Document is copied.
As filed with the Securities and Exchange Commission on April
13, 2001
Registration No. 333-55284
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-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 3
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 10,079,578 $2.00 $20,119,156 $ 5,039.00

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): $ 7,717.14

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: 10,079,578 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 8,519,578 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 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
payment of cash, and (iii) 1,238,195 warrants to purchase up to
3,714,585 shares of common stock ( without payment of cash). 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.

Cryocon will not receive proceeds from the resale of any of
the stock registeredCryocon will receive the proceeds from the
exercise of the warrants and options if exercised.
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 July 5, 2001, the average of the closing bid
and ask prices for the Common Stock was $1.75.

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 4

PROSPECTUS SUMMARY 4

RISK FACTORS 6

RESCISSION OFFER 12

USE OF PROCEEDS 22

DETERMINATION OF OFFERING PRICE 22

DILUTION 22

PLAN OF DISTRIBUTION 23

LEGAL PROCEEDINGS 25

DESCRIPTION OF SECURITIES 25

BUSINESS ORGANIZATION WITHIN THE LAST FIVE YEARS 27

DESCRIPTION OF BUSINESS 28

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 30

DESCRIPTION OF PROPERTY 32

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 32

EXECUTIVE COMPENSATION 35

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 36

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 37

COUNSEL AND EXPERTS 38

INTEREST OF NAMED EXPERTS & COUNSEL 39

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 39

SELLING STOCKHOLDERS 39

CHANGES IN ACCOUNTANTS 47

ADDDITIONAL INFORMATION 48

DISCLOSURE OF COMMISSION POSITION
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES 48

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 49

EXHIBIT A: RESCISSION ELECTION FORM 80

EXHIBIT B: INDEX TO EXCEPTS FROM STATE SECURITY LAWS 83

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..10,079,578 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 July 5, 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:

* 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.

* 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)
September 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.

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. Cryocon used the proceeds to purchase the facility
in Utah. The loan was secured by the deed of trust on the
facility. The promissory note became due on February 28, 2001.
The remaining balance due is $1,350,000. Cryocon has paid
approximately $700,000 against the principal of $2,050,000. If
Cryocon fails pay the remaining balance due on the note to Bourn,
Cryocon will lose the building, lose capital Cryocon invested in
building improvements and suffer a disruption of operations
during a move from the facility. Additionally, there is no
guarantee that Cryocon could lease facilities that would meet
it's needs to expand operations as currently planned.

Cryocon has had an accumulated loss of $7,679,161, since
its inception in January 2000. For the fiscal year-ending March
31, 2001, Cryocon experienced a net operating loss of 6,609,229,
and for the fiscal year to date, net operating losses of
$371,173. During the same period, Cryocon Utah experienced a
working capital deficit of $1,158,077, and $1,592,784,
respectively.

Xtool has had an accumulated loss of $10,399, since its
inception in January 1, 2001. For its fiscal year-ending
December 31, 2000, 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 September 30, 2001,
the aggregate accrued interest (on the total liability of
$284,491) will be $16,376 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 Millennium Capital
rejects the rescission offer and exercises it's option, 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 the Notes to Consolidated Financial Statement for Fiscal
Year ending March 31, 2001.

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. As of the date of this Prospectus, , only three of the
Paragon Venture Fund Members accepted Paragon's rescission offer.
The three members invested a total of $122,000 and owns 62,000
shares of Cryocon stock. Paragon has asked Cryocon to return the
$122,000 together with appropriate interest 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 $122,000.00 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 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 completion of the agreement with Venture 2000. As
compensation for the proposed services, Venture 2000 will receive
a warrant to purchase 4,500,000 shares of Cryocon common stock
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 execute a contract Dr.
Lindstrom may not remain on Cryocon's Board of. If Cryocon
executes a contract with Venture 2000, the market may react
negatively at the prospect of one group obtaining approximately
21% of Cryocon's issued and outstanding. This may 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 may lose its facility in Utah if does not repay the
unpaid balance due on the loan from Bourns, Inc. before completes
a foreclosure sale.

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. If Cryocon fails pay the
remaining balance due on the note to Bourn, Cryocon will lose the
building, lose capital Cryocon invested in building improvements
and suffer a disruption of operations during a move from the
facility. Additionally, there is no guarantee that Cryocon could
lease facilities that would meet 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 to or cash 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
first 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 the 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

* 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.
* 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.
* 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 September 30, 2001, and (v) the aggregate
amount of liability calculated through September 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 $ 15,554.00 $ 139,654.00
Colorado 8% $ 7,500 $ 747.00 $ 8,247.00
Texas 6% $ 6,000 $ 75.00 $ 6,075.00

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 the Notes to the Consolidated
Financial Statements for Fiscal Year ending March 31, 2001.

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 the Notes to the Consolidated Financial Statements
for Fiscal Year ending March 31, 2001.

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
$2,100,000 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 July 15, 2001 of $1.755 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 $9,739,170. 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 $1.75 per share and the bid price
was $2.10

DILUTION

On July 5, 2001, Cryocon had a net tangible book value
of (798,555) or approximately ($0.037) 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 July 5, 2001,
there were 21,756,640 outstanding

shares. This figure includes shares authorized, but not yet issued.
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 $1.75 per share, as of July 5,
2001, the new shareholders will realize an immediate dilution in
the shares purchased of $3.68 per share or 210%. The following
table illustrates this per share dilution:

o Market price per share (as of July 5, 2001). . . . . . .$1.75

o Net Tangible Book Value (as of July 5, 2001) . . . . .($0.037)

o Dilution per share to new investors . . . . . . . . . . $3.68

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 an exercise at the minimum exercise
price of $2.00 per share 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 $2,100580,000 in
additional cash investments from the selling shareholders
assuming a rejection of the rescission offer, at a 20% discount
to the market price of $1.75 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 July 5, 2001), Cryocon's net tangible
book value would become $8,940,615 or approximately $0.31 per
share.

Assuming that the selling shareholders sells their
shares at the market price, as of July 5, 2001, of $1.75 per
share to new shareholders, the new shareholders will realize an
immediate dilution in the shares purchased of $1.44 or 82%. 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 July 5, 2001) . . . . . . . . .$1.75

Net Tangible Book Value (assuming exercise of all warrants) .$0.31

Dilution per share to new investors . . . . . . . . . . . . .$1.44

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

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. The written agreement expired on May 31, 2001; however,
Millennium Capital has agreed to extend the agreement by written
instrument until September 30, 2001.

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 has reached an agreement in principal 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 consummation
of the relationship 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. 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 fail to consummate
their business relationship 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 15 full time employees and one 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 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 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 $163,910
in gross sales and had $30,647 in accounts receivable. Of those
gross sales $82,198 resulted from the treatment of firearm
components through the Cryo-Accurizing Division and $81,712 has
resulted from deep cryogenic tempering of miscellaneous parts for
various individuals and manufacturers. Cryocon's cumulative

operating loss through March 31, 2001 is $7,679,160. 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, $1,640,204 assessed for
common stock for services, and $514,050 assessed as additional
expenses on convertible debentures.

Cryocon's operation to date has consumed substantial amounts
of cash. As of March 31, 2001, Cryocon had a working capital
deficit of $2,953,922, which includes the current portion of all
notes payable including the debt on the building. Since
inception the net cash loss from operations is $3,886,088 and is
expected to continue; however it is anticipated that these losses
may decrease in the foreseeable future due to corporate
restructuring. 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.

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 August 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.

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 July 5, 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
Annual Stock underlying payouts Compensation
Name and 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 appointed 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 July 5, 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 are authorized to Mr. Brunson upon conversion of the
debenture. The certificate evincing these shares has not yet
been issued by the transfer agent, but are considered
outstanding. 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 July 5, 2001, Cryocon's common stock was quoted on
the OTC Electronic Bulletin Board at the price of $1.75. The
following sets for the quarterly fluctuations in the reported bid
prices for the period from March 31, 1998 through March 31, 2001.

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 AMOUNT OF SHARES NUMBERS OF COMMON NUMBER OF SHARES
OWNER OF COMMON STOCK SHARES OFFERED BY OF COMMON STOCK
OWNED BEFORE SELLING OWNED AFTER THE
OFFERING SHAREHOLDERS OFFERING
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 & 1,000 1,000 0 *
Sandra Dee Brown
Jason MacPhee & Leah 7,000 7,000 0 *
Pauline Brown
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 *

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

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 *

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

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 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.
48

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

AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR 2001

Independent Auditor's Report F-10

Consolidated Balance Sheet as of March 31, 2001 F-11

Consolidated Statements of Operations for
March 31, 2000 and March 31, 2001 F-12

Consolidated Statements of
Stockholders' Equity (Deficit) F-13

Consolidated Statements of Cash Flows
For the year ended March 31, 2000 and March 31, 2001 F-16

Notes to Consolidated Financial Statements F-18

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

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

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

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

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

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

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

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2001

F-9

INDEPENDENT AUDITORS' REPORT

To the Stockholders of
Cryocon, Inc. and Subsidiary
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Ogden, Utah

We have audited the accompanying consolidated balance sheet of
Cryocon, Inc. and Subsidiary (formerly ISO Block Products USA,
Inc.) (a development stage company) as of March 31, 2001 and the
related consolidated statements of operations, stockholders'
equity (deficit) and cash flows for the year ended March 31, 2001
and from inception on October 20, 1999 through March 31, 2000 and
2001. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Cryocon, Inc. and Subsidiary (formerly ISO
Block Products USA, Inc.) (a development stage company) as of
March 31, 2001 and the consolidated results of their operations
and their cash flows for the year ended March 31, 2001 and from
inception on October 20, 1999 through March 31, 2000 and 2001 in
conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going
concern. As discussed in Note 8 to the consolidated financial
statements, the Company is a development stage company with no
significant operating results to date, which raise substantial
doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described
in Note 8. The consolidated financial statements do not include
any adjustments that might result from the outcome of the
uncertainty.

HJ & Associates, LLC
Salt Lake City, Utah
July 5, 2001
F-10

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Consolidated Balance Sheet
ASSETS
March 31,
2001
CURRENT ASSETS
Cash $ 8,980
Accounts receivable, net (Note 1) 30,647
Deposits and prepaid expenses 34,214

Total Current Assets 73,841

PROPERTY AND EQUIPMENT, NET (Notes 1 and 2) 2,250,790

OTHER ASSETS

Patents, trademarks and licenses, net (Note 1) 329,267

Total Other Assets 329,267

TOTAL ASSETS $ 2,653,898

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

Accounts payable $ 341,552
Accrued expenses (Note 5) 605,965
Stock deposits (Note 6) 284,391
Note payable, related party (Note 3) 191,964
Current portion long-term debt (Note 4) 1,603,891

Total Current Liabilities 3,027,763

LONG-TERM LIABILITIES

Long-term debt (Note 4) 146,966

Total Long-Term Liabilities 146,966

TOTAL LIABILITIES 3,174,729

STOCKHOLDERS' EQUITY (DEFICIT)

Common stock: 50,000,000 shares authorized
of no par value, 19,319,837 shares
issued and outstanding 7,158,329
Deficit accumulated during the development stage (7,679,160)
Total Stockholders' Equity (Deficit) (520,831)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)$ 2,653,898

F-11

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Consolidated Statements of Operations

For the From Inception on
Year Ended October 20, 1999 Through
March 31, March 31,
2001 2000 2001

REVENUES $ 141,405 $ 22,505 $ 163,910

EXPENSES

Cost of Sales 57,804 6,979 64,783
Advertising 397,159 53,524 450,683
Bad debt expense 11,000 - 11,000
Depreciation and amortization 228,999 42,299 271,298
General and administrative 5,344,796 963,490 6,308,286

Total Expenses 6,039,758 1,066,292 7,106,050

OPERATING LOSS (5,898,353) (1,043,787) (6,942,140)

OTHER INCOME (EXPENSE)

Interest income 3,504 - 3,504
Other income 2,097 - 2,097
Loss on sale of assets (27,515) - (27,515)
Interest expense (688,962) (26,144) (715,106)

Total Other Income (Expense) (710,876) (26,144) (737,020)

NET LOSS $(6,609,229) $(1,069,931) $(7,679,160)

BASIC LOSS PER SHARE $ (0.53) $ (0.31)

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 12,538,082 3,472,710

F-12

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)

Deficit
Accumulated
During the
Common Stock Development
Shares Amount Stage

Balance at inception on
October 20, 1999 - $ - $ -

Issuance of common stock to founders
for services at $0.00 per share 1,000 - -

Issuance of common stock to founders
for services at $.00 per share 524,000 - -

Issuance of common stock to founders
for services and intangible assets at
$0.00 per share 9,700,000 - -

Issuance of common stock for services
at $0.75 per share 100,000 75,000 -

Issuance of common stock for cash
at $0.50 per share 10,000 5,000 -

Issuance of common stock for services
at $0.50 per share 5,000 2,500 -

Issuance of common stock for cash
at $0.50 per share 10,000 5,000 -

Issuance of common stock for cash
at $0.50 per share 4,000 2,000 -

Issuance of common stock for services
at $0.50 per share 16,000 8,000 -

Issuance of common stock for services
at $0.75 per share 100,000 75,000 -

Issuance of common stock for services
at $0.75 per share 500,000 375,000 -

Issuance of common stock for cash at
$1.00 per share 10,000 10,000 -

Balance forward 10,980,000 $557,500 $ -

F-13

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
(Continued)

Deficit
Accumulated
During the
Common Stock Development
Shares Amount Stage

Balance forward 10,980,000 $ 557,500 $ -

Issuance of common stock for cash
at $1.00 per share 10,000 10,000 -

Net loss from inception on
October 20, 1999 through
March 31, 2000 __________ _________ (1,069,931)

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

Recapitalization 1,237,724 - -

Warrants issued below market
value - 980,000 -

Issuance of common stock upon exercise
of options at $0.50 per share 17,500 8,750 -

Issuance of common stock for
services at $5.375 per share 10,000 53,750 -

Issuance of common stock upon exercise
of options at $0.50 per share 31,650 15,825 -

Issuance of common stock for cash
at $0.01 per share 2,880,000 28,800 -

Issuance of common stock for cash
at $0.50 per share 1,294,000 647,000 -

Issuance of common stock for cash
at $1.00 per share 1,355,437 1,355,437 -

Issuance of common stock for cash
at $2.00 per share 237,500 475,000 -

Issuance of common stock for cash
at $2.00 per share 782,118 1,564,236 -

Stock issuance costs - (390,708) -

Balance Forward 18,845,929 $5,315,590 $(1,069,931)

F-14

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Consolidated Statement of Stockholders' Equity (Deficit)
(Continued)

Deficit
Accumulated
During the
Common Stock Development
Shares Amount Stage

Balance Forward 18,845,929 $ 5,315,590 $ (1,069,931)
Issuance of common stock upon exercise
of options at $0.50 per share 13,250 6,625 -

Issuance of common stock for
services at $2.25 per share 300,000 675,000 -

Options issued below market
value - 268,110 -

Issuance of common stock upon exercise
of options at $0.50 per share 6,000 3,000 -

Issuance of common stock for services
at $3.063 per share 3,658 11,204 -

Issuance of common stock for
services at $2.25 per share 51,000 114,750 -

Issuance of common stock for
services at $2.50 per share 100,000 250,000 -

Additional interest recorded on
convertible debentures - 514,050 -

Net loss for the year ended
March 31, 2001 - - (6,609,229)

Balance , March 31, 2001 19,319,837 $ 7,158,329 $ (7,679,160)

F-15

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

For the From Inception on
Year Ended October 20, 1999 Through
March 31 March 31
2001 2000 2001

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (6,609,229) $ (1,069,931) $ (7,679,160)
Adjustments to reconcile net loss to net
cash used by operating activities:
Amortization and depreciation 228,999 42,299 271,298
Options and warrants issued below market
value 1,248,110 - 1,248,110
Loss on sale of assets 27,515 - 27,515
Bad debt expense 11,000 - 11,000
Additional expense recorded on convertible
debentures 514,050 - 514,050
Common stock issued for services rendered 1,104,704 535,500 1,640,204
(Increase) decrease in:
Accounts receivable (29,036) (12,611) (41,647)
Deposits and prepaids (34,214) - (34,214)
Stock deposits 284,391 - 284,391
Accounts payable and accrued expenses 791,492 156,025 947,517

Net Cash Used by Operating Activities (2,462,218) (348,718) (2,810,936)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase or development of intangibles - (449,000) (449,000)
Equipment purchases (156,919) (222,951) (379,870)
Purchase of building - (2,050,000) (2,050,000)

Net Cash (Used) by Investing Activities (156,919) (2,721,951) (2,878,870)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock for cash 4,104,673 42,000 4,146,673
Stock offering costs (390,708) - (390,708)
Issuance of notes payable 382,741 3,105,846 3,488,587
Payments made on notes payable (1,540,360) (5,406) (1,545,766)

Net Cash Provided by Financing Activities 2,556,346 3,142,440 5,698,786

NET INCREASE IN CASH AND CASH
EQUIVALENTS (62,791) 71,771 8,980

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

CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 8,980 $ 71,771 $ 8,980

F-16

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

For the From Inception on
Year Ended October 20, 1999 Through
March 31, March 31,
2001 2000 2001

CASH PAID FOR:
Interest $ 115,611 $ 3,944 $ 119,555
Income taxes $ - $ - $ -

SCHEDULE OF NON-CASH FINANCING ACTIVITIES:

Common stock issued for services $ 1,104,704 $ 535,500 $ 1,640,204
Vehicles purchased under notes payable $ 65,549 $ - $ 65,549

F-17

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2001 and 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. General Information

The consolidated financial statements presented are those
of Cryocon, Inc. (Cryocon Colorado) and its wholly-owned
subsidiary, Cryocon, Inc. (Cryocon Utah). Collectively
they are referred to herein as "the Company".

Cryocon Colorado was incorporated on April 28, 1986 under
the laws of the State of Colorado, under the name
Champion Computer Rentals, Inc. Effective September 21,
1994, the name was changed to ISO Block Products USA,
Inc. As part of the reorganization with Cryocon Utah,
the name was changed to Cryocon, Inc. on September 21,
2000.

Cryocon Utah was organized under the laws of the State of
Utah on October 20, 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.

On August 16, 2000, Cryocon Colorado and Cryocon Utah
completed an Agreement and Plan of Reorganization whereby
Cryocon Colorado issued 44,000,000 shares (11,000,000
shares post-split) of its common stock is exchange for
all of the outstanding common stock of Cryocon Utah.

The acquisition was accounted for as a recapitalization
of Cryocon Utah because the shareholders of Cryocon Utah
controlled the Company after the acquisition. Therefore,
Cryocon Utah is treated at the acquiring entity. There
was no adjustment to the carrying value of the assets of
liabilities of Cryocon Utah in the exchange. Cryocon
Colorado is the acquiring entity for legal purposes and
Cryocon Utah is the acquiring 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.

b. Accounting Method

The Company's consolidated financial statements are
prepared using the accrual method of accounting. The
Company has elected a March 31 year end.

c. Basic Loss Per Share

The computation of basic loss per share of common stock
is based on the weighted average number of shares
outstanding during the period of the consolidated
financial statements. Common stock equivalents,
consisting of stock options, have not been included in
the calculation as their effect is antidilutive for the
periods presented.
F-18

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2001 and 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

c. Basic Loss Per Share (Continued)
For the Year Ended
March 31, 2001

Loss Shares Per Share
(Numerator) (Denominator) Amount

$(6,609,229) 12,538,082 $(0.53)

For the Period Ended
March 31, 2000
Loss Shares Per Share
(Numerator) (Denominator) Amount

$(1,069,931) 3,472,710 $(0.31)
d. Provision for Taxes

At March 31, 2001, the Company has net operating loss
carryforwards of approximately $7,600,000 that may be offset
against future taxable income through 2021. No tax benefit has
been reported in the consolidated financial statements because
the potential tax benefits of the net operating loss
carryforwards are offset by a valuation allowance of the same
amount.

The income tax benefit differs from the amount computed at
federal statutory rates of approximately 38% as follows:

For the Years Ended
March 31,
2001 2000
Income tax benefit at statutory rate $ 2,511,500 $ 406,500
Change in valuation allowance (2,511,500) (406,500)

$ - $ -

Deferred tax assets (liabilities) are comprised of the
following:
For the Years Ended
March 31,
2001 2000

Income tax benefit at statutory rate $ 2,918,000 $ 406,500
Change in valuation allowance (2,918,000) (406,500)
$ - $ -

F-19

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2001 and 2000

NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
d. Provision for Taxes (Continued)
Due to the change in ownership provisions of the Tax
Reform Act of 1986, net operating loss carryforwards for
Federal income tax reporting purposes are subject to
annual limitations. Should a change in ownership occur,
net operating loss carryforwards may be limited as to use
in future years.

e. Cash Equivalents

The Company considers all highly liquid investment with a
maturity of three months or less when purchased to be
cash equivalent.

f. Principles of Consolidation

The consolidated financial statements include those of
Cryocon, Inc. (Cryocon Colorado) and it's wholly-owned
subsidiary, Cryocon, Inc. (Cryocon Utah). All
significant intercompany accounts and transactions have
been eliminated.

g. Revenue Recognition

Revenue is recognized on an accrual basis when the product
is shipped.

h. Property and Equipment

Property and equipment are stated at cost with
depreciation and amortization computed on the straight-
line method. Property and equipment are depreciated over
the following estimated useful lives:
Years

Office furniture 5-10
Machinery and equipment 5-10
Building 39.5
Vehicles 5

i. Patents, Trademarks and Licenses

Net Book
Value
Term Cost Amortization 2001

Product rights 5 years $ 100,000 $ 26,666 $ 73,334
Customer lists, patents and trademarks 5 years 349,000 93,067 255,933
$ 449,000 $ 119,733 $329,267

F-20

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2001 and 2000

NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

i. Patents, Trademarks and Licenses (Continued)

Product rights, customer lists, patents and trademarks
have been capitalized and amortized over five years using
a straight line method. The total amortization of
production costs for the years ended March 31, 2001 and
2000 amounted to $89,800 and $29,933, respectively.

The Company evaluates the recoverability of intangibles
and reviews the amortization period on an annual basis.
Several factors are used to evaluate intangibles,
including, but not limited to, management's plans for
future operations, recent operating results and
projected, undiscounted cash flows.

j. Accounts Receivable

Accounts receivable are shown net of the allowance for
doubtful accounts of $11,000 as of March 31, 2001.

k. Equity Securities

Equity securities issued for services rendered have been
accounted for at the fair market value of the securities
on the date of issuance.

l. Production Costs

The Company classifies the costs of planning, designing
and establishing the technological feasibility of
development costs and charges those costs to expense when
incurred. Costs of maintenance and customer support are
charged to expense when costs are incurred.

m. Advertising

The Company follows the policy of charging the costs of
advertising to expense as incurred.

n. Estimates

The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts
of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
F-21

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2001 and 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

o. Change in Accounting Principles

The Company has adopted the provisions of FASB Statement
No. 138 "Accounting for Certain Derivative Instruments
and Hedging Activities, (an amendment of FASB Statement
No. 133.)" Because the Company had adopted the provisions
of FASB Statement No. 133, prior to June 15, 2000, this
statement is effective for all fiscal quarters beginning
after June 15, 2000. The adoption of this principle had
no material effect on the Company's consolidated
financial statements.

The Company has adopted the provisions of FASB Statement
No. 140 "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities (a
replacement of FASB Statement No. 125.)" This statement
provides accounting and reporting standard for transfers
and servicing of financial assets and extinguishments of
liabilities. Those standards are based on consistent
application of a financial-components approach that
focuses on control. Under that approach, the transfer of
financial assets, the Company recognized the financial
and servicing assets it controls and the liabilities it
has incurred, derecognizes financial assets when control
has been surrendered, and derecognizes liabilities when
extinguished. This statement provides consistent
standards for distinguishing transfers of financial
assets that are sales from transfers that are secured
borrowings. This statement is effective for transfers
and servicing of financial assets and extinguishments of
liabilities occurring after March 31, 2001. This
statement is effective for recognition and
reclassification of collateral and for disclosures
relating to securitization transactions and collateral
for fiscal years ending after December 15, 2000. The
adoption of this principle had no material effect on the
Company's consolidated financial statements.

The Company has adopted the provisions of FIN 44
"Accounting for Certain Transactions Involving Stock
Compensation (an interpretation of APB Opinion No. 25.)"
This interpretation is effective July 1, 2000. FIN 44
clarifies the application of Opinion No. 25 for only
certain issues. It does not address any issues related
to the application of the fair value method in Statement
No. 123. Among other issues, FIN 44 clarifies the
definition of employee for purposes of applying Opinion
25, the criteria for determining whether a plan qualifies
as a noncompensatory plan, the accounting consequence of
various modifications to the terms of a previously fixed
stock option or award, and accounting for an exchange of
stock compensation awards in a business combination. The
adoption of this principle had no material effect on the
Company's consolidated financial statements.

p. Stock Options
The company applies Accounting Principles Board ("APB")
25, "Accounting for Stock Issued to Employees," and
related interpretations in accounting for all stock
option plans. Under APB 25, compensation cost is
recognized for stock options granted to employees when
the option price is less than the market price of the
underlying common stock on the date of grant.
F-22

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2001 and 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
p. Stock Options (Continued)
FASB Statement 123, "Accounting for Stock-Based
Compensation" ("SFAS No. 123"), requires the Company to
provide proforma information regarding net income (loss)
and net income (loss) per share as if compensation costs
for the Company's stock option plans and other stock
awards had been determined in accordance with the fair
value based method prescribed in SFAS No. 123. The
Company estimates the fair value of each stock award at
the grant date by using the Black-Scholes options pricing
model using the following assumptions. The U.S. Treasury
rate for the period equal to the expected life of the
options was used as the risk-free interest rate. The
expected life of the options is one to five years. The
volatility used was 586.91% based upon the historical
price per share of shares sold. There are no expected
dividends.

Under the accounting provisions of SFAS 123, the Company's
net loss for the years ended March 31, 2001 and 2000 would have
changed from the reported net loss as follows:
2001 2000

Net loss:
As reported $ (6,609,229) $ (1,069,931)
Pro forma (13,780,222) (1,069,931)

Net loss per share:
As reported $ (0.53) $ (0.31)
Pro forma (1.10) (0.31)

Pursuant to SFAS 123, additional expense of $1,248,110
was recorded during the year ended March 31, 2001 as a
result of options and warrants granted below market value
to non-employees.

NOTE 2 -PROPERTY AND EQUIPMENT

Property and equipment as of March 31, 2001 are detailed
in the following summary:
Net Book
Accumulated Value
Cost Depreciation 2001

Office furniture and fixtures $ 233,711 $ 35,654 $ 198,057
Vehicles 29,945 5,490 24,455
Machinery and equipment 314,532 37,124 277,408
Building and land 1,816,324 65,454 1,750,870

Total $2,394,512 $143,722 $2,250,790

F-23

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2001 and 2000

NOTE 2 - PROPERTY AND EQUIPMENT (Continued)
Depreciation expense is computed principally on the
straight-line method in amounts sufficient to write off
the cost of depreciable assets over their estimated
useful lives. Depreciation expense for the years ended
March 31, 2001 and 2000 amounted to $139,199 and $12,366,
respectively.

NOTE 3 - NOTE PAYABLE - RELATED PARTY
Note payable - related party as of March 31, 2001 is
detailed in the following summary:

2001
Note payable to a shareholder and former CEO; with an
interest rate of 12%; unsecured; is due on demand. $ 191,964

Less: current portion (191,964)

Long-term portion $ -

NOTE 4 - LONG-TERM DEBT
Notes payable as of March 31, 2001 are detailed in the
following summary:
2001
Note payable to an individual; includes interest at 18%;
due April 8, 2001, secured by processor. $ 30,000

Notes payable to an individual, originally due on February
28, 2001, includes interest at 12%, secured by land, currently
in default (see note below). 100,000

Notes payable to an individual, due April 30, 2001, non-
interest bearing, unsecured. 100,000

Note payable to a company, originally due February
28, 2001, interest at 8.5% through February 28, 2001,
interest at 15% once in default, interest only payments
were due monthly through February 28, 2001, currently
in default, secured by building (see note below). 1,350,000

Note payable to an individual, includes interest at 8%,
payments of $3,117 due monthly, due December 31, 2006,
secured by intangible assets. 170,857

Total long -term debt 1,750,857
Less: current portion (1,603,891)
Long-term portion $ 146,966

F-24

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2001 and 2000

NOTE 4 - LONG-TERM DEBT (Continued)

The Company is currently working on negotiations to
restructure the long-term debt that is in default. These
negotiations on payment plans were not finalized as of
the date of our audit report. Accordingly, amounts in
default are being shown as current liabilities until the
agreements are finalized.

Maturities of long-term debt are summarized below:

Year Ended
March 31, Amount
2002 $1,603,891
2003 25,874
2004 28,021
2005 30,347
2006 32,866
2007 29,858

Total $ 1,750,857

NOTE 5 - ACCRUED EXPENSES

Accrued expenses as of March 31, 2001 are summarized as
follows:

Accrued wages and consulting $ 340,546
Payroll taxes 156,167
Accrued interest 81,501
Other 27,751

Total Accrued Expenses $ 605,965

F-25

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2001 and 2000

NOTE 6 - COMMON STOCK
The Company is authorized to issue 50,000,000 shares of
common stock with no par value. In November of 1999,
10,225,000 shares were issued as founders shares to
officers for the transfer of intangible assets and
services valued at predecessor cost of $-0-. The Company
issued an additional 775,000 shares of common stock
during the year ended March 31, 2000 for cash and
services at prices ranging from $0.50 to $1.00 per share.

On February 9, 2001, the Company entered into an
agreement with Citizen Asia Pacific, Ltd. to promote the
Company is Asia and other non-US markets. The Company
issued 300,000 shares of common stock valued at $675,000
for their consulting fees. On the same date, the Company
entered into an agreement with an individual to promote
the Company in Europe. The Company has agreed to issue
20,000 shares of common stock valued at $45,000 for the
consulting fee. The $45,000 fee has been included in
accrued expenses as of March 31, 2001, until the shares
are issued.

On January 12, 2001, the Company issued warrants to its
shareholders to purchase 3,714,585 shares of common
stock. The exercise price for the warrants is eighty
(80%) percent of the market price of the Company's common
stock on the day immediately prior to the day that the
shareholders elect to exercise the warrants, with a
minimum exercise price of $2.00 per share. The shares to
be issued pursuant to the exercise of the warrants are
not to be issuable until after the effective date of the
Company's registration statement originally filed
February 9, 2001, which includes the issuance of the
underlying shares of common stock. The warrants will be
valued pursuant to the Black-Scholes pricing model once
the measurement date is determined (the effective date of
the registration statement). No expense was recorded for
the warrants during the year ended March 31, 2001 since
the measurement date was determined to be subsequent to
year end.

On February 16, 2001, the Company entered into a written
agreement with Millennium Capital, granting Millennium
the right to purchase up to 1,500,000 shares of the
Company's outstanding common shares, at a price that is
eighty percent (80%) of the market price of the Company'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. The Company believes that the written offer to
sale 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 the Company's
knowledge, management of the investor is sophisticated in
financial investments and received a variety of financial
and other information about the Company in connection
with its due diligence. No public solicitation or
general advertising was done in connection with the
issuance of options. The Company did not pay any fees or
commissions in connection with this sale.

From February 16, 2001 to March 1, 2001, the Company sold
139,100 restricted shares of common stock to eight
individuals, five current shareholders and three new
investors at a price of $2.00 per share. The Company
received $278,200 in gross proceeds from the sale of the
restricted shares. The Company 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 the Company reports filed pursuant to the
Exchange Act, and were familiar with the Company
operations and financial condition. No public
solicitation or general advertising was done in
connection with this sale. The Company 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 sale of the shares after filing the
registration statement may have been made in violation of
section 5.
F-26

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2001 and 2000

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

2. The Company will pay the shareholders owning the 139,100
shares of 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.

3. Since the warrants were issued without payment of cash, or
any other consideration, the Company will pay the option holders,
which elect to accept the rescission offer, $0.005 per warrant.
The Company's aggregate liability for the rescission offer of the
warrants is $6,191.

4. The potential liability of this rescission offer is
approximately $284,391 as of March 31, 2001. This amount has
been accrued as "stock deposits" until the Company has determined
whether or not they will be required to repay the shareholders.
If the shareholders do not accept the rescission offer, the
Company will issue the corresponding shares and record the
original funds received as equity.

The rescission offer will expire on the later of (1)
August 31, 2001 (30 days after the Effective Date of the
Registration), or 30 days after the date each offeree
received the Prospectus (the "Expiration Date"). The
rescission offer does not apply to any of the Company's
other securities.

The Company 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, the Company will attempt to
arrange financing or underwriting of the rescission or
purchase back the subject securities with operating
capital. Assuming the rejection of the rescission offer
by Millennium Capital, the Company is confident that it
will have sufficient capital necessary to fund the
rescission offer.

While the Company's management believes that it will be
able to arrange for financing or underwriting of the
rescission offer, the Company 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.

During the year ended March 31, 2001, the Company issued
68,400 shares of common stock upon exercise of stock
options at $0.50 per share. The Company also issued
164,658 shares of common stock during the year ended
March 31, 2001 for services rendered valued at prices
ranging from $2.25 to $5.375 per share

The Company entered into certain Securities Purchase
Agreements and convertible debentures with Paragon
Venture Capital Fund and issued a total of 6,549,055
shares of common stock at prices ranging from $0.01 to
$2.00 per share for total proceeds of $4,070,473. The
Company recorded additional interest expense of $514,050
for the year ended March 31, 2001 pursuant to EITF 98-5
as a result of the convertible debentures issued below
the market value of the shares on the date the agreements
were entered into.

F-27

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2001 and 2000

NOTE 7 - STOCK OPTIONS AND WARRANTS

Stock Options

A summary of the status of the Company's stock options as
of March 31, 2001 and changes during the year ending
March 31, 2001 are presented below:

Weighted Weighted
Average Average
Exercise Grant Date
Options Price Fair Value

Outstanding, March 31, 2000 375,000 $ 0.50 $ 0.00
Granted 1,880,817 1.19 3.12
Expired/Canceled - - -
Exercised (68,400) (0.50) (0.00)

Outstanding, March 31, 2001 2,187,417 $ 1.11 $ 2.77

Exercisable, March 31, 2001 1,379,417 $ 0.95 $ 2.70

The total amount of outstanding stock options at March
31, 2001 is summarized as follows:

Shares Price Expiration
306,600 $0.50 December 31, 2001
30,000 $1.00 October 6, 2003
30,000 $1.00 December 15, 2003
250,000 $1.50 November 27, 2001
250,000 $1.50 October 4, 2001
41,696 $1.50 March 21, 2002
8,959 $1.50 September 11, 2001
50,000 Note 1(b) Note 1(a)
37,503 $1.50 September 17, 2001
60,000 Note 1(b) Note 1(a)
250,000 Note 1(b) Note 1(a)
250,000 Note 1(b) Note 1(a)
30,000 $1.00 Note 1(a)
250,000 Note 1(b) Note 1(a)
250,000 $1.50 December 31, 2005
92,659 $1.50 January 1, 2004
2,187,417
F-28

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2001 and 2000

NOTE 7 - STOCK OPTIONS AND WARRANTS (Continued)

Stock Options (Continued)

Note 1(a):These options expire 180 days
following termination of employment with the
Company.
Note 1(b):The exercise price for these options
is $1.50 per share for the first vesting and 80%
of the average market value for the month of
December preceding the additional vesting dates.

Stock Warrants

A summary of the status of the Company's stock warrants
as of March 31, 2001 and changes during the year ended
March 31, 2001 are presented below:

Weighted Weighted
Average Average
Exercise Grant Date
Warrants Price Fair Value

Outstanding, March 31, 2000 - $ - $ -
Granted 5,214,585 0.03 0.41
Expired/canceled - - -
Exercised - - -

Outstanding, March 31, 2001 5,214,585 $ 0.03 $ 0.41

Exercisable, March 31, 2001 1,500,000 $ 0.10 $ 1.41

As discussed in Note 6, the Company issued warrants to
its shareholders to purchase 3,714,585 shares of common
stock. As of March 31, 2001, the measurement date on the
warrants was not established pending the effective date
of the registration statement, registering the underlying
shares to be issued. Accordingly, at March 31, 2001,
there was no exercise price or weighted average grant
date fair value. An additional 1,500,000 warrants were
granted to a consultant and an employee during the year
ended March 31, 2001, exercisable at $0.10 per share and
expire on December 31, 2005.

F-29

CRYOCON, INC. AND SUBSIDIARY
(Formerly ISO Block Products USA, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2001 and 2000

NOTE 8 - 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 (see Note 6). 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 gong 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.

NOTE 9 - SUBSEQUENT EVENTS

On March 30, 2001, the Company entered into an agreement
with Tool, Inc., a Utah Corporation, to exchange all of
the outstanding shares of Tool, 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
Tool, Inc.. Tool, 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.

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.

F-30

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 SEPTEMBER 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 September 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 July __, 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.
81

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.
82

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:
83

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.

B-6

(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 itslocation 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.

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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 anywritten 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
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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.

(c)(Deleted by amendment, P.L.1985, c.405.)

(d)(Deleted by amendment, P.L.1985, c.405.)

(e)The security is registered under this act; or

B-32

(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 thedeath 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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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,

B-39

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 ass etslisted
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.
B-48

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.
B-49

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 consider ation 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 perannum 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.

B-50

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.

B-51

(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.

B-52

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 9,500.00

Fees and Expenses for Qualification 5,500.00
under State Securities Laws

Transfer Agent Fees and Expenses 10,020.00

Miscellaneous 750.00

Total 54,466.00

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

160

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.

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
$1,4,000. 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,
161

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 752,118 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.

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
162

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
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.

163

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
126,000 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 $252,000 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 13,100
restricted shares of common stock to three new investors at the
price of $2.00 per share. Cryocon received $16,200 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 3, 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.

On May 3, 2001, a Cryocon shareholder elected to surrender
his 10,000 shares to Cryocon in exchange for a 6 month note in
the principal amount of $20,000. The note carries an interest
rate of 12% per annum and is secured by stock pledged by an
affiliate of Cryocon. 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 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.

164

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 $1.50 per
share 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 4(2) of the Securities
Act. Mr. Kammeyer has access to Cryocon's reports filed pursuant
to the Exchange

165

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.

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.

166

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) Option Issuance to Bourns, Inc.

4.9(1) Warrant Issuance to J. Brian Morrison

167

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

4.12 Addendum to Common Stock Purchase Agreement
Millennium Capital Partners, LLC.

5.0 Opinion re Legality

5.1 and 23.01 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.

10.0 Material Contracts

10.1 XTool, Inc. Acquisition Contract (Amended)

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

168

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.

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 SB-2 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: July 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 J. Brain
Morrison, 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 July 18, 2001
J. BRIAN MORRISON

____/s/__________ CHIEF FINANCIAL OFFICER July 18, 2001
VAUGHN P. GRIGGS

___/s/__________ DIRECTOR July 18, 2001
LYNDELL PARKS
169

____/s/__________ DIRECTOR July 18, 2001
STERLING REDFERN

___/s/___________ DIRECTOR/SECRETARY July 18, 2001
JAMES S. CUNDIFF

__/s/___________ DIRECTOR July 18, 2001
RICHARD L. LINDSTROM
170