in the sale
or purchase, and every broker-dealer or agent who materially aids in the sale or
purchase is also liable jointly and severally with and to the same extent as the
seller or purchaser, unless the nonseller or nonpurchaser who is so liable
sustains the burden of proof that he did not know, and in the exercise of
reasonable care could not have known, of the existence of the facts by reason of
which the liability is alleged to exist. There is contribution as in cases of
contract among the several persons so liable.

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(5) Any tender specified in this section may be made at any time before
entry of judgment. Every cause of action under this statute survives the death
of any person who might have been a plaintiff or defendant. No person may sue
under this section more than three (3) years after the occurrence of the act,
omission, or transaction constituting a violation of this chapter. No person may
sue under this section:

(a) If the buyer received a written offer, before suit and at a time
when he owned the security, to refund the consideration paid together with
interest at the legal rate from the date of payment, less the amount of any
income received on the security, and he failed to accept the offer within thirty
(30) days of its receipt;

(b) If the buyer received an offer before suit and at a time when he
did not own the security, unless he rejected the offer in writing within thirty
(30) days of its receipt; or

(c) If paragraph (b) of subsection (2) or this section applies, and if
the seller received a written offer before suit equal to the difference between
the greater of the highest intermediate value of the security of the
consideration received by the purchaser upon disposal of the security and the
consideration received by the seller for the security, together with interest on
the difference at the legal rate from the date of the transaction; or if
paragraph (a) of subsection (2) of this section applies, and if the seller
received a written offer to return the security together with any income
received by the purchaser on the security; and in either case he failed to
accept the offer within thirty (30) days of its receipt.

(6) No person who has made or engaged in the performance of any
contract in violation of any provision of this chapter or any rule or order
hereunder, or who has acquired any purported right under any contract with
knowledge of the facts by reason of which its making or performance was in
violation, may base any suit on the contract. Any condition, stipulation or
provision binding any person acquiring any security to waive compliance with any
provision of this chapter or any rule or order hereunder is void.

(7) The rights and remedies provided by this section are in addition to
any other rights or remedies that may exist at law or in equity.

LOUISIANA SECURITIES LAW

SECTION 51:705. REGISTRATION OF SECURITIES; WHEN AND HOW REQUIRED;
DELIVERY OF PROSPECTUS.

A. Generally. It shall be unlawful for any person to offer for sale or
to sell any securities to any person in this state unless:

(1) They are subject to an effective registration statement under this
Part; or

(2) The security or transaction is exempt under R.S. 51:708 or
R.S. 51:709.

SECTION 51:712. UNLAWFUL PRACTICES.

A. It shall be unlawful for any person:

(1) To offer to sell or to sell any security in violation of
R.S. 51:703, 705, or any rule, regulation or order promulgated or issued by
the commissioner under this Part.

(2) To offer to sell or to sell a security by means of any oral or
written untrue statement of a material fact or any omission to state a material
fact necessary in order to make the statements made, in the light of the
circumstances under which they are made, not misleading, the buyer not knowing
of the untruth or omission, if such person shall not sustain the burden of proof
that he did not know, and in the exercise of reasonable care could not have
known, of the untruth or omission.

(3) To offer or sell any security:

(a) Registered under R.S. 51:705(B) by means of any prospectus except a
prospectus which complies with R.S. 51:705(B)(3).

(b) Registered under R.S. 51:705(E) by means of any prospectus except a
prospectus which complies with R.S. 51:705(E)(3).

(c) Registered under R.S. 51:705(F) by means of any prospectus except a
prospectus which complies with R.S. 51:705(F)(4).

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SECTION 51:714. CIVIL LIABILITY FROM SALES OF SECURITIES.

A. Any person who violates R.S. 51:712(A) shall be liable to the person
buying such security, and such buyer may sue in any court to recover the
consideration paid in cash or, if such consideration was not paid in cash, the
fair value thereof at the time such consideration was paid for the security with
interest thereon from the date of payment down to the date of repayment as
computed in R.S. 51:714(C)(1), less the amount of any income received thereon,
together with all taxable court costs and reasonable attorney's fees, upon the
tender, where practicable, of the security at any time before the entry of
judgment, or for damages if he no longer owns the security. Damages are the
amount which equals the difference between the fair value of the consideration
the buyer gave for the security and the fair value of the security at the time
the buyer disposed of it, plus interest thereon from the date of payment to the
date of repayment as computed in R.S. 51:714(C)(2).

B. Every person who directly or indirectly controls a person liable
under Subsection A of this Section, every general partner, executive officer, or
director of such person liable under Subsection A of this Section, every person
occupying a similar status or performing similar functions, and every dealer or
salesman who participates in any material way in the sale is liable jointly and
severally with and to the same extent as the person liable under Subsection A of
this Section unless the person whose liability arises under this Subsection
sustains the burden of proof that he did not know and in the exercise of
reasonable care could not have known of the existence of the facts by reason of
which liability is alleged to exist. There is contribution as in the case of
contract among several persons so liable.

C. (1) No person may sue under this Section more than two years from
the date of the contract for sale or sale, if there is no contract for sale. No
person may sue under this Section:

(a) If the buyer received a written offer, before suit and at a time
when he owned the security, to repay in cash or by certified or official bank
check, within thirty days from the date of acceptance of such offer in exchange
for the securities, the fair value of the consideration paid, determined as of
the date such payment was originally paid by the buyer, together with interest
on such amount for the period from the date of payment to the date of repayment,
such interest to be computed in case the security consists of an
interest-bearing obligation, at the same rate as provided in the security or, in
case the security consists of other than an interest-bearing obligation, at the
applicable rate of legal interest, less, in every case, the amount of any income
received on the security, and:

(i) Such offeree does not accept the offer within thirty days of its
receipt or

(ii) If such offer was accepted, the terms thereof were complied with
by the offeror;

(b) If the buyer received a written offer before suit and at a time
when he did not own the security to repay in cash or by certified or official
bank check, within thirty days from the date of acceptance of such offer, an
amount equal to the difference between the fair value of the consideration the
buyer gave for the security and the fair value of the security at the time the
buyer disposed of it, together with interest on such amount for the period from
the date of payment down to the date of repayment, such interest to be computed
in case the security consists of an interest-bearing obligation at the same rate
as provided in the security or, in case the security consists of other than an
interest-bearing obligation, at the applicable rate of legal interest, less, in
every case, the amount of any income received on the security, and

(i) Such offeree does not accept the offer within thirty days of its
receipt or

(ii) If such offer was accepted, the terms thereof were complied
with by the offeror

Provided, that no written offer shall be effective within the meaning
of this Subsection unless, if it were an offer to sell securities, it would be
exempt under R.S. 51:709 or, if registration would have been required, then
unless such rescission offer has been registered and effected under R.S. 51:705.
Any person who is paid for his security in the amount provided by this
Subsection shall be foreclosed from asserting any remedies under this Part,
regardless of whether the other requirements of this Subsection have been
complied with.

D. Every cause of action under this Part survives the death of any
person who might have been a plaintiff or defendant.

E. Nothing in this Part shall limit any statutory or civil right of
any person to bring action in any court for any act involved in the sale of
securities or the right of this state to punish any person for any violation of
any law. The attorney general and each of the district attorneys throughout this
state, with regard to violation of this Part in their respective districts,
shall lend full assistance to the commissioner in any investigations or
prosecutions that the commissioner may deem necessary under the provisions of
this Part.

REVISED MAINE SECURITIES ACT

SECTION 10605. CIVIL LIABILITY.

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1. Offer or sale of security. Any person who offers or sells a security
in violation of section 10201, 10205, 10301, 10401 or 10405, subsection 8, or
any rule of the administrator relating to those sections or any condition
imposed under section 10405, subsection 7, is liable to the person purchasing
the security from that person. The person purchasing the security may sue to
recover the consideration paid for the security, together with interest at the
legal rate from the date of payment, costs and reasonable attorneys' fees less
the amount of any income received on the security, upon the tender of the
security, or for damages plus costs and reasonable attorneys' fees if the person
no longer owns the security. Damages are the amount that would be recoverable
upon a tender less the value of the security when the purchaser disposed of it
and interest at the legal rate from the date of disposition. Tender shall
require only notice of willingness to exchange the security for the amount
specified. A person who offers or sells a security in violation of section
10201, subsection 2, is not liable under this subsection if the purchaser knew
of the untrue statement of a material fact or omission of a statement of a
material fact; or the person sustains the burden of proof to establish that the
person did not know and in the exercise of reasonable care could not have known
of the untrue statement or omission.

2. Purchase of a security. Any person who purchases a security in
violation of section 10201, subsection 2, is liable to the person selling the
security to that person. The person selling the security may sue to recover the
security, plus any income received by the purchaser on the security upon tender
of the consideration received, costs and reasonable attorneys' fees, or for
damages plus costs and reasonable attorneys' fees if the purchaser no longer
owns the security. Damages are the excess of the value of the security when the
purchaser acquired it, plus interest at the legal rate on that amount from the
date of disposition, over the consideration paid for the security plus any
income received on the security. Tender requires only notice of willingness to
pay the amount specified in exchange for the security. A person who purchases a
security in violation of section 10201, subsection 2, is not liable under this
subsection if the seller knew of the untrue statement of a material fact or
omission of a statement of a material fact; or the person sustains the burden of
proof to establish that the person did not know and in the exercise of
reasonable care could not have known of the untrue statement or omission.

3. Control persons. Every person who directly or indirectly controls
another person liable under subsection 1 or 2, every partner, officer or
director of that other person, every person occupying a similar status or
performing similar functions, every employee of that other person who materially
aids in the act or transaction constituting the violation and every
broker-dealer or sales representative who materially aids in the act or
transaction constituting the violation is also liable jointly and severally with
and to the same extent as that other person, unless the person otherwise
secondarily liable under this Act proves that the person did not know, and in
the exercise of reasonable care could not have known, of the existence of the
facts by reason of which the liability is alleged to exist. There is
contribution as in cases of contract among the several persons so liable.

SECTION 10606. CIVIL STATUTE OF LIMITATIONS.

No person may sue under section 10605, unless suit is brought within 2
years after the violation, except that, if liability arises under subchapter II,
suit must be brought within 2 years after the discovery of the violation or
after discovery should have been made by the exercise of reasonable diligence.

SECTION 10607. RESCISSION AND SETTLEMENT OFFERS.

1. Purchaser. No purchaser may commence an action under section 10605
if, before suit is commenced, the purchaser has received a written offer:

A. Stating the respect in which liability under section 10605 may have
arisen and fairly advising the purchaser of the purchaser's rights;

B. Offering to repurchase the security for cash, payable on delivery of
the security, equal to the consideration paid, together with interest at the
legal rate from the date of payment, less the amount of any income received
thereon, or, if the purchaser no longer owns the security, offering to pay the
purchaser upon acceptance of the offer an amount in cash equal to the damages
computed in accordance with section 10605, subsection 1; and

C. Stating that the offer may be accepted by the purchaser at any time
within a specified period of not less than 30 days after the date of its receipt
by the purchaser.

2. Seller. No seller may commence an action under section 10605 if,
before suit is commenced, the seller has received a written offer:

A. Stating the respect in which liability under section 10605 may have
arisen and fairly advising the seller of the seller's rights;

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B. Offering to return the security, plus the amount of any income
received on the security, upon payment of the consideration received, or, if the
purchaser no longer owns the security, offering to pay the seller upon
acceptance of the offer an amount in cash equal to the damages computed in
accordance with section 10605, subsection 2; and

C. Providing that the offer may be accepted by the seller at any time
within a specified period of not less than 30 days after the date of its receipt
by the seller.

3. Form of offer. The administrator, by rule, may prescribe the form in
which the information specified in subsections 1 and 2 shall be contained in any
offer made under subsection 1 or 2.

4. Delivery of offer. Every offer under subsection 1 or 2 shall be
delivered to the offeree or sent by certified mail to the offeree at the
offeree's last known address.

5. Statute of limitation tolled. If an offer is not performed in
accordance with its terms, suit by the offeree under section 10605 shall be
permitted without regard to this section and the statute of limitations shall
toll from the time of receipt of the offer until 60 days after the rescission or
settlement offer was to have been performed.

MARYLAND SECURITIES ACT

SECTION 11-501. REGISTRATION REQUIREMENT.

A person may not offer or sell any security in this State unless:

(1) The security is registered under this title;

(2) The security or transaction is exempted under Subtitle 6 of this
title; or

(3) The security is a federal covered security.

SECTION 11-703. CIVIL LIABILITIES.

(a) When seller, purchaser or advisor liable. (1) A person is civilly
liable to the person buying a security from him if he:

(i) Offers or sells the security in violation of Section 11-304(b),
Section 11-401(a), Section 11-402(a), or Section 11-501 of this title, or of any
rule or order under Section 11-205 of this title which requires the affirmative
approval of sales literature before it is used; or

(ii) Offers or sells the security by means of any untrue statement of a
material fact or any omission to state a material fact necessary in order to
make the statements made, in the light of the circumstances under which they are
made, not misleading, the buyer not knowing of the untruth or omission, and if
he does not sustain the burden of proof that he did not know, and in the
exercise of reasonable care could not have known, of the untruth or omission.

(2) A person is civilly liable to the person selling a security to him
if he offers to purchase or purchases the security by means of any untrue
statement of a material fact or any omission to state a material fact necessary
in order to make the statements made, in light of the circumstances under which
they are made, not misleading, the seller not knowing of the untruth or
omission, and if he does not sustain the burden of proof that he did not know,
and in the exercise of reasonable care could not have known, of the untruth or
omission.

(3) A person is civilly liable to another person if the person:

(i) Acts as an investment adviser or representative in violation of
Section 11-302(c), Section 11-401(b), Section 11-402(b), or Section 11-304(b) of
this title or any rule or order promulgated under it, except that an action
based on a violation of Section 11-402(b) of this title may not be maintained
except by those persons who directly received advice from the unregistered
investment adviser representative; or

(ii) Receives, directly or indirectly, any consideration from another
person for advice as to the value of securities or their purchase or sale or for
acting as an investment adviser or representative under Section 11-101(h) and
(i) of this title, whether through the issuance of analyses, reports, or
otherwise, and employs any device, scheme, or artifice to defraud such other
person or engages in any act, practice or course of business which operates or
would operate as a fraud or deceit on such other person.

(b) Extent of liability. (1) A buyer may sue either at law or in
equity:

(i) On tender of the security, to recover the consideration paid for
the security, together with interest at the rate provided for in Section
11-107(a) of the Courts and Judicial Proceedings Article, as amended, from the
date of payment, costs, and reasonable attorneys' fees, less the amount of any
income received on the security; or

(ii) If he no longer owns the security, for damages.

(2) A seller may sue either at law or in equity:

B-23

(i) On tender of the consideration paid for the security, to recover
the security, together with the amount of any income received on the security,
costs, and reasonable attorneys' fees; or

(ii) If the buyer no longer owns the security, for damages.

(3) For the purposes of subsection (b)(1)(ii) of this section, damages
are the amount that would be recoverable on a tender less the value of the
security when the buyer disposed of it and interest at the rate provided for in
Section 11-107(a) of the Courts and Judicial Proceedings Article, as amended,
from the date of disposition.

(4)

(i) In any action brought under subsection (a)(3) of this section a
person may sue either at law or in equity for the rescission of the advisory
contract and any damages resulting from the violation, together with interest at
the rate provided for in Section 11-107(a) of the Courts and Judicial
Proceedings Article, as amended, from the date of payment of the consideration,
costs, and reasonable attorneys' fees, less the amount of any income received
from such advice.

(ii) An action based on a violation of Section 11-302(c) of this title
may not prevail where the person accused of the violation sustains the burden of
proof that he did not know, and in the exercise of reasonable care could not
have known, of the existence of the facts by reason of which the liability is
alleged to exist.

(1) Every person who directly or indirectly controls a person liable
under subsection (a) of this section, every partner, officer, or director of the
person liable, every person occupying a similar status or performing similar
functions, every employee of the person liable who materially aids in the
conduct giving rise to the liability, and every broker-dealer or agent who
materially aids in such conduct are also liable jointly and severally with and
to the same extent as the person liable, unless able to sustain the burden of
proof that he did not know, and in exercise of reasonable care could not have
known, of the existence of the facts by reason of which the liability is alleged
to exist.

(2) There is contribution as in cases of contract among the several
persons so liable.

(d) Time of making tender. Any tender specified in this section may be
made at any time before entry of judgment.

(e) Survival of cause of action. Every cause of action under this
statute survives the death of any person who might have been a plaintiff or
defendant.

(f) Limitation of actions; effect of offer of refund.

(1) A person may not sue under subsections (a)(1) and (2) of this
section after the earlier to occur of 3 years after the contract of sale or
purchase or the time specified in paragraph (2) of this subsection.

(2) An action may not be maintained:

(i) To enforce any liability created under subsection (a)(1)(i) of this
section, unless brought within one year after the violation on which it is
based; or

(ii) To enforce any liability created under subsection (a)(1)(ii) or
(2) of this section, unless brought within one year after the discovery of the
untrue statement or omission, or after the discovery should have been made by
the exercise of reasonable diligence.

(3) A person may not sue under subsection (a)(3) of this section more
than 3 years after the date of the advisory contract or the rendering of
investment advice, or the expiration of 2 years after the discovery of the facts
constituting the violation, whichever first occurs.

(4) A person may not sue under this section:

(i) If the buyer received a written offer, before suit and at a time
when he owned the security or asset, to refund the consideration paid together
with interest at the rate provided for in Section 11-107(a) of the Courts and
Judicial Proceedings Article, as amended, from the date of payment, less the
amount of any income received on the security or asset, and he failed to accept
the offer within 30 days of its receipt;

(ii) If the buyer received the offer before suit and at a time when he
did not own the security or asset, unless he rejected the offer in writing
within 30 days of its receipt; or

(iii) If the seller received a written offer from the buyer, before
suit, to return the security or asset, together with the amount of any income
received on the security, less interest at the rate provided for in Section
11-107(a) of the Courts and Judicial Proceedings Article, as amended, from the
date of payment, and he failed to accept the offer within 30 days of its
receipt.

(g) Effect of making or performing contract with knowledge of facts. A
person may not base any suit on any contract if he:

(1) Has made or engaged in the performance of the contract in violation
of any provision of this title or any rule or order under this title; or

(2) Has acquired any purported right under the contract with knowledge
of the facts by reason of which its making or performance was in violation.

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(h) Provision for waiver of compliance with section void. Any
condition, stipulation, or provision binding any person acquiring any security
or asset or receiving any investment advice to waive compliance with any
provision of this title or any rule or order under this title is void.

(i) Rights and remedies additional to others. The rights and remedies
provided by this title are in addition to any other rights or remedies that may
exist at law or in equity, but this title does not create any cause of action
not specified in this section or Section 11-410 of this title.

MASSACHUSETTS UNIFORM SECURITIES ACT

SECTION 301. REGISTRATION REQUIREMENT.

It is unlawful for any person to offer or sell any security in the
commonwealth unless (1) it is registered under this chapter or (2) the security
or transaction is exempted under section 402.

SECTION 410. CIVIL LIABILITIES.

(a) Any person who

(1) offers or sells a security in violation of section 201(a), 301, or
405(b), or of any rule or order under section 403 which requires the affirmative
approval of sales literature before it is used, or of any condition imposed
under section 303(d), or

(2) offers or sells a security by means of any untrue statement of a
material fact or any omission to state a material fact necessary in order to
make the statements made, in the light of the circumstances under which they are
made, not misleading, the buyer not knowing of the untruth or omission, and who
does not sustain the burden of proof that he did not know, and in the exercise
of reasonable care could not have known, of the untruth or omission, is liable
to the person buying the security from him, who may sue either at law or in
equity to recover the consideration paid for the security, together with
interest at six per cent per year from the date of payment, costs, and
reasonable attorneys' fees, less the amount of any income received on the
security, upon the tender of the security, or for damages if he no longer owns
the security. Damages are the amount that would be recoverable upon a tender
less the value of the security when the buyer disposed of it and interest at six
per cent per year from the date of disposition.

(b) Every person who directly or indirectly controls a seller liable
under subsection (a), every partner, officer, or director of such a seller,
every person occupying a similar status or performing similar functions, every
employee of such a seller who materially aids in the sale, and every
broker-dealer or agent who materially aids in the sale are also liable jointly
and severally with and to the same extent as the seller, unless the non-seller
who is so liable sustains the burden of proof that he did not know, and in
exercise of reasonable care could not have known, of the existence of the facts
by reason of which the liability is alleged to exist. There is contribution as
in cases of contract among the several persons so liable.

(d) Every cause of action under this statute survives the death of any
person who might have been a plaintiff or defendant.

(e) No person may sue under this section more than four years after the
discovery by the person bringing the action of a violation of this chapter or
any rule promulgated or order issued thereunder. No person may sue under this
section (1) if the buyer received a written offer, before suit and at a time
when he owned the security, to refund the consideration paid together with
interest at six percent per year from the date of payment, less the amount of
any income received on the security, and he failed to accept the offer within
thirty days of its receipt, or (2) if the buyer received such an offer before
suit and at a time when he did not own the security, unless he rejected the
offer in writing within thirty days of its receipt.

(f) No person who has made or engaged in the performance of any
contract in violation of any provision of this chapter or any rule or order
hereunder, or who has acquired any purported right under any such contract with
knowledge of the facts by reason of which its making or performance was in
violation, may base any suit on the contract.

(g) Any condition, stipulation, or provision binding any person
acquiring any security to waive compliance with any provision of this chapter or
any rule or order hereunder is void.

(h) The rights and remedies provided by this chapter are in addition to
any other rights or remedies that may exist at law or in equity, but this
chapter does not create any cause of action not specified in this section.

B-25

MICHIGAN UNIFORM SECURITIES ACT

SECTION 301. SALE OF SECURITIES; REGISTRATION REQUIREMENT.

It is unlawful for any person to offer or sell any security in this
state unless (1) it is registered under this act or (2) the security or
transaction is exempted under section 402.

SECTION 410. OFFER OR SALE OF SECURITY OR COMMODITY CONTRACT;
LIABILITY; DAMAGES; CONTRIBUTION; TENDER; SURVIVAL OF ACTION; LIMITATIONS;
RESCISSION OFFER; DISCLOSURE; SUIT BASED ON CONTRACT; RIGHTS AND REMEDIES
CUMULATIVE.

(a) Any person who does either of the following shall be liable to the
person buying the security or commodity contract from him or her and the buyer
may sue either at law or in equity to recover the consideration paid for the
security or commodity contract, together with interest at 6% per year from the
date of payment, costs, and reasonable attorneys' fees, less the amount of
income received on the security or commodity contract, upon the tender of the
security or commodity contract, or, if he or she no longer owns the security or
commodity contract, for damages which shall be the amount that would be
recoverable upon a tender less the value of the security or commodity contract
when the buyer disposed of it and interest at 6% per year from the date of
disposition:

(1) Offers or sells a security or commodity contract in violation of
section 201(a), 301, or 405(b) or of any rule or order under section 403, which
requires the affirmative approval of sales literature before it is used, or of
any condition imposed under section 304(d), 305(f), 305(g), or 412(g), or

(2) Offers or sells a security or commodity contract by means of any
untrue statement of a material fact or any omission to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they are made, not misleading, the buyer not knowing
of the untruth or omission, and who does not sustain the burden of proof that he
or she did not know, and in the exercise of reasonable care could not have
known, of the untruth or omission.

(b) Every person who directly or indirectly controls a seller liable
under subsection (a), every partner, officer, or director of such a seller,
every person occupying a similar status or performing similar functions, every
employee of such a seller who materially aids in the sale, and every
broker-dealer or agent who materially aids in the sale are also liable jointly
and severally with and to the same extent as the seller, unless the non-seller
who is so liable sustains the burden of proof that he or she did not know, and
in exercise of reasonable care could not have known, of the existence of the
facts by reason of which the liability is alleged to exist. There is
contribution as in cases of contract among the several persons so liable.

(d) Every cause of action under this statute survives the death of any
person who might have been a plaintiff or defendant.

(e) A person may not bring an action under subsection (a)(1) more than
2 years after the contract of sale. A person may not bring an action under
subsection (a)(2) more than 2 years after such person, in the exercise of
reasonable care, knew or should have known of the untruth or omission, but in no
event more than 4 years after the contract of sale. A person may not bring an
action under this section if the buyer received a written offer, before the
action and at a time when he or she owned the security or commodity contract, to
refund the consideration paid together with interest at 6% per year from the
date of payment, less the amount of any income received on the security, and he
or she failed to accept the offer within 30 days of its receipt, or if the buyer
received such an offer before the action and at a time when he or she did not
own the security or commodity contract, unless he or she rejected the offer in
writing within 30 days of its receipt. The documents making full written
disclosure about the financial and business condition of the issuer and the
financial and business risks associated with the retention of the securities or
commodities shall be provided to the offeree concurrently with the written
rescission offer. Such an offer shall not be made until 45 days after the date
of sale of the securities and acceptance or rejection of the offer shall not be
binding until 48 hours after receipt by the offeree. The rescission offer shall
recite the provisions of this section. A rescission offer under this section
shall not be valid unless the offeror substantiates that it has the ability to
fund the offering and this information is set forth in the disclosure documents.

(f) No person who has made or engaged in the performance of any
contract in violation of any provision of this act or any rule or order
hereunder, or who has acquired any purported right under any such contract with
knowledge of the facts by reason of which its making or performance was in
violation, may base any suit on the contract.

(g) Any condition, stipulation, or provision binding any person
acquiring any security or commodity contract to waive compliance with any
provision of this act or any rule or order hereunder is void.

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(h) The rights and remedies provided by this act are in addition to any
other rights or remedies that may exist at law or in equity, but this act does
not create any cause of action not specified in this section or section 202(e).

MINNESOTA SECURITIES ACT

SECTION 80A.08. REGISTRATION REQUIREMENT.

It is unlawful for any person to offer or sell any security in this
state unless (a) it is registered under sections 80A.01 to 80A.31 or (b) the
security or transaction is exempted under section 80A.15 or (c) it is a federal
covered security.

SECTION 80A.23. CIVIL LIABILITIES.

Subdivision 1. Any person who sells a security in violation of sections
80A.08 or 80A.18, or of any condition imposed under section 80A.11, subdivision
4, or 80A.12, subdivisions 5 and 6, is liable to the person purchasing the
security, who may sue either in equity for rescission upon tender of the
security or at law for damages if that person no longer owns the security. In
any action for rescission, the purchaser shall be entitled to recover the
consideration paid for the security together with interest at the legal rate,
costs, and reasonable attorney's fees, less the amount of any income received on
the securities. In an action at law, damages shall be the consideration paid for
the security together with interest at the legal rate to the date of
disposition, costs, and reasonable attorney's fees, less the value of the
security at the date of disposition.

Subd. 2. Any person who violates section 80A.01 in connection with the
purchase or sale of any security shall be liable to any person damaged thereby
who sold such security to that person or to whom that person sold such security,
and any person who violates section 80A.03 in connection with the purchase or
sale of any security shall be liable to any person damaged by the conduct
prescribed by section 80A.03. Any person who violates section 80A.02 in
connection with the purchase or sale of any security shall be liable to any
investment advisory client who is damaged thereby. Damages in an action pursuant
to this subdivision shall include the actual damages sustained plus interest
from the date of payment or sale, costs and reasonable attorney's fees.

Subd. 3. Every person who directly or indirectly controls a person
liable under subdivision 1 or 2, every partner, principal executive officer or
director of such person, every person occupying a similar status or performing a
similar function, every employee of such person who materially aids in the act
or transaction constituting the violation, and every broker-dealer or agent who
materially aids in the act or transaction constituting the violation, are also
liable jointly and severally with and to the same extent as such person. There
is contribution as in cases of contract among the several persons so liable.

Subd. 4. No person shall be liable under subdivisions 1 to 3 who shall
sustain the burden of proof that the person did not know, and in the exercise of
reasonable care could not have known, of the existence of facts by reason of
which the liability is alleged to exist.

Subd. 5. Any tender specified in this section may be made at any time
before entry of judgment. Tender by a purchaser shall require only notice of
willingness to exchange the security for the amount computed pursuant to
subdivision 1. Tender by a seller shall require only notice of willingness to
pay the amount specified in exchange for the security. Any notice may be given
by service as in civil actions or by certified mail to the last known address of
the person liable.

Subd. 6. Every cause of action under this statute survives the death of
any person who might have been a plaintiff or defendant.

Subd. 7. No person may commence an action under subdivision 1 more than
three years after the sale upon which such action is based. No person may
commence an action under subdivision 2 more than three years after the
occurrence of the act or transaction constituting the violation.

Subd. 8. No purchaser may commence an action under subdivision 1 if,
before suit is commenced, the purchaser has received a written offer to
repurchase the security for cash payable on delivery of the security equal to
the consideration paid, together with interest at the legal rate from the date
of payment, less the amount of any income received thereon or, if the purchaser
no longer owns the security, an offer to pay an amount in cash equal to the
damages computed in accordance with subdivision 1 and the purchaser has failed
to accept such offer in writing within 30 days of its receipt. No offer shall be
effective to prevent suit under this section unless a duplicate copy thereof
shall have been filed with the commissioner at least 20 days prior to its
delivery to the offeree and the commissioner shall not have objected to the
offer within that time. The offer shall be in the form and contain the
information the commissioner by rule

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or order prescribes. If the offer is not performed in accordance with its terms,
suit by the offeree under this section shall be permitted without regard to this
subdivision.

Subd. 9. No person who has made or engaged in the performance of any
contract in violation of any provision of this section or any rule or order
hereunder or has acquired any purported rights under any such contract with
knowledge of the facts by reason of which its making or performance was in
violation may base any suit on such violation under the contract.

Subd. 10. Any condition, stipulation or provision binding any person to
waive compliance with any provision of sections 80A.01 to 80A.31 or any rule or
order hereunder in the purchase or sale of any security is void.

Subd. 11. The rights and remedies promulgated by sections 80A.01 to
80A.31 are in addition to any other right or remedy that may exist at law or in
equity, but sections 80A.01 to 80A.31 do not create any cause of action not
specified in this section or section 80A.05, subdivision 5. No civil cause of
action may be based solely upon the failure of a broker-dealer or agent to
comply with the requirements of section 80A.04, subdivision 1 or 3, except a
cause of action arising under section 45.027.

MISSISSIPPI SECURITIES ACT

SECTION 75-71-401. REGISTRATION OR EXEMPTION REQUIRED.

Except as provided for in Section 75-71-109(a), it is unlawful for any
person to offer or sell any security in the State of Mississippi unless (1) it
is registered under this chapter or (2) the security or transaction is exempted
under Article 3 of this chapter.

SECTION 75-71-717. LIABILITY TO BUYERS FOR ILLEGAL OR FRAUDULENT SALES
OR OFFERS.

(a) Any person who (1) offers or sells a security in violation of
Section 75-71-117(a), 75-71-301 or 75-71-401, or of any rule or order under
Section 75-71-113 which requires the affirmative approval of sales literature
before it is used, or of any condition imposed under Section 75-71-405(d) or
75-71-417, or (2) offers or sells a security by the use of any written or oral
communication which contains any untrue statement of a material fact or any
omission to state a material fact necessary in order to make the statements
made, in the light of the circumstances under which they are made, not
misleading (the buyer not knowing of the untruth or omission), and who does not
sustain the burden of proof that he did not know, and in the exercise of
reasonable care could not have known, of the untruth or omission, is liable to
the person buying the security from him, who may sue either at law or in equity
to recover the consideration paid for the security, together with interest at
eight percent (8%) per year from the date of payment, costs and reasonable
attorneys' fees, less the amount of any income received on the security, upon
the tender of the security, or for damages if he no longer owns the security.
Damages are the amount that would be recoverable upon a tender less the value of
the security when the buyer disposed of it and interest at eight percent (8%)
per year from the date of disposition.

(b) No buyer may sue under this section if, before suit is commenced,
the buyer has received a written offer stating the respect in which liability
under this section may have arisen and fairly advising the buyer of his rights;
offering to repurchase the security for cash payable on delivery of the security
equal to the consideration paid, together with interest at six percent (6%) from
the date of payment, less the amount of any income received on the security or,
if the buyer no longer owns the security, offering to pay the buyer upon
acceptance of the offer an amount in cash equal to the damages computed in
accordance with subsection (a); and stating that the offer may be accepted by
the buyer at any time within thirty (30) days of its receipt; and the buyer has
failed to accept such offer in writing within the specified period.

SECTION 75-71-725. LIMITATION OF ACTIONS.

No action shall be maintained to enforce any liability created under
section 75-71-717(2) unless brought within two (2) years after the discovery of
the untrue statement or omission, or after such discovery should have been made
by the exercise of reasonable diligence, or, if the action is to enforce a
liability created under section 75-71-717(1) unless brought within two (2) years
after the violation upon which it is based.

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MISSOURI UNIFORM SECURITIES ACT

SECTION 409.301. REGISTRATION REQUIREMENT (SECURITIES).

It is unlawful for any person to offer or sell any security in this
state unless:

(1) It is registered under this act;

(2) The security or transaction is exempted under section 409.402; or

(3) It is a federal covered security.

SECTION 409.411. CIVIL LIABILITIES.

(a) Any person who:

(1) Offers or sells a security in violation of section 409.201(a),
409.301, or 409.405(b), or of any rule or order under section 409.403 which
requires the affirmative approval of sales literature before it is used, or of
any condition imposed under section 409.304(d), 409.305(f), or 409.305(g); or

(b) Any person who:

(1) Engages in the business of advising others, for compensation,
either directly or through publications or writings, as to the value of
securities or as to the advisability of investing in, purchasing, or selling
securities, or who, for compensation and as a part of a regular business, issues
or promulgates analyses or reports concerning securities in violation of section
409.102, 409.201(c) or (d), 409.405(b); or

(2) Receives directly or indirectly any consideration from another
person for advice as to the value of securities or their purchase or sale,
whether through the issuance of analyses, reports or otherwise and employs any
device, scheme, or artifice to defraud such other person or engages in any act,
practice or course of business which operates or would operate as a fraud or
deceit on such other person, is liable to that person who may sue either at law
or in equity to recover the consideration paid for such advice and any loss due
to such advice, together with interest at eight percent per year from the date
of payment of the consideration plus costs and reasonable attorney's fees, less
the amount of any income received from such advice in the amount specified in
subsection (j) of this section.

(c) Every person who directly or indirectly controls a person liable
under subsections (a) and (b) of this section, including every partner, officer,
or director of such a person, every person occupying a similar status or
performing similar functions, every employee of such a person who materially
aids in the conduct giving rise to the liability, and every broker-dealer or
agent who materially aids in such conduct is also liable jointly and severally
with and to the same extent as such person, unless able to sustain the burden of
proof that he did not know, and in exercise of reasonable care could not have
known, of the existence of the facts by reason of which the liability is alleged
to exist. There is contribution as in cases of contract among the several
persons so liable.

(d) Any tender specified in this section may be made at any time before
entry of judgment.

(e) Every cause of action under this statute survives the death of any
person who might have been a plaintiff or defendant.

(f) No person may sue under this section more than three years after
the contract of sale, or the rendering of investment advice.

(g) No person may sue under this section (1) if the buyer received a
written offer, before suit and at a time when he owned the security, to refund
the consideration paid together with interest at eight percent per year from the
date of payment, less the amount of any income received on the security, and he
failed to accept the offer within thirty days of its receipt, or (2) if the
buyer received such an offer before suit and at a time when he did not own the
security, unless he rejected the offer in writing within thirty days of its
receipt.

(h) No person who has made or engaged in the performance of any
contract in violation of any provision of sections 409.101 to 409.419 or any
rule or order hereunder, or who has acquired any purported right under any such
contract with knowledge of the facts by reason of which its making or
performance was in violation, may base any suit on the contract.

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(i) Any condition, stipulation, or provision binding any person
acquiring any security or receiving any investment advice to waive compliance
with any provision of sections 409.101 to 409.419 or any rule or order hereunder
is void.

(j) The amounts recoverable by a person damaged as a result of a
violation of subsection (a) or (b) of this section shall be the consideration
paid for the purchase of the security together with interest at eight percent
per year from the date of payment, cost, and reasonable attorney's fees, less
the amount of any income received on the security, upon the tender of the
security, or for damages if he no longer owns the security. "Damages" is the
amount that would be recoverable upon the tender less the value of the security
when the buyer disposed of it and interest at eight percent per year from the
date of disposal. An action pursuant to a violation of subsection (b) of this
section may not be maintained except by those persons who directly receive
advice from the person charged with the violation. Any recovery under subsection
(b) of this section must be offset by any recovery received from any source
under subsection (a) of this section.

(k) The rights and remedies provided by sections 409.101 to 409.419 are
in addition to any other rights or remedies that may exist at law or in equity,
but sections 409.101 to 409.419 do not create any cause of action not specified
in this section or section 409.202(e).

NEVADA UNIFORM SECURITIES ACT

SECTION 90.460. REGISTRATION REQUIREMENT.

It is unlawful for a person to offer to sell or sell any security in
this state unless the security is registered or the security or transaction is
exempt under this chapter.

SECTION 90.660. CIVIL LIABILITY.

1. A person who offers or sells a security in violation of any of the
following provisions:

(a) Subsection 1 of NRS 90.310;

(b) NRS 90.460;

(d) Subsection 2 of NRS 90.570;

(e) Subsection 2 of NRS 90.610; or

(f) A condition imposed in subsection 8 or 9 of NRS 90.500, is liable
to the person purchasing the security. Upon tender of the security, the
purchaser may recover the consideration paid for the security and interest at
the legal rate of this state from the date of payment, costs and reasonable
attorney's fees, less the amount of income received on the security. A purchaser
who no longer owns the security may recover damages. Damages are the amount that
would be recoverable upon a tender less the value of the security when the
purchaser disposed of it, plus interest at the legal rate of this state from the
date of disposition of the security, costs and reasonable attorney's fees
determined by the court. Tender requires only notice of willingness to exchange
the security for the amount specified.

2. A person who offers or sells a security in violation of subsection
2 of NRS 90.570 is not liable under subsection 1 of this section if:

(a) The purchaser knew that a statement of a material fact was untrue
or that there was an omission of a statement of a material fact; or

(b) The seller did not know and in the exercise of reasonable care
could not have known of the untrue statement or misleading omission.

3. A person who willfully participates in any act or transaction in
violation of NRS 90.580 is liable to a person who purchases or sells a security,
other than a security traded on a national securities exchange or quoted on a
national automated quotation system administered by a self-regulatory
organization, at a price that was affected by the act or transaction for the
damages sustained as a result of the act or transaction. Damages are the
difference between the price at which the securities were purchased or sold and
the market value the securities would have had at the time of the person's
purchases or sale in the absence of the act or transaction, plus interest at the
legal rate of this state from the date of the act or transaction and reasonable
attorney's fees.

4. A person who directly or indirectly controls another person who is
liable under subsection 1 or 3, a partner, officer or director of the person
liable, a person occupying a similar status or performing similar functions, any
agent of the person liable, an employee of the person liable if the employee
materially aids in the act, omission or transaction constituting the violation,
and a broker-dealer or sales representative who materially aids in the act,
omission

B-30

or transaction constituting the violation, are also liable jointly and severally
with and to the same extent as the other person, but it is a defense that the
person did not know, and in the exercise of reasonable care could not have
known, of the existence of the facts by which the liability is alleged to exist.
With respect to a person who directly or indirectly, controls another person who
is liable under subsection 3, it is also a defense that the controlling person
acted in good faith and did not, directly or indirectly, induce the act,
omission or transaction constituting the violation. Contribution among the
several persons liable is the same as in cases arising out of breach of
contract.

SECTION 90.670. STATUTE OF LIMITATIONS.

A person may not sue under NRS 90.660 unless suit is brought within the
earliest of 1 year after the discovery of the violation, 1 year after discovery
should have been made by the exercise of reasonable care, or 5 years after the
act, omission or transaction constituting the violation.

SECTION 90.680. OFFER OF RESCISSION AND SETTLEMENT.

1. Relief may not be obtained under subsection 1 of NRS 90.660 if,
before suit is commenced, the purchaser:

(a) Receives a written offer:

(1) Stating the respect in which liability under NRS 90.660 may have
arisen and fairly advising the purchaser of his rights of rescission;

(2) If the basis for relief under subsection 1 of NRS 90.660 is a
violation of subsection 2 of NRS 90.570, including financial and other
information necessary to correct all material misstatements or omissions in the
information which was required by this chapter to be furnished to the purchaser
as of the time of the sale of the security to the purchaser;

(3) Offering to repurchase the security for cash, payable on delivery
of the security, equal to the consideration paid, plus interest at the legal
rate of this state from the date of payment, less income received thereon, or,
if the purchaser no longer owns the security, offering to pay the purchaser upon
acceptance of the offer an amount in cash equal to the damages computed under
subsection 1 of NRS 90.660 plus attorney's fees; and

(4) Stating that the offer may be accepted by the purchaser at any time
within a specified period of not less than 30 days after the date of its receipt
by the purchaser or such shorter or longer time as the administrator by order
prescribes; and

(b) Fails to accept the offer in writing within the period specified
under subparagraph (4) of paragraph (a).

2. The administrator by regulation may prescribe the form in which the
information specified in subsection 1 must be contained in an offer made under
subsection 1.

3. An offer under subsection 1 must be delivered to the offeree or sent
in a manner which assures actual receipt by the offeree.

4. If, after acceptance, a rescission offer is not performed in
accordance with either its terms or this section, the offeree may obtain relief
under NRS 90.660 without regard to this section.

NEW HAMPSHIRE UNIFORM SECURITIES ACT

SECTION 421-B:11. REGISTRATION REQUIREMENT AND NOTICE FILING OF
SECURITIES.

I. It is unlawful for any person to offer or sell any security in this
state unless it is registered under this chapter, the security or transaction is
exempted under RSA 421-B:17, or it is a federal covered security for which the
fee has been paid and documents have been filed as required by paragraph I-a of
this section.

SECTION 421-B:25. CIVIL LIABILITIES.

I. Any person who sells a security in violation of RSA 421-B:11 or
421-B:20, I or of any condition imposed under RSA 421-B:14, IV or RSA 421-B:15,
V, VI and VII, is liable to the person purchasing the security from him, who may
sue either in equity for rescission upon tender of the security or at law for
damages if he no longer owns the security. In any action for rescission, the
purchaser shall be entitled to recover the consideration paid for the security
together with interest at the legal rate, costs, and reasonable attorney's fees,
less the amount of any income received on the securities. In an action at law,
damages shall be the consideration paid for the security together with interest
at the legal rate to the date of disposition, costs, and reasonable attorney's
fees, less the value of the security at the date of disposition.

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II. Any person who violates RSA 421-B:3 in connection with the purchase
or sale of any security shall be liable to any person damaged by the violation
of that section who sold such security to him or to whom he sold such security,
and any person who violates RSA 421-B:5 in connection with the purchase or sale
of any security shall be liable to any person damaged by the conduct proscribed
by RSA 421-B:5. Any person who violates RSA 421-B:4 in connection with the
purchase or sale of any security shall be liable to any investment advisory
client of his who is damaged by the violation of that section. Damages in an
action pursuant to this paragraph shall include the actual damages sustained
plus interest from the date of payment or sale, costs, and reasonable attorney's
fees.

III. Every person who directly or indirectly controls a person liable
under paragraph I or II, every partner, principal executive officer, or director
of such person, every person occupying a similar status or performing a similar
function, every employee of such person who materially aids in the act or
transaction constituting the violation, and every broker-dealer or agent who
materially aids in the acts or transactions constituting the violation, are also
liable jointly and severally with and to the same extent as such person. There
is contribution as in cases of contract among the several persons so liable.

IV. No person shall be liable under paragraphs I and III who shall
sustain the burden of proof that he did not know, and in the exercise of
reasonable care could not have known, of the existence of facts by reason of
which the liability is alleged to exist.

V. Any tender specified in this section may be made at any time before
entry of judgment. Tender by a purchaser shall require only notice of
willingness to exchange the security for the amount computed pursuant to
paragraph I. Tender by a seller shall require only notice of willingness to pay
the amount specified in exchange for the security. Any notice may be given by
service as in civil actions or by certified mail to the last known address of
the person liable.

VI. Every cause of action under this chapter survives the death of
any person who might have been a plaintiff or defendant.

VII. A person may not recover under this section in actions commenced more
than 6 years after his first payment of money to the broker-dealer or issuer in
the contested transaction.

VIII. No purchaser may commence an action under paragraph I if, before suit
is commenced, the purchaser has received a written offer to repurchase the
security for cash payable on delivery of the security equal to the consideration
paid, together with interest at the legal rate from the date of payment, less
the amount of any income received on the security or, if the purchaser no longer
owns the security, an offer to pay an amount in cash equal to the damages
computed in accordance with paragraph I and the purchaser has failed to accept
such offer in writing within 30 days of its receipt. No offer shall be effective
to prevent suit under this section unless a duplicate copy thereof shall have
been filed with the secretary of state at least 20 days prior to its delivery to
the offeree and the secretary of state shall not have objected to the offer
within that time. The offer shall be in the form and contain the information the
secretary of state by rule or order prescribes. If the offer is not performed in
accordance with its terms, suit by the offeree under this section shall be
permitted without regard to this subdivision.

IX. No person who has made or engaged in the performance of any contract
in violation of any provision of this section or any rule or order under this
section or has acquired any purported rights under any such contract with
knowledge of the facts by reason of which its making or performance was in
violation may base any suit on such violation under the contract.

X. Any condition, stipulation or provision binding any person to waive
compliance with any provision of this chapter or any rule or order under this
chapter in the purchase or sale of any security is void.

XI. The rights and remedies promulgated by this chapter are in addition
to any other right or remedy that may exist at law or in equity, but this
chapter does not create any cause of action not specified in this section or RSA
421-B:8, V. No civil cause of action may be based solely upon the failure of a
broker-dealer or agent to comply with the requirements of RSA 421-B:6, I or III,
except a cause of action arising under RSA 421-B:23.

NEW JERSEY UNIFORM SECURITIES LAW

SECTION 49:3-60. It is unlawful for any security to be offered or sold
in this State unless:

(a) The security or transaction is exempt under section 3 of P.L.1967,
c.93 (C.49:3-50);

(b) (Deleted by amendment, P.L.1997, c.276.)

(d) (Deleted by amendment, P.L.1985, c.405.)

(e) The security is registered under this act; or

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(f) It is a federal covered security for which a notice filing and fees
have been submitted as required by section 14 of this act (C.49:3-60.1).

SECTION 49:3-71. (a) Any person who

(1) Offers, sells or purchases a security in violation of subsection
(b) of section 8, subsection (a) of section 9 or section 13 of P.L.1967, c.93
(C.49:3-55, 49:3-56, or 49:3-60), or

(2) Offers, sells or purchases a security by means of any untrue
statement of material fact or any omission to state a material fact necessary in
order to make the statements made, in the light of the circumstances under which
they are made, not misleading (the buyer not knowing of the untruth or
omission), or

(3) offers, sells or purchases a security by employing any device,
scheme, or artifice to defraud, or

(4) offers, sells or purchases a security by engaging in any act,
practice or course of business which operates or would operate as a fraud or
deceit upon any person, or

(5) engages in the business of advising others, for compensation,
either directly or through publications or writings, as to the value of
securities, or as to the advisability of investing in, purchasing or selling
securities, or who, for compensation and as a part of a regular business, issues
or promulgates analyses or reports concerning securities (i) in willful
violation of this act or of any rule or order promulgated pursuant to this act,
or (ii) employs any device, scheme or artifice to defraud the other person or
engages in any act, practice or course of business or conduct which operates or
would operate as a fraud or deceit on the other person, is liable as set forth
in subsection (c) of this section;

(b)(1) If any claim is brought for violation of paragraph (2), (3), (4)
or (5) of subsection (a) of this section, the person who bought the security or
received the investment advice shall sustain the burden of proof that the seller
or giver of investment advice knew of the untruth or omission and intended to
deceive the buyer or recipient of investment advice and that the buyer or
recipient of investment advice has suffered a financial detriment;

(2) If any claim is brought for violation of paragraph (2), (3), (4) or
(5) of subsection (a) of this section involving a purchase of securities by
others or investment advice as to the selling of securities, the person who sold
the security or who received the investment advice to sell the security shall
sustain the burden of proof that that person suffered a net loss with respect to
that sale or investment advice taking into account all transactions by that
person in the same security or any security convertible into that security
within one year before or after the sale or advice which is the basis of the
claim;

(c) Any person who offered, sold or purchased a security or engaged in
the business of giving investment advice to a person in violation of paragraph
(1), (2), (3), (4) or (5) of subsection (a) of this section is liable to that
person, who may bring an action either at law or in equity to recover the
consideration paid for the security or the investment advice and any loss due to
the advice, together with interest set at the rate established for interest on
judgments for the same period by the Rules Governing the Courts of the State of
New Jersey from the date of payment of the consideration for the investment
advice or security, and costs, less the amount of any income received on the
security, upon the tender of the security and any income received from the
investment advice or on the security, or for damages if he no longer owns the
security. Damages are the amount that would be recoverable upon a tender less
the value of the security when the buyer disposed of it and interest at the rate
established for interest on judgments for the same period by the Rules Governing
the Courts of the State of New Jersey from the date of disposition;

(d) Every person who directly or indirectly controls a seller liable
under subsection (a) of this section, every partner, officer, or director of
such a seller, or investment adviser, every person occupying a similar status or
performing similar functions, every employee of such a seller or investment
adviser who materially aids in the sale or in the conduct giving rise to the
liability, and every broker-dealer, investment adviser, investment adviser
representative or agent who materially aids in the sale or conduct are also
liable jointly and severally with and to the same extent as the seller or
investment adviser, unless the nonseller who is so liable sustains the burden of
proof that he did not know, and in the exercise of reasonable care could not
have known, of the existence of the facts under paragraphs (1) through (5) of
subsection (a) of this section which give rise to liability. There is
contribution as in cases of contract among the several persons so liable;

(e) Any tender specified in this section may be made at any time
before entry of judgment;

(f) Every cause of action under this act survives the death of any
person who might have been a plaintiff or defendant;

(g) No person may bring an action under this section more than two
years after the contract of sale or the rendering of the investment advice, or
more than two years after the time when the person aggrieved knew or should have
known of the existence of his cause of action, whichever is later. No person may
bring an action under this section (1) if the buyer received a written offer,
before suit and at a time when he owned the security, to refund the
consideration paid, together with interest at the rate established for interest
on judgments for the same period by the Rules Governing the

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Courts of the State of New Jersey at the time the offer was made, from the date
of payment, less the amount of any income received on the security, and he
failed to accept the offer within 30 days of its receipt, or (2) if the buyer
received such an offer before suit and at a time when he did not own the
security, unless he rejected the offer in writing within 30 days of its receipt;

(h) No person who has made or engaged in the performance of any
contract in violation of any provision of this act or any rule or order
hereunder, or who has acquired any purported right under any such contract with
knowledge of the facts by reason of which its making or performance was in
violation, may base any suit on the contract;

(i) Any condition, stipulation or provision binding any person
acquiring any security or receiving investment advice to waive compliance with
any provision of this act or any rule or order hereunder is void;

(j) The rights and remedies provided by this act are in addition to any
other rights or remedies that may exist at law or in equity, but this act does
not create any cause of action not specified in this section or subsection (e)
of section 10 of P.L.1967, c.93 (C.49:3-57).

NEW YORK BLUE SKY LAW (MARTIN ACT)

[NO PROVISION REQUIRING REGISTRATION OF SECURITIES.]

NORTH CAROLINA SECURITIES ACT

SECTION 78A-24. REGISTRATION REQUIREMENT.

It is unlawful for any person to offer or sell any security in this State
unless (i) it is registered under this Chapter, (ii) the security or transaction
is exempted under G.S. 78A-16 or 78A-17 and such exemption has not been denied
or revoked under G.S. 78A-18, or (iii) it is a security covered under federal
law.

SECTION. 78A-56. CIVIL LIABILITIES.

(a) Any person who:

(1) Offers or sells a security in violation of G.S. 78A-8(1), 78A,
8(3), 78A-10(b), 78A-12, 78A-24, or 78A-36(a), or of any rule or order under
G.S. 78A-49(d) which requires the affirmative approval of sales literature
before it is used, or of any condition imposed under G.S. 78A-27(d) or
78A-28(g), or

(2) Offers or sells a security by means of any untrue statement of a
material fact or any omission to state a material fact necessary in order to
make the statements made, in the light of the circumstances under which they
were made, not misleading (the purchaser not knowing of the untruth or
omission), and who does not sustain the burden of proof that he did not know,
and in the exercise of reasonable care could not have known, of the untruth or
omission, is liable to the person purchasing the security from him, who may sue
either at law or in equity to recover the consideration paid for the security,
together with interest at the legal rate from the date of payment, costs, and
reasonable attorneys' fees, less the amount of any income received on the
security, upon the tender of the security, or for damages if he no longer owns
the security. Damages are the amount that would be recoverable upon a tender
less the value of the security when the purchaser disposed of it and interest at
the legal rate as provided by G.S. 24-1 from the date of disposition.

(b) Any person who purchases a security by means of any untrue
statement of a material fact or any omission to state a material fact necessary
in order to make the statements made, in the light of the circumstances under
which they are made, not misleading (the seller not knowing of the untruth or
omission), and who does not sustain the burden of proof that he did not know,
and in the exercise of reasonable care could not have known, of the untruth or
omission, shall be liable to the person selling the security to him, who may sue
either at law or in equity to recover the security, plus any income received by
the purchaser thereon, upon tender of the consideration received, or for damages
if the purchaser no longer owns the security. Damages are the excess of the
value of the security when the purchaser disposed of it, plus interest at the
legal rate from the date of disposition, over the consideration paid for the
security.

(c) Every person who directly or indirectly controls a person liable
under subsection (a) or (b), every partner, officer, or director of such a
person, every person occupying a similar status or performing similar functions,
every employee of such a person who materially aids in the act or transaction,
and every dealer or salesman who materially aids in the sale are also liable
jointly and severally with and to the same extent as such person, unless the
person who is so liable sustains the burden of proof that he did not know, and
in the exercise of reasonable care should not have known, of the existence of
the facts by reason of which the liability is alleged to exist. There is
contribution as in cases of contract among the several persons so liable.

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(d) Any tender specified in this section may be made at any time before
entry of judgment. Tender shall require only notice of willingness to exchange
the security for the amount specified. Any notice may be given by service as in
civil actions or by certified mail addressed to the last known address of the
person liable.

(e) Every cause of action under this statute survives the death of any
person who might have been a plaintiff or defendant.

(f) No person may sue under this section more than two years after the
sale or contract of sale.

(g)(1) No purchaser may sue under this section if, before suit is
commenced, the purchaser has received a written offer stating the respect in
which liability under this section may have arisen and fairly advising the
purchaser of his rights; offering to repurchase the security for cash payable on
delivery of the security equal to the consideration paid, together with interest
at the legal rate as provided by G.S. 24-1 from the date of payment, less the
amount of any income received on the security or, if the purchaser no longer
owns the security, offering to pay the purchaser upon acceptance of the offer an
amount in cash equal to the damages computed in accordance with subsection (a);
and stating that the offer may be accepted by the purchaser at any time within
30 days of its receipt; and the purchaser has failed to accept such offer in
writing within the specified period.

(2) No seller may sue under this section if, before suit is commenced,
the seller has received a written offer stating the respect in which liability
under this section may have arisen and fairly advising the seller of his rights;
offering to return the security plus the amount of any income received thereon
upon payment of the consideration received, or, if the purchaser no longer owns
the security, offering to pay the seller upon acceptance of the offer an amount
in cash equal to the damages computed in accordance with subsection (b); and
providing that the offer may be accepted by the seller at any time within 30
days of its receipt; and the seller has failed to accept such offer in writing
within the specified period.

(3) Offers shall be in the form and contain the information the
Administrator by rule prescribes. Every offer under subsection (g) shall be
delivered to the offeree or sent by certified mail addressed to him at his last
known address. If an offer is not performed in accordance with its terms, suit
by the offeree under this section shall be permitted without regard to this
subsection.

(h) No person who has made or engaged in the performance of any
contract in violation of any provision of this Chapter or any rule or order
hereunder, or who has acquired any purported right under any such contract with
knowledge of the facts by reason of which its making or performance was in
violation, may base any suit on the contract.

(i) Any condition, stipulation, or provision binding any person
acquiring any security to waive compliance with any provision of this Chapter or
any rule or order hereunder is void.

(j) The rights and remedies provided by this Chapter are in addition to
any other rights or remedies that may exist at law or in equity, but this
Chapter does not create any cause of action not specified in this section or
G.S. 78A-37(d).

OHIO SECURITIES ACT

SECTION 1707.43. REMEDIES OF PURCHASER IN UNLAWFUL SALE.

Every sale or contract for sale made in violation of Chapter 1707 of
the Revised Code, is voidable at the election of the purchaser. The person
making such sale or contract for sale, and every person who has participated in
or aided the seller in any way in making such sale or contract for sale, are
jointly and severally liable to such purchaser, in an action at law in any court
of competent jurisdiction, upon tender to the seller in person or in open court
of the securities sold or of the contract made, for the full amount paid by such
purchaser and for all taxable court costs, unless the court determines that the
violation did not materially affect the protection contemplated by the violated
provision.

No action for the recovery of the purchase price as provided for in
this section, and no other action for any recovery based upon or arising out of
a sale or contract for sale made in violation of Chapter 1707. of the Revised
Code, shall be brought more than two years after the plaintiff knew, or had
reason to know, of the facts by reason of which the actions of the person or
director were unlawful, or more than four years from the date of such sale or
contract for sale, whichever is the shorter period.

No purchaser is entitled to the benefit of this section who has failed
to accept, within thirty days from the date of such offer, an offer in writing
made after two weeks from the date of such sale or contract of sale, by the
seller or by any person who has participated in or aided the seller in any way
in making such sale or contract of sale, to take back the security in question
and to refund the full amount paid by such purchaser.

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OKLAHOMA SECURITIES ACT

SECTION 301. REGISTRATION REQUIREMENT.

It is unlawful for any person to offer or sell any security in this
state unless:

(1) it is registered under this act or the security or transaction is
exempted under Section 401 of this title; or

(2) it is a federal covered security.

SECTION 408. CIVIL LIABILITIES.

(a) Any person who:

(1) offers or sells a security in violation of Sections 201(a), 301, or
404(b) of this title, or of any rule or order under Section 402 of this title,
or of any condition imposed under Sections 304(d), 305(f), or 305(g) of this
title; or

(2) offers or sells or purchases a security by means of any untrue
statement of a material fact or any omission to state a material fact necessary
in order to make the statements made, in the light of the circumstances under
which they are made, not misleading (the other party not knowing of the untruth
or omission), and who does not sustain the burden of proof that he did not know,
and in the exercise of reasonable care could not have known, of the untruth or
omission, is liable:

(A) in the case of an offer or sale of a security, to the person buying
the security from him, who may sue either at law or in equity to recover the
consideration paid for the security, together with interest at ten percent (10%)
per year from the date of payment, costs, and reasonable attorneys' fees, less
the amount of any income received on the security, upon the tender of the
security, or for damages if he no longer owns the security. Damages are the
amount that would be recoverable upon a tender, less the value of the security
when the buyer disposed of it, and interest at ten percent (10%) per year from
the date of disposition; or

(B) in the case of a purchase of a security, to the person selling the
security to him, who may sue at law or in equity, for a return of the security,
together with any income received by the purchaser on the security, costs and
reasonable attorneys' fees, upon a tender of the full amount of the
consideration received for the security, or, if the purchaser no longer owns the
security, for the difference between the fair value of the security at the date
of the transaction and the consideration received for the security, together
with interest on such difference at the rate of ten percent (10%) per year from
the date of the transaction, costs and reasonable attorneys' fees.

(b) Every person who materially participates or aids in a sale or
purchase made by any person liable under paragraph (1) or (2) of subsection (a)
of this section, or who directly or indirectly controls any person so liable,
shall also be liable jointly and severally with and to the same extent as the
person so liable, unless the person who so participates, aids or controls,
sustains the burden of proof that he did not know, and could not have known, of
the existence of the facts by reason of which liability is alleged to exist.
There shall be contribution as in cases of contract among the several persons so
liable.

(1) in violation of Sections 201(c) and 201(d) of this title, engages
in the business of advising others for compensation, either directly or through
publications or writings, as to the value of securities or as to the
advisability of investing in, purchasing, or selling securities, or who, for
compensation and as a part of a regular business, issues or promulgates analyses
or reports concerning securities, in violation of Sections 201(c) and 201(d) of
this title; or

(2) receives, directly or indirectly, any consideration from another
person for advice as to the value of securities or their purchase or sale,
whether through the issuance of analyses, reports or otherwise and employs any
device, scheme, or artifice to defraud such other person or engages in any act,
practice or course of business which operates or would operate as a fraud or
deceit on such other person, is liable to that person who may sue either at law
or in equity to recover the consideration paid for such advice and any loss due
to such advice, together with interest at ten percent (10%) per year from the
date of payment of the consideration plus costs and reasonable attorney's fees,
less the amount of any income received from such advice.

(d) Any tender specified in this section may be made at any time before
entry of judgment.

(e) Every cause of action under this section survives the death of any
person who might have been a plaintiff or defendant.

(f) No person may sue under paragraph (1) of subsection (a) of this
section more than three (3) years after the sale. No person may sue under
paragraph (2) of subsection (a) of this section more than two (2) years after
the untruth

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or omission was discovered, but in no event more than three (3) years after the
sale. No person may sue under this section if:

(1) the buyer received a written offer, before suit and at a time when
he owned the security, to refund the consideration paid together with interest
at ten percent (10%) per year from the date of payment, less the amount of any
income received on the security, and he failed to accept the offer within thirty
(30) days of its receipt; or

(2) the buyer received such an offer before suit and at a time when he
did not own the security, unless he rejected the offer in writing within thirty
(30) days of its receipt.

(g) No person may sue under paragraph (1) of subsection (c) of this
section more than three (3) years from the date the advice was given. No person
may sue under paragraph (2) of subsection (c) of this section more than one (1)
year after the fraud or deceit was discovered, but in no event more than three
(3) years after the date the advice was given.

(h) Provided, any longer term of limitation as otherwise provided by
law shall apply to any actions brought under the Oklahoma Securities Act.

(i) No person who has made or engaged in the performance of any
contract in violation of any provision of this title or any rule or order
promulgated thereunder, or who has acquired any purported right under any such
contract with knowledge of the facts by reason of which its making or
performance was in violation, may base any suit on the contract. Any defendant
who prevails in an action brought under paragraph (1) or (2) of subsection (a)
or paragraph (1) or (2) of subsection (c) of this section may recover his
reasonable attorneys' fees and costs in the action from the plaintiff if the
court, in its discretion, determines that the action was without substantial
merit. Any plaintiff who prevails in an action brought under paragraph (1) or
(2) of subsection (a) or paragraph (1) or (2) of subsection (c) of this section
may recover his reasonable attorneys' fees and costs in the action from the
defendant.

(j) Any condition, stipulation, or provision is void if it would bind a
person acquiring any security to waive compliance with any provision of this
title, or any rule or order promulgated thereunder.

(k) The rights and remedies provided for in this title are in addition
to other rights or remedies that may exist in law or in equity; however, no
additional cause of action is created unless specified in this section.

OREGON SECURITIES LAW

SECTION 59.055. CONDITIONS OF OFFER AND SALE OF SECURITIES.

It is unlawful for any person to offer or sell any security in this
state, unless:

(1) The security is registered and the offer or sale is not in
violation of any rule or order of the Director of the Department of Consumer and
Business Services or any condition, limitation or restriction imposed by the
director upon such registration;

(2) The security is exempt under ORS 59.025 or the sale is exempt under
ORS 59.035; or

(3) The security is a federal covered security for which a notice has
been filed and fees have been paid under ORS 59.049.

SECTION 59.115. LIABILITY IN CONNECTION WITH SALE OF SECURITIES;
RECOVERY BY PURCHASER; LIMITATIONS ON PROCEEDING; ATTORNEY FEES.

(1) A person who sells a security is liable as provided in subsection
(2) of this section to a purchaser of the security if the person:

(a) Sells a security, other than a federal covered security, in
violation of the Oregon Securities Law or of any condition, limitation or
restriction imposed upon a registration or license under the Oregon Securities
Law; or

(b) Sells a security by means of an untrue statement of a material fact
or an omission to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they are made, not
misleading (the buyer not knowing of the untruth or omission), and who does not
sustain the burden of proof that the person did not know, and in the exercise of
reasonable care could not have known, of the untruth or omission.

(2) The purchaser may recover:

(a) Upon tender of the security, the consideration paid for the
security, and interest from the date of payment equal to the greater of the rate
of interest specified in ORS 82.010 for judgments and decrees for the payment of
money or the rate provided in the security if the security is an
interest-bearing obligation, less any amount received on the security; or

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(b) If the purchaser no longer owns the security, damages in the amount
that would be recoverable upon a tender, less the value of the security when the
purchaser disposed of it and less interest on such value at the rate of interest
specified in ORS 82.010 for judgments and decrees for the payment of money from
the date of disposition.

(3) Every person who directly or indirectly controls a seller liable
under subsection (1) of this section, every partner, limited liability company
manager, including a member who is a manager, officer or director of such
seller, every person occupying a similar status or performing similar functions,
and every person who participates or materially aids in the sale is also liable
jointly and severally with and to the same extent as the seller, unless the
nonseller sustains the burden of proof that the nonseller did not know, and, in
the exercise of reasonable care, could not have known, of the existence of facts
on which the liability is based. Any person held liable under this section shall
be entitled to contribution from those jointly and severally liable with that
person.

(4) Notwithstanding the provisions of subsection (3) of this section, a
person whose sole function in connection with the sale of a security is to
provide ministerial functions of escrow, custody or deposit services in
accordance with applicable law is liable only if the person participates or
materially aids in the sale and the purchaser sustains the burden of proof that
the person knew of the existence of facts on which liability is based or that
the person's failure to know of the existence of such facts was the result of
the person's recklessness or gross negligence.

(5) Any tender specified in this section may be made at any time before
entry of judgment.

(6) Except as otherwise provided in this subsection, no action or suit
may be commenced under this section more than three years after the sale. An
action under this section for a violation of subsection (1)(b) of this section
or ORS 59.135 may be commenced within three years after the sale or two years
after the person bringing the action discovered or should have discovered the
facts on which the action is based, whichever is later. Failure to commence an
action on a timely basis is an affirmative defense.

(7) No action may be commenced under this section solely because an
offer was made prior to registration of the securities.

(8) Any person having a right of action against a broker-dealer, state
investment adviser or against a salesperson or investment adviser representative
acting within the course and scope or apparent course and scope of authority of
the salesperson or investment adviser representative, under this section shall
have a right of action under the bond or irrevocable letter of credit provided
in ORS 59.175.

(9) Subsection (4) of this section shall not limit the liability of any
person: (a) For conduct other than in the circumstances described in subsection
(4) of this section; or (b) Under any other law, including any other provisions
of the Oregon Securities Law.

(10) Except as provided in subsection (11) of this section, the court
may award reasonable attorney fees to the prevailing party in an action under
this section.

(11) The court may not award attorney fees to a prevailing defendant
under the provisions of subsection (10) of this section if the action under this
section is maintained as a class action pursuant to ORCP 32.

SECTION 59.125. EFFECT OF NOTICE OF OFFER TO REPAY PURCHASER;
EXCEPTIONS; REGISTRATION OF TRANSACTION.

(1) Except as provided in subsection (3) of this section, no action or
suit may be commenced under ORS 59.115 if the purchaser has received before suit
a written notice as outlined in subsection (2) of this section.

(2) The notice shall contain:

(a) An offer to pay the amount specified in ORS 59.115(2)(a) upon
tender of the security; and

(b) A statement of the effect on the purchaser's rights of failure to
respond as required in subsection (3) of this section.

(3) An action or suit under this section may be commenced after receipt
of a notice as outlined in subsection (2) of this section:

(a) If the purchaser owned the security when the notice was received,
accepted the payment offer within 30 days after its receipt, and has not been
paid the full amount offered; or

(b) If the purchaser did not own the security when the notice was
received and, within 30 days after receipt, gave written notice of inability to
tender back the security.

(4) An offer to repay the purchaser pursuant to this section involves
the offer or sale of a security. The transaction must be registered under ORS
59.055 unless there is an exemption from the registration requirement or a
notice is filed under ORS 59.049.

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101

PENNSYLVANIA SECURITIES ACT OF 1972

SECTION 201. REGISTRATION REQUIREMENT.

It is unlawful for any person to offer or sell any security in this
State unless the security is registered under this act or the security or
transaction is exempted under section 202 or 203 hereof.

SECTION 502. VIOLATION OF REGISTRATION REQUIREMENTS.

Any person who violates section 201 or any material condition imposed
under section 206 or 207 shall be liable to the person purchasing the security
offered or sold in violation of section 201 from him who may sue either at law
or in equity to recover the consideration paid for the security, together with
interest at the legal rate from the date of payment, less the amount of any
income or distributions, in cash or in kind, received on the security, upon the
tender of the security, or for damages if he no longer owns the security.
Damages shall be the amount that would be recoverable upon a tender less the
value of the security when the purchaser disposed of it and interest at the
legal rate from the date of disposition. Any person on whose behalf an offering
is made and any underwriter of the offering, whether on a best efforts or a firm
commitment basis, shall be jointly and severally liable under this section, but
in no event shall any underwriter be liable in any suit or suits authorized
under this section for damages in excess of the total price at which the
securities underwritten by him and distributed to the public were offered to the
public. Tender requires only notice of willingness to exchange the security for
the amount specified. Any notice may be given by service as in civil actions or
by certified mail addressed to the last known address of the person liable. No
person shall be liable under this section if the sale of the security is
registered prior to the payment or receipt of any part of the consideration for
the security sold, even though an offer to sell or a contract of sale may have
been made or entered into without registration.

SECTION 504. TIME LIMITATIONS ON RIGHTS OF ACTION.

(a) No action shall be maintained to enforce any liability created
under section 501 (or section 503 in so far as it relates to that section)
unless brought before the expiration of four years after the act or transaction
constituting the violation or the expiration of one year after the plaintiff
receives actual notice or upon the exercise of reasonable diligence should have
known of the facts constituting the violation, whichever shall first expire.

(b) No action shall be maintained to enforce any liability created
under section 502 (or section 503 in so far as it relates to that section)
unless brought before the expiration of two years after the violation upon which
it is based or the expiration of one year after the plaintiff receives actual
notice or upon the exercise of reasonable diligence should have known of the
facts constituting such violation, whichever shall first expire.

(c) No action shall be maintained to enforce any right of
indemnification or contribution created by section 503 unless brought before the
expiration of one year after final judgment based upon the liability for which
the right of indemnification or contribution exists.

(d) No purchaser may commence an action under section 501, 502 or 503
if, before suit is commenced, the purchaser has received a written offer: (i)
stating the respect in which liability under such section may have arisen and
fairly advising the purchaser of his rights; offering to repurchase the security
for cash, payable on delivery of the security, equal to the consideration paid,
together with interest at the legal rate from the date of payment, less the
amount of any income or distributions, in cash or in kind, received thereon or,
if the purchaser no longer owns the security, offering to pay the purchaser upon
acceptance of the offer an amount in cash equal to the damages computed in
accordance with section 501(a); and (ii) stating that the offer may be accepted
by the purchaser at any time within a specified period of not less than thirty
days after the date of receipt thereof, or such shorter period as the commission
may by rule prescribe; and the purchaser has failed to accept such offer in
writing within the specified period.

(e) No seller may commence an action under section 501, 502 or 503 if,
before suit is commenced, the seller has received a written offer: (i) stating
the respect in which liability under such section may have arisen and fairly
advising the seller of his rights; (ii) offering to return the security plus the
amount of any income or distributions, in cash or in kind, received thereon upon
payment of the consideration received, or if the purchaser no longer owns the
security, offering to pay the seller upon acceptance of the offer an amount in
cash equal to the damages computed in accordance with section 501(b); and (iii)
providing that the offer may be accepted by the seller at any time within a
specified period of not less than thirty days after the date of receipt thereof,
or such shorter period as the commission may by regulation prescribe; and the
seller has failed to accept such offer in writing within the specified period.

(f) Offers under subsection (d) or (e) of this section 504 shall be in
the form and contain the information the commission by rule prescribes. Every
offer under this subsection shall be delivered to the offeree personally or sent
by certified mail addressed to him at his last known address. If an offer is not
performed in accordance with its terms,

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102

suit by the offeree under section 501, 502 or 503, shall be permitted without
regard to subsections (d) and (e) of this section 504.

SOUTH CAROLINA UNIFORM SECURITIES ACT

SECTION 35-1-810. REGISTERED, EXEMPTED, OR FEDERAL COVERED SECURITY
REQUIRED.

It is unlawful for any person to offer or sell any security in this
State unless (a) it is registered under this chapter, (b) the security or
transaction is exempted under Section 35-1-310 or 35-1-320, or (c) it is a
federal covered security.

SECTION 35-1-1490. LIABILITY TO BUYERS FOR ILLEGAL OR FRAUDULENT
SALES OR OFFERS.

Any person who:

(1) offers or sells a security in violation of subsection (2) of
Section 35-1-170 or Section 35-1-410 or Section 35-1-810, or of any rule or
order under Section 35-1-50 which requires the affirmative approval of sales
literature before it is used or of any condition imposed under Section 35-1-950
or Section 35-1-990; or

Is liable to the person buying the security from him, who may sue
either at law or in equity to recover the consideration paid for the security,
together with interest at six percent per year from the date of payment, costs,
and reasonable attorneys' fees, less the amount of any income received on the
security, upon the tender of the security, or for damages if he no longer owns
the security. Damages are the amount that would be recoverable upon a tender
less the value of the security when the buyer disposed of it and interest at six
percent per year from the date of disposition.

SECTION 35-1-1530. LIMITATION OF ACTIONS; EFFECT OF OFFER TO REFUND
CONSIDERATION WITH INTEREST.

No person may sue under Sections 35-1-1490 and 35-1-1500 more than
three years after the contract of sale. No person may sue under either section
(a) if the buyer received a written offer, before suit and at a time when he
owned the security, to refund the consideration paid together with interest at
six percent per year from the date of payment, less the amount of any income
received on the security, and he failed to accept the offer within thirty days
of its receipt or (b) if the buyer received such an offer before suit and at a
time when he did not own the security, unless he rejected the offer in writing
within thirty days of its receipt.

TENNESSEE SECURITIES ACT OF 1980

SECTION 48-2-104. SECURITIES REGISTRATION REQUIREMENT.

It is unlawful for any person to sell any security in this state
unless:

(1) It is registered under this part;

(2) The security or transaction is exempted under Section 48-2-103;
or (3)

The security is a covered security.

SECTION 48-2-122. CIVIL LIABILITIES.

(a)(1) Any person who:

(A) Sells a security in violation of Sections 48-2-104C48-2-109,
48-2-110(f), or of any condition imposed under Section 48-2-107(g), or any rule,
or order under this part of which he has notice; or

(B) Sells a security in violation of Section 48-2-121(a) (the purchaser
not knowing of the violation of Section 48-2-121(a)); shall be liable to the
person purchasing the security from the seller to recover the consideration paid
for the security, together with interest at the legal rate from the date of
payment, less the amount of any income received on the security, upon the tender
of the security, or, if the purchaser no longer owns the security, the amount
that would be

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recoverable upon a tender, less the value of the security when the purchaser
disposed of it and interest at the legal rate form the date of disposition.

(2) Tender shall require only notice of willingness to exchange the
security for the amount specified.

(3) Any notice may be given by service as in civil actions or by
certified mail addressed to the last known address of the person liable.

(b)(1) Any person who purchases a security in violation of Section
48-2-121(a) ( the seller not knowing of the violation of Section 48-2-121(a),
and who does not carry the burden of proof of showing that he did not know and
in the exercise of reasonable care could not have known of the violation of
Section 48-2-121(a)) shall be liable to the person selling the security to the
purchaser to return the security, plus any income received by the purchaser
thereon, upon tender of the consideration received, or, if the purchaser no
longer owns the security, the excess of the value of the security when the
purchaser disposed of it, plus interest at the legal rate from the date of
disposition, over the consideration paid for the security.

(2) Tender requires only notice of willingness to pay the amount
specified in exchange for the security.

(3) Any notice may be given by service as in civil actions or by
certified mail to the last known address of the person liable.

(c)(1) Any person who willfully engages in any act or conduct which
violates Section 48-2-121 shall be liable to any other person (not knowing that
any such conduct constituted a violation of Section 48-2-121) who purchases or
sells any security at a price which was affected by the act or conduct for the
damages sustained as a result of such act or conduct unless the person sued
shall prove that the person sued acted in good faith and did not know, and in
the exercise of reasonable care could not have known, that such act or conduct
violated Section 48-2-121.

(2) Damages shall be the difference between the price at which the
other person purchased or sold securities and the market value which the
securities would have had at the time of the other person's purchase or sale in
the absence of the act or conduct plus interest at the legal rate.

(d) Any person who shall make or cause to be made any statement in any
application, report, or document filed pursuant to this part or any rule or
order hereunder or any undertaking contained in a registration statement
hereunder, or in any advice given in such person's capacity as an investment
adviser, which statement was at the time and in the light of the circumstances
under which it was made false or misleading with respect to any material fact
shall be liable to any person (not knowing that any such statement was false or
misleading) who, in reliance upon such statement, shall have purchased or sold a
security at a price which was affected by such statement, for damages
(calculated as provided in subsections (a) and (b)) caused by such reliance,
unless the person sued shall prove that the person sued acted in god faith and
had no knowledge that such statement was false or misleading and in the exercise
of reasonable care could not have known that such statement was false or
misleading.

(e) A person seeking to enforce any liability under this section may
sue either at law or in equity in any court of competent jurisdiction.

(f) In any such suit under this section, the court may, in its
discretion, require an undertaking for the payment of the costs of such suit,
and assess reasonable cost, including reasonable attorneys' fees, against either
party litigant.

(g) Every person who directly or indirectly controls a person liable
under this section, every partner, principal executive officer, or director of
such person, every person occupying a similar status or performing similar
functions, every employee of such person who materially aids in the act or
transaction constituting the violation, and every broker-dealer or agent who
materially aids in the act or transaction constituting the violation, are also
liable jointly and severally with and to the same extent as such person, unless
the person who would be liable under subsection (d) proves that the person who
would be liable did not know, and in the exercise of reasonable care could not
have known, of the existence of the facts by reason of which the liability is
alleged to exist. There is contribution as in cases of contract among the
several persons so liable.

(h) No action shall be maintained under this section unless commenced
before the expiration of two (2) years after the act or transaction constituting
the violation or the expiration of one (1) year after the discovery of the facts
constituting the violation, or after such discovery should have been made by the
exercise of reasonable diligence, whichever first expires.

(i) Any condition, stipulation or provision binding any person
acquiring any security to waive compliance with any provision of this part or
any rule or order hereunder is void.

(j) The rights and remedies under this part are in addition to any
other rights or remedies that may exist at law or in equity.

(k) The legal rate of interest shall be that as provided by Section
47-14-121.

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TEXAS SECURITIES ACT OF 1957

SECTION 7. PERMIT OR REGISTRATION FOR ISSUE BY COMMISSIONER;
INFORMATION FOR ISSUANCE OF PERMIT OR REGISTRATION.

A. Qualification of Securities.

(1) No dealer, agent or salesman shall sell or offer for sale any
securities issued after September 6, 1955, except those which shall have been
registered by Notification under subsection B or by Coordination under
subsection C of this Section 7 and except those which come within the classes
enumerated in Section 5 or Section 6 of this Act, until the issuer of such
securities or a dealer registered under the provisions of this Act shall have
been granted a permit by the Commissioner; and no such permit shall be granted
by the Commissioner until the issuer of such securities or a dealer registered
under the provisions of this Act shall have filed with the Commissioner a sworn
statement verified under the oath of an executive officer or partner of the
issuer, or of such registered dealer, and attested by the secretary or partner
thereof, setting forth the following information:

a. The names, residences and post office addresses of the officers
and directors of the company;

b. The location of its principal office and of all branch offices in
this State, if any;

c. A copy of its articles of incorporation or partnership or
association, as the case may be, and of any amendments thereto, if any; if a
corporation, a copy of all minutes of any proceedings of its directors,
stockholders or members relating to or affecting the issue of said security; if
a corporation, a copy of its bylaws and of any amendments thereto; if a trustee,
a copy of all instruments by which the trust is created and in which it is
accepted, acknowledged or declared;

d. A statement showing the amount of capital stock, if any, and if no
capital stock, the amount of capital of the issuer that is contemplated to be
employed; the number of shares into which such stock is divided, or if not
divided into shares of stock, what division is to be made or is contemplated;
the par value of each share, or if no par stock, the price at which such
security is proposed to be sold; the promotional fees or commissions to be paid
for the sale of same, including any and all compensations of every nature that
are in any way to be allowed the promoters or allowed for the sale of same; and
how such compensation is to be paid, whether in cash, securities, service or
otherwise, or partly of either or both; also, the amount of cash to be paid, or
securities to be issued, given, transferred or sold to promoters for promotion
or organization services and expenses, and the amount of promotion or
organization services and expenses which will be assumed or in any way paid by
the issuer;

e. Copies of certificates of the stock and all other securities to be
sold, or offered for sale, together with application blanks therefore; a copy of
any contract it proposes to make concerning such security; a copy of any
prospectus or advertisement or other description of security prepared by or for
it for distribution or publication;

1. A detailed statement prepared in accordance with generally accepted
auditing standards and procedures and generally accepted accounting principles,
showing all the assets and all the liabilities of the issuer, said statement to
reflect the financial condition of the issuer on a day not more than ninety (90)
days prior to the date such statement is filed. Such statement shall list all
assets in detail and shall show how the value of such assets was determined,
that is, whether the value set forth in said statement represents the actual
cost in money of such assets, or whether such value represents their present
market value, or some other value than the actual cost in money, and shall show
the present actual value of said assets; also, whether the value set forth in
the statement is greater or less than the actual cost value in money and greater
or less than the present market value of such assets. If any of the assets
consist of real estate, then said statement shall show the amount for which said
real estate is rendered for State and county taxes, or assessed for taxes. If
any such assets listed shall consist of anything other than cash and real
estate, same shall be set out in detail so as to give the Commissioner the
fullest possible information concerning same, and the Commissioner shall have
the power to require the filing of such additional information as the
Commissioner may deem necessary to determine whether or not the true value of
said assets are reflected in the statement filed. Should any of the assets
listed in said statement be subject to any repurchase agreement, or any other
agreement of like character, by the terms of which the absolute ownership of, or
title to said assets is qualified or limited in any way, then the terms and
conditions of said agreement by which the absolute ownership of, or title to
said assets is qualified or limited, as well as the amount and character of the
assets subject thereto shall be fully stated. Said statement shall list all
current liabilities, that is, all liabilities which will mature and become due
within one year from the date of such application, and shall list separately
from such current liabilities, all other liabilities, contingent or otherwise,
showing the amount of those which are secured by mortgage or otherwise, the
assets of the issuer which are subject to such mortgage, and the dates of
maturity of any such mortgage indebtedness. Such application shall also include
a detailed income statement, prepared in accordance with generally accepted
auditing standards and procedures and generally accepted accounting principles,
which shall cover the last three (3) years' operations of the issuer, if such
issuer has been in operation for three (3) years, but if not, said income
statement shall

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cover the time that said issuer has been operating. If said issuer has not been
operating, but is taking over a concern of any kind which has been previously
operating, an income statement showing the operations of the concern thus taken
over for a period of the last three (3) years next preceding the taking over of
said concern shall be included in said statement; said income statement shall
clearly reflect the amount of net income or net loss incurred during each of the
years shown.

2. The financial statements required in subparagraph (1) of this
paragraph for a small business issuer, as defined by Board rule, may be reviewed
by an independent certified public accountant in accordance with the Statements
on Standards for Accounting and Review Services promulgated by the American
Institute of Certified Public Accountants in lieu of being audited and
certified, provided that the small business issuer otherwise meets all of the
requirements that the Board by rule, regulation, or order may prescribe,
conditionally or unconditionally.

SECTION 33. CIVIL LIABILITIES.

A. Liability of Sellers.

(1) Registration and Related Violations. A person who offers or sells a
security in violation of Section 7, 9 (or a requirement of the Commissioner
thereunder), 12, 23B, or an order under 23A of this Act is liable to the person
buying the security from him, who may sue either at law or in equity for
rescission or for damages if the buyer no longer owns the security.

(2) Untruth or Omission. A person who offers or sells a security
(whether or not the security or transaction is exempt under Section 5 or 6 of
this Act) by means of an untrue statement of a material fact or an omission to
state a material fact necessary in order to make the statements made, in the
light of the circumstances under which they are made, not misleading, is liable
to the person buying the security from him, who may sue either at law or in
equity for rescission, or for damages if the buyer no longer owns the security.
However, a person is not liable if he sustains the burden of proof that either
(a) the buyer knew of the untruth or omission or (b) he (the offeror or seller)
did not know, and in the exercise of reasonable care could not have known, of
the untruth or omission. The issuer of the security (other than a government
issuer identified in Section 5M) is not entitled to the defense in clause (b)
with respect to an untruth or omission (i) in a prospectus required in
connection with a registration statement under Section 7A, 7B, or 7C, or (ii) in
a writing prepared and delivered by the issuer in the sale of a security.

B. Liability of Buyers. A person who offers to buy or buys a security
(whether or not the security or transaction is exempt under Section 5 or 6 of
this Act) by means of an untrue statement of a material fact or an omission to
state a material fact necessary in order to make the statements made, in the
light of the circumstances under which they are made, not misleading, is liable
to the person selling the security to him, who may sue either at law or in
equity for rescission or for damages if the buyer no longer owns the security.
However, a person is not liable if he sustains the burden of proof that either
(a) the seller knew of the untruth or omission, or (b) he (the offeror or buyer)
did not know, and in the exercise of reasonable care could not have known, of
the untruth or omission.

C. Liability of Nonselling Issuers Which Register.

(1) This Section 33C applies only to an issuer which registers under
Section 7A, 7B, or 7C of this Act, or under Section 6 of the U.S. Securities Act
of 1933, its outstanding securities for offer and sale by or for the owner of
the securities. (2) If the prospectus required in connection with the
registration contains, as of its effective date, an untrue statement of a
material fact or an omission to state a material fact necessary in order to make
the statements made, in the light of the circumstances under which they are
made, not misleading, the issuer is liable to a person buying the registered
security, who may sue either at law or in equity for rescission or for damages
if the buyer no longer owns the securities. However, an issuer is not liable if
it sustains the burden of proof that the buyer knew of the untruth or omission.

D. Rescission and Damages. For this Section 33:

(1) On rescission, a buyer shall recover (a) the consideration he paid
for the security plus interest thereon at the legal rate from the date of
payment by him, less (b) the amount of any income he received on the security,
upon tender of the security (or a security of the same class and series).

(2) On rescission, a seller shall recover the security (or a security
of the same class and series) upon tender of (a) the consideration he received
for the security plus interest thereon at the legal rate from the date of
receipt by him, less (b) the amount of any income the buyer received on the
security.

(3) In damages, a buyer shall recover (a) the consideration he paid for
the security plus interest thereon at the legal rate from the date of payment by
him, less (b) the value of the security at the time he disposed of it plus the
amount of any income he received on the security.

(4) In damages, a seller shall recover (a) the value of the security at
the time of sale plus the amount of any income the buyer received on the
security, less (b) the consideration paid the seller for the security plus
interest thereon at the legal rate from the date of payment to the seller.

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(5) For a buyer suing under Section 33C, the consideration he paid
shall be deemed the lesser of (a) the price he paid and (b) the price at which
the security was offered to the public.

(6) On rescission or as a part of damages, a buyer or a seller shall
also recover costs.

(7) On rescission or as a part of damages, a buyer or a seller may also
recover reasonable attorney's fees if the court finds that the recovery would be
equitable in the circumstances.

E. Time of Tender. Any tender specified in Section 33D may be made
at any time before entry of judgment.

F. Liability of Control Persons and Aiders.

(1) A person who directly or indirectly controls a seller, buyer, or
issuer of a security is liable under Section 33A, 33B, or 33C jointly and
severally with the seller, buyer, or issuer, and to the same extent as if he
were the seller, buyer, or issuer, unless the controlling person sustains the
burden of proof that he did not know, and in the exercise of reasonable care
could not have known, of the existence of the facts by reason of which the
liability is alleged to exist.

(2) A person who directly or indirectly with intent to deceive or
defraud or with reckless disregard for the truth or the law materially aids a
seller, buyer, or issuer of a security is liable under Section 33A, 33B, or 33C
jointly and severally with the seller, buyer, or issuer, and to the same extent
as if he were the seller, buyer, or issuer.

(3) There is contribution as in cases of contract among the several
persons so liable.

G. Survivability of Actions. Every cause of action under this Act
survives the death of any person who might have been a plaintiff or defendant.

H. Statute of Limitations.

(1) No person may sue under Section 33A(1) or 33F so far as it relates
to Section 33A(1):

(a) more than three years after the sale; or

(b) if he received a rescission offer (meeting the requirements of
Section 33I) before suit unless he (i) rejected the offer in writing within 30
days of its receipt and (ii) expressly reserved in the rejection his right to
sue; or

(2) No person may sue under Section 33A(2), 33C, or 33F so far as it
relates to 33A(2) or 33C:

(a) more than three years after discovery of the untruth or omission,
or after discovery should have been made by the exercise of reasonable
diligence; or

(b) more than five years after the sale; or

(c) if he received a rescission offer (meeting the requirements of
Section 33I) before suit, unless he (i) rejected the offer in writing within 30
days of its receipt, and (ii) expressly reserved in the rejection his right to
sue; or

(d) more than one year after he so rejected a rescission offer meeting
the requirements of Section 33I.

(3) No person may sue under Section 33B or 33F so far as it relates to
Section 33B:

(a) more than three years after discovery of the untruth or omission,
or after discovery should have been made by the exercise of reasonable
diligence; or

(b) more than five years after the purchase; or

(c) if he received a rescission offer (meeting the requirements of
Section 33J) before suit unless he (i) rejected the offer in writing within 30
days of its receipt, and (ii) expressly reserved in the rejection his right to
sue; or

(d) more than one year after he so rejected a rescission offer meeting
the requirements of Section 33J.

I. Requirements of a Rescission Offer to Buyers. A rescission offer
under Section 33H(1) or (2) shall meet the following requirements:

(1) The offer shall include financial and other information material to
the offeree's decision whether to accept the offer, and shall not contain an
untrue statement of a material fact or an omission to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they are made, not misleading.

(2) The offeror shall deposit funds in escrow in a state or national
bank doing business in Texas (or in another bank approved by the commissioner)
or receive an unqualified commitment from such a bank to furnish funds
sufficient to pay the amount offered.

(3) The amount of the offer to a buyer who still owns the security
shall be the amount (excluding costs and attorney's fees) he would recover on
rescission under Section 33D(1).

(4) The amount of the offer to a buyer who no longer owns the security
shall be the amount (excluding costs and attorney's fees) he would recover in
damages under Section 33D(3).

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(5) The offer shall state:

(a) the amount of the offer, as determined pursuant to Paragraph (3) or
(4) above, which shall be given (i) so far as practicable in terms of a
specified number of dollars and a specified rate of interest for a period
starting at a specified date, and (ii) so far as necessary, in terms of
specified elements (such as the value of the security when it was disposed of by
the offeree) known to the offeree but not to the offeror, which are subject to
the furnishing of reasonable evidence by the offeree.

(b) the name and address of the bank where the amount of the offer
will be paid.

(c) that the offeree will receive the amount of the offer within a
specified number of days (not more than 30) after receipt by the bank, in form
reasonably acceptable to the offeror, and in compliance with the instructions in
the offer, of:

(i) the security, if the offeree still owns it, or evidence of the
fact and date of disposition if he no longer owns it; and

(ii) evidence, if necessary, of elements referred to in Paragraph
(a)(ii) above.

(d) conspicuously that the offeree may not sue on his purchase under
Section 33 unless:

(i) he accepts the offer but does not receive the amount of the offer,
in which case he may sue within the time allowed by Section 33H(1)(a) or
33H(2)(a) or (b), as applicable; or

(ii) he rejects the offer in writing within 30 days of its receipt and
expressly reserves in the rejection his right to sue, in which case he may sue
within one year after he so rejects.

(e) in reasonable detail, the nature of the violation of this Act that
occurred or may have occurred.

(f) any other information the offeror wants to include.

J. Requirements of a Rescission Offer to Sellers. A rescission offer
under Section 33H(3) shall meet the following requirements:

(2) The offeror shall deposit the securities in escrow in a state or
national bank doing business in Texas (or in another bank approved by the
commissioner).

(3) The terms of the offer shall be the same (excluding costs and
attorney's fees) as the seller would recover on rescission under Section 33D(2).

(4) The offer shall state:

(a) the terms of the offer, as determined pursuant to Paragraph (3)
above, which shall be given (i) so far as practicable in terms of a specified
number and kind of securities and a specified rate of interest for a period
starting at a specified date, and (ii) so far as necessary, in terms of
specified elements known to the offeree but not the offeror, which are subject
to the furnishing of reasonable evidence by the offeree.

(b) the name and address of the bank where the terms of the offer
will be carried out.

(c) that the offeree will receive the securities within a specified
number of days (not more than 30) after receipt by the bank, in form reasonably
acceptable to the offeror, and in compliance with the instructions in the offer,
of:

(i) the amount required by the terms of the offer; and

(ii) evidence, if necessary, of elements referred to in Paragraph
(a)(ii) above.

(d) conspicuously that the offeree may not sue on his sale under
Section 33 unless:

(i) he accepts the offer but does not receive the securities, in which
case he may sue within the time allowed by Section 33H(3)(a) or (b), as
applicable; or

(ii) he rejects the offer in writing within 30 days of its receipt and
expressly reserves in the rejection his right to sue, in which case he may sue
within one year after he so rejects.

(e) in reasonable detail, the nature of the violation of this Act that
occurred or may have occurred.

(f) any other information the offeror wants to include.

K. Unenforceability of Illegal Contracts. No person who has made or
engaged in the performance of any contract in violation of any provision of this
Act or any rule or order or requirement hereunder, or who has acquired any
purported right under any such contract with knowledge of the facts by reason of
which its making or performance was in violation, may base any suit on the
contract.

L. Waivers Void. A condition, stipulation, or provision binding a buyer
or seller of a security to waive compliance with a provision of this Act or a
rule or order or requirement hereunder is void.

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M. Saving of Existing Remedies. The rights and remedies provided by
this Act are in addition to any other rights (including exemplary or punitive
damages) or remedies that may exist at law or in equity.

N. Limitation of Liability in Small Business Issuances.

(1) For purposes of this Section 33N, unless the context otherwise
requires, "small business issuer" means an issuer of securities that, at the
time of an offer to which this Section 33N applies:

(a) has annual gross revenues in an amount that does not exceed $25
million; and

(b) does not have a class of equity securities registered, or required
to be registered, with the Securities and Exchange Commission under Section 12
of the Securities Exchange Act of 1934, as amended (15 U.S.C. Section 78l).

(2) This Section 33N applies only to:

(a) an offer of securities made by a small business issuer or by the
seller of securities of a small business issuer that is in an aggregate amount
that does not exceed $5 million; and

(b) a person who has been engaged to provide services relating to an
offer of securities described by Section 33N(2)(a), including an attorney, an
accountant, a consultant, or the firm of the attorney, accountant, or
consultant.

(3) The maximum amount that may be recovered against a person to which
this Section 33N applies in any action or series of actions under Section 33
relating to an offer of securities to which this Section 33N applies is an
amount equal to three times the fee paid by the issuer or other seller to the
person for the services related to the offer of securities, unless the trier of
fact finds the person engaged in intentional wrongdoing in providing the
services.

(4) A small business issuer making an offer of securities shall provide
to the prospective buyer a written disclosure of the limitation of liability
created by this Section 33N and shall receive a signed acknowledgment that the
disclosure was provided.

UTAH UNIFORM SECURITIES ACT

SECTION 61-1-7. REGISTRATION BEFORE SALE.

It is unlawful for any person to offer or sell any security in this
state unless it is registered under this chapter, the security or transaction is
exempted under Section 61-1-14, or the security is a federal covered security
for which a notice filing has been made pursuant to the provisions of Section
61-1-15.5.

SECTION 61-1-22. SALES AND PURCHASES IN VIOLATION; REMEDIES;
LIMITATION OF ACTIONS.

(1)(a) A person who offers or sells a security in violation of
Subsection 61-1-3(1), Section 61-1-7, Subsection 61-1-17(2), any rule or order
under Section 61-1-15, which requires the affirmative approval of sales
literature before it is used, any condition imposed under Subsection 61-1-10(4)
or 61-1-11(7), or offers, sells, or purchases a security in violation of
Subsection 61-1-1(2) is liable to the person selling the security to or buying
the security from him, who may sue either at law or in equity to recover the
consideration paid for the security, together with interest at 12% per year from
the date of payment, costs, and reasonable attorney's fees, less the amount of
any income received on the security, upon the tender of the security or for
damages if he no longer owns the security.

(b) Damages are the amount that would be recoverable upon a tender less
the value of the security when the buyer disposed of it and interest at 12% per
year from the date of disposition.

(2) The court in a suit brought under Subsection (1) may award an
amount equal to three times the consideration paid for the security, together
with interest, costs, and attorney's fees, less any amounts, all as specified in
Subsection (1) upon a showing that the violation was reckless or intentional.

(3) A person who offers or sells a security in violation of Subsection
61-1-1(2) is not liable under Subsection (1)(a) if the purchaser knew of the
untruth or omission, or the seller did not know and in the exercise of
reasonable care could not have known of the untrue statement or misleading
omission.

(4)(a) Every person who directly or indirectly controls a seller or
buyer liable under Subsection (1), every partner, officer, or director of such a
seller or buyer, every person occupying a similar status or performing similar
functions, every employee of such a seller or buyer who materially aids in the
sale or purchase, and every broker-dealer or agent who materially aids in the
sale are also liable jointly and severally with and to the same extent as the
seller or purchaser, unless the nonseller or nonpurchaser who is so liable
sustains the burden of proof that he did not know, and in exercise of reasonable
care could not have known, of the existence of the facts by reason of which the
liability is alleged to exist.

(b) There is contribution as in cases of contract among the several
persons so liable.

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(5) Any tender specified in this section may be made at any time before
entry of judgment.

(6) A cause of action under this section survives the death of any
person who might have been a plaintiff or defendant.

(7)(a) No action shall be maintained to enforce any liability under
this section unless brought before the expiration of four years after the act or
transaction constituting the violation or the expiration of two years after the
discovery by the plaintiff of the facts constituting the violation, whichever
expires first.

(b) No person may sue under this section if:

(i) the buyer or seller received a written offer, before suit and at a
time when he owned the security, to refund the consideration paid together with
interest at 12% per year from the date of payment, less the amount of any income
received on the security, and he failed to accept the offer within 30 days of
its receipt; or

(ii) the buyer or seller received such an offer before suit and at a
time when he did not own the security, unless he rejected the offer in writing
within 30 days of its receipt.

(8) No person who has made or engaged in the performance of any
contract in violation of this chapter or any rule or order hereunder, or who has
acquired any purported right under any such contract with knowledge of the facts
by reason of which its making or performance was in violation, may base any suit
on the contract.

(9) A condition, stipulation, or provision binding a person acquiring a
security to waive compliance with this chapter or a rule or order hereunder is
void.

(10)(a) The rights and remedies provided by this chapter are in
addition to any other rights or remedies that may exist at law or in equity.

(b) This chapter does not create any cause of action not specified in
this section or Subsection 61-1-4(6).

VERMONT SECURITIES ACT

SECTION 4205. REGISTRATION AND NOTICE FILING OF SECURITIES.

No securities except those exempted under section 4203a of this title,
those sold in any transaction exempt under section 4204a of this title, or those
that are federal covered securities may be offered for sale or sold within this
state unless such securities shall have been registered by notification or by
qualification as defined in this chapter. Registration of stock shall be deemed
to include the registration of rights to subscribe to such stock if the notice
under section 4207 of this title or the application under section 4208 of this
title for registration of such stock includes a statement that such rights are
to be issued.

SECTION 4240. CIVIL LIABILITY.

(a) Any person who offers or sells a security in violation of sections
4205, 4213, 4224a or 4234 of this title, or any rule of the commissioner
relating to those sections is liable to the person purchasing the security from
that person. The purchaser of the security may sue to recover the consideration
paid for the security, together with interest at the legal rate from the date of
payment, costs and reasonable attorneys' fees less the amount of any income
received on the security, upon the tender of the security, or for damages plus
costs and reasonable attorneys' fees if the purchaser no longer owns the
security. Damages are the amount that would be recoverable upon a tender less
the value of the security when the purchaser disposed of it and interest at the
legal rate from the date of disposition. Tender shall require only notice of
willingness to exchange the security for the amount specified.

(b) A person who offers or sells a security in violation of subsection
4224a(a) is not liable under this subsection if the purchaser knew of the untrue
statement of a material fact or omission of a statement of a material fact; or
the seller sustains the burden of proof to establish that the seller did not
know and in the exercise of reasonable care could not have known of the untrue
statement or omission.

(c) Any person who purchases a security in violation of subsection
4224a(a) is liable to the person selling the security to that person. The seller
of the security may sue to recover the security, plus any income received by the
purchaser on the security upon tender of the consideration received, costs and
reasonable attorneys' fees, or for damages plus costs and reasonable attorneys'
fees if the purchaser no longer owns the security. Damages are the excess of the
value of the security when the purchaser acquired it, plus interest at the legal
rate on that amount from the date of disposition, over the consideration paid
for the security plus any income received on the security. Tender requires only
notice of willingness to pay the amount specified in exchange for the security.

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(d) A person who purchases a security in violation of subsection
4224a(a) is not liable under this subsection if the seller knew of the untrue
statement of a material fact or omission of a statement of a material fact; or
the purchaser sustains the burden of proof to establish that the purchaser did
not know and in the exercise of reasonable care could not have known of the
untrue statement or omission.

(e)(1) A person who engages in the business of advising other persons,
for compensation, either directly or through publications or writings, as to the
value of securities or as to the advisability of investing in, purchasing, or
selling securities, or who, for compensation and as a part of a regular
business, issues or promulgates analyses or reports concerning securities in
violation of subsections 4213(f), (g), (h) or (i) of this title, subsections
4224a(e), (f), (g), or (i) of this title, or section 4234 of this title is
liable to such other persons, who may sue to recover the consideration paid for
such advice and any loss due to such advice, together with interest at the legal
rate from the date of payment of the consideration plus costs and reasonable
attorney's fees, less the amount of any income received from such advice.

(2) A person who receives directly or indirectly any consideration from
another person for advice as to the value of securities or their purchase or
sale, whether through the issuance of analyses, reports, or otherwise and
employs any device, scheme, or artifice to defraud such other person or engages
in any act, practice, or course of business which operates or would operate as a
fraud or deceit on such other person, is liable to such other person, who may
sue to recover the consideration paid for such advice and any loss due to such
advice, together with interest at the legal rate from the date of payment of the
consideration plus costs and reasonable attorney's fees, less the amount of any
income received from such advice.

(f) Every person who directly or indirectly controls another person
liable under subsection (a), (c) or (e) of this section, every partner, officer
or director of that other person, every member in a member-managed limited
liability company, every manager in a manager-managed limited liability company,
and every member in a manager-managed limited liability company who materially
aids in the act or transaction constituting the violation, every person
occupying a similar status or performing similar functions, every employee of
that other person who materially aids in the act or transaction constituting the
violation and every broker-dealer or sales representative who materially aids in
the act or transaction constituting the violation is also liable jointly and
severally with and to the same extent as that other person, unless the person
otherwise secondarily liable under this chapter proves that the person did not
know, and in the exercise of reasonable care could not have known, of the
existence of the facts by reason of which the liability is alleged to exist.
There is contribution as in cases of contract among the several persons so
liable.

(g) An action under this section shall be brought within three years
after the act, omission or transaction constituting the violation, or within two
years after the violation is or reasonably should have been discovered,
whichever occurs later, but not later than six years after the act, omission or
transaction constituting the violation.

(h) No person subject to this chapter who has made or engaged in the
performance of any contract in violation of sections 4205, 4213, 4224a or 4234
of this chapter or any rule or order of the commissioner, or who has acquired
any purported right under any contract with knowledge of the facts by reason of
which its making or performance was in violation, may base any suit on the
contract.

(i) The rights and remedies provided by this chapter are in addition to
any other rights or remedies that may exist at law or in equity.

(j) Every cause of action under this chapter survives the death of any
person who might have been a plaintiff or defendant.

VIRGINIA SECURITIES ACT

SECTION 13.1-507. REGISTRATION REQUIREMENT; EXEMPTIONS.

It shall be unlawful for any person to offer or sell any security
unless (i) the security is registered under this chapter, (ii) the security or
transaction is exempted by this chapter, or (iii) the security is a federal
covered security. Notwithstanding the provisions of subdivision (iii), for the
period ending three years from October 11, 1996, the Commission may require the
registration of a federal covered security issued by any issuer who refuses to
pay a fee required by this chapter or rule promulgated pursuant to this chapter;
provided, that a delay in payment or an underpayment of a fee that is remedied
within fifteen days after receipt of notice from the Commission shall not
constitute a refusal to pay the fee.

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SECTION 13.1-522. CIVIL LIABILITIES.

A. Any person who: (i) sells a security in violation of Section
13.1-502, 13.1-504A, 13.1-507(i) or (ii), 13.1-510(e) or (f), or (ii) sells a
security by means of an untrue statement of a material fact or any omission to
state a material fact necessary in order to make the statement made, in the
light of the circumstances under which they were made, not misleading (the
purchaser not knowing of such untruth or omission), and who shall not sustain
the burden of proof that he did not know, and in the exercise of reasonable care
could not have known, of such untruth or omission, shall be liable to the person
purchasing such security from him who may sue either at law or in equity to
recover the consideration paid for such security, together with interest thereon
at the annual rate of six percent, costs, and reasonable attorneys' fees, less
the amount of any income received on the security, upon the tender of such
security, or for the substantial equivalent in damages if he no longer owns the
security.

B. Any person who (i) engages in the business of advising others, for
compensation, either directly or through publications or writings, as to the
value of securities or as to the advisability of investing in, purchasing, or
selling securities, or who, for compensation and as a part of a regular
business, issues or promulgates analyses or reports concerning securities in
willful and material violation of Section 13.1-503, subsection A of Section
13.1-504, or of any rule or order under Section 13.1-505.1, or (ii) receives,
directly or indirectly, any consideration from another person for advice as to
the value of securities or their purchase or sale, whether through the issuance
of analyses, reports or otherwise and employs any device, scheme, or artifice to
defraud such other person or engages in any act, practice or course of business
which operates or would operate as a fraud or deceit on such other person, shall
be liable to that person who may sue either at law or in equity to recover the
consideration paid for such advice and any loss due to such advice, together
with interest thereon at the annual rate of six percent from the date of payment
of the consideration plus costs and reasonable attorney's fees, less the amount
of any income received from such advice and any other economic advantage.

C. Every person who directly or indirectly controls a person liable
under subsection A or B of this section, including every partner, officer, or
director of such a person, every person occupying a similar status or performing
similar functions, every employee of such a person who materially aids in the
conduct giving rise to the liability, and every broker-dealer, investment
advisor, investment advisor representative or agent who materially aids in such
conduct shall be liable jointly and severally with and to the same extent as
such person, unless able to sustain the burden of proof that he did not know,
and in the exercise of reasonable care could not have known, of the existence of
the facts by reason of which the liability is alleged to exist. There shall be
contribution as in cases of contract among the several persons so liable.

D. No suit shall be maintained to enforce any liability created under
this section unless brought within two years after the transaction upon which it
is based; provided, that, if any person liable by reason of subsection A, B or C
of this section makes a written offer, before suit is brought, to refund the
consideration paid and any loss due to any investment advice provided by such
person, together with interest thereon at the annual rate of six percent, less
the amount of any income received on the security or resulting from such advice,
or to pay damages if the purchaser no longer owns the security, no purchaser or
user of the investment advisory service shall maintain a suit under this section
who has refused or failed to accept such offer within thirty days of its
receipt.

E. Any tender specified in this section may be made at any time
before entry of judgment.

F. Any condition, stipulation or provision binding any person acquiring
any security or receiving any investment advice to waive compliance with any
provision of this chapter or of any rule or order thereunder shall be void.

G. The rights and remedies provided by this chapter shall be in
addition to any and all other rights and remedies that may exist at law or in
equity.

THE SECURITIES ACT OF WASHINGTON

SECTION 21.20.140. UNLAWFUL TO OFFER OR SELL UNREGISTERED SECURITIES;
EXCEPTIONS.

It is unlawful for any person to offer or sell any security in this
state unless: (1) The security is registered by coordination or qualification
under this chapter; (2) the security or transaction is exempted under RCW
21.20.310 or 21.20.320; or (3) the security is a federal covered security, and,
if required, the filing is made and a fee is paid in accordance with RCW
21.20.327.

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SECTION 21.20.430. CIVIL LIABILITIES; SURVIVAL, LIMITATION OF ACTIONS;
WAIVER OF CHAPTER VOID; SCIENTER.

(1) Any person, who offers or sells a security in violation of any
provisions of RCW 21.20.010, 21.20.140(1) or (2), or 21.20.180 through
21.20.230, is liable to the person buying the security from him or her, who may
sue either at law or in equity to recover the consideration paid for the
security, together with interest at eight percent per annum from the date of
payment, costs, and reasonable attorneys' fees, less the amount of any income
received on the security, upon the tender of the security, or for damages if he
or she no longer owns the security. Damages are the amount that would be
recoverable upon a tender less (a) the value of the security when the buyer
disposed of it and (b) interest at eight percent per annum from the date of
disposition.

(2) Any person who buys a security in violation of the provisions of
RCW 21.20.010 is liable to the person selling the security to him or her, who
may sue either at law or in equity to recover the security, together with any
income received on the security, upon tender of the consideration received,
costs, and reasonable attorneys' fees, or if the security cannot be recovered,
for damages. Damages are the value of the security when the buyer disposed of
it, and any income received on the security, less the consideration received for
the security, plus interest at eight percent per annum from the date of
disposition, costs, and reasonable attorneys' fees.

(3) Every person who directly or indirectly controls a seller or buyer
liable under subsection (1) or (2) above, every partner, officer, director or
person who occupies a similar status or performs a similar function of such
seller or buyer, every employee of such a seller or buyer who materially aids in
the transaction, and every broker-dealer, salesperson, or person exempt under
the provisions of RCW 21.20.040 who materially aids in the transaction is also
liable jointly and severally with and to the same extent as the seller or buyer,
unless such person sustains the burden of proof that he or she did not know, and
in the exercise of reasonable care could not have known, of the existence of the
facts by reason of which the liability is alleged to exist. There is
contribution as in cases of contract among the several persons so liable.

(4)(a) Every cause of action under this statute survives the death of
any person who might have been a plaintiff or defendant.

(b) No person may sue under this section more than three years after
the contract of sale for any violation of the provisions of RCW 21.20.140(1) or
(2) or 21.20.180 through 21.20.230, or more than three years after a violation
of the provisions of RCW 21.20.010, either was discovered by such person or
would have been discovered by him or her in the exercise of reasonable care. No
person may sue under this section if the buyer or seller receives a written
rescission offer, which has been passed upon by the director before suit and at
a time when he or she owned the security, to refund the consideration paid
together with interest at eight percent per annum from the date of payment, less
the amount of any income received on the security in the case of a buyer, or
plus the amount of income received on the security in the case of a seller.

(5) No person who has made or engaged in the performance of any
contract in violation of any provision of this chapter or any rule or order
hereunder, or who has acquired any purported right under any such contract with
knowledge of the facts by reason of which its making or performance was in
violation, may base any suit on the contract. Any condition, stipulation, or
provision binding any person acquiring any security to waive compliance with any
provision of this chapter or any rule or order hereunder is void.

(6) Any tender specified in this section may be made at any time before
entry of judgment.

(7) Notwithstanding subsections (1) through (6) of this section, if an
initial offer or sale of securities that are exempt from registration under RCW
21.20.310 is made by this state or its agencies, political subdivisions,
municipal or quasi-municipal corporations, or other instrumentality of one or
more of the foregoing and is in violation of RCW 21.20.010(2), and any such
issuer, member of the governing body, committee member, public officer,
director, employee, or agent of such issuer acting on its behalf, or person in
control of such issuer, member of the governing body, committee member, public
officer, director, employee, or agent of such person acting on its behalf,
materially aids in the offer or sale, such person is liable to the purchaser of
the security only if the purchaser establishes scienter on the part of the
defendant. The word "employee" or the word "agent," as such words are used in
this subsection, do not include a bond counsel or an underwriter. Under no
circumstances whatsoever shall this subsection be applied to require purchasers
to establish scienter on the part of bond counsels or underwriters. The
provisions of this subsection are retroactive and apply to any action commenced
but not final before July 27, 1985. In addition, the provisions of this
subsection apply to any action commenced on or after July 27, 1985.

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WISCONSIN UNIFORM SECURITIES LAW

SECTION 551.21. REGISTRATION REQUIREMENT.

(1) It is unlawful for any person to offer or sell any security in this
state unless at least one of the following conditions is met:

(a) The security is registered under this chapter.

(b) The security or transaction is exempted under s. 551.22 or 551.23.

(2) It is unlawful for any issuer or registrant of any securities
registered under this chapter, or any person in control of or controlled by or
under common control with the issuer or registrant, to offer or sell any of the
registered securities in this state if the issuer or registrant is in violation
of this chapter, or any rule under this chapter, or any order under this chapter
of which he or she has notice, or if the registration statement relating to the
securities, as of the date of such offer or sale, is incomplete in any material
respect or contains any statement which is false or misleading with respect to
any material fact.

SECTION 551.59. CIVIL LIABILITIES.

(1)(a) Any person who offers or sells a security in violation of
s.551.21, 551.31, 551.41 or 551.55 or any rule relating thereto, or any
condition imposed under s. 551.26 or 551.27 or any order under this chapter of
which the person has notice is liable to the person purchasing the security from
him or her. The person purchasing the security may sue either at law or in
equity to recover the consideration paid for the security, together with
interest at the legal rate under s. 138.04 from the date of payment, and
reasonable attorney fees, less the amount of any income received on the
security, upon the tender of the security, or for damages if the person no
longer owns the security. Damages are the amount that would be recoverable upon
a tender less the value of the security when the purchaser disposed of it and
interest at the legal rate under s. 138.04 from the date of disposition. Tender
shall require only notice of willingness to exchange the security for the amount
specified. Any notice may be given by service as in civil actions or by
certified mail addressed to the last-known address of the person liable.

(1)(b) A person who offers or sells a security in violation of s.
551.41(2) is not liable under par. (a) if the purchaser knew of the untrue
statement of a material fact or omission of a statement of a material fact or
the person sustains the burden of proof to establish that he or she did not know
and in the exercise of reasonable care could not have known of the untrue
statement or omission.

(2)(a) Any person who purchases a security in violation of s. 551.41(2)
is liable to the person selling the security to him or her, who may sue either
at law or in equity to recover the security and reasonable attorney fees, plus
any income received by the purchaser thereon, upon tender of the consideration
received, or for damages and reasonable attorney fees if the purchaser no longer
owns the security. Damages are the excess of the value of the security when the
purchaser disposed of it, plus interest at the legal rate under s. 138.04 from
the date of disposition, over the consideration paid for the security. Tender
requires only notice of willingness to pay the amount specified in exchange for
the security. Any notice may be given by service as in civil actions or by
certified mail to the last-known address of the person liable.

(2)(b) A person who purchases a security in violation of s. 551.41(2) is
not liable under par. (a) if the seller knew of the untrue statement of a
material fact or omission of a statement of a material fact or the person
sustains the burden of proof to establish that he or she did not know and in the
exercise of reasonable care could not have known of the untrue statement or
omission.

(3) Any person who willfully participates in any act or transaction in
violation of s. 551.42 shall be liable to any other person who purchases or
sells any security at a price which was affected by the act or transaction for
the damages sustained as a result of such act or transaction. Damages shall be
the difference between the price at which the other person purchased or sold
securities and the market value which the securities would have had at the time
of his or her purchase or sale in the absence of the act or transaction, plus
interest at the legal rate under s. 138.04 and reasonable attorney fees.

(4) Every person who directly or indirectly controls a person liable
under sub. (1), (2) or (3), every partner, principal executive officer or
director of such person, every person occupying a similar status or performing
similar functions, every employee of such person who materially aids in the act
or transaction constituting the violation, and every broker-dealer or agent who
materially aids in the act or transaction constituting the violation, are also
liable jointly and severally with and to the same extent as such person, unless
the person liable hereunder proves that he or she did not know, and in the
exercise of reasonable care could not have known, of the existence of the facts
by reason of which the liability is alleged to exist. There is contribution as
in cases of contract among the several persons so liable.

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(5) No action shall be maintained under this section unless commenced
before the expiration of 3 years after the act or transaction constituting the
violation, but the time specified for commencing such action shall be extended
by reason of any fact and for the time specified in ss. 893.13 and 893.16 to
893.23.

(6)(a) No purchaser may commence an action under this section if, before
suit is commenced, the purchaser has received a written offer stating the
respect in which liability under this section may have arisen and fairly
advising the purchaser of his or her rights; offering to repurchase the security
for cash payable on delivery of the security equal to the consideration paid,
together with interest at the legal rate under s. 138.04 from the date of
payment, less the amount of any income received thereon or, if the purchaser no
longer owns the security, offering to pay the purchaser upon acceptance of the
offer an amount in cash equal to the damages computed in accordance with sub.
(1); and stating that the offer may be accepted by the purchaser at any time
within a specified period of not less than 30 days after the date of receipt
thereof or such shorter period as the division may by rule prescribe; and the
purchaser has failed to accept such offer in writing within the specified
period.

(b) No seller may commence an action under this section if, before suit
is commenced, the seller has received a written offer stating the respect in
which liability under this section may have arisen and fairly advising the
seller of his or her rights; offering to return the security plus the amount of
any income received thereon upon payment of the consideration received, or, if
the purchaser no longer owns the security, offering to pay the seller upon
acceptance of the offer an amount in cash equal to the damages computed in
accordance with sub. (2); and providing that the offer may be accepted by the
seller at any time within a specified period of not less than 30 days after the
date of receipt thereof; and the seller has failed to accept the offer in
writing within the specified period.

(c) Offers shall be in the form and contain the information the division
by rule prescribes. Every offer under this subsection shall be delivered to the
offeree or sent by certified mail addressed to the offeree at the offeree's
last-known address. If an offer is not performed in accordance with its terms,
suit by the offeree under this section shall be permitted without regard to this
subsection.

(7) No person who has made or engaged in the performance of any contract
in violation of this chapter or any rule or order hereunder, or who has acquired
any purported right under any contract with knowledge of the facts by reason of
which its making or performance was in violation, may base any suit on the
contract.

(8) Any condition, stipulation or provision binding any person acquiring
any security to waive compliance with any provision of this chapter or any rule
or order hereunder is void.

(9) The rights and remedies under this chapter are in addition to any
other rights or remedies that may exist at law or in equity.

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PART II.

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 24 Indemnification of Directors and Officers.

Article Seven of Cryocon's Certificate of Incorporation authorizes
Cryocon to indemnify any current or former director, officer, employee, or agent
of Cryocon, or a person serving in a similar post in another organization at the
request of Cryocon, against expenses, judgments, fines, and amounts paid in
settlement incurred by him in connection with any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative, to the fullest extent not prohibited by the Colorado Business
Corporation Act, public policy or other applicable law. Sections 7-109-103 and
7-109-107 of the Colorado Business Corporation Act authorize a corporation to
indemnify its directors, officers, employees, or agents in terms sufficiently
broad to permit the indemnification under certain circumstances for liabilities
(including provisions permitting advances for expenses incurred) arising under
the 1933 Act.

Item 25. Other Expenses of Issuance and Distribution.

It is estimated that the expenses incurred in connection with
distribution of the shares of Common Stock offered hereby will be as follows:

Amount Payable
Item by Company

SEC Registration Fee 8,666.00

Printing and Engraving 5,000.00

Legal Fees and Expenses 15,000.00

Accounting Fees and Expenses 2,500.00

Fees and Expenses for Qualification 5,500.00
under State Securities Laws

Transfer Agent Fees and Expenses 10,020.00

Miscellaneous 750.00

Total 47,466.00

116

ITEM 26. Recent Sales Of Unregistered Securities

The Company has sold the following securities that were not registered
under the Securities Act of 1933.

On August 14, 2000, ISO Block (the predecessor to Cryocon) acquired all
of the issued and outstanding shares of Cryocon Utah, and issued 44,000,000
restricted shares of its common stock as consideration to the eleven (11)
shareholders of Cryocon Utah. In exchange, the Cryocon Utah shareholders gave
ISO Block their 11,000,000 shares previously held in Cryocon Utah. The shares
were issued pursuant to an exemption from registration under Section 4(2) of the
Securities Act. To Cryocon's knowledge, the shareholders received a variety of
financial and other information about ISO Block in connection with the
shareholders' due diligence. No public solicitation or general advertising was
done in connection with this sale. ISO Block did not pay commissions in
connection with this transaction.

On August 14, 2000, ISO Block (the predecessor to Cryocon) assumed the
obligation of a convertible debenture issued by Cryocon Utah to Paragon Venture
Fund I, an Illinois Limited Liability Company, on January 15, 2000. Upon
assuming the obligation of the convertible debenture, ISO Block agreed to issue
its shares of common stock to Paragon Venture Fund I upon conversion of the
debenture. Paragon Venture Fund I purchased the debenture, from Cryocon Utah,
with principal in the amount of $28,800. Cryocon Utah's sale of the convertible
debenture was exempt from registration under the Securities Act pursuant to
Section 4(2) thereof. To Cryocon's knowledge, the management of the investor was
sophisticated in financial investments and received a variety of financial and
other information about Cryocon Utah, and later about ISO Block, Inc., in
connection with its due diligence. No public solicitation or general advertising
was done in connection with this sale. Neither ISO Block nor Cryocon Utah paid
any fees or commissions in connection with this sale.

On August 14, 2000, ISO Block (the predecessor to Cryocon) assumed the
obligation of a convertible debenture issued by Cryocon Utah to Paragon Venture
Fund II, an Illinois Limited Liability Company, on February 15, 2000. Upon
assuming the obligation of the convertible debenture, ISO Block agreed to issue
its shares of common stock to Paragon Venture Fund II upon conversion of the
debenture. Paragon Venture Fund II purchased the debenture, from Cryocon Utah,
with principal in the amount of $647,300. Cryocon Utah's sale of the convertible
debenture was exempt from registration under the Securities Act pursuant to
Section 4(2) thereof. To Cryocon's knowledge, the management of the investor was
sophisticated in financial investments and received a variety of financial and
other information about Cryocon Utah, and later ISO Block, Inc., in connection
with its due diligence. No public solicitation or general advertising was done
in connection with this sale. Neither ISO Block nor Cryocon Utah paid any fees
or commissions in connection with this sale.

On August 14, 2000, ISO Block (the predecessor to Cryocon) assumed the
obligation of a convertible debenture issued by Cryocon Utah to Paragon Venture
Fund III, an Illinois Limited Liability Company, on March 15, 2000. Upon
assuming the obligation of the convertible debenture, ISO Block agreed to issue
its shares of common stock to Paragon Venture Fund III upon conversion of the
debenture. Paragon Venture Fund III purchased the debenture, from Cryocon Utah,
with principal in the amount of $1,404,437. Cryocon Utah's sale of the
convertible debenture was exempt from registration under the Securities Act
pursuant to Section 4(2) thereof. To Cryocon's knowledge, the management of the
investor was sophisticated in financial investments and received a variety of
financial and other information about Cryocon Utah, and later ISO Block, Inc.,
in connection with its due diligence. No public solicitation or general
advertising was done in connection with this sale. Neither ISO Block nor Cryocon
Utah paid any fees or commissions in connection with this sale.

On August 14, 2000, ISO Block (the predecessor to Cryocon) assumed the
obligation of a convertible debenture issued by Cryocon Utah to Paragon Venture
Fund IV, an Illinois Limited Liability Company, on April 15, 2000. Upon assuming
the obligation of the convertible debenture, ISO Block agreed to issue its
shares of common stock to Paragon Venture Fund IV upon conversion of the
debenture. Paragon Venture Fund IV purchased the debenture, from Cryocon Utah,
with principal in the amount of $475,000. Cryocon Utah's sale of the convertible
debenture was exempt from registration under the Securities Act pursuant to
Section 4(2) thereof. To Cryocon's knowledge, the management of the investor was
sophisticated in financial investments and received a variety of financial and
other information about Cryocon Utah, and later ISO Block, Inc., in connection
with its due diligence. No public solicitation or general advertising was done
in connection with this sale. Neither ISO Block nor Cryocon Utah paid any fees
or commissions in connection with this sale.

117

On September 15, 2000, Cryocon issued a convertible debenture to
Paragon Venture Fund V, an Illinois Limited Liability Company. Paragon Venture
Fund V purchased the debenture, from Cryocon, with principal in the amount of
$1,564,000. Cryocon Utah's sale of the convertible debenture was exempt from
registration under the Securities Act pursuant to Section 4(2) thereof. To
Cryocon's knowledge, the management of the investor was sophisticated in
financial investments and received a variety of financial and other information
about Cryocon, in connection with its due diligence. No public solicitation or
general advertising was done in connection with this sale. Cryocon Utah did not
pay any fees or commissions in connection with this sale.

On November 3, 2000, Cryocon issued 2,880,000 shares of common stock to
Paragon Venture Fund I, after receiving a notice of conversion of the denture
issued to Paragon Venture Fund I. Cryocon issuance of the common stock was
exempt from registration under the Securities Act pursuant to Section 4(2)
thereof. To Cryocon's knowledge, the management of the investor was
sophisticated in financial investments and received a variety of financial and
other information about Cryocon, in connection with its due diligence. No public
solicitation or general advertising was done in connection with this sale.
Cryocon did not pay any fees or commissions in connection with this issuance.

On November 3, 2000, Cryocon issued 1,294,000 shares of common stock to
Paragon Venture Fund II, after receiving a notice of conversion of the denture
issued to Paragon Venture Fund II. Cryocon issuance of the common stock was
exempt from registration under the Securities Act pursuant to Section 4(2)
thereof. To Cryocon's knowledge, the management of the investor was
sophisticated in financial investments and received a variety of financial and
other information about Cryocon, in connection with its due diligence. No public
solicitation or general advertising was done in connection with this sale.
Cryocon did not pay any fees or commissions in connection with this issuance.

On November 3, 2000, Cryocon issued 1,355,437 shares of common stock to
Paragon Venture Fund III, after receiving a notice of conversion of the denture
issued to Paragon Venture Fund III. Cryocon issuance of the common stock was
exempt from registration under the Securities Act pursuant to Section 4(2)
thereof. To Cryocon's knowledge, the management of the investor was
sophisticated in financial investments and received a variety of financial and
other information about Cryocon, in connection with its due diligence. No public
solicitation or general advertising was done in connection with this sale.
Cryocon did not pay any fees or commissions in connection with this issuance.

On November 3, 2000, Cryocon issued 237,500 shares of common stock to
Paragon Venture IV, after receiving a notice of conversion, after receiving a
notice of conversion of the denture issued to Paragon Venture Fund IV. Cryocon
issuance of the common stock was exempt from registration under the Securities
Act pursuant to Section 4(2) thereof. To Cryocon's knowledge, the management of
the investor was sophisticated in financial investments and received a variety
of financial and other information about Cryocon, in connection with its due
diligence. No public solicitation or general advertising was done in connection
with this sale. Cryocon did not pay any fees or commissions in connection with
this issuance.

On January 27, 2001, Cryocon issued 722,118 shares of common stock to
Paragon Venture V, after receiving a notice of conversion of the denture issued
to Paragon Venture Fund V. Cryocon issuance of the common stock was exempt from
registration under the Securities Act pursuant to Section 4(2) thereof. To
Cryocon's knowledge, the management of the investor was sophisticated in
financial investments and received a variety of financial and other information
about Cryocon, in connection with its due diligence. No public solicitation or
general advertising was done in connection with this sale. Cryocon did not pay
any fees or commissions in connection with this issuance.

On October 6, 2000, Cryocon issued an option to Bourns, Inc. granting
Bourns the right to purchase 30,000 shares of Cryocon's common stock at the
price of $1.00 per share. The options were issued in consideration of Bourn
granting an extension of the closing date for the purchase of real estate that
Cryocon was purchasing from Bourn. Cryocon did not receive any cash proceeds
from the issuance of the options, but will receive proceeds upon the exercise of
the options. The option and the shares of common stock to be issued upon the
exercise of the option are issued pursuant an exemption from registration under
Section 4(2) of the Securities Act. To Cryocon's knowledge, the management of
the investor is sophisticated in financial investments and received a variety of
financial and other information about Cryocon, in connection with its due
diligence. No public solicitation or general advertising was done in connection
with this sale. Cryocon did not pay any fees or commissions in connection with
this issuance.

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On December 15, 2000, Cryocon issued an option to Bourns, Inc. granting
Bourns the right to purchase 30,000 shares of Cryocon's common stock at the
price of $1.00 per share. The options were issued in consideration of Bourn
granting an extension of the closing date for the purchase of real estate that
Cryocon was purchasing from Bourn. Cryocon did not receive any cash proceeds
from the issuance of the options, but will receive proceeds upon the exercise of
the options. The option and the shares of common stock to be issued upon the
exercise of the option are issued pursuant an exemption from registration under
Section 4(2) of the Securities Act. To Cryocon's knowledge, the management of
the investor is sophisticated in financial investments and received a variety of
financial and other information about Cryocon, in connection with its due
diligence. No public solicitation or general advertising was done in connection
with this sale. Cryocon did not pay any fees or commissions in connection with
this issuance.

On December 15, 2000, Cryocon granted options to purchase 15,392
restricted shares of Cryocon's common stock to 9 former employees and options
were also extended to 17 employees who remained after the corporate
restructuring. The options totaled 72,198 restricted shares. These parties have
the right to pay the exercise price of $1.50 per share, or to utilize a
"cashless" method to exercise of their options. Cryocon did not receive any
proceeds from the issuance of the options, but will receive proceeds upon the
exercise of the options, if these employees elect to purchase the shares. One
former employee has exercised his option pursuant to the "cashless" exercise
method. Cryocon issued 1,670 shares of common stock pursuant to the former
employee's cashless exercise. The option and the shares of common stock to be
issued upon the exercise of the option are issued pursuant an exemption from
registration under Section 4(2) of the Securities Act. The former employees have
access to the Company's reports filed pursuant to the Exchange Act, and are
familiar with Cryocon's operations and financial condition. Cryocon did not pay
any fees or commissions in connection with this issuance.

On December 17, 2000, Cryocon issued an option on 250,000 shares of
common stock to J. Brain Morrison in connection with his position as a board
member with Cryocon. The option shares vest in the amount of 100,000 shares on
January 2, 2001; 75,000 shares on January 2, 2002; and 75,000 on January 2,
2003. There is no exercise price. Cryocon will not receive any cash proceeds
from the issuance the common stock. The shares will be issued pursuant to an
exemption from registration under Section 4 (2) of the Securities Act. Mr.
Morrison has access to the Company's reports filed pursuant to the Exchange Act
and is familiar with Cryocon's operations and financial positions. Cryocon did
not pay any fees or commissions in connection with this issuance.

On December 20, 2000, Cryocon issued an option to Mr. Todd Moore
granting Mr. Moore the right to purchase 1,000,000 shares of Cryocon's common
stock at the price of $0.10 per share. Cryocon did not receive any proceeds from
the issuance of the option, but will receive proceeds upon the exercise of the
options. The option and the shares of common stock to be issued upon the
exercise of the option are issued pursuant an exemption from registration under
Section 4(2) of the Securities Act. To Cryocon's knowledge, Mr. Moore is
sophisticated in financial investments and received a variety of financial and
other information about Cryocon, in connection with his due diligence, and Mr.
Moore has had and continues to have access to the Company's reports filed
pursuant to the Exchange Act, and is familiar with Cryocon's operations and
financial condition. Cryocon did not pay any fees or commissions in connection
with this issuance.

On January 12, 2001, Cryocon issued warrants to 327 of its shareholders
to purchase up to 3,714,585 shares of Cryocon's common stock. The exercise price
for the warrants is eighty (80%) percent of the market price of Cryocon's common
stock on the day immediately prior to the day that the shareholders elect to
exercise their warrants, with a minimum exercise price of $2.00 dollars per
share. The warrants were issued as a dividend to Cryocon's shareholders without
cost or consideration from the shareholders, and not issued for value. The
issuance of the Warrants, therefore, was exempt from the registration. The
shares to be issued pursuant to the exercise of the warrants were not to be
issuable until the effective date of the registration statement original filed
February 9, 2001. Cryocon intends to issue new warrants in exchange for the
warrants currently issued to its shareholders. The new warrants and common stock
issuable upon their exercise are being registered pursuant to this registration
statement. Cryocon did not pay any fees or commissions in connection with this
issuance.

Pursuant to a written agreement between Cryocon and J. Brain Morrison,
executed on February 1, 2001, Cryocon issued an option to Mr. Morrison to
purchase up to 500,000 shares of Cryocon's common stock at the price of $0.10
per share. Cryocon did not receive any proceeds from the issuance of the option,
but will receive proceeds upon the exercise of the options. The option and the
shares of common stock to be issued upon the exercise of the option are issued
pursuant an exemption from registration under Section 4(2) of the Securities
Act. To Cryocon's knowledge, Mr. Morrison is sophisticated in financial
investments and received a variety of financial and other information about
Cryocon, in connection with his due diligence, and Mr. Morrison has had and

119

continues to have access to the Company's reports filed pursuant to the Exchange
Act, and is familiar with Cryocon's operations and financial condition. Cryocon
did not pay any fees or commissions in connection with this issuance.

On February 1, 2001, Cryocon issued 300,000 restricted shares of common
stock to Citizen Asia Pacific, Ltd, as consideration for Citizen Asia Pacific's
services as consultants. The shares were issued pursuant to an exemption from
registration under Section 4 (2) of the Securities Act. To Cryocon's knowledge,
Asia Pacific's management is sophisticated in financial investments and received
a variety of financial and other information about Cryocon, and has had, and
continues to have, access to the Company's reports filed pursuant to the
Exchange ct, and is familiar with Cryocon's operations and financial condition.
Cryocon did not pay any fees or commissions in connection with this issuance.

On March 2, 2001, Cryocon agreed to issue an additional 300,000 shares
of restricted common stock to Citizen Asia Pacific, Ltd, as consideration for
Citizen Asia Pacific's services as consultants. The shares will be issued
increments of 100,000 shares. The first increment was issued on March 2, 2001.
The shares were issued pursuant to an exemption from registration under Section
4 (2) of the Securities Act. To Cryocon's knowledge, Asia Pacific's management
is sophisticated in financial investments and received a variety of financial
and other information about Cryocon, and has had, and continues to have, access
to the Company's reports filed pursuant to the Exchange ct, and is familiar with
Cryocon's operations and financial condition. Cryocon did not pay any fees or
commissions in connection with this issuance.

On February 16, 2001, Cryocon entered into a written agreement with
Millennium Capital, granting Millennium the right to purchase 1,500,000 shares
of Cryocon's common stock. Millennium's purchase price per share is eighty
percent (80%) of the market price for Cryocon's common stock on the business day
immediately prior to the day that Millennium purchases the shares. The sale of
shares was exempt from registration under the Securities Act pursuant to Section
4(2) thereof. To Cryocon's knowledge, management of the investor is
sophisticated in financial investments and received a variety of financial and
other information about Cryocon in connection with its due diligence. No public
solicitation or general advertising was done in connection with this sale.
Cryocon did not pay any fees or commissions in connection with this sale.

From February 16, 2001 to March 1, 2001, Cryocon sold 111,000
restricted shares of common stock to five of its current shareholders (plus
eight children of a current shareholder) at the price of $2.00 per share.
Cryocon received $222,000 in gross proceeds from the sale of the restricted
shares. The sale of shares was exempt from registration under the Securities Act
pursuant to Section 4(2) thereof. As a shareholder prior to the investment, the
investor had received the Company's reports filed pursuant to the Exchange Act,
and was familiar with Cryocon's operations and financial condition. No public
solicitation or general advertising was done in connection with this sale.
Cryocon did not pay any fees or commissions in connection with this sale.

From February 16, 2001 to March 1, 2001, Cryocon sold 26,500 restricted
shares of common stock to three new investors at the price of $2.00 per share.
Cryocon received $53,000 in gross proceeds from the sale of the restricted
shares. The sale of shares was exempt from registration under the Securities Act
pursuant to Section 4(2) thereof. To Cryocon's knowledge, management of the
investor is sophisticated in financial investments and received a variety of
financial and other information about Cryocon in connection with its due
diligence. No public solicitation or general advertising was done in connection
with this sale. Cryocon did not pay any fees or commissions in connection with
this sale.

On April 10, 2001, Cryocon acquired all of the issued and outstanding
shares of XTool, Inc. and issued 250,000 shares of restricted common stock as
consideration to the four (4) shareholders of XTool. In exchange, the XTool's
shareholders gave Cryocon their shares previously held in XTool. The shares were
issued pursuant to an exemption from registration under Section 4(2) of the
Securities Act. To Cryocon's knowledge, the shareholders received a variety of
financial and other information about Cryocon in connection with the
shareholders' due diligence. No public solicitation or general advertising was
done in connection with this sale. Cryocon did not pay commissions in connection
with this transaction.

Ms. Debra L. Brunson has received options to purchase 500,000
restricted shares due to her position as an officer and director of Cryocon. She
served as Vice President of Human Relations and Public Relations from January 3,
2000 to March 16, 2001. Ms. Brunson also served as a director and corporate
secretary from January 3, 2000 to December 31, 2000. To date Ms. Brunson has not
exercised any of her option. Cryocon did not receive any proceeds from the

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issuance of the options, but will receive proceeds upon the exercise of the
options, if she elects to purchase the shares. The option and the shares of
common stock to be issued upon the exercise of the option are issued pursuant an
exemption from registration under Section 4(2) of the Securities Act. Ms.
Brunson has access to Cryocon's reports filed pursuant to the Exchange Act, and
is familiar with Cryocon's operations and financial condition. Cryocon did not
pay any fees or commissions in connection with this issuance.

Mr. Jeffrey A. Taylor was hired as Vice President, Sales, May 10, 2000.
Mr. Taylor received stock options for 250,000 restricted shares to vest at
50,000 shares a year over 5 years. Mr. Taylor terminated employment with Cryocon
on March 21, 2001. His option was modified to 41,696 shares vesting immediately.
The exercise price was set at $1.50 per share. Mr. Taylor's option expires 180
days from March 21, 2001. To date Mr. Taylor has not exercised any of his
option. Cryocon did not receive any proceeds from the issuance of the options,
but will receive proceeds upon the exercise of the options, if he elects to
purchase the shares. The option and the shares of common stock to be issued upon
the exercise of the option are issued pursuant an exemption from registration
under Section 4(2) of the Securities Act. Mr. Taylor has access to Cryocon's
reports filed pursuant to the Exchange Act, and is familiar with Cryocon's
operations and financial condition. Cryocon did not pay any fees or commissions
in connection with this issuance.

Mr. James M. Retallick was promoted to Vice President, Corporate
Counsel and July 10, 2001 and has received options in the amount of 250,000
restricted to vest at 50,000 shares a year over a 5 year period. The exercise
price is set at $1.50 for the first vesting and 80% of the average share price
for the month of December preceding future vestings. To date no shares have
vested. Mr. Retallick has also received an option at no cost for 250,000
restricted founder shares. To date Mr. Retallick has not exercised any of his
options. Cryocon did not receive any proceeds from the issuance of the options,
but will receive proceeds upon the exercise of the options, if he elects to
purchase the shares. The option and the shares of common stock to be issued upon
the exercise of the option are issued pursuant an exemption from registration
under Section 4(2) of the Securities Act. Mr. Retallick has access to Cryocon's
reports filed pursuant to the Exchange Act, and is familiar with Cryocon's
operations and financial condition. Cryocon did not pay any fees or commissions
in connection with this issuance.

Mr. Phillip Ray was hired July 10, 2000 as Vice President of Marketing.
He received a hiring bonus of 10,000 restricted shares and stock options for
250,000 restricted shares to vest at 50,000 shares a year over 5 years. Mr. Ray
terminated employment with Cryocon on October 4, 2000. His option was modified
to 30,000 shares vesting at 5,000 shares per quarter, beginning December 31,
2000. The option expires five days from the last vesting date. The exercise
price was set at $1.00 per share. To date Mr. Ray has not exercised any of his
option. Cryocon did not receive any proceeds from the issuance of the options,
but will receive proceeds upon the exercise of the options, if he elects to
purchase the shares. The option and the shares of common stock to be issued upon
the exercise of the option are issued pursuant an exemption from registration
under Section 4(2) of the Securities Act. Mr. Ray has access to Cryocon's
reports filed pursuant to the Exchange Act, and is familiar with Cryocon's
operations and financial condition. Cryocon did not pay any fees or commissions
in connection with this issuance.

Mr. D. Clark Carlile was hired July 17, 2000, as Vice President of
Operations. He received a hiring bonus of 10,000 restricted shares and stock
options for 250,000 restricted shares to vest at 50,000 shares a year over 5
years. Mr. Carlile terminated employment with Cryocon on April 25, 2001. His
option was modified to 37,503 shares vesting immediately. The exercise price was
set at $1.50 per share. The option expires 180 days from April 25, 2001. To date
Mr. Carlile has not exercised any of his option. Cryocon did not receive any
proceeds from the issuance of the options, but will receive proceeds upon the
exercise of the options, if he elects to purchase the shares. The option and the
shares of common stock to be issued upon the exercise of the option are issued
pursuant an exemption from registration under Section 4(2) of the Securities
Act. Mr. Carlile has access to Cryocon's reports filed pursuant to the Exchange
Act, and is familiar with Cryocon's operations and financial condition. Cryocon
did not pay any fees or commissions in connection with this issuance.

Mr. Matthew Kammeyer was promoted to Vice President, Marketing on
January 3, 2001. He received a hiring bonus of 10,000 restricted shares and
stock options for 250,000 restricted shares to vest at 50,000 shares a year over
5 years. The exercise price is set at $1.50 per share for the first vesting and
80% of the average market price for the month of December preceding any
additional vestings. To date Mr. Kammeyer has not exercised any of his option.
Cryocon did not receive any proceeds from the issuance of the options, but will
receive proceeds upon the exercise of the options, if he elects to purchase the
shares. The option and the shares of common stock to be issued upon the exercise
of the option are issued pursuant an exemption from registration under Section

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4(2) of the Securities Act. Mr. Kammeyer has access to Cryocon's reports filed
pursuant to the Exchange Act, and is familiar with Cryocon's operations and
financial condition. Cryocon did not pay any fees or commissions in connection
with this issuance.

Mr. Harry M. Brunson received an option for 250,000 restricted shares
for his service as a Director from January 3, 2000 to December 31, 2000. The
option vested immediately and has an exercise price of $1.50 per share. The
option expires 180 days from April 7, 2001. To date Mr. Brunson has not
exercised any of his option. Cryocon did not receive any proceeds from the
issuance of the options, but will receive proceeds upon the exercise of the
options, if he elects to purchase the shares. The option and the shares of
common stock to be issued upon the exercise of the option are issued pursuant an
exemption from registration under Section 4(2) of the Securities Act. Mr.
Brunson has access to Cryocon's reports filed pursuant to the Exchange Act, and
is familiar with Cryocon's operations and financial condition. Cryocon did not
pay any fees or commissions in connection with this issuance.

Mr. Ryan Brunson received 50,000 restricted shares for his assistance
in founding and start-up of Cryocon. The effective date of this transfer was
November 10, 1999. The gift of shares was made prior to the acquisition of
Cryocon by ISO Block.

Ms. Arlene Racker received an option for 50,000 restricted shares on
March 30, 2001 for her services as an administrative assistant. Ms. Racker's
option vests at 10,000 shares a year at the anniversary of her hire. The
exercise price is set at $1.50 per share for the first vesting and 80% of the
average market price for the month of December preceding any additional
vestings. To date Ms. Racker has not exercised any of her option. Cryocon did
not receive any proceeds from the issuance of the options, but will receive
proceeds upon the exercise of the options, if she elects to purchase the shares.
The option and the shares of common stock to be issued upon the exercise of the
option are issued pursuant an exemption from registration under Section 4(2) of
the Securities Act. Ms. Racker has access to Cryocon's reports filed pursuant to
the Exchange Act, and is familiar with Cryocon's operations and financial
condition. Cryocon did not pay any fees or commissions in connection with this
issuance.

Mr. Gregg Craft received an option upon terminating his employment on
March 15, 2001. The option was for 8,959 restricted shares and vested
immediately with an exercise price of $1.50 per share. To date, Mr. Craft has
not exercised any of his option. Cryocon did not receive any proceeds from the
issuance of the options, but will receive proceeds upon the exercise of the
options, if he elects to purchase the shares. The option and the shares of
common stock to be issued upon the exercise of the option are issued pursuant an
exemption from registration under Section 4(2) of the Securities Act. Mr. Craft
has access to Cryocon's reports filed pursuant to the Exchange Act, and is
familiar with Cryocon's operations and financial condition. Cryocon did not pay
any fees or commissions in connection with this issuance.

Mr. Doug Moore received an option for 60,000 restricted shares on April
11, 2001. The option vests at 12,000 shares per year over five years. The
exercise price is set at $1.50 per share for the first vesting and 80% of the
average market price for the month of December preceding any additional
vestings. To date Mr. Moore has not exercised any of his option. Cryocon did not
receive any proceeds from the issuance of the options, but will receive proceeds
upon the exercise of the options, if he elects to purchase the shares. The
option and the shares of common stock to be issued upon the exercise of the
option are issued pursuant an exemption from registration under Section 4(2) of
the Securities Act. Mr. Moore has access to Cryocon's reports filed pursuant to
the Exchange Act, and is familiar with Cryocon's operations and financial
condition. Cryocon did not pay any fees or commissions in connection with this
issuance.

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Item 27. Exhibits.

(a) Exhibits. The following exhibits are filed with this report, except
those indicated as having previously been filed with the Securities and Exchange
Commission and which are incorporated by reference to another report,
registration statement or form. Cryocon will furnish any exhibit indicated in
the list below as filed with this report (not incorporated by reference) upon
payment to Cryocon of its expenses in furnishing the information upon the
request of any Shareholder of Record.

2.0 Plan of Acquisition, Reorganization, Arrangement, Liquidation or
Succession

2.1 Agreement and Plan of Reorganization dated April 25, 2000
(incorporated by reference to Exhibit 2.1 to Form 8-K dated
August 18, 2000)

3.0 Articles and Bylaws

3.1 Articles of Incorporation of Cryocon (incorporated by
reference to Exhibit 3.1 to registration statement on Form S-8
of Champion Computer Rentals, Inc., file no. 33-23257-D)

3.2 Bylaws of Cryocon (incorporated by reference to Exhibit on Form 10-KSB
for fiscal year ended 1993).

3.3 Certificate of Amendment and Restatement to Articles of
Incorporation (incorporated by reference to Exhibit 3.4 to
Form 8-K dated February 10, 1994).

3.4 Certificate of Amendment to Articles of Incorporation,
changing Cryocon's name to Iso-Block Products USA,
Inc.(incorporated by reference to Exhibit 2(c) to registration
statement on Form 8-A, file no. 0-25810).

3.5 Certificate of Amendment to Articles of Incorporation,
changing the company's name to Cryocon, Inc., authorizing a
four to one reverse split, authorizing the increase of capital
stock to 50,000,000 shares of common stock, and ratifying the
change of auditors to HJ & Associates of Salt Lake City, Utah.
(Incorporated by reference to Exhibit 3.6 to the 10-QSB, filed
November 14, 2000.)

4.0 Instruments Defining the Rights of Security Rights

4.1(1) Convertible Debenture Due January 3, 2003 between Cryocon,
Inc. and Robert Brunson in the Principal Amount of $50,000.00.

4.2(1) Convertible Debenture Due February 1, 2003 between Cryocon,
Inc. and Paragon Venture Fund LLC in the Principal Amount of
$28,800.00.

4.3(1) Convertible Debenture Due February 1, 2003 between Cryocon,
Inc. and Paragon Venture Fund LLC in the Principal Amount of
$647,300.00.

4.4(1) Convertible Debenture Due February 1, 2003 between Cryocon,
Inc. and Paragon Venture Fund LLC in the Principal Amount of
$1,404,473.00.

4.5(1) Convertible Debenture Due February 1, 2003 between Cryocon,
Inc. and Paragon Venture Fund LLC in the Principal Amount of
$475,000.00.

4.6(1) Convertible Debenture Due February 1, 2003 between Cryocon,
Inc. and Paragon Venture Fund LLC in the Principal Amount of
$1,564,236.00.

4.7(1) Warrant Issuance to Todd Moore.

4.8(1) Warrant Issuance to Bourns, Inc.

4.9(1) Warrant Issuance to J. Brian Morrison

4.10(2) Common Stock Purchase Agreement Millennium Capital Partners,
L.L.C.

4.11(3) Sample Form of Warrant issued to Cryocon's shareholders

5.0 Opinion re Legality

5.1 and 23.01(2)Letter of opinion, including consent of
Marcus Sanders, Attorney and Counselor at Law,
regarding legality of common stock to be issued
pursuant to options granted under the Plan.

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10.0 Material Contracts

10.1(2) XTool, Inc. Acquisition Contract

16.0(2) Letter on Change in Certifying Account

22.0(2) Subsidiaries of Registrant

23.0(1) Consent of experts and counsel

23.02 Consent of H.J.& Associates, independent certified public
accountants

23.03 Consent of Larry O'Donnell, CPA, PC, and independent certified
public accountant for the fiscal year end March 31, 2000.

24.0 Power of Attorney

24.01 Power of Attorney (See Signature Page)

(1) These Exhibits were included with the Form S-3 filed February 9, 2001
and are incorporated herewith.

(2) These Exhibits were included in Amendment No. 1 to Form SB-2 filed
April 17, 2001.

(3) This Exhibit was modified from the last amendment and is included.

Item 28. UNDERTAKINGS.
The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers and sales are being
made, a post-effective amendment to this registration statement to include (i)
any prospectus required by Section 10(a)(3); (ii) reflect in the prospectus any
facts or events which, individually or together, represent a fundamental change
in the information in the registration statement; (iii) any additional or
changed material information with respect to the plan of distribution.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of the such securities at that time shall be deemed to be the initial
bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.

(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of the such securities at that time shall be deemed to be the initial
bona fide offering thereof.

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

124

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Denver, Colorado, on the date below.

DATED: May 18, 2001 Cryocon, INC.

By: /s/
------------------------------------------
J. Brian Morrison, Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Robert W. Brunson, with power of
substitution, as his attorney-in-fact for him, in all capacities, to sign any
amendments to this registration statement and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorney-in-fact or his substitutes may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons, in the
capacities and on the dates respectively indicated.

__/s/___________________ CHAIRMAN/CHIEF EXECUTIVE OFFICER May 23, 2001
J. BRIAN MORRISON

__/s/___________________ CHIEF FINANCIAL OFFICER May 23, 2001
VAUGHN P. GRIGGS

__/s/___________________ DIRECTOR May 23, 2001
LYNDELL PARKS

__/s/___________________ DIRECTOR May 23, 2001
STERLING REDFERN

__/s/___________________ DIRECTOR/SECRETARY May 23, 2001
JAMES S. CUNDIFF

125