U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1O-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter ended September 30, 2001 Commission File No.33-30476-D
CRYOCON, INC.
(Exact name of registrant as specified in its charter)
COLORADO
(State or other jurisdiction of
incorporation or organization)
2773 Industrial Drive
Ogden, Utah 84401
(Address of Principal's Executive Offices)
84-1O26503
(I.R.S. Employer Identification No.)
(801) 395-2796
(Registrant's Telephone No. Incl. area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the
registrant was required to file such reports), and (2) Has been subject to
such filing requirements for at least the past: 90 days.
Yes _X_ No ___
The number of shares outstanding of each of the Registrant's classes of
common equity, as of September 30, 2001, are as follows:
Class of Securities Shares Outstanding
------------------- ------------------
Common Stock, no par value 21,924,603
INDEX
PART I. FINANCIAL STATEMENTS
Item 1. Financial Statements PAGE
Consolidated Balance Sheets
(September 30, 2001 and March 31, 2001) F-1
Liabilities and Stockholders' Equity (Deficit) F-2
Consolidated Statement of Operations F-3
Consolidated Statement of Cash Flows F-4
Notes to Unaudited Financial Statements F-6
Item 2. Management's Discussion and Analysis and
Plan of Operation 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
PART I FINANCIAL STATEMENTS
Item 1 Financial Statements
CRYOCON, INC. AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2001 and March 31, 2001
CRYOCON, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Balance Sheets
ASSETS
September 30, March 31,
2001 2001
(Unaudited)
CURRENT ASSETS
Cash $ 760 $ 8,980
Accounts receivable, net 10,975 30,647
Deposits and prepaid expenses 29,315 34,214
---------- ----------
Total Current Assets 41,050 73,841
---------- ----------
PROPERTY AND EQUIPMENT, NET 1,942,125 2,250,790
---------- ----------
OTHER ASSETS
Patents, trademarks and licenses, net 284,367 329,267
---------- ----------
Total Other Assets 284,367 329,267
TOTAL ASSETS $2,267,542 $2,653,898
========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
F-1
CRYOCON, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Balance Sheets
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
September 30, March 31,
2001 2001
(Unaudited)
CURRENT LIABILITIES
Accounts payable $ 382,896 $ 341,552
Due to related parties 283,100 -
Accrued expenses 1,009,690 605,965
Stock deposits 284,391 284,391
Notes payable, related party 277,964 191,964
Current portion long-term debt 1,538,654 1,603,891
--------- ---------
Total Current Liabilities 3,776,695 3,027,763
--------- ---------
LONG-TERM LIABILITIES
Long-term debt 177,818 146,966
--------- ---------
Total Long-Term Liabilities 177,818 146,966
--------- ---------
TOTAL LIABILITIES 3,954,513 3,174,729
--------- ---------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: 50,000,000 shares
authorized of no par value,
19,922,080 and 19,319,837 shares issued
and outstanding, respectively 8,261,694 7,158,329
Deficit accumulated during the
development stage (9,948,665) (7,679,160)
---------- ----------
Total Stockholders' Equity
(Deficit) (1,686,971) (520,831)
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $2,267,542 $2,653,898
========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
F-2
CRYOCON, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
From
Inception on
For the For the October 20,
Six Months Ended Three Months Ended 1999 through
September 30, September 30, September 30,
2001 2000 2001 2000 2001
REVENUES $ 26,400 $ 81,411 $ 8,269 $ 40,996 $ 190,310
--------- ----------- ----------- --------- -----------
EXPENSES
Cost of sales 13,665 14,641 6,803 7,300 78,448
Advertising 19,539 199,547 3,662 133,691 470,222
Bad debt expense 9,000 - 9,000 - 20,000
Depreciation and
amortization 118,238 76,085 37,055 37,159 389,536
General and
administrative 1,425,405 1,075,050 733,124 705,933 7,733,691
---------- ----------- ----------- --------- -----------
Total Expenses 1,585,847 1,365,323 789,644 884,083 8,691,897
---------- ----------- ----------- --------- -----------
OPERATING LOSS (1,559,447) (1,283,912) (781,375) (843,087) (8,501,587)
---------- ----------- ----------- --------- -----------
OTHER INCOME
(EXPENSE)
Interest income 5 - - - 3,509
Other income 9,687 - - - 11,784
Loss on sale of
assets - - - - (27,515)
Impairment loss
on fixed assets (227,388) - (227,388) - (227,388)
Impairment of
goodwill (419,198) - (419,198) - (419,198)
Interest expense (73,164) (215,133) (29,352) (107,566) (788,270)
---------- ----------- ----------- --------- -----------
Total Other
Income (Expense)(710,058) (215,133) (675,938) (107,566) (1,447,078)
---------- ----------- ----------- --------- -----------
NET LOSS $(2,269,505) $(1,499,045) $(1,457,313) $(950,653) $(9,948,665)
========== =========== =========== ========= ===========
BASIC LOSS PER
SHARE $ (0.11) $ (0.14) $ (0.07) $ (.09)
========== =========== =========== =========
WEIGHTED
AVERAGE NUMBER
OF SHARES
OUTSTANDING 19,760,778 11,035,110 19,883,837 11,070,221
========== ========== ========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
CRYOCON, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
From
Inception on
For the October 20,
Six Months Ended 1999 Through
September 30, September 30,
2001 2000 2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(2,269,505) $(1,499,045) $(9,978,665)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Amortization and depreciation 118,238 76,085 389,536
Options and warrants issued below
market value - - 1,248,110
Impairment loss on fixed assets 227,388 - 227,388
Impairment of goodwill 419,198 - 419,198
Loss on sale of assets - - 27,515
Bad debt expense 9,000 0 20,000
Additional expense recorded on
convertible debentures - - 514,050
Common stock issued for services
rendered 267,365 - 1,907,569
(Increase) decrease in:
Accounts receivable 10,672 (20,635) (30,975)
Deposits and prepaids 4,899 (14,277) (29,315)
Increase (decrease) in:
Stock deposits - - 284,391
Accounts payable and accrued expenses 643,085 197,349 1,590,602
--------- --------- ----------
Net Cash Used by Operating
Activities (569,660) (1,260,523) (3,380,596)
--------- --------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase or development of intangibles - - (449,000)
Sale of assets 10,600 - 10,600
Equipment purchases (2,661) (180,778) (382,531)
Purchase of building - - (2,050,000)
--------- --------- ----------
Net Cash (Used) by Investing
Activities 7,939 (180,778) (2,870,931)
--------- --------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock for cash 100,000 7,500 4,246,673
Stock offering costs - - (390,708)
Due to related parties 283,100 - 283,100
Issuance of notes payable 179,751 1,848,626 3,668,338
Payments made on notes payable (9,350) (362,339) (1,555,116)
--------- --------- ----------
Net Cash Provided by Financing
Activities $ 553,501 $1,493,787 $6,252,287
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
CRYOCON, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
From
Inception on
For the October 20,
Six Months Ended 1999 Through
September 30, September 30,
2001 2000 2001
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ (8,220) 52,486 760
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 8,980 71,771 -
------------ --------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 760 $ 124,257 $ 760
CASH PAID FOR:
Interest $ 45 $ 55,832 $ 119,600
Income taxes $ - $ - $ -
SCHEDULE OF NON-CASH FINANCING ACTIVITIES:
Common stock issued for services $ 267,365 $ - $1,907,569
Common stock issued in lieu of debt $ 56,250 $ - $ 56,250
Vehicles purchased under notes
payable $ 35,215 $ - $ 100,764
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
CRYOCON, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2001 and March 31, 2001
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial
statements have been prepared by the Company pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted in accordance with such
rules and regulations. The information furnished in the interim
condensed consolidated financial statements include normal recurring
adjustments and reflects all adjustments, which, in the opinion of
management, are necessary for a fair presentation of such financial
statements. Although management believes the disclosures and
information presented are adequate to make the information not
misleading, it is suggested that these interim condensed consolidated
financial statements be read in conjunction with the Company's most
recent audited financial statements and notes thereto included in its
March 31, 2001 Annual Report on Form 10-KSB. Operating results for
the six months ended September 30, 2001 are not necessarily
indicative of the results that may be expected for the year ending
March 31, 2002.
NOTE 2 - PRONOUNCEMENTS ISSUED NOT YET ADOPTED
In July, 2001, the Financial Accounting Standards Board issued two
statements - Statement 141, Business Combinations, and Statement 142,
Goodwill and Other Intangible Assets, which will potentially impact
the Company's accounting for its reported goodwill and other
intangible assets.
Statement 141:
Eliminates the pooling method for accounting for business
combinations.
Requires that intangible assets that meet certain criteria be
reported separately from goodwill.
Requires negative goodwill arising from a business combination to
be recorded as an extraordinary gain.
Statement 142:
Eliminates the amortization of goodwill and other intangibles that
are determined to have an indefinite life.
Requires, at a minimum, annual impairment tests for goodwill and
other intangible assets that are determined to have an indefinite
life.
F-6
CRYOCON, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2001 and March 31, 2001
NOTE 2 - PRONOUNCEMENTS ISSUED NOT YET ADOPTED (Continued)
Upon adoption of these Statements, the Company is required to:
Re-evaluate goodwill and other intangible assets that arose from
business combinations entered into before July 1, 2001. If the
recorded other intangibles assets do not meet the criteria for
recognition, they should be reclassified to goodwill. Similarly,
if there are other intangible assets that meet the criteria for
recognition but were not separately recorded from goodwill, they
should be reclassified from goodwill.
Reassess the useful lives of intangible assets and adjust the
remaining amortization periods accordingly.
Write-off any remaining negative goodwill.
NOTE 3 - GOING CONCERN
The Company's consolidated 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 raise additional funds through an
SB-2 filing in order to fund operations until revenues are sufficient
to cover the operating expenses. The Company is also trying to
restructure its long-term debt and dispose of certain assets, if
needed, in order to reduce operating expenses. Until that time, the
stockholders have committed to covering the operating costs of the
Company.
Additionally, the Company is registering a rescission offer
concerning certain securities that may have been offered or issued in
violation with state and/or federal securities laws. 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) the Company will be able to raise additional
working capital through either private placements or public
offerings. To the extent that funds generated from operations,
standby investors and any private placements or public offerings are
insufficient, the Company 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 the
Company. If adequate working capital is not available, the Company
may be required to curtail its operations.
This rescission raises substantial doubt about the Company's ability
to continue as a going concern. The 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 the
Company be unable to continue as a going concern.
F-7
CRYOCON, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2001 and March 31, 2001
NOTE 4 - SIGNIFICANT EVENTS
On March 30, 2001, the Company entered into an agreement with XTool,
Inc., a Utah Corporation, to exchange all of the outstanding shares
of XTool, Inc. for 250,000 shares of the Company's outstanding stock.
The agreement was effective as of April 3, 2001 when the 250,000
shares were distributed equally to the four stockholders of XTool,
Inc.. XTool, Inc. is a development stage company which has developed
tooling to be sold in the petroleum, mining and horizontal drilling
industries. These tools are unique in the industry and are
cryogenically treated.
As part of the acquisition, the Company committed to a minimum of
$250,000 of capital contribution to the new subsidiary. In addition
to other compensation, each officer of the new subsidiary will
receive stock options to purchase 100,000 shares of the Company's
common stock. The options will vest 50,000 shares on the anniversary
of the acquisition for two years. The exercise price of the options
will be $1.50 per share for the first vesting and eighty percent
(80%) of the average stock price for the month of December preceding
the date of vesting for the second vesting shares.
The acquisition of XTool, Inc. resulted in goodwill of $441,261 as
follows:
Value of 250,000 shares issued ($2.375 per share) $ 593,750
Assets acquired, net (167,657)
Liabilities assumed, net 15,168
----------
Resulting goodwill $ 441,261
==========
Amortization of the goodwill is computed on the straight-line method
over the estimated useful life of 5 years. Amortization on the
goodwill through September 30, 2001 was $22,063. The assets of
XTool, Inc. were contributed by shareholders who during the quarter
ended September 30, 2001 took back the assets and associated
liabilities of XTool, Inc. As a result, the goodwill previously
booked had been impaired. Therefore, the remaining goodwill of
$419,198 was amortized in full.
On June 4, 2001, the note holder of the $1,350,000 promissory note
filed a Notice of Default with the County Recorder in an effort to
commence foreclosure on the trust deed on the Company's current
administrative and operational facility. The promissory note was
originally due February 28, 2001. As of October 16, 2001, the
Company's administrative faculty was evacuated and given back to the
note holder. An impairment loss of $227,388 was recorded as a result
of the loan foreclosure.
F-8
Item 2 Management's Discussion and Analysis or Plan of Operation
FORWARD-LOOKING STATEMENTS
This report 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 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.
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.
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 losses for fiscal year 2001 are $6,609,229. 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 20 employees to a total of
7 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
9
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. Mr. Morrison believes that given the personnel
employed at Cryocon and the opportunities that are presenting themselves, that
Cryocon has the potential to become a world leader in the cryogenics market.
In furtherance of these goals, Cryocon acquired XTool, Inc. Cryocon has
committed to obtain funding and make the capital expenditures necessary to
develop XTool's business, production and promote its 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.
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.
The original principals of the XTOOL have left the company and Cryocon is
currently searching for and individual(s) to replace them.
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. It
is anticipated that revenues will substantially increase, but further capital
will need to be raised. Management's stated goals, as issued by J. Brain
Morrison, Cryocon's Chairman and Chief Executive Officer 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-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
10
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 out source
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 $190,310 in gross sales and has
$10,975 in Net Accounts Receivable. Cryocon had gross sales in the quarter
ending September 30, 2001 of $8,269. Cryocon's cumulative operating loss
through September 30, 2001 is $9,948,665. 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. These costs include
$1,248,110 assessed for options granted below market value, $1,907,569
assessed for common stock for services, $514,050 assessed as additional
expenses on convertible debentures, impairment of Goodwill and loss of fixed
assets of $646,586.
Cryocon's operation to date has consumed substantial amounts of cash.
As of September 30, 2001, Cryocon had a working capital deficit of $3,817,745,
which includes the current portion of all notes payable including the debt on
the building. Since inception the net cash loss from operations is $3,380,596
and is expected to continue; however it is anticipated that these losses may
increase 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:
* the continued progress of Cryocon's research and development of new
process applications; the cost, the timing, and outcome of further
regulatory approvals;
* the expenses of establishing a sales and marketing force, the timing
and cost of establishing or procuring additional requisite
production and other manufacturing capacities,
* the cost; if any, the cost of preparing, filing, prosecuting,
maintaining, defending and enforcing patent claims; and
* the status of competitive products and the availability of other
financing.
11
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 October 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.
PART II OTHER INFORMATION
Item 1 Legal Proceedings
On June 4, 2001, Bourn Inc. filed a Notice of Default with the Weber County
Recorder, in its effort to commence foreclosure on the deed trust on Cryocon's
current administrative and operational facility located at 2250 North 1500
West, in Ogden, Weber County, Utah. On June 1, 2000, Bourn, Inc. loaned
Cryocon $2,050,000. The promissory note became due on February 28, 2001. The
remaining balance due is $1,350,000. Building was foreclosed on as of October
30, 2001. Cryocon has moved to another location at 2773 Industrial Drive,
Ogden, UT 84401
On August 7, 2001,Cryocon was served legal process in a collection action by
Rushford/Ross Advertising Agency claiming a debt owed in the amount of
$7,709.26, interest and costs in
collection.
On October 9, 2001 Maxim Technologies received a judgement for $3,425.00 ,
including court costs, for a claim for a debt a owed for a Phase One
Environmental Study.
On September 10th 2001 the Internal Revenue Service placed a lien on the
company building located at 2250 North 1500 West, Ogden, Utah in the amount of
$141,602.82for non payment of payroll taxes for tax periods December 2000 and
March 2001.
Cryocon has been informed that Krieger Barrel filed a law suit against the
Cryo-Accurizing Patent but has not served Cryocon with the law suit pending
further negotiations.
On October 12, 2001 a suit was filed in Dallas County Texas by Staffing
Solutions Southwest, Inc. for service rendered to Cyrocon from November 27
through December 24 2000.
Cryocon has not been served with any other legal process providing it with
legal notice of any other pending proceedings. Cryocon is not a plaintiff in
any pending action.
Item 2. Changes in Securities and Use of Proceeds
None
12
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(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. The Company will furnish any exhibit
indicated in the list below as filed with this report (not incorporated by
reference) upon payment to the Company 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 the Company (incorporated by
reference to Exhibit 3.1 to registration statement on Form S-8 of
Champion Computer Rentals, Inc., file no. 33-23257-D)
3.3 Bylaws of the Company (incorporated by reference to Exhibit on
Form 10-KSB for fiscal year ended 1993).
3.4 Certificate of Amendment and Restatement to Articles of
Incorporation (incorporated by reference to Exhibit 3.4 to Form 8-
K dated February 10, 1994)
3.5 Certificate of Amendment to Articles of Incorporation, changing
the Company'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)
3.6 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
13
by reference to Exhibit 3.6 to the quarterly report filed on Form
10-QSB for the Quarter ending September 30, 2000).
(b) Reports on Form 8-K. : There were no reports filed on Form 8-K
between March 31, 2001 and September 30, 2001.
SIGNATURES
___________________________________________________________________________
In accordance with the requirements of the Exchange Act, the Registrant caused
this Report on Form 10-QSB to be signed on its behalf by the undersigned
thereunto duly authorized.
Dated: November 20, 2001
CRYOCON, INC.
By:____________/s/_______________
J. BRAIN MORRISON
Chairman/Chief Executive Officer
By: _________/s/_________________
VAUGHN P. GRIGGS
Chief Financial Officer
14