<PAGE>
<PAGE>
                                    FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

              [x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended August 31, 1996        Commission file number 0-14996
-----------------------------------------        ------------------------------

                             CRYENCO SCIENCES, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                  Delaware                               52-1471630
       ---------------------------------             -------------------
         (State or other jurisdiction                 (I.R.S. Employer
       of incorporation or organization)             Identification No.)

3811 Joliet Street, Denver, CO                                       80239
--------------------------------------------------------------------------------
Address of principal executive offices                            (Zip Code)

Registrant's telephone number, including area code:  303-371-6332
                                                     ------------

Securities registered pursuant to Section 12(b) of the Act:

                                                   Name of each exchange on
        Title of each class                             which registered
        -------------------                        -------------------------
        None                                       None


Securities  registered  pursuant  to Section  12(g) of the  Act:  Class A Common
Stock, $.01 par value

        Indicate by check mark whether the  registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the  preceding  12 months,  and (2) has been  subject to such filing
requirements for the past 90 days. Yes X   No ____
                                      ---
        Indicate by check mark if disclosure of  delinquent  filers  pursuant to
item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K [X]

        The  aggregate  market  value at  November  25,  1996 of  shares  of the
registrant's  Common  Stock,  $.01  par  value,  held by  non-affiliates  of the
registrant was approximately $13,334,638. On such date, the closing price of the
Common Stock on the  NASDAQ-National  Market System was $2.00 per share.  Solely
for the purposes of this  calculation,  shares held by directors  and  executive
officers of the  registrant  have been excluded.  Such  exclusion  should not be
deemed a determination  or an admission by the registrant that such  individuals
are, in fact, affiliates of the registrant.

        Indicate the number of shares  outstanding  of each of the  registrant's
classes of common  stock,  as of the latest  practicable  date:  At November 25,
1996, there were outstanding  6,996,997 shares of Class A Common Stock, $.01 par
value.

Documents  Incorporated  by  Reference:  Certain  portions  of the  registrant's
definitive proxy statement to be filed not later than December 29, 1996 pursuant
to Regulation 14A are  incorporated  by reference in Items 10 through 13 of Part
III of this Annual Report on Form 10-K.




<PAGE>
<PAGE>




                             CRYENCO SCIENCES, INC.

                               INDEX TO FORM 10-K

<TABLE>
<CAPTION>
Item Number                                                                           Page
-----------                                                                           ----
                                            PART I

<S>            <C>                                                                    <C>
Item 1.        Business                                                                 2
Item 2.        Properties                                                              10
Item 3.        Legal Proceedings                                                       10
Item 4.        Submission of Matters to a Vote of Security Holders                     10


                                           PART II

Item 5.        Market for Registrant's Common Equity and
                 Related Stockholder Matters                                           12
Item 6.        Selected Consolidated Financial Data                                    13
Item 7.        Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                                   14
Item 8.        Financial Statements and Supplementary Data                             19
Item 9.        Changes in and Disagreements with Accountants on
                 Accounting and Financial Disclosure                                   19

                                           PART III

Item 10.       Directors and Executive Officers of the Registrant                      20
Item 11.       Executive Compensation                                                  20
Item 12.       Security Ownership of Certain Beneficial Owners and
                 Management                                                            20
Item 13.       Certain Relationships and Related Transactions                          20


                                           PART IV

Item 14.       Exhibits, Financial Statement Schedules, and Reports on Form 8-K        21

Signatures                                                                             31
</TABLE>




<PAGE>
<PAGE>




                                            PART I

ITEM 1.    BUSINESS.

GENERAL

       Cryenco  Sciences,  Inc., its  subsidiaries and their  predecessors  (the
"Company") have  manufactured  vacuum jacketed  containment  systems and related
products  since  1978.   Vacuum  jacketing   provides  a  highly  efficient  and
cost-effective insulation to prevent heat transfer and is therefore critical for
many applications  that are  temperature-sensitive.  The Company's  products are
used in such applications as magnetic resonance imaging ("MRI"),  industrial gas
transportation  and  storage,   military   cryogenics,   liquefied  natural  gas
transportation,    storage   and   dispensing,    vacuum   jacketed   intermodal
transportation, and other applications requiring both custom and standard design
and fabrication.

       The Company  has  significant  expertise  in the field of  cryogenics,  a
branch of physics that deals with the  production  and effects of extremely cold
temperatures  on the properties of matter.  To date, most  applications  for the
Company's  products have required the storing and handling of cryogenic liquids.
Cryogenic liquids are typically atmospheric gases in the liquid state which have
extremely low boiling points, such as liquid oxygen (-297 degrees Fahrenheit; 90
Kelvin), liquid nitrogen (-320 degrees Fahrenheit;  77 Kelvin) and liquid helium
(-452  degrees  Fahrenheit;  4 Kelvin),  and density  ratios  reaching  700 to 1
compared  to  their  atmospheric  state.   Cryogenic  liquids  are  produced  by
compressing  and cooling  gases until they reach the liquid  state.  As liquids,
they can be stored and transported with weight and volume  advantages of five to
ten  times  compared  with  compressed  gases.  The  Company's  vacuum  jacketed
containers  minimize  evaporation  of these  cryogenic  liquids and preserve low
temperature.

       The Company's  expansion strategy is to extend vacuum jacketed technology
into new areas,  including high performance  insulated  containers which enhance
energy  conservation  and  environmental  protection,  and to take a  leadership
position in the introduction of products to advance the use of liquefied natural
gas ("LNG") and compressed  natural gas ("CNG") as  alternatives to other fuels.
Management  believes  that  current  international  efforts to  conserve  energy
together with growing concerns for  environmental  issues provide  opportunities
for the Company to broaden the  applications for its existing  technology,  both
within and outside of its  historical  focus.  One such  opportunity is a direct
application  of  the  Company's  current  manufacturing   expertise  to  develop
alternative fuel powered  transportation  systems including  dispensing  systems
using LNG and CNG.  Another  application is the use of LNG for heat and power in
areas which are not served by gas pipelines. LNG is less costly than propane and
is a much more  environmentally  friendly  fuel.  The  Company is  working  with
various bus and engine  manufacturers,  transit  authorities  and private  fleet
operators to supply LNG fuel tanks and systems.  See  "Products -- Liquefied and
Compressed Natural Gas Products."


                                        2



<PAGE>
<PAGE>



PRODUCTS

       The Company  offers a wide range of custom and standard  vacuum  systems,
components and  accessories to meet the needs and  requirements  of customers in
the medical, industrial gas, transportation, chemical, pharmaceutical, food, and
aerospace   and  defense   industries,   as  well  as   national   laboratories,
semiconductor  manufacturers  and the United  States  Government.  The Company's
products  generally  include  an inner  vessel  that is  surrounded  by a jacket
casing.  An annular  space is created  between the vessel and the jacket  casing
into which  insulation  such as  aluminum  foil,  glass paper or  fiberglass  is
installed and a vacuum is created.  This insulated system is designed to prevent
heat gain or, in some cases,  to promote heat  retention.  Both the inner vessel
and  jacket  casing  are  generally  made of carbon  steel,  stainless  steel or
aluminum.  While the Company's products differ  substantially in their use, they
all require close tolerance forming and sophisticated welding of stainless steel
and aluminum to create microscopically leak-tight systems.

           MRI CRYOSTAT COMPONENTS
       MRI is generally regarded as a significant advance in medical diagnostics
and has been found to offer  benefits  not  provided  by other  forms of medical
examination.  From a clinical point of view, MRI may also be considered superior
to other available techniques in providing images of the central nervous system,
particularly in the brain.  Unlike x-rays and certain other imaging  techniques,
such as computerized axial tomography, MRI is a non-invasive procedure where the
patient is not exposed to radiation or required to ingest any liquids or receive
injections  of any type.  Although MRI is a relatively  expensive  technology to
purchase and to operate,  its growth has been substantial.  MRI use has replaced
or  complemented  much of the imaging done by other  techniques and can decrease
the number of necessary  tasks performed on a patient,  thereby  eliminating the
need for many  exploratory  procedures  and adding  significantly  to diagnostic
knowledge.

       The basis of the MRI  technique  is the  magnetic  properties  of certain
nuclei of the human body which can be  detected,  measured  and  converted  into
images for analysis.  MRI equipment uses high-strength  magnetic fields, applied
radio waves and  high-speed  computers to obtain  cross-sectional  images of the
body.  The major  components  of the MRI  assembly  are a series  of  concentric
thermal  shields and a supercooled  magnet immersed in a liquid helium vessel (a
"cryostat") that maintains a constant,  extremely low temperature  (-452 degrees
Fahrenheit;  4 Kelvin) to achieve  superconductivity.  The Company  manufactures
large cryostats,  various  cryogenic  interfaces,  electrical  feed-throughs and
various other MRI components,  that are used to transfer power and/or  cryogenic
fluids from the  exterior of the MRI unit to the various  layers of the cryostat
and superconducting magnet.

       The Company  currently sells all of its MRI cryostats to General Electric
Company  ("GE"),  and is the  exclusive  supplier of GE's  cryostats.  GE is the
leading worldwide manufacturer of MRI equipment.  The Company will soon complete
the second year of its current  two-year  contract with GE for the production of
MRI cryostats, its tenth consecutive year of this work for GE. A new contract of
two years is currently  being  negotiated  with GE. It is  anticipated  that the
contract will allow for price adjustments based upon the cost of material, which
can be modified if GE changes specifications and contains options under which GE
may  adjust  the  number  of units  which  it will  purchase.  Revenue  from MRI
cryostats and  components  was 35%, 36% and 50% of the  Company's  total revenue
during the fiscal years




                                        3



<PAGE>
<PAGE>



ended August 31, 1996,  1995 and 1994,  respectively.  The Company's  backlog of
purchase  orders with GE was  approximately  $6.0  million  and $4.3  million at
September 30, 1996 and September 30, 1995, respectively. It is expected that all
of the Company's  current backlog for MRI cryostat  components will be filled by
August 31, 1997.

       TRANSPORTATION AND STORAGE EQUIPMENT
       Cryogenic Transport Trailers
       Cryogenic  transport  trailers are designed to hold a variety of gases in
liquid or gaseous state and are capable of storing and  transporting  such gases
without substantial evaporation,  limiting the loss to less than one percent per
day. Because of these characteristics, cryogenic liquids can be transported over
relatively long distances with marginal loss.

       The  Company  designs and  produces  transport  trailers to the  specific
requirement  of its  customers.  The primary  purchasers of cryogenic  transport
trailers are  industrial  gas  companies,  independent  carriers  which  service
producers and users of these gases,  and independent  carriers  transporting LNG
for use as an alternative  fuel.  During the past year, the increased demand for
new  cryogenic  transport  trailers,  combined  with the  Company's  success  in
obtaining  a high  percentage  of trailer  orders  placed,  has  resulted  in an
increased level of trailer  production by the Company.  The Company also repairs
transport  trailers  built by others  and  provides  such  services  for its own
trailers.

       Revenue  from  cryogenic  transport  trailers was 42%, 33% and 17% of the
Company's  total  revenue for the fiscal years ended  August 31, 1996,  1995 and
1994,  respectively.  Sales of cryogenic  transport  trailers to Jack B. Kelley,
Inc. and affiliated companies accounted for 21%, 12% and 6% of total revenue for
the  fiscal  years  ended  August 31,  1996,  1995 and 1994,  respectively.  The
Company's  backlog of cryogenic  transport  trailers at  September  30, 1996 and
September  30, 1995 was $2.7  million  and $10.3  million,  respectively.  It is
expected that the Company's current backlog of cryogenic transport trailers will
be filled by August 31, 1997.

       TVAC(R) Intermodal Containers
       Intermodal  containers,  which  are used to store and  transport  various
items worldwide,  are generally  uniform in size and are  transferable  from one
mode of transportation or carrier to another. Management believes that there are
in excess of 70,000 intermodal tank containers worldwide,  many of which rely on
mechanical  refrigeration  or  heating  to  maintain  the  temperature  of their
contents.

       The  Company  has  designed  a number of models of its  proprietary  TVAC
intermodal tank container,  which fall into two categories.  The first category,
which is used in the chemical, food and pharmaceutical  industries,  enables the
transportation  of up to 5,500  gallons  of  temperature  sensitive  hot or cold
liquids by truck, rail and ship without mechanical refrigeration or heating. The
Company has been producing these products since 1993 for applications  involving
the  transportation  of various  temperature-sensitive  products,  including hot
liquid  chocolate,  glacial  acrylic acid and chilled fruit  juices.  The second
category, for the transportation and storage of cryogenic liquids, was developed
in 1994,  and also  transports up to 5,500 gallons of these liquids  without the
need for mechanical refrigeration. As of




                                        4



<PAGE>
<PAGE>



October  31,  1996,  over  175  TVACs  have  been  produced  and are in  service
transporting  food and chemical  products as well as various  cryogenic  liquids
including liquid argon and LNG.

       Revenue from TVACs  accounted for 13%, 21% and 13% of the Company's total
revenue for the fiscal years ended August 31, 1996, 1995 and 1994, respectively.
Sales of TVACs to Jack B. Kelley,  Inc. and affiliated  companies  accounted for
9%,  20% and 8% of the  Company's  total  revenue  during  the same  years.  The
Company's backlog of TVACs at September 30, 1996 and September 30, 1995 was $7.3
million  and $4.8  million,  respectively.  It is  expected  that the  Company's
current backlog of TVACs will be filled by August 31, 1997.

       Cryogenic Storage Tanks
       Large  cryogenic  storage tanks ("Big Tanks") are used for the storage of
liquefied  atmospheric gases and LNG at sites where a permanent storage facility
is  desired.  The  Company  has  designed  a series of  shop-built  Big Tanks to
accommodate  storage of cryogenic  liquids from 15,000  gallons  through  60,000
gallons. These tanks are an alternative to fieldbuilt tanks, and often provide a
more cost effective storage solution for customers. The Company made its initial
deliveries of Big Tanks in the fiscal year ended August 31, 1996.

       LIQUEFIED AND COMPRESSED NATURAL GAS PRODUCTS
       The  Company  believes  that  LNG,  used  as an  alternative  fuel in the
transportation  sector, offers a significant  opportunity for application of the
Company's  cryogenic  equipment and  technology.  Natural gas burns more cleanly
than gasoline or diesel fuel, and advanced natural gas-fueled  vehicles have the
potential to reduce carbon  monoxide  emissions by about 90% and carbon  dioxide
emissions by about 25% compared  with most  gasoline  powered  vehicles.  Recent
legislation, including the Clean Air Act of 1990, has prompted many governmental
agencies  to  consider  and  require  conversion  of  municipal  vehicles to the
utilization  of  natural  gas.  In  addition,  the cost of LNG in many areas has
decreased in the past year,  primarily due to the increasing supply of LNG. This
has resulted,  in some cases, in an economic  advantage over other fuels in both
vehicle and industrial applications. Natural gas may be used in compressed (CNG)
or liquid  (LNG)  states,  and the Company  believes  that LNG offers a superior
alternative   to  CNG  for  certain   transportation   applications,   providing
substantially   longer  range  before   refueling  is  required  and   requiring
significantly  less  vehicle  tank space and weight.  Additionally,  the Company
believes that  compressed  natural gas made from liquefied  natural gas ("LCNG")
offers some distinct  advantages as an alternative  fuel compared to traditional
CNG. Currently,  LNG production requires  liquefaction plants to convert the gas
into a liquid state and specialized  cryogenic containers to store and transport
the liquid gas to fueling stations.




                                        5



<PAGE>
<PAGE>



       The Company continues to develop proprietary products for the LNG and CNG
transportation  market.  Among the  products  developed  to date are LNG vehicle
tanks for heavy vehicle applications, portable dispensing equipment for both LNG
and  LCNG,  fueling  facilities  utilizing  either  a TVAC or a large  permanent
storage tank and dispensing  equipment  which looks and operates like a gasoline
fuel station,  a mobile refueling facility for dispensing both LNG and LCNG, and
fuel  gas  modules  for  converting  LNG to  pipeline  gas  for  industrial  and
commercial  applications.  Management  believes that the  Company's  proprietary
products  developed  for this market will be  increasingly  well received as the
supply of LNG becomes more widespread,  and as the advantages of LNG and LCNG as
alternative fuels,  including the economic advantages in an increasing number of
cases, become apparent to the potential customers.

       The  Company's  joint  venture  with Jack B.  Kelley,  Inc.,  Applied LNG
Technologies  USA,  LLC  ("ALT-USA")  has  been  active  throughout  the year in
identifying opportunities for the use of LNG as an alternative fuel source, both
for vehicle applications and for heat and power applications in areas not served
by gas  pipelines.  The vehicle  opportunities  have recently been limited by an
increased  excise tax burden imposed by the Internal Revenue Service (the "IRS")
for highway use of LNG as a motor fuel.

       On  August 7, 1995 the IRS  ruled  that LNG is not a  gaseous  fuel,  and
should be taxed as a liquid motor fuel. The result of this ruling is to impose a
much higher effective rate of tax on LNG, one that is 25.1 cents higher than CNG
and 7.1 cents higher than diesel fuel. This tax penalty  compared to diesel fuel
has  virtually  halted the  conversion of medium and large trucks from diesel to
LNG.  A number of bills have been  introduced  in  Congress  to  eliminate  this
disparity,  and this issue is currently  working its way through the legislative
process.  While there appears to be  substantial  support for a reduction of the
tax on LNG to a rate  equaling the tax on CNG, the outcome of the effort and the
timing are in question.

       The Company continues to seek international  sales agents,  licensees and
joint venture  partners,  and continues to pursue the sale of LNG fuel tanks and
systems to a number of potential  domestic  customers,  including  municipal and
private fleets.

       TADOPTR
       The Company has obtained  exclusive rights to license technology from the
Los Alamos National  Laboratory which management believes may enable the Company
to produce a low cost, low maintenance,  reliable cryogenic refrigerator,  known
as  "TADOPTR",  to be used as a liquefier to produce LNG and CNG in a variety of
locations  and  applications.  The TADOPTR  refrigerator's  maximum  theoretical
efficiency  occurs at approximately  110 Kelvin (-260 degrees  Fahrenheit),  the
liquefication temperature for natural gas.




                                        6



<PAGE>
<PAGE>



       In June 1994,  the Company  received  $780,000 in funding  from a limited
partnership  for the  purpose of  developing  a 500 gallon per day  TADOPTR.  In
return for the partnership's investment, the Company issued warrants to purchase
200,000  shares of the  Company's  Common Stock at $3.00 per share,  and entered
into a Royalty Rights and Technology  Development Agreement with the partnership
pursuant to which royalties will be paid to the partnership on net revenues from
the sale of TADOPTRs.  The  royalties  are payable for a period of 20 years from
the  execution of the  agreement.  The Company  spent the funds  provided by the
partnership for the development of a 500 gallon per day TADOPTR during the years
ended August 31, 1995 and 1994.  Should the  development  under this contract be
successful,  management believes that there are numerous potential  applications
for this technology, including use at fueling stations for LNG and CNG vehicles,
use for  liquefaction  of natural gas at remote well  locations and use in other
commercial liquefaction applications.

       In May, 1995, the Company received a contract from BDM-Oklahoma,  Inc., a
program manager for the U.S. Department of Energy administering  funding for LNG
and CNG  research,  in the amount of  $452,500  for further  development  of and
additional  enhancements  to the TADOPTR  liquefier  and LNG  dispenser  system.
During the year ended August 31, 1996, the Company billed approximately $120,000
against this contract.

       In October 1995, the Company  successfully  liquefied a stream of natural
gas,  utilizing  a  compressor  to power the OPTR  phase of the  TADOPTR,  which
demonstrates  that the OPTR  technology can be scaled to a large size. In August
1996, the Company successfully operated a TAD power source,  designed to operate
a 500 gallon per day TADOPTR,  which  demonstrates  that the TAD  technology can
also be scaled to a large size.  Currently  the Company is working to  integrate
the TAD and the OPTR hardware as well as developing related liquefier  products.
Considerable additional development is required to transition these developments
to a refrigerator that will produce LNG efficiently and economically.

MANUFACTURING
       The Company's reputation as an innovative and effective problem solver is
supported  by  its  engineering   expertise  and   manufacturing   capabilities.
Customized  products  often result from extended  efforts  between the Company's
engineers and the customers' design staff.

       The Company meets stringent  industrial and  governmental  specifications
throughout the entire design and manufacturing process and produces fabrications
in  accordance  with the  requirements  of the  American  Society of  Mechanical
Engineers  ("ASME")  and the Boiler and  Pressure  Container  Vessel Code ("ASME
Code").   The  ASME  Code  sets  forth   generally   recognized   standards  for
manufacturing,  inspection and testing of containers for  pressurized  gases and
liquids. The ASME, through the National Board of Pressure Vessel Inspectors, has
examined  and approved the  Company's  quality  control  system.  This  approval
permits the Company to stamp its pressure  containers  with a symbol  indicating
that the equipment was built according to the  requirements of the ASME Code. In
addition,   many  of  the  Company's  products  are  designed  to  meet  various
international   standards  for  containers  used  for   transporting   regulated
materials,  such  as the  International  Maritime  Organization  standards.  The
Company  believes that, in many cases,  its ability to meet such standards gives
it a competitive advantage.




                                        7



<PAGE>
<PAGE>



       To the extent that the Company's products transport  cryogenic liquids in
interstate  commerce,  they are also subject to  regulation by the United States
Department of Transportation.  These regulations provide safety inspections that
vary according to the method of  transportation  and the nature of the substance
being transported.  Also, many states and localities impose safety  requirements
which are independent of federal requirements.

       The Company's  quality control  procedures  incorporate  many "inspection
points." Such  inspection  points require review of the quality of raw materials
used by the Company,  review of the engineering design,  inspections  throughout
the  manufacturing  process and  postmanufacture  tests to insure the structural
integrity of the container,  its durability and its  impermeability to leaks. At
each inspection point, the quality control review is conducted both by employees
of the Company and by representatives of an independent agency acceptable to the
ASME.  The  frequency  of  inspections  varies  according  to the  nature of the
manufacturing projects underway at any given time.

       The  Company  generally   warrants  its  manufactured   products  against
defective  materials and  workmanship  for a period of one year from the date of
delivery of the product.

       The  principal  raw  materials  and  supplies  used by the Company in its
manufacturing  processes are stainless steel,  carbon steel,  aluminum,  valves,
pressure  gauges,  liquid level  detectors  and  insulation  materials,  such as
aluminum foil.  These  materials are generally  available at competitive  prices
from many sources.

SALES AND MARKETING
       The Company  currently  has five sales  account  executives.  These sales
account   executives  are  responsible   for  specific   customer  and  industry
relationships.  To facilitate its sales and marketing efforts, the Company has a
sales  administration   department  consisting  of  a  sales  manager,  a  sales
administrator, an order entry clerk and a contract administrator, and agreements
with marketing  representatives  to cover parts of the United States and Europe.
In addition,  the Company  utilizes a team  selling  effort which draws upon the
expertise of senior  management from areas such as  engineering,  manufacturing,
operations and finance. To supplement its direct sales efforts, the Company also
has an  indirect  sales  and  marketing  network,  utilizing  the  personnel  of
customers and affiliates,  including Chemical Leaman Tank Lines, Jack B. Kelley,
Inc.  and  ALT-USA.  The  Company  believes  that  its  team  approach  and  the
utilization  of  outside   resources   enables  it  to  address  its  customers'
requirements  more effectively and provide a more complete  understanding of the
costs  involved  in a  particular  project,  allowing  the  Company  to bid more
competitively  and  maximize  the  opportunity  for  longer-term,   high  volume
contracts.




                                        8



<PAGE>
<PAGE>



CUSTOMERS
       Over the past several  years,  the Company has  developed  close  working
relationships with several significant customers,  including GE, Jack B. Kelley,
Inc.,  Chemical Leaman Tank Lines, MG Industries,  BOC Gases, Air Products,  the
Department  of Defense  (the "DOD") and others.  The  Company's  recent focus on
broadening its product lines is reducing customer  concentration to levels where
the loss of a single  contract or  customer,  other than GE and Jack B.  Kelley,
Inc.,  would  not  have a  material  adverse  effect  on the  Company's  overall
business. GE and Jack B. Kelley, Inc. have accounted for substantial percentages
of the Company's  revenues during the past three fiscal years.  See "Products --
MRI Cryostat Components" and "Products -- Transportation Equipment." The Company
anticipates  that its  dependence on these  customers  will be reduced in future
years.

       Historically,  the  Company's  products  were sold  pursuant  to customer
orders which called for delivery on a relatively short term basis. Over the past
several years, the Company has developed  proprietary products which has enabled
it to enter into longer term contracts with certain of its major customers. Such
contracts  contain  product  specifications,  numbers of units,  and pricing per
unit,  subject in some cases to adjustment  for changes in cost of materials and
product  specifications.  During the term of these contracts,  the customer will
issue  specific   purchase  orders  against  which  the  Company  will  commence
production.  These  orders are counted in the backlog when  purchase  orders are
received.

       At September 30, 1996,  the Company had a total backlog of $18.8 million,
compared  to a backlog of $21.2  million at  September  30,  1995.  The  Company
estimates that all of the current backlog will be filled by August 31, 1997. The
Company's backlog fluctuates depending on placement of large orders from certain
customers.

COMPETITION
       The Company has  competitors  in each of its  product  lines.  Certain of
these competitors are significantly  larger and have greater financial resources
than the Company. The Company believes that the principal competitive factors in
the markets in which it competes  are product  expertise,  quality,  service and
price.  The Company  believes that its products have achieved market  acceptance
due to the  Company's  ability to meet  stringent  industrial  and  governmental
specifications, innovative design and attention to customer service. The Company
has  achieved  significant  market  position  in the  fields  of MRI  cryostats,
cryogenic truck trailers,  cryogenic  intermodal tank containers and LNG fueling
systems,  and has  historically  been one of the largest  suppliers of cryogenic
tankage to the DOD.

EMPLOYEES
       At September 30, 1996, the Company employed 210 persons, including 167 in
manufacturing, 5 in quality control, 12 in administration, 11 in sales and 15 in
engineering.

       The Company depends on many skilled employees,  and the Company's success
is  affected  by its ability to retain  such  employees.  None of the  Company's
employees is represented by a union or other  collective  bargaining  group, and
management  believes  that its  relationships  with its  employees are generally
good.




                                        9



<PAGE>
<PAGE>



ITEM 2.    PROPERTIES.

       The Company  leases 14,700 square feet of office space and 105,100 square
feet of  manufacturing  space for its  primary  offices  and plant under a lease
expiring in 2006 at 3811 Joliet Street, Denver, Colorado. Lease expense is $3.75
per square foot per year,  to be increased  every two years at an annual rate of
between 3% and 5%,  depending  upon the level of  inflation.  Additionally,  the
Company is  required to pay all  maintenance  for the  premises  and the cost of
insurance and property taxes.

       The Company also leases  approximately 13,700 square feet of office space
and 91,300 square feet of manufacturing  space at 5995 North Washington  Street,
Denver,  Colorado  under a lease expiring in 1999. The facility was remodeled in
1989 and substantial leasehold  improvements were made to the manufacturing area
to facilitate  production and improve  efficiencies.  Lease expense is $3.25 per
square foot per year and the Company is required to pay all taxes, insurance and
maintenance  for the  premises.  The  Company  has a right of first  refusal  to
purchase the facility.

       The Company believes that its facilities are generally in good repair and
provide  suitable  and  adequate  capacity  for its  present  needs.  Additional
facilities may be required for future expansion of operations.

ITEM 3.    LEGAL PROCEEDINGS.

       Not Applicable

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

       Not Applicable




                                       10



<PAGE>
<PAGE>



EXECUTIVE OFFICERS OF THE COMPANY

       The  following  table  sets  forth  certain  information  concerning  the
executive officers of the Company.

<TABLE>
<CAPTION>

                                                               Positions and offices held
        Name                        Age                        during the past fiscal year
        ----                        ---                        ---------------------------

<S>                                 <C>            <C>
Alfred Schechter................     76            Chairman of the Board, Chief Executive
                                                   Officer  and   President  of  the  Company;
                                                   Chairman  of  the  Board,  Chief  Executive
                                                   Officer and President of Cryenco, Inc.

James A. Raabe..................     44            Vice President, Treasurer, Chief Financial
                                                   Officer  and   Secretary  of  the  Company;
                                                   Vice President,  Treasurer, Chief Financial
                                                   Officer and Secretary of Cryenco, Inc.

</TABLE>



       Each  executive  officer serves at the pleasure of the Board of Directors
and until his or her successor is duly elected and qualifies.

        ALFRED  SCHECHTER  has been  Chairman  of the Board and Chief  Executive
Officer of Cryenco,  Inc. since September 1991, President of Cryenco, Inc. since
September 1996 and Chairman of the Board,  Chief Executive Officer and President
of the  Company  since  February  1992.  Mr.  Schechter  has been a Director  of
Charterhouse  Group  International,   Inc.   ("Charterhouse")  since  1985.  Mr.
Schechter  served  as  Chairman  of the Board and  Chief  Executive  Officer  of
Charter-Crellin,  Inc., a designer,  manufacturer  and  marketer of  proprietary
injected molded plastic products, from 1985 to 1989 and as Chairman of the Board
and  Chief  Executive  Officer  of  Paco   Pharmaceutical   Services,   Inc.,  a
pharmaceutical  contract packaging company,  from 1975 to 1988. Mr. Schechter is
also a member of The Advisory Board of The Recovery Group,  L.P.,  which invests
in debt and equity  securities of distressed  companies.  Mr. Schechter has held
the positions of Chairman of Stanley  Interiors  Corporation,  a manufacturer of
home  furnishings,   Vice  Chairman  of  Joseph  Kirschner   Company,   Inc.,  a
manufacturer  of processed  meat products,  and Director of Paco  Pharmaceutical
Services,  Inc.,  WDP, Inc., a brick  refractory  servicing the steel  industry,
Dreyers Grand Ice Cream,  Inc., a manufacturer of ice cream  products,  Marathon
Enterprises Inc., a manufacturer of processed meat products,  and Garden America
Corporation, a manufacturer and distributor of garden products.

        JAMES A. RAABE  became Vice  President  and Chief  Financial  Officer of
Cryenco,  Inc. and Chief Financial Officer of the Company in July 1994. He later
became Vice  President of the Company and Treasurer of Cryenco,  Inc. in January
1995 and Secretary  and Treasurer of the Company and Secretary of Cryenco,  Inc.
in July 1995. Mr. Raabe was employed by Cryenco, Inc. in March 1994 as Financial
Manager.  Mr. Raabe was previously employed by Stanley Aviation  Corporation,  a
manufacturer  of  aerospace  products,  from  1977 to  1993,  where  he was Vice
President - Finance,  Corporate  Secretary  and a Director of the  Company.  Mr.
Raabe received his B.A. degree in Business  Administration from California State
University, Fullerton, and is a Certified Public Accountant.




                                       11



<PAGE>
<PAGE>



                                            PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

MARKET INFORMATION

       The Company's Common Stock is traded on the NASDAQ National Market System
under the symbol  CSCI.  The  following  table sets forth the high and low sales
prices for the Company's  Common Stock as reported on the NASDAQ National Market
System from September 1, 1994 to November 25, 1996. The prices set forth reflect
interdealer quotations, without retail markups, markdowns or commissions, and do
not necessarily represent actual transactions.


<TABLE>
<CAPTION>

                                                                                High      Low
                                                                                ----      ---
<S>                                                                            <C>       <C>
Fiscal Quarter Ended

   November 30, 1994.......................................................    $5 1/2    $3 1/8
   February 28, 1995.......................................................     4 1/2     2 1/2
   May 31, 1995............................................................     4 1/2     3
   August 31, 1995.........................................................     4 1/4     3 1/4

   November 30, 1995.......................................................    $5        $3 5/8
   February 29, 1996.......................................................     5 1/8     3 3/8
   May 31, 1996............................................................     4 3/8     3
   August 31, 1996.........................................................     4 3/4     2 5/8


   November 30, 1996 (through November 25, 1996)...........................    $3 3/4    $1 3/8
</TABLE>


   The closing  price of the  Company's  Common  Stock on November  25, 1996 was
$2.00 per share. At November 25, 1996, there were approximately 200 stockholders
of record.  However, the Company believes that at such date there were in excess
of 500 beneficial stockholders.

DIVIDENDS

       The Company has never  declared or paid any cash  dividends on its Common
Stock and currently intends to retain any earnings for use in its business.  The
Company's  ability  to  pay  cash  dividends  is  currently  limited  by  credit
agreements and the Company does not anticipate  paying any cash dividends in the
foreseeable future.




                                       12



<PAGE>
<PAGE>



ITEM 6.    SELECTED CONSOLIDATED FINANCIAL DATA.

       The  selected  consolidated  financial  data at and for the fiscal  years
ended August 31, 1996, 1995, 1994 and 1993 are derived from financial statements
which have been audited by Ernst & Young LLP, independent auditors. The selected
consolidated financial data at and for the fiscal year ended August 31, 1992 are
derived from the  consolidated  financial  statements which have been audited by
KPMG Peat Marwick LLP, independent auditors.  This information should be read in
conjunction  with the Company's  consolidated  financial  statements and related
notes and other financial information appearing elsewhere herein.


<TABLE>
<CAPTION>

                                                         Fiscal year ended August 31,
                                        -----------------------------------------------------------
                                            1996       1995         1994        1993       1992
                                            ----       ----         ----        ----       ----

                                                      (In thousands, except per share data)
Statement of income data:

<S>                                     <C>         <C>         <C>         <C>        <C>     
    Contract Revenue                     $31,259     $27,215     $17,665     $13,099    $22,198
    Cost of revenue                       24,898      22,350      14,670      12,198     16,398
                                         -------     -------     -------     -------    -------
           Gross Profit                    6,361       4,865       2,995         901      5,800
    Selling, general and
      administrative expenses              3,288       2,867       2,834       3,396      2,366
    Research and development expenses        792          70          86         701        319
    Amortization expense                     346         346         338         286        321
                                         -------     -------     -------     -------    -------

    Operating income (loss)                1,935       1,582        (263)     (3,482)     2,794
    Interest expense, net                    943         987       1,105       1,057      1,282
    Other nonoperating expense
      (income), net                            9          40         (69)        (19)       111
                                         -------     -------     -------     -------    -------
    Income (loss) before income taxes
      and extraordinary item                 983         555      (1,229)     (4,500)     1,401
    Income tax (expense) benefit            (363)       (194)        403       1,196       (483)
                                         -------     -------     -------     -------    -------
    Income from operations before
      extraordinary item                     620         361        (896)     (3,304)       918
    Extraordinary item, net of taxes          93          --          --          --         --
                                         -------     -------     -------     -------    -------
    Net income (loss)                    $   527     $   361     $  (896)    $(3,304)       918
                                         =======     =======     =======     =======    =======

    Earnings (loss) per share (1)        $   .06     $   .04     $  (.17)    $  (.62)   $   .20
                                         =======     =======     =======     =======    =======

Balance sheet data:

    Total assets                         $25,704     $23,377     $18,404     $20,344    $21,644
    Long-term debt, excluding
      current maturities                   8,634       5,629       6,928       8,191      7,558
    Stockholders' equity                  11,673      11,236       7,047       7,191     10,420

</TABLE>

(1) Net income  (loss) per share for the fiscal  years  ended  August 31,  1996,
    1995,  1994,  1993  and  1992  have  been  calculated  based  on  7,230,773,
    6,620,055,  5,346,760,  5,326,936 and 4,491,392  weighted average common and
    common equivalent shares outstanding during the year, respectively.




                                       13



<PAGE>
<PAGE>



ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

        This  Annual  Report  on  Form  10-K  contains  certain  forward-looking
statements  that involve risks and  uncertainties.  Discussions  containing such
forward-looking  statements  may be  found  in the  materials  set  forth  under
"Business" and in "Management's  Discussion and Analysis of Financial  Condition
and Results of Operations" set forth below.  The Company's  actual results could
differ materially from those anticipated in the forward-looking statements.

GENERAL

        The Company's operating subsidiary, Cryenco, Inc. was organized in 1978.
Effective August 30, 1991,  Cryenco  Holdings,  Inc. ("CHI") acquired all of the
outstanding  common stock of Cryenco,  Inc. On February 11, 1992, CHI was merged
with and into Gulf & Mississippi  Corporation and Gulf & Mississippi Corporation
changed its name to Cryenco Sciences,  Inc. (the "Merger").  The Merger has been
accounted  for as a reverse  acquisition,  whereby CHI is  considered  to be the
acquirer  of  Gulf  &  Mississippi  Corporation  for  accounting  and  financial
reporting  purposes.  The  discussion and analysis set forth below refers to the
financial  condition  and results of  operations  of the Company,  including its
predecessor, Cryenco, Inc.

        The Company accounts for its revenue using the  percentage-of-completion
method,  units  delivered  or  completed  contract,  whichever  is  deemed  more
appropriate  for  the  contract.  See  Note  1  to  the  consolidated  financial
statements.  Revenue  has been  generated  primarily  from  sales  of  cryogenic
components  and systems to a small number of significant  customers.  During the
fiscal years ended August 31, 1996,  1995 and 1994,  revenue from MRI  cryostats
and components accounted for 35%, 36% and 50%,  respectively,  of total contract
revenue.  Revenue from the sale and repair of cryogenic  transport  trailers and
intermodal  tank  containers  accounted  for 55%, 55% and 40% of total  contract
revenue for the fiscal years ended August 31, 1996, 1995 and 1994, respectively.

        During fiscal 1996, the Company  continued to concentrate its efforts on
developing  new domestic and  international  markets with an emphasis on product
lines offering  repeatability  and higher volume potential while  de-emphasizing
its traditional job shop or short product run products.  During this period, the
Company  expanded certain  segments of its operations,  including  personnel and
plant  capacity,  to support the growth from these new markets for its cryogenic
technology. Management believes that the Company has been successful in securing
the majority of the orders placed during the past year for these  trailers.  The
markets  for  LNG  fuel  tanks  and  systems  both  in  the  United  States  and
internationally  are  growing,  but much more slowly than the Company had hoped.
Nevertheless,  this market appears to be improving as an increased  availability
of LNG and new products,  including the Company's dispensing equipment and TVAC,
have made LNG vehicles more economically viable.




                                       14



<PAGE>
<PAGE>



RESULTS OF OPERATIONS

        The  following  table sets  forth,  for the periods  indicated,  certain
income and expense items as a percentage of revenue:


<TABLE>
<CAPTION>

                                                                         Fiscal Year Ended
                                                                              August 31,
                                                                   --------------------------

                                                                   1996       1995     1994
                                                                   ----       ----     ----
<S>                                                                <C>       <C>       <C>   
Contract revenue..............................................     100.0%    100.0%    100.0%
Cost of revenue...............................................      79.7      82.1      83.0
                                                                   -----     -----     -----
Gross profit..................................................      20.3      17.9      17.0
Selling, general and administrative expenses..................      10.5      10.5      16.1
Research and development expenses.............................       2.5       0.3       0.5
Amortization expense..........................................       1.1       1.3       1.9
                                                                   -----     -----     -----
Operating (loss) income ......................................       6.2       5.8      (1.5)
Interest expense, net.........................................       3.0       3.6       6.3
Other nonoperating (income) expense, net......................       0.0       0.2      (0.4)
                                                                   -----     -----     -----
Income (loss) before income taxes and extraordinary item......       3.2       2.0      (7.4)
Income tax (expense) benefit..................................      (1.2)     (0.7)      2.3
                                                                   -----     -----     -----
Income (loss) before extraordinary item.......................       2.0       1.3      (5.1)
Extraordinary item............................................       0.3        --        --
                                                                   -----     -----     -----
        Net income (loss).....................................       1.7%      1.3%     (5.1)%
                                                                   =====     =====     ===== 
</TABLE>

       FISCAL YEARS ENDED AUGUST 31, 1996 AND 1995

       Contract  revenue  increased  14.9% to $31.3  million  in 1996 from $27.2
million in 1995,  primarily as a result of the increase in revenue  derived from
the  sale of  industrial  gas and LNG  transport  trailers,  as well as  revenue
derived from the sale of various products to ALT-USA.  Additionally, the Company
recognized smaller increases in revenue from the production of MRI cryostats and
sales of LNG products.

       Gross profit in 1996 increased 30.8% to $6.4 million from $4.9 million in
1995 and gross profit as a percentage of contract revenue  increased to 20.3% in
1996 from 17.9% in 1995. This increase is the result of higher production levels
which reduced the unabsorbed  overhead,  as well as the increasing gross margins
in Transportation Equipment.  Additionally,  excess and obsolete inventory costs
increased  to  $269,000  in 1996 from  $55,000  in 1995,  while  warranty  costs
decreased  from  $663,000 in 1995 to $379,000 in 1996.  The increase in obsolete
inventory  costs is  primarily  due to the  changing of the  Company's  products
during the past few years,  which has resulted in certain inventory items having
no  anticipated  production  use,  and an increase  in the reserve for  obsolete
inventory.  The decrease in warranty  costs is  primarily  based on the improved
quality of the Company's  products.  At August 31, 1996 the reserve for obsolete
inventory was $150,000, compared to the $100,000 reserve at August 31, 1995.

       Selling,  general and  administrative  expenses  increased  14.7% to $3.3
million in 1996 from $2.9  million  in 1995 and  remained  at 10.5% of  contract
revenue.




                                       15



<PAGE>
<PAGE>



       Research  and  development  expenses  increased  to $792,000 in 1996 from
$70,000 in 1995.  This  increase is primarily  due to the  Company's  funding of
research and development for the TADOPTR program and for the further development
of LNG  products,  both of which  were in  excess  of  amounts  reimbursed  from
customers.

       Amortization expense remained at $346,000 in both 1996 and 1995.

       Interest  income  decreased to $1,000 in 1996 from $20,000 in 1995.  This
decrease  is  primarily  due to the  lower  level of  excess  cash  invested  in
short-term interest bearing accounts.

       Interest expense decreased to $944,000 in 1996 from $1.0 million in 1995.
This decrease is the result of slightly  higher  average  borrowings  during the
year which is more than offset by lower interest rates.

       Other  nonoperating  expense  decreased to $9,000 in 1996 from $40,000 in
1995.  This  decrease  is  primarily  due to the  expenses  from  the  Company's
investment in ALT-USA in 1995 that did not recur in 1996.

       Income tax expense  increased to $363,000 in 1996 from  $194,000 in 1995,
due primarily to the increased profit in 1996 compared to 1995.

       In 1996, the Company recorded an extraordinary  expense of $93,000 net of
income tax  benefit of  $54,000,  with no  corresponding  expense in 1995.  This
amount is the result of the expensing in the current period of certain  deferred
financing expenses, due to the early retirement of the Chemical Bank loans and a
portion of The CIT Group/Equity Investments, Inc.
("CIT") note.

       Net income  increased  to  $527,000 in 1996 from  $377,000  in 1995.  The
resulting  net  income  is the  result  of the  cumulative  effect  of the above
factors.

       Net cash  used by  operating  activities  in 1996  amounted  to  $356,000
compared  to $1.2  million  in 1995.  The use of cash in 1996 is  primarily  the
result  of an  increase  in  accounts  receivable  resulting  from  the  Company
discontinuing its policy of granting cash discounts, combined with a decrease in
accounts payable following the increase in borrowing  capacity from FBS Business
Finance Corporation. This use of funds was only partially offset by the decrease
in costs and estimated  earnings in excess of billings on uncompleted  contracts
during 1996.

       FISCAL YEARS ENDED AUGUST 31, 1995 AND 1994

       Contract  revenue  increased  54.1% to $27.2  million  in 1995 from $17.7
million in 1994,  primarily as a result of the increase in revenue  derived from
the sale of  industrial  gas and LNG  transport  trailers  and  TVAC  intermodal
containers.  Additionally,  the Company  recognized smaller increases in revenue
from the production of MRI cryostats and sales of LNG products.




                                       16



<PAGE>
<PAGE>



       Gross profit in 1995 increased 62.4% to $4.9 million from $3.0 million in
1994 and gross profit as a percentage of contract revenue  increased to 17.9% in
1995 from 17.0% in 1994. This increase is the result of higher production levels
which reduced the unabsorbed  overhead,  as well as the increasing gross margins
in  Transportation  Equipment  and LNG  Products.  Additionally,  the excess and
obsolete  inventory  costs  decreased to $55,000 in 1995 from  $142,000 in 1994,
while  warranty  costs  increased from $287,000 in 1994 to $663,000 in 1995. The
increase in  warranty  costs is  primarily  due to costs  incurred on  cryogenic
transport trailers produced in 1993, and an increase in the warranty reserve. At
August 31, 1995 the reserve for  warranty  costs was  $200,000,  compared to the
$144,000  reserve at August 31, 1994,  and the allowance for excess and obsolete
inventory  increased  from  $52,000 at August 31, 1994 to $100,000 at August 31,
1995.

       Selling,  general  and  administrative  expenses  increased  1.2% to $2.9
million  in 1995 from $2.8  million in 1994 and  decreased  as a  percentage  of
contract  revenue to 10.6% from 16.1%.  This decrease  resulted from  continuing
savings resulting from the Company's cost reduction efforts and the fixed nature
of certain general and administrative expenses in relation to increased revenue.

       Research  and  development  expenses  decreased  to  $70,000 in 1995 from
$86,000 in 1994.  In both years,  the costs for the  continuing  development  of
products were generally charged against specific customer orders.

       Amortization expense increased to $346,000 in 1995 from $338,000 in 1994.
This increase is the result of the increased warrant amortization resulting from
the 1993 debt  restructuring  with Chemical Bank,  CIT and the Company's  junior
subordinated debt holders.

       Interest income  decreased to $20,000 in 1995 from $103,000 in 1994. This
decrease  is  primarily  due to the  lower  level of  excess  cash  invested  in
short-term interest bearing accounts.

       Interest  expense  decreased to $1.0 million in 1995 from $1.2 million in
1994.  This decrease is primarily due to reduced level of interest  bearing debt
in 1995 compared to 1994.

       Other  nonoperating  expense  increased  to  $40,000  in  1995  from  the
nonoperating  income of $69,000  in 1994.  This  increase  is  primarily  due to
expenses from the  Company's  investment in ALT-USA in the current year compared
to a reimbursement received for warranty claims in the prior year.

       Income tax  expense  increased  to $194,000 in 1995 from a tax benefit of
$403,000 in 1994,  due  primarily to the profit in 1995  compared to the loss in
1994.

       Net income  increased  to $361,000 in 1995 from a net loss of $896,000 in
1994.  The  resulting net income is the result of the  cumulative  effect of the
above factors.

       Net cash used by operating  activities  in 1995  amounted to $1.2 million
compared  to  $1.9  million  provided  by  operating  activities  in  1994.  The
difference of $3.2 million is due to




                                       17



<PAGE>
<PAGE>



the increased level of operating  activities of the Company,  which has resulted
in increased  inventories and costs and estimated earnings in excess of billings
on uncompleted  contracts,  which are only  partially  offset by the increase in
accounts payable.

       LIQUIDITY AND CAPITAL RESOURCES

       At August 31, 1996, the Company's working capital was $9.8 million, which
represented  a  current  ratio  of 2.8 to 1.  Also,  the  Company's  outstanding
indebtedness  under the Credit and Security  Agreement with FBS Business Finance
Corporation  ("FBS")  was $7.8  million,  of  which  $615,000  represented  term
indebtedness and $7.2 million represented revolving indebtedness.  At August 31,
1996,  the  Company's  outstanding  indebtedness  to CIT was $1.7 million  which
represented subordinated indebtedness.

       In  December  1995,  the  Company  entered  into a  Credit  and  Security
Agreement  with FBS.  Under the  agreement,  FBS is  providing a revolving  loan
facility of up to  $10,000,000  and a term loan  facility  of up to  $2,960,000,
subject  to the  amount  of  the  Company's  borrowing  base  and  manufacturing
equipment additions in the fiscal year ended August 31, 1996, respectively.  The
revolving loan  initially  bore interest at the First Bank National  Association
reference  rate (the  "Reference  Rate")  plus  0.5%,  while the term loan bears
interest at the Reference  Rate plus 0.75%.  The revolving  loan has a provision
for  incentive  pricing  whereby  the rate may adjust  upward or  downward  on a
quarterly basis depending upon the performance of the Company.

       On January 16, 1996, the Company  obtained the initial  funding under the
revolving loan in the amount of $5,825,000.  The proceeds of this loan were used
to retire the outstanding Chemical Bank revolving credit facility  ($2,200,000),
to retire  the  outstanding  Chemical  Bank term  loan  ($2,125,000),  to make a
partial  payment on the  outstanding  note  payable to CIT  ($500,000),  and for
general corporate purposes ($1,000,000).

       The Credit and Security  Agreement  limits the Company's  ability to make
capital  expenditures  to $6.5  million for fiscal  1997,  and $4.5  million for
fiscal 1998. As necessary to supplement capital expenditure needs, Cryenco, Inc.
intends to utilize  leasing  arrangements  to the extent they are  available  on
commercially  reasonable terms. The Company intends to fund capital  expenditure
needs from cash flow from operations, future borrowing capacity under the Credit
and Security Agreement, if any, and, as necessary, future financing.

       The Company believes that its existing capital  resources,  together with
its cash flow from future  operations  will be sufficient to meet its short term
working capital needs. Additional financing may be required for future expansion
of operations  and research and  development,  as  necessary,  including for the
continued development of the Company's TADOPTR products.




                                       18



<PAGE>
<PAGE>



ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

       See pages F-1 and S-2.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
           ON ACCOUNTING AND FINANCIAL DISCLOSURE.

       Not Applicable.




                                       19



<PAGE>
<PAGE>



                                    PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

EXECUTIVE OFFICERS OF THE COMPANY.

       See  Part  I,  page  11.  "Executive  Officers  of  the  Company."  Other
information  required  by this  item  is  incorporated  by  reference  from  the
Company's  definitive  proxy  statement to be filed not later than  December 29,
1996 pursuant to Regulation 14A of the General Rules and  Regulations  under the
Securities Exchange Act of 1934, as amended ("Regulation 14A").

ITEM 11.   EXECUTIVE COMPENSATION.

       The  information  required by this item is incorporated by reference from
the Company's definitive proxy statement to be filed not later than December 29,
1996 pursuant to Regulation 14A.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN
           BENEFICIAL OWNERS AND MANAGEMENT.

       The  information  required by this item is incorporated by reference from
the Company's definitive proxy statement to be filed not later than December 29,
1996 pursuant to Regulation 14A.

ITEM 13.   CERTAIN RELATIONSHIPS AND
           RELATED TRANSACTIONS.

       The  information  required by this item is incorporated by reference from
the Company's definitive proxy statement to be filed not later than December 29,
1996 pursuant to Regulation 14A.




                                       20


<PAGE>
<PAGE>



                                     PART IV

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

<TABLE>


<S>                                                                                  <C>
     (a)(1) Consolidated Financial Statements of Registrant.

            Report of Independent Auditors...........................................F-2 & S-1

            Consolidated Balance Sheets as of August 31, 1996 and 1995...............F-3

            Consolidated Statements of Operations for the Years Ended
              August 31, 1996, 1995 and 1994.........................................F-5

            Consolidated Statements of Stockholders' Equity for the
              Years Ended August 31, 1996, 1995 and 1994.............................F-6

            Consolidated Statements of Cash Flows for the Years Ended
              August 31, 1996, 1995 and 1994.........................................F-7

            Notes to Consolidated Financial Statements...............................F-9

     (a)(2) Schedule II..............................................................S-2

</TABLE>

               All other schedules for which provision is made in the applicable
            regulations  of the  Securities  and  Exchange  Commission  are  not
            required under the related  instructions  or are  inapplicable  and,
            therefore, have been omitted.

     (a)(3) Exhibits.

<TABLE>
<CAPTION>
  Exhibit                                        Description
  -------                                        -----------

<S>               <C>         <C>                                                                         
    3.1           -           Restated   Certificate  of  Incorporation  of  the
                              Registrant,  incorporated  by reference to Exhibit
                              3.1 to the Registrant's  Registration Statement on
                              Form  S-2,  File No.  33-48738,  filed on June 19,
                              1992 (the "S-2 Registration Statement").

    3.2           -           By-laws  of  the   Registrant,   incorporated   by
                              reference  to  Exhibit  3.2  to  the  Registrant's
                              Registration  Statement  on  Form  S-1,  File  No.
                              33-7532,   filed  on  July  25,   1986  (the  "S-1
                              Registration Statement").

    3.3           -           Certificate   of   Amendment   to   the   Restated
                              Certificate of  Incorporation  of the  Registrant,
                              incorporated  by  reference  to Exhibit 3.3 to the
                              Registrant's  Annual  Report  on Form 10-K for the
                              fiscal  year  ended  August  31,  1995 (the  "1995
                              Annual Report").
</TABLE>




                                       21



<PAGE>
<PAGE>



<TABLE>
<CAPTION>
  Exhibit                                        Description
  -------                                        -----------

<S>               <C>         <C>                                                                         

    3.4           -           Certificate of Designation, Preferences and Rights
                              of the Series A Preferred Stock of the Registrant,
                              incorporated  by  reference  to Exhibit 3.4 to the
                              1995 Annual Report.

    3.5           -           Corrected  Certificate  of  Amendment  of Restated
                              Certificate of  Incorporation  of the  Registrant,
                              incorporated  by  reference  to Exhibit 3.5 to the
                              1995 Annual Report.

    4.1           -           See Article Fourth of the Restated  Certificate of
                              Incorporation,  as amended and  corrected,  of the
                              Registrant  (Exhibit 3.5 hereof),  incorporated by
                              reference  to  Exhibit  4.1  to  the  1995  Annual
                              Report.

    4.2           -           Forms of Common  Stock  and  Class B Common  Stock
                              certificates  of the  Registrant,  incorporated by
                              reference  to  Exhibit  4.3  of  the  Registrant's
                              Registration  Statement on Form S-4,  File No. 33-
                              43782,  filed  on  December  19,  1991  (the  "S-4
                              Registration Statement").

    4.3           -           Registration  Rights  Agreement dated as of August
                              30,  1991 among CHI,  CIT,  Chemical  Bank and the
                              Investors named therein, incorporated by reference
                              to Exhibit 4.3 to the 1995 Annual Report.

    4.4           -           Warrant  Agreement  dated as of  August  30,  1991
                              between  Chemical  Bank,  CHI and the  Registrant,
                              incorporated  by  reference  to Exhibit 4.4 to the
                              1995 Annual Report.

    4.5           -           Letter  Agreement  dated  April 15, 1992 among the
                              Registrant,  CIT and Chemical Bank relating to the
                              Warrants  referred to herein at  Exhibits  4.8 and
                              4.9,  incorporated  by reference to Exhibit 4.9 to
                              the S-2 Registration Statement.

    4.6           -           Letter Agreement dated August 12, 1992 between the
                              Registrant  and  Chemical  Bank  relating  to  the
                              Warrants   referred  to  herein  at  Exhibit  4.8,
                              incorporated  by  reference  to Exhibit 4.6 to the
                              1995 Annual Report.

    4.7           -           Letter Agreement dated August 12, 1992 between the
                              Registrant   and  CIT  relating  to  the  Warrants
                              referred to herein at Exhibit 4.9, incorporated by
                              reference  to  Exhibit  4.7  to  the  1995  Annual
                              Report.
</TABLE>




                                       22



<PAGE>
<PAGE>

<TABLE>
<CAPTION>
  Exhibit                                        Description
  -------                                        -----------

<S>               <C>         <C>                                                                         


    4.8           -           Warrants  issued to Chemical Bank each dated April
                              27, 1992, incorporated by reference to Exhibit 4.8
                              to the 1995 Annual Report.

    4.9           -           Warrants  issued to CIT each dated April 27, 1992,
                              incorporated  by  reference  to Exhibit 4.9 to the
                              1995 Annual Report.

    4.10          -           Warrant issued to Dain Bosworth Incorporated dated
                              August 20,  1992,  incorporated  by  reference  to
                              Exhibit 4.12 to the S-2 Registration Statement.

    4.11          -           Warrant  Agreement  dated  as of  March  12,  1993
                              between  the  Registrant  and  Alfred   Schechter,
                              incorporated  by  reference to Exhibit 4.11 to the
                              1995 Annual Report.

    4.12          -           Warrant  Agreement  dated  as of  March  12,  1993
                              between  the   Registrant   and  Don  M.  Harwell,
                              incorporated  by  reference to Exhibit 4.12 to the
                              1995 Annual Report.

    4.13          -           Warrant  Agreement  dated  as of  March  12,  1993
                              between the  Registrant and MCC,  incorporated  by
                              reference  to  Exhibit  4.13  to the  1995  Annual
                              Report.

    4.14          -           Warrant issued to Alfred Schechter dated March 12,
                              1993, incorporated by reference to Exhibit 4.14 to
                              the 1995 Annual Report.

    4.15          -           Warrant  issued to Don M. Harwell  dated March 12,
                              1993, incorporated by reference to Exhibit 4.15 to
                              the 1995 Annual Report.

    4.16          -           Warrant  issued  to  MCC  dated  March  12,  1993,
                              incorporated  by  reference to Exhibit 4.16 to the
                              1995 Annual Report.

    4.17          -           Letter  Agreement dated as of June 9, 1993 between
                              the Registrant  and Alfred  Schechter with respect
                              to the Exercise Price for the Warrant  referred to
                              herein at Exhibit 4.14,  incorporated by reference
                              to Exhibit 4.17 to the 1995 Annual Report.

    4.18          -           Letter  Agreement dated as of June 9, 1993 between
                              the  Registrant and Don M. Harwell with respect to
                              the  Exercise  Price for the  Warrant  referred to
                              herein at Exhibit 4.15,  incorporated by reference
                              to Exhibit 4.18 to the 1995 Annual Report.
</TABLE>




                                       23



<PAGE>
<PAGE>


<TABLE>
<CAPTION>
  Exhibit                                        Description
  -------                                        -----------

<S>               <C>         <C>                                                                         


    4.19          -           Letter  Agreement dated as of June 9, 1993 between
                              the Registrant and MCC with respect to the Warrant
                              referred to herein at Exhibit  4.16,  incorporated
                              by  reference  to Exhibit  4.19 to the 1995 Annual
                              Report.

    4.20          -           Warrant issued to Chemical Bank dated November 24,
                              1993, incorporated by reference to Exhibit 4.20 to
                              the 1995 Annual Report.

    4.21          -           Warrant  issued to CIT dated  November  24,  1993,
                              incorporated  by  reference to Exhibit 4.21 to the
                              1995 Annual Report.

    4.22          -           Warrant  Agreement  dated as of January  26,  1995
                              between   the   Company   and  Alfred   Schechter,
                              incorporated  by  reference to Exhibit 4.22 to the
                              1995 Annual Report.

    4.23          -           Warrant  Agreement  dated as of January  26,  1995
                              between   the   Company   and   Don  M.   Harwell,
                              incorporated  by  reference to Exhibit 4.23 to the
                              1995 Annual Report.

    4.24          -           Warrant  Agreement  dated as of January  26,  1995
                              between  the  Company  and  MCC,  incorporated  by
                              reference  to  Exhibit  4.24  to the  1995  Annual
                              Report.

    4.25          -           Warrant issued to Alfred  Schechter  dated January
                              26,  1995,  incorporated  by  reference to Exhibit
                              4.25 to the 1995 Annual Report.

    4.26          -           Warrant issued to Don M. Harwell dated January 26,
                              1995, incorporated by reference to Exhibit 4.26 to
                              the 1995 Annual Report.

    4.27          -           Warrant  issued to MCC  dated  January  26,  1995,
                              incorporated  by  reference to Exhibit 4.27 to the
                              1995 Annual Report.

    4.28          -           See the  Certificate of  Designation,  Preferences
                              and Rights of the Series A Preferred  Stock of the
                              Registrant  (Exhibit 3.4 hereof),  incorporated by
                              reference  to  Exhibit  4.28  to the  1995  Annual
                              Report.

    4.29          -           Warrant Agreement dated as of June 8, 1994 between
                              the Registrant and Cryogenic TADOPTR Company, L.P.
                              and  the  Form  of  Warrant   Certificate   issued
                              pursuant  thereto,  incorporated  by  reference to
                              Exhibit 4.29 to the 1995 Annual Report.
</TABLE>




                                       24



<PAGE>
<PAGE>


<TABLE>
<CAPTION>
  Exhibit                                        Description
  -------                                        -----------

<S>               <C>         <C>                                                                         

    4.30          -           Warrant  Agreement  dated as of December  20, 1994
                              between   the    Registrant   and   The   Edgehill
                              Corporation,  incorporated by reference to Exhibit
                              4.30 to the 1995 Annual Report.

    4.31          -           Warrant issued to The Edgehill  Corporation  dated
                              as of December 20, 1994, incorporated by reference
                              to Exhibit 4.31 to the 1995 Annual Report.

    4.32          -           Registration Rights Agreement dated as of December
                              20,  1994 among the  Registrant,  certain  parties
                              named therein and International  Capital Partners,
                              Inc., incorporated by reference to Exhibit 4.32 to
                              the 1995 Annual Report.

    4.33          -           Form of  Warrant  issued to each of  International
                              Capital  Partners,  Inc. and the parties  named in
                              the  Registration  Rights  Agreement  dated  as of
                              December   20,   1994   (Exhibit   4.32   hereof),
                              incorporated  by  reference to Exhibit 4.33 to the
                              1995 Annual Report.

    10.1          -           1986   Non-Qualified   Stock   Option   Agreement,
                              incorporated  by  reference to Exhibit 10.1 to the
                              1995 Annual Report.

    10.2          -           Stockholders Agreement dated as of August 30, 1991
                              among the Registrant,  CHI and other  stockholders
                              of CHI,  incorporated by reference to Exhibit 10.2
                              to the 1995 Annual Report.

    10.3          -           Securities  Purchase  Agreement dated as of August
                              30,  1991  among CIT,  CHI,  the  Registrant,  CEC
                              Acquisition  Corp. and Cryogenic  Energy  Company,
                              incorporated  by  reference to Exhibit 10.3 of the
                              1995 Annual Report.

    10.4          -           Credit Agreement dated as of August 30, 1991 among
                              Cryenco,  Inc.,  the Lenders  named  therein,  and
                              Chemical Bank, as Agent, incorporated by reference
                              to Exhibit 10.7 to the S-4 Registration Statement.

    10.5          -           Form of  Amended  and  Restated  Pledge  Agreement
                              dated  February  11, 1992  relating to the capital
                              stock   of   Cryenco,   Inc.   executed   by  CSCI
                              Corporation    in   favor   of   Chemical    Bank,
                              incorporated  by  reference to Exhibit 10.6 to the
                              S-4 Registration Statement.

</TABLE>



                                       25



<PAGE>
<PAGE>

<TABLE>
<CAPTION>
  Exhibit                                        Description
  -------                                        -----------

<S>               <C>         <C>                                                                         


    10.6          -           Employment Agreement dated as of September 1, 1991
                              between  Cryenco,   Inc.  and  Alfred   Schechter,
                              incorporated  by  reference to Exhibit 10.8 of the
                              S-4 Registration Statement.

    10.7          -           1992 Employee  Incentive and  Non-Qualified  Stock
                              Option Plan,  incorporated by reference to Exhibit
                              4.1 to the Registrant's  Registration Statement on
                              Form  S-8,  File No.  33-65864,  filed on July 12,
                              1993 (the "S-8 Registration Statement").

    10.8          -           Form of Option  Agreement  under the 1992 Employee
                              Incentive  and  Non-Qualified  Stock  Option Plan,
                              incorporated  by  reference  to Exhibit 4.2 to the
                              S-8 Registration Statement.

    10.9          -           1993  Non-Employee  Director Stock Option Program,
                              incorporated  by  reference  to Exhibit 4.3 to the
                              S-8 Registration Statement.

   10.10          -           Form of  Option  Agreement  under  the  1993  Non-
                              Employee Director Stock Option Program  (contained
                              in the 1993  Non-Employee  Director  Stock  Option
                              Program  referred  to  herein  at  Exhibit  10.9),
                              incorporated  by  reference  to Exhibit 4.4 to the
                              S-8 Registration Statement.

   10.11          -           1991 Incentive Compensation Plan of Cryenco, Inc.,
                              as amended,  incorporated  by reference to Exhibit
                              10.9 to the S-2 Registration Statement.

   10.12          -           Lease,   as   amended,   dated   August  22,  1989
                              concerning  the property  leased by the Registrant
                              located at 5995 North Washington  Street,  Denver,
                              Colorado,  incorporated  by  reference  to Exhibit
                              10.10 to the S-2 Registration Statement.

   *10.13         -           Lease, as amended,  dated June 19, 1996 concerning
                              the property  leased by the Registrant  located at
                              3811 Joliet Street, Denver, Colorado.

   10.14          -           Consulting Agreement dated August 30, 1991 between
                              the Registrant and  Charterhouse,  incorporated by
                              reference to Exhibit 10.12 to the S-2 Registration
                              Statement.


</TABLE>


                                       26



<PAGE>
<PAGE>

<TABLE>
<CAPTION>
  Exhibit                                        Description
  -------                                        -----------

<S>               <C>         <C>                                                                         

   10.15          -           Waiver  and  Amendment   Agreement   dated  as  of
                              February 28, 1993 among Cryenco, Inc., the Lenders
                              named  therein and  Chemical  Bank,  amending  the
                              Credit  Agreement  dated as of August 30, 1991, as
                              amended,  incorporated  by  reference  to  Exhibit
                              10.15 to the 1995 Annual Report.

   10.16          -           Waiver  and  Amendment   Agreement   dated  as  of
                              February  28,  1993  among   Cryenco,   Inc.,  the
                              Registrant   and  CIT,   amending  the  Securities
                              Purchase Agreement dated as of August 30, 1991, as
                              amended,  incorporated  by  reference  to  Exhibit
                              10.16 to the 1995 Annual Report.

   10.17          -           Funding  Agreement  dated  March  12,  1993  among
                              Alfred  Schechter,  Don M.  Harwell,  MCC  and the
                              Registrant,  incorporated  by reference to Exhibit
                              10.17 to the 1995 Annual Report.

   10.18          -           Intentionally left blank.

   10.19          -           Form of  Indemnification  Agreement  entered  into
                              between the Registrant and certain of its officers
                              and directors  dated March 16, 1993,  incorporated
                              by reference  to Exhibit  10.19 to the 1995 Annual
                              Report.

   10.20          -           Second Waiver and Amendment  Agreement dated as of
                              August 31, 1993 among  Cryenco,  Inc., the Lenders
                              named  therein and  Chemical  Bank,  amending  the
                              Credit  Agreement  dated as of August 30, 1991, as
                              amended,  incorporated  by  reference  to  Exhibit
                              10.20 to the 1995 Annual Report.

   10.21          -           Second Waiver and Amendment  Agreement dated as of
                              October  31,  1993  among   Cryenco,   Inc.,   the
                              Registrant   and  CIT,   amending  the  Securities
                              Purchase Agreement dated as of August 30, 1991, as
                              amended,  incorporated  by  reference  to  Exhibit
                              10.21 to the 1995 Annual Report.

   10.22          -           Letter  Agreement  dated  April 13, 1994 among the
                              Registrant,  Cryenco, Inc., Chemical Bank and CIT,
                              incorporated  by reference to Exhibit 10.22 to the
                              1995 Annual Report.




                                       27



<PAGE>
<PAGE>




</TABLE>
<TABLE>
<CAPTION>
  Exhibit                                        Description
  -------                                        -----------

<S>               <C>         <C>                                                                         

   10.23          -           Exchange  Agreement  dated  April 13,  1994  among
                              Alfred  Schechter,  Don M.  Harwell,  MCC  and the
                              Registrant,  incorporated  by reference to Exhibit
                              10.23 to the 1995 Annual Report.

   10.24          -           Royalty   Rights   and   Technology    Development
                              Agreement   dated   June  8,  1994   between   the
                              Registrant and Cryogenic  TADOPTR  Company,  L.P.,
                              incorporated  by reference to Exhibit 10.24 to the
                              1995 Annual Report.

   10.25          -           Third Waiver and Amendment  Agreement  dated as of
                              November 29, 1994 among Cryenco, Inc., the Lenders
                              named   therein  and  Chemical   Bank,  as  Agent,
                              amending the Credit  Agreement  dated as of August
                              30, 1991, as amended, incorporated by reference to
                              Exhibit 10.25 to the 1995 Annual Report.

   10.26          -           Third Waiver and Amendment  Agreement  dated as of
                              November  29,  1994  among   Cryenco,   Inc.,  the
                              Registrant   and  CIT,   amending  the  Securities
                              Purchase Agreement dated as of August 30, 1991, as
                              amended,  incorporated  by  reference  to  Exhibit
                              10.26 to the 1995 Annual Report.

   10.27          -           Purchase  Agreement  dated as of November 29, 1994
                              among  the   Registrant,   International   Capital
                              Partners,  Inc. and the Purchasers  named therein,
                              incorporated  by reference to Exhibit 10.27 to the
                              1995 Annual Report.

   10.28          -           Fourth Waiver and Amendment  Agreement dated as of
                              December 20, 1994 among the  Registrant,  Cryenco,
                              Inc., the Lenders named therein and Chemical Bank,
                              as Agent,  amending the Credit  Agreement dated as
                              of August 30, 1991,  as amended,  incorporated  by
                              reference  to  Exhibit  10.28 to the  1995  Annual
                              Report.

   10.29          -           Fourth Waiver and Amendment  Agreement dated as of
                              December  20,  1994  among   Cryenco,   Inc.,  the
                              Registrant   and  CIT,   amending  the  Securities
                              Purchase Agreement dated as of August 30, 1991, as
                              amended,  incorporated  by  reference  to  Exhibit
                              10.29 to the 1995 Annual Report.
</TABLE>




                                       28



<PAGE>
<PAGE>



<TABLE>
<CAPTION>
  Exhibit                                        Description
  -------                                        -----------

<S>               <C>         <C>                                                                         

   10.30          -           First Amendment to the Purchase Agreement dated as
                              of  December   20,  1994  among  the   Registrant,
                              International  Capital  Partners,   Inc.  and  the
                              Purchasers  named  therein,  amending the Purchase
                              Agreement   dated  as  of   November   29,   1994,
                              incorporated  by reference to Exhibit 10.30 to the
                              1995 Annual Report.

   10.31          -           Second  Amendment to the Purchase  Agreement dated
                              as of  January  30,  1994  among  the  Registrant,
                              International  Capital  Partners,   Inc.  and  the
                              Purchasers  named  therein,  amending the Purchase
                              Agreement  dated  as  of  November  29,  1994,  as
                              amended,  incorporated  by  reference  to  Exhibit
                              10.31 to the 1995 Annual Report.

   10.32          -           Amended and Restated  Employment  Agreement  dated
                              January 18, 1995 between Cryenco, Inc. and Dale A.
                              Brubaker,  incorporated  by  reference  to Exhibit
                              10.32 to the 1995 Annual Report.

   10.33          -           Letter  Agreement  dated  May 18,  1995  among the
                              Registrant,  International Capital Partners,  Inc.
                              and the Purchasers named therein,  incorporated by
                              reference  to  Exhibit  10.33 to the  1995  Annual
                              Report.

   10.34          -           Fifth Waiver and Amendment  Agreement  dated as of
                              May 30,  1995 among  Cryenco,  Inc.,  the  Lenders
                              named   therein  and  Chemical   Bank,  as  Agent,
                              amending the Credit  Agreement  dated as of August
                              30, 1995, as amended, incorporated by reference to
                              Exhibit 10.34 to the 1995 Annual Report.

   10.35          -           Credit and Security Agreement dated as of December
                              19, 1995 and Supplement A thereto between Cryenco,
                              Inc.,   the  Company  and  FBS  Business   Finance
                              Corporation,  incorporated by reference to Exhibit
                              10.1 to the Registrant's  Quarterly Report on Form
                              10-Q for the fiscal  quarter  ended  November  30,
                              1995.
</TABLE>




                           29



<PAGE>
<PAGE>




<TABLE>
<CAPTION>
  Exhibit                                        Description
  -------                                        -----------

<S>               <C>         <C>                                                                         


   10.36          -           First  Amendment  dated  as of  January  16,  1996
                              between FBS Business Finance Corporation, Cryenco,
                              Inc., the Company and Cryenex,  Inc., amending the
                              Credit and Security Agreement dated as of December
                              19,  1995,  incorporated  by  reference to Exhibit
                              10.1 to the Registrant's  Quarterly Report on Form
                              10-Q for the fiscal  quarter  ended  February  29,
                              1996 (the "February 29, 1996 Quarterly Report").

   10.37          -           Letter  Agreement  dated  January 12, 1996 between
                              CIT  and   FBS   Business   Finance   Corporation,
                              incorporated  by  reference to Exhibit 10.2 to the
                              February 29, 1996 Quarterly Report.

    *21           -           Subsidiaries of the Registrant
  *23.1           -           Consent of Ernst & Young LLP

    *27           -           Financial  Data Schedule  pursuant to Article 5 of
                              Regulation S-X filed with EDGAR filing only.
</TABLE>

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

*    Filed herewith

(b)  Reports on Form 8-K:  None




                                       30



<PAGE>
<PAGE>



                                   SIGNATURES

       Pursuant  to the  requirements  of Section 13 or 15(d) of the  Securities
Exchange Act of 1934, as amended,  the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                                   CRYENCO SCIENCES, INC.
                                                   (Registrant)

                                                   By: /s/     Alfred Schechter
                                                      --------------------------
                                                               Alfred Schechter,
                                                           Chairman of the Board

                                                              November  25, 1996
                                                              ------------------
                                                                     Date

       Pursuant to the  requirements of the Securities  Exchange Act of 1934, as
amended,  this report has been signed by the following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.


<TABLE>
<CAPTION>

        SIGNATURE                   DATE                    CAPACITY IN WHICH SIGNED
        ---------                   ----                    ------------------------

<S>                            <C>                    <C>                        
/s/    Alfred Schechter        November  25, 1996     Chairman of the Board, Chief Executive
       -------------------                              Officer, President and Director of the
       Alfred Schechter                                 Company (Principal Executive Officer)

/s/    James A. Raabe          November 25, 1996      Vice President, Treasurer, Chief
       -------------------                              Financial Officer and Secretary of the
       James A. Raabe                                   Company, Vice President, Treasurer,
                                                        Chief Financial Officer and Secretary
                                                        of Cryenco, Inc. (Principal Financial
                                                        and Accounting Officer)
                                                        

/s/    Jerome L. Katz          November 25, 1996      Director of the Company
       -------------------
       Jerome L. Katz

/s/    Russell R. Haines       November 25, 1996      Director of the Company
       -------------------
       Russell R. Haines

/s/    Burton J. Ahrens        November 25, 1996      Director of the Company
       -------------------
       Burton J. Ahrens

/s/    Ajit G. Hutheesing      November 25, 1996      Director of the Company
       -------------------
       Ajit G. Hutheesing

</TABLE>



                                       31


<PAGE>
<PAGE>


                        Consolidated Financial Statements

                        Cryenco Sciences, Inc.
                        Years ended August 31, 1996, 1995 and 1994
                        with Report of Independent Auditors

<PAGE>

<PAGE>




                                Cryenco Sciences, Inc.

                           Consolidated Financial Statements

                      Years ended August 31, 1996, 1995 and 1994

                                       CONTENTS
<TABLE>
<CAPTION>
<S>                                                                                 <C>
Report of Independent Auditors .....................................................F-2
Audited Consolidated Financial Statements
Consolidated Balance Sheets.........................................................F-3
Consolidated Statements of Operations...............................................F-5
Consolidated Statements of Stockholders' Equity.....................................F-6
Consolidated Statements of Cash Flows...............................................F-7
Notes to Consolidated Financial Statements .........................................F-9

</TABLE>


                                         F-1

<PAGE>

<PAGE>










                         Report of Independent Auditors

The Board of Directors and Stockholders
Cryenco Sciences, Inc.

We  have  audited  the  accompanying  consolidated  balance  sheets  of  Cryenco
Sciences,  Inc.  as of August 31, 1996 and 1995,  and the  related  consolidated
statements of operations,  stockholders'  equity, and cash flows for each of the
three years in the period ended August 31, 1996. These financial  statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated financial position of Cryenco Sciences,
Inc.  at  August  31,  1996 and  1995,  and the  consolidated  results  of their
operations  and their cash flows for each of the three years in the period ended
August 31, 1996, in conformity with generally accepted accounting principles.

                                                          ERNST & YOUNG LLP

Denver, Colorado
October 5, 1996


                                      F-2

<PAGE>

<PAGE>


                                Cryenco Sciences, Inc.

                              Consolidated Balance Sheets
                         (In Thousands, except share amounts)

<TABLE>
<CAPTION>

                                                                    AUGUST 31
                                                               1996           1995
                                                           -----------------------------
<S>                                                         <C>           <C>      
ASSETS
Current assets:
  Cash and cash equivalents                                 $     111     $     632
  Accounts receivable, trade, net of allowance of $12
    in 1996 and $14 in 1995                                     5,352         2,738
  Accounts receivable, affiliate                                1,423            83
  Costs and estimated earnings in excess of billings
    on uncompleted contracts                                    3,944         6,707
  Inventories                                                   4,333         4,208
  Prepaid expenses                                                 57           116
                                                           -----------------------------
Total current assets                                           15,220        14,484

Property and equipment:
  Leasehold improvements                                          739           684
  Machinery and equipment                                       5,355         3,979
  Office furniture and equipment                                1,231           402
                                                           -----------------------------
                                                                7,325         5,065

  Less accumulated depreciation                                 3,099         2,249
                                                           -----------------------------
                                                                4,226         2,816

Property on operating leases, net of accumulated
  depreciation of $7                                              604             -
Deferred financing costs, net of accumulated
  amortization of $177 in 1996 and $738 in 1995                   120           256
Organizational costs, net of accumulated
  amortization of $507 in 1996 and $404 in 1995                     -           103
Goodwill, net of accumulated amortization of
  $738 in 1996 and $589 in 1995                                 5,226         5,375
Other assets                                                      308           343




                                                           -----------------------------
Total assets                                                  $25,704       $23,377
                                                           =============================


                                      F-3


<PAGE>

<PAGE>







</TABLE>
<TABLE>
<CAPTION>


                                                                    AUGUST 31
                                                               1996           1995
                                                           -----------------------------
<S>                                                          <C>           <C>     
LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
  Accounts payable                                           $  2,224      $  3,469
  Accrued expenses                                              1,123           880
  Accrued management fees                                         324           324
  Current portion of long-term debt and capital lease
    obligations                                                 1,382         1,593
  Income tax payable                                              344           246
                                                           -----------------------------
Total current liabilities                                       5,397         6,512
Long-term debt and capital lease obligations, less
current portion                                                 8,634         5,629
Commitments and contingencies

Stockholders' equity:
  Preferred stock, $.01 par value,  authorized shares -
  2,000,000,  preferences, limitations and relative 
  rights to be established by the Board of Directors:
      Series A,  nonvoting,  authorized  shares - 150,000
        Issued and outstanding shares - 67,838
        (aggregate liquidation preference of $678,380)              1             1
  Common stock, $.01 par value:
    Class A,  voting,  authorized  shares -  21,500,000
    Issued and  outstanding shares - 6,996,997 at August 31,
    1996 and 6,842,828 at August 31,
    1995                                                           70            68
    Class B, nonvoting, authorized shares - 1,500,000
      Issued and outstanding shares - none                          -             -
  Additional paid-in capital                                   14,020        14,022
  Warrants                                                        169           169
  Retained earnings (deficit)                                  (2,587)       (3,024)
                                                           -----------------------------
Total stockholders' equity                                     11,673        11,236
                                                           -----------------------------
Total liabilities and stockholders' equity                    $25,704       $23,377
                                                           =============================

</TABLE>

See accompanying notes.


                                      F-4


<PAGE>

<PAGE>


                                Cryenco Sciences, Inc.

                         Consolidated Statements of Operations
                  (In Thousands, except share and per share amounts)

<TABLE>
<CAPTION>

                                                        YEAR ENDED AUGUST 31
                                                  1996          1995          1994
                                              ------------------------------------------

<S>                                               <C>           <C>          <C>    
Contract revenue                                  $31,259       $27,215      $17,665
Cost of revenue                                    24,898        22,350       14,670
                                              ------------------------------------------
Gross profit                                        6,361         4,865        2,995
Selling, general and administrative expenses        3,288         2,867        2,834
Research and development expenses                     792            70           86
Amortization expense                                  346           346          338
                                              ------------------------------------------
Operating income (loss)                             1,935         1,582         (263)
Other (income) expense:
  Interest income                                      (1)          (20)        (103)
  Interest expense                                    944         1,007        1,208
  Other nonoperating (income) expense, net              9            40          (69)
                                              ------------------------------------------
Income (loss) from operations before
  income taxes and extraordinary item                 983           555       (1,299)
Income tax expense (benefit)                          363           194         (403)
                                              ------------------------------------------
Income (loss) from operations before
  extraordinary item                                  620           361         (896)
Extraordinary item (net of income tax
  benefit of $54)                                      93             -            -
                                              ------------------------------------------
Net income (loss)                                $    527     $     361    $    (896)
                                              ==========================================

Earnings (loss) per common share and common share equivalent:
    Income (loss) from operations before
      extraordinary item                         $    .07     $     .04    $     (.17)
    Extraordinary item                               (.01)           -             -
                                              ------------------------------------------
Net income (loss)                                $    .06     $     .04     $    (.17)
                                              ==========================================

Weighted average number of shares
  outstanding during year                       7,230,773     6,620,055    5,346,760
                                              ==========================================

</TABLE>

See accompanying notes.


                                      F-5


<PAGE>

<PAGE>


                             Cryenco Sciences, Inc.

                 Consolidated Statements of Stockholders' Equity
               (In Thousands, except share and per share amounts)


<TABLE>
<CAPTION>
                                 Preferred           Common        Additional          Retained
                                   Stock             Stock          Paid-In            Earnings
                              ------------------------------------
                              Shares   Amount   Shares    Amount   Capital   Warrants (Deficit)    Total
                              ------------------------------------------------------------------------------
<S>                           <C>       <C>   <C>          <C>   <C>          <C>     <C>        <C> 
Balance at August 31, 1993         -    $-    5,326,936    $53   $  9,469     $  55   $(2,386)   $  7,191
  Issuance of warrants             -     -           -       -          -        94         -          94
  Issuance of preferred
    stock                     67,838     1           -       -        678         -         -         679
  Issuance of common
    stock in exchange for
    warrants exercised             -     -       56,974      1         (1)        -         -           -
  Cash dividends paid on
    preferred stock ($.32
    per share)                     -     -           -       -          -         -       (21)        (21)
  Net loss                         -     -           -       -          -         -      (896)       (896)
                              ------------------------------------------------------------------------------
Balance at August 31, 1994    67,838     1    5,383,910     54     10,146       149    (3,303)      7,047
    Sale of common stock           -     -      800,000      8      2,223         -         -       2,231
    Issuance of warrants           -     -           -       -          -        74         -          74
    Issuance of common
      stock in exchange for
      warrants exercised           -     -      658,918      6      1,653       (54)        -       1,605
    Cash dividends paid on
      preferred stock ($1.22
      per share)                   -     -           -       -          -         -       (82)        (82)
    Net income                     -     -           -       -          -         -       361         361
                              ------------------------------------------------------------------------------
Balance at August 31, 1995    67,838     1    6,842,828     68     14,022       169    (3,024)     11,236
    Issuance of common
      stock in exchange for
      warrants exercised           -     -      154,169      2         (2)        -         -           -
    Dividends on preferred
      stock ($1.32 per share)      -     -           -       -          -         -       (90)        (90)
    Net income                     -     -           -       -          -         -       527         527
                              ==============================================================================
  Balance at August 31, 1996  67,838    $1    6,996,997    $70    $14,020      $169   $(2,587)    $11,673
                              ==============================================================================
</TABLE>

  See accompanying notes.


                                      F-6


<PAGE>

<PAGE>




 
                             Cryenco Sciences, Inc.

                      Consolidated Statements of Cash Flows
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                              YEAR ENDED AUGUST 31
                                                       1996           1995          1994
                                                   -------------------------------------------
<S>                                                  <C>            <C>            <C>
OPERATING ACTIVITIES
Net income (loss)                                    $     527      $   361        $  (896)
Adjustments to reconcile net income (loss) to net
  cash provided (used) by operating activities:
    Depreciation                                           857          684            571
    Amortization                                           436          346            338
    Deferred taxes                                          26            -              -
    Write-down of deferred financing costs                 147            -              -
    Changes in operating assets and liabilities:
      Accounts receivable                               (3,954)         (48)           525
      Costs and estimated earnings in excess of
        billings on uncompleted contracts                2,763       (3,191)          (293)
      Inventories                                         (125)      (1,562)          (114)
      Income tax payable                                    72          596            863
      Prepaid expenses and other assets                   (101)          14            228
      Accounts payable                                  (1,245)       2,107            217
      Accrued expenses                                     220          (16)            87
      Accrued management fees                                -           80            133
      Customer deposits                                      -         (607)           285
                                                   -------------------------------------------
Net cash provided (used) by operating activities          (377)      (1,236)         1,944

INVESTING ACTIVITIES
Purchases of property and equipment                     (1,956)      (1,402)          (601)
Payments for operating lease property                     (611)           -              -
Proceeds from sale of property and equipment                 -            6             17
                                                   -------------------------------------------
Net cash used by investing activities                   (2,567)      (1,396)          (584)

FINANCING ACTIVITIES
Net proceeds from issuance of common stock                   -        3,892              -
Net proceeds from issuance of stock warrants                 -           72             60
Principal payments on long-term debt and capital
  lease obligations                                    (31,322)      (1,343)        (1,927)
Proceeds from long-term debt borrowings, net
  of expenses                                           33,812            -              -
Exercise of common stock options and warrants                -          (54)             -
Dividends paid on preferred stock                          (67)         (82)           (21)
                                                   -------------------------------------------
Net cash provided (used) by financing activities         2,423        2,485         (1,888)
                                                   -------------------------------------------
</TABLE>


                                      F-7


<PAGE>

<PAGE>


                             Cryenco Sciences, Inc.

                Consolidated Statements of Cash Flows (continued)
                                 (In Thousands)
<TABLE>
<CAPTION>

                                                              YEAR ENDED AUGUST 31
                                                       1996           1995          1994
                                                   -------------------------------------------
<S>                                                  <C>            <C>            <C>     
Net decrease in cash and cash equivalents            $    (521)     $  (147)       $  (528)
Cash and cash equivalents at beginning of year             632          779          1,307
                                                   -------------------------------------------
Cash and cash equivalents at end of year             $     111      $   632        $   779
                                                   ===========================================

Supplemental disclosures of cash flow information:
  Cash paid for income taxes                         $     247    $       -      $       -
  Cash paid for interest                                   787          875          1,267

Supplemental disclosures of noncash financing activities:
    Equipment acquired and financed under capital
      leases                                               304          317             87
    Retirement of debt in exchange for issuance of
      Series A preferred stock                               -            -            678
    Issuance of common stock in exchange for
      warrants exercised                                     2            2              1
    Issuance of warrants as part of debt restructurings      -            -             35

</TABLE>

See accompanying notes.


                                      F-8

<PAGE>

<PAGE>


                             Cryenco Sciences, Inc.

                   Notes to Consolidated Financial Statements
                                 August 31, 1996

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF THE BUSINESS

Cryenco  Sciences,  Inc.  (the  Company)  designs  and  manufactures  controlled
atmospheric  enclosures and products to transport,  store and dispense cryogenic
materials.

PRINCIPLES OF CONSOLIDATION

The consolidated  financial statements include the accounts of Cryenco Sciences,
Inc. and its wholly owned subsidiaries.  All significant  intercompany  balances
and transactions have been eliminated.

INCOME TAXES

Deferred tax  liabilities or assets (net of a valuation  allowance) are provided
in the financial statements by applying the provisions of applicable tax laws to
measure the deferred tax consequences of temporary  differences that will result
in net  taxable  or  deductible  amounts  in future  years as a result of events
recognized in the financial statements in the current or preceding years.

CASH AND CASH EQUIVALENTS

For purposes of the consolidated statements of cash flows, the Company considers
all highly liquid  investments with original  maturities of three months or less
to be cash equivalents.

CONTRACT REVENUE AND COST RECOGNITION

Revenue and costs on long-term  contracts  (contracts  with a value in excess of
$100,000 and requiring  more than six months to complete) are  recognized  using
the  percentage-of-completion  method  (measured  by  the  percentage  of  costs
incurred to date to total estimated costs for each contract) or units delivered,
whichever is deemed more appropriate for the contract.

Revenue  and costs on  short-term  contracts  (contracts  with a value less than
$100,000 and requiring six months or less to complete) are recognized  using the
completed  contract  method,  which results in the deferral of revenue and costs
until such time as the contracts


                                      F-9


<PAGE>

<PAGE>



                             Cryenco Sciences, Inc.

             Notes to Consolidated Financial Statements (continued)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

are  complete.  A  contract  is  considered  complete  when  all  costs,  except
insignificant items, have been incurred and the units have been delivered to the
customer.

Contract  costs include all direct  material and labor costs and those  indirect
costs  related to contract  performance  such as indirect  labor,  building  and
equipment rental, supplies, freight and depreciation costs. Selling, general and
administrative  costs  are  charged  to  expense  as  incurred.  Provisions  for
estimated losses on uncompleted contracts are made in the period such losses are
determined.

INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out) or market. The
Company records an allowance for excess and obsolete inventory based on periodic
reviews.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost.  Depreciation is computed using the
straight-line method over the estimated useful lives of the assets.

DEFERRED FINANCING COSTS

Deferred  financing costs are amortized using the straight-line  method over the
term of the related indebtedness.

ORGANIZATIONAL COSTS

Organizational  costs are  amortized  using the  straight-line  method over five
years.

GOODWILL

Goodwill is being amortized using the straight-line method over forty years. The
Company  periodically  evaluates goodwill impairment on the basis of whether the
goodwill is fully recoverable from projected, undiscounted operating cash flows.


                                      F-10


<PAGE>

<PAGE>


                             Cryenco Sciences, Inc.

              Notes to Consolidated Financial Statements (continued)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RESEARCH AND DEVELOPMENT

Research and development  expenses are typically  charged to expense as incurred
or are charged against a specific contract, if to be reimbursed by the customer.

In May 1995, the Company  entered into an arrangement  with a corporation  under
which the corporation would provide $452,500 to the Company for the development,
demonstration,  delivery, and installation of an on-site  Thermo-Acoustic Driven
Orifice Pulse Tube Refrigerator  (TADOPTR)  liquefier and LNG dispensing system.
The period of performance under the arrangement was over twelve months.  For the
year ended August 31, 1995, the Company incurred approximately $255,000 in costs
for development for which it was fully reimbursed. For the year ended August 31,
1996, the Company incurred  approximately  $504,000 in costs for development and
received $120,000 of reimbursement.

WARRANTIES

The Company records a warranty accrual at the time of sale for estimated claims,
based on actual  claims  experience.  The  warranty for the  Company's  products
generally  is for defects in  material  and  workmanship  for a period of twelve
months.

EARNINGS (LOSS) PER COMMON SHARE

Net  earnings  (loss) per common share is computed  using the  weighted  average
number of shares of common stock outstanding.  When dilutive,  stock options and
warrants are included as share  equivalents  using the treasury stock method. In
calculating  net earnings (loss) per share,  preferred  dividends of $89,661 and
$82,538 decreased the net earnings during 1996 and 1995, respectively. Preferred
dividends  of $21,150  increased  the net loss during  1994.  Fully  diluted net
earnings (loss) per common share is not significantly different from primary net
earnings (loss) per common share.

CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS

During the fiscal years ended August 31, 1996,  1995 and 1994,  revenue from one
customer, General Electric, was approximately $11,067,000 (35% of revenue),



                                      F-11

<PAGE>


<PAGE>



                             Cryenco Sciences, Inc.

          Notes to Consolidated Financial Statements (continued)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  (CONTINUED)

$9,702,000 (36% of revenue), and $8,888,000 (50% of revenue), respectively. This
customer  also  represented  $1,140,000  (21%) and  $659,000  (24%) of  accounts
receivable at August 31, 1996 and 1995,  respectively,  and $2,775,000 (70%) and
$2,734,000  (40%) of costs and  estimated  earnings  in excess  of  billings  on
uncompleted contracts at August 31, 1996 and 1995, respectively.

Revenue  from  Jack  B.  Kelley,  Inc.  and  affiliates  totaled   approximately
$9,566,000  (31% of  revenue) in 1996,  $9,854,000  (36% of revenue) in 1995 and
$2,545,000  (14% of revenue) in 1994.  Jack B. Kelley,  Inc. and affiliates also
represent  $1,835,000  (34%)  and  $821,000  (30%) of  accounts  receivable  and
$435,000 (11%) and $2,182,000 (32%) of costs and estimated earnings in excess of
billings on uncompleted contracts at August 31, 1996 and 1995, respectively.

Revenue from Air Products totaled  approximately  $4,024,000 (13% of revenue) in
1996.  Air Products also  represents  $408,000 (8%) of accounts  receivable  and
$960,000  (24%) of costs  and  estimated  earnings  in  excess  of  billings  on
uncompleted contracts as of August 31, 1996.

The Company  performs  periodic credit  evaluations of its customers'  financial
condition and generally does not require  collateral.  Receivables are generally
due within 30 days. Credit losses consistently have not been significant.

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial  statements and disclosures made in
the accompanying notes to the financial statements.  Actual results could differ
from those estimates.

FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying values of the Company's  financial  assets  approximate fair value.
The fair values of debt are estimated  using  discounted cash flow analyses with
discount  rates equal to the interest  rates  currently  being offered for loans
with similar  terms to borrowers of similar  credit  quality.  While the Company
believes the  carrying  value of its note payable  generally  approximates  fair
value, a reasonable  estimate of the fair market value could not be made without
incurring excessive costs.


                                      F-12


<PAGE>

<PAGE>


                             Cryenco Sciences, Inc.

             Notes to Consolidated Financial Statements (continued)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  (CONTINUED)

STOCK BASED COMPENSATION

In  October  1995,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement No. 123, Accounting for Stock-Based Compensation. Statement No. 123 is
applicable  for fiscal  years  beginning  after  December 15, 1995 and gives the
option to either follow fair value accounting or to follow Accounting Principles
Board Opinion No. 25, Accounting for Stock Issued to Employees (APB No. 25), and
related interpretations.

The Company has determined it will follow APB No. 25 and related interpretations
in accounting for its employee stock options. The Company has not yet determined
the impact on its  financial  position or results of  operations  had fair value
accounting been adopted.

LONG-LIVED ASSETS

In March 1995, the FASB issued Statement No. 121,  Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, which requires
impairment  losses to be recorded on long-lived  assets used in operations  when
indicators of impairment are present. The Company is required to adopt Statement
No.  121 in the  first  quarter  of  fiscal  year  1997  and,  based on  current
circumstances, does not believe the effect of adoption will be material.

2. INVENTORIES

At August 31, inventories consist of:

<TABLE>
<CAPTION>

                                                             1996            1995
                                                       ---------------------------------
                                                                (In Thousands)
<S>                                                         <C>              <C>   
    Raw materials                                           $3,344           $3,514
    Finished goods and work-in-process                       1,139              794
                                                       ---------------------------------
                                                             4,483            4,308
    Less reserve for obsolescence                              150              100
                                                       ---------------------------------
                                                            $4,333           $4,208
                                                       =================================

</TABLE>

                                      F-13


<PAGE>

<PAGE>


                             Cryenco Sciences, Inc.

             Notes to Consolidated Financial Statements (continued)

3. COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS ON UNCOMPLETED CONTRACTS

At August 31, costs and estimated  earnings in excess of billings on uncompleted
contracts consist of:

<TABLE>
<CAPTION>
                                                             1996            1995
                                                       ---------------------------------
                                                                (In Thousands)
<S>                                                         <C>            <C>     
     Costs on uncompleted contracts                         $5,436         $  8,776
     Estimated gross profit to date                          2,203            2,616
                                                       ---------------------------------
     Estimated revenue                                       7,639           11,392
     Less billings to date                                   3,695            4,685
                                                       ---------------------------------
                                                            $3,944         $  6,707
                                                       =================================
</TABLE>

4. LONG-TERM DEBT

Long-term debt is comprised of the following:

<TABLE>
<CAPTION>

                                                                     AUGUST 31
                                                                 1996         1995
                                                             ---------------------------
                                                                   (In Thousands)
<S>                                                            <C>             <C>   
     Note payable bearing interest at 14%, subordinated,
       unsecured.  Interest is payable quarterly and
       principal payments of $275,000 are payable quarterly
       beginning November 30, 1996.                            $  1,700        $2,200

     Term loan maturing December 31, 1998 bearing interest
       at the reference rate (as defined in the loan agreement)
       plus 3/4% (9.0% at August 31,  1996)
       payable monthly. Principal payments of $12,806 are
       payable monthly beginning September 15, 1996.                615             -

     Term loan bearing interest at the adjusted LIBO rate
       plus 3 1/2%.                                                   -         2,500

     Revolving credit facility.  Interest payable at the
       adjusted LIBO rate plus 3 1/2%.                                -         2,200

</TABLE>


                                      F-14


<PAGE>

<PAGE>


                             Cryenco Sciences, Inc.

             Notes to Consolidated Financial Statements (continued)

4. LONG-TERM DEBT (CONTINUED)

<TABLE>
<CAPTION>

                                                                     AUGUST 31
                                                                 1996         1995
                                                             ---------------------------
                                                                   (In Thousands)

<S>                                                             <C>             <C>   
     Revolving credit facility  maturing  December 31, 1998
       bearing interest at the reference rate (as defined in
       the loan agreement) plus up to an additional 1.0%
       depending upon financial performance (9.25% at
       August 31, 1996).                                       $  7,210     $       -

     Capital lease obligations                                      491           322
                                                             ---------------------------
                                                                 10,016         7,222
     Less current portion                                         1,382         1,593
                                                             ---------------------------
                                                               $  8,634        $5,629
                                                             ===========================
</TABLE>

In December 1995, the Company entered into a Credit and Security  Agreement (the
Agreement) with FBS Business Finance Corporation (FBS). Under the Agreement, FBS
has provided a revolving loan facility of up to $9,000,000  through December 31,
1997, increasing to $10,000,000 through December 31, 1998, subject to the amount
of the Company's  borrowing  base, and a term loan facility of up to $2,960,000,
subject to eligible manufacturing additions for the year ended August 31, 1996.

On January  16,  1996,  the  Company  obtained  the  initial  funding  under the
revolving loan in the amount of $5,825,000.  The proceeds of this loan were used
to retire the outstanding revolving credit facility ($2,200,000),  to retire the
outstanding term loan ($2,125,000), to make a partial payment on the outstanding
note payable  ($500,000) and for general corporate purposes  ($1,000,000).  As a
result of the early  retirement of the term loan, the revolving credit facility,
and  the  partial  payment  on the  note  payable,  the  Company  recognized  an
extraordinary expense of $93,000 (net of the related tax benefit of $54,000) for
the write-down of deferred financing expenses related to these debts.

The term loan and revolving  credit  facility are secured by the common stock of
Cryenco, Inc. and all accounts receivable,  inventories,  property and equipment
and intangible assets of the Company.

The Company must comply with certain debt  covenants,  including the maintenance
of certain financial ratios and restrictions on dividends.


                                      F-15


<PAGE>

<PAGE>


                             Cryenco Sciences, Inc.

             Notes to Consolidated Financial Statements (continued)

4. LONG-TERM DEBT (CONTINUED)

The aggregate maturities of long-term debt are as follows (in thousands):

<TABLE>
<CAPTION>

<S>                                                             <C>
           Year ending August 31:
             1997                                               $  1,382
             1998                                                    899
             1999                                                  7,648
             2000                                                     74
             2001                                                     13
                                                              -----------
                                                                 $10,016
                                                              ===========
</TABLE>


5. LEASES

Office  space,  production  facilities,  and certain  equipment are leased under
agreements  which are  classified as operating  leases for  financial  reporting
purposes.  The facilities  leases provide for renewal  options of up to five and
ten years at  approximately  the same rates.  Total  rental  expense  charged to
operations  for the years ended  August 31,  1996,  1995 and 1994 was  $784,000,
$853,000 and $828,000, respectively.

The Company's  assets held under capital leases,  which are included in property
and equipment, consist of the following at August 31:

<TABLE>
<CAPTION>

                                                               1996           1995
                                                           -----------------------------
<S>                                                           <C>           <C>
     Machinery and equipment                                  $628,003      $418,039
     Less accumulated depreciation                             110,481        52,824
                                                           -----------------------------
                                                              $517,522      $365,215
                                                           =============================

</TABLE>


                                      F-16

<PAGE>

<PAGE>


                             Cryenco Sciences, Inc.

             Notes to Consolidated Financial Statements (continued)

5. LEASES (CONTINUED)

Future minimum lease payments under capital and  noncancelable  operating leases
are as follows (in thousands):

<TABLE>
<CAPTION>

                                                              CAPITAL      OPERATING
                                                              LEASES         LEASES
                                                           -----------------------------

<S>                                                             <C>         <C>    
           Year ending August 31:
             1997                                               $180        $   860
             1998                                                180            360
             1999                                                155            359
             2000                                                 80             42
             2001                                                 20             13
                                                           -----------------------------
           Total minimum lease payments                          615         $1,634
                                                                             ===========
           Less interest                                         124
                                                           --------------
           Present value of minimum lease payments              $491
                                                           ==============

</TABLE>


Depreciation  expense relating to assets held under capital leases for the years
ended  August  31,  1996,  1995 and  1994  was  $98,323,  $36,023  and  $16,801,
respectively.

Subsequent  to August 31,  1996,  the  property  located at 3811 Joliet  Street,
Denver, Colorado, was sold and a new lease agreement between the Company and the
new  owners  became  effective.  Under the terms of the  lease,  the  Company is
obligated  to pay a minimum  rent of $38,841 per month for 10 years  (subject to
increases based on an inflation index), property taxes and insurance. This lease
replaces the Company's  lease with the prior owners which had one year remaining
with rent of $41,666 per month,  and is not included in the future minimum lease
payments shown above.

6. EQUIPMENT LEASING

During the year ended August 31, 1996, the Company entered into lease agreements
under which equipment manufactured by the Company is leased to customers.  These
leases have been classified as operating leases by the Company.


                                      F-17

<PAGE>

<PAGE>


                             Cryenco Sciences, Inc.

             Notes to Consolidated Financial Statements (continued)

6. EQUIPMENT LEASING (CONTINUED)

Future  minimum  lease  payments  under  noncancelable  operating  leases are as
follows (in thousands):

<TABLE>
<CAPTION>
         Year ending August 31:
<S>                                                             <C>  
           1997                                                 $  81
           1998                                                    74
                                                             ----------
                                                                 $155
                                                             ==========
</TABLE>


7. COMMON STOCK, PREFERRED STOCK, WARRANTS, AND OPTIONS

In connection with a term loan and subordinated note payable, the Company issued
warrants  to  purchase  197,456  shares of its Class A common  stock and 543,372
shares  of its  Class B  common  stock  for  $.86112  per  share  (the  original
warrants). At April 15, 1992, the Company issued warrants to purchase a total of
38,323  additional  shares  of Class B common  stock  at $5 per  share  (the new
warrants)  to the  holders  of the  original  Class A and  Class B  warrants  in
exchange  for the  removal of a feature of the  original  warrants  whereby  the
holders had the option to require the  Company to purchase  the  warrants or the
stock issued  pursuant to the warrants.  During 1995, the Company  increased the
number of original  warrants to purchase an additional 1,443 shares of its Class
A common  stock and 16,854  shares of its Class B common  stock and  reduced the
exercise price to $.8352 per share as a result of antidilutive  provisions which
were invoked when the Company issued the shares of common stock described below.
In addition,  the new warrants were  increased to purchase an  additional  1,189
shares of Class A common stock and the exercise price was reduced to $4.8496 per
share. The holders of the original  warrants,  as amended,  and the new warrants
have a "cashless  exercise  right," whereby the holders may reduce the number of
shares to be received to pay the exercise  price,  such reduction to be equal to
the  exercise  price to be paid divided by the then fair market value per share.
These warrants  expire August 29, 2003.  During the years ended August 31, 1996,
1995 and 1994,  warrants for 191,766,  150,000 and 75,925 shares,  respectively,
were  exercised,  using the  cashless  exercise  option,  which  resulted in the
issuance of 154,169, 118,918 and 56,974 shares, respectively,  of Class A common
stock.

In 1992,  130,000  outstanding  options and warrants to acquire shares of Gulf &
Mississippi   Corporation,   which  had   acquired  the  Company  in  a  reverse
acquisition,  were  converted  into  options and  warrants to purchase  the same
number of shares of Class A common  stock of the  Company.  Warrants to purchase
100,000  shares  of the  Company's  Class A common  stock at  $3.6956  per share
expired  July 9, 1995 and options to  purchase  30,000  shares of the  Company's
Class A common stock at $16 per share are exercisable


                                      F-18


<PAGE>

<PAGE>



                             Cryenco Sciences, Inc.

             Notes to Consolidated Financial Statements (continued)

7. COMMON STOCK, PREFERRED STOCK, WARRANTS, AND OPTIONS (CONTINUED)

prior to November 5, 1996.  The options  were issued  pursuant to the  Company's
1986 Non-Qualified  Stock Option Plan, which provides for an aggregate of 50,000
shares of common stock to be issued under the Plan.

In  connection  with the 1992 public  offering,  the  Company  sold a warrant to
purchase  10,000  shares of Class A common  stock at $5.50 per share for $100 to
one of the  underwriters.  The warrant is exercisable for a period of five years
commencing August 13, 1993.

In March  1993,  in  conjunction  with a debt  restructuring,  the  Company  was
advanced $650,000 from stockholders,  treated as junior  subordinated  notes. In
consideration for the advances, these stockholders received warrants to purchase
130,000  shares of Class A common  stock at $7.90 per share.  The  warrants  are
exercisable for a period of five years  commencing March 12, 1993. The warrants'
fair value of $55,000  at time of  issuance,  as  determined  by an  independent
appraiser,  was  capitalized  as a deferred  expense and is being  amortized  to
expense over five years.

In  November  1993,  the Company  amended  certain of its debt  agreements  with
respect to certain covenants.  Under the terms of these amendments,  the Company
issued  warrants to purchase 35,000 shares of the Company's Class B common stock
and warrants to purchase  17,500 shares of the  Company's  Class A common stock.
The warrants were exercisable at a price of $6.38 per share and expire on August
29, 2003.  The  warrants'  fair value at time of issuance,  as determined by the
Company, was $22,000.  During 1995, the Company increased the number of warrants
to  purchase  an  additional  1,086  shares of its Class B common  stock and 542
shares of its Class A common stock and reduced the  exercise  price to $6.19 per
share as a result of antidilutive provisions which were invoked when the Company
issued the shares of common stock described below.

During the year ended August 31, 1994,  the Company  exchanged  67,838 shares of
its Series A  Preferred  Stock for the  junior  subordinated  notes and  related
current interest notes totaling  approximately  $678,000. The Series A Preferred
Stock  provides  for  a  cumulative  cash  dividend  of  12%  of  the  aggregate
liquidation value, as defined, per annum through August 31, 1995,  increasing 1%
per annum  thereafter to a maximum of 18%.  However,  all dividends in excess of
12% per annum shall not be paid in cash, but shall be paid by issuing additional
shares of Series A  Preferred  Stock.  The  Series A  Preferred  Stock  shall be
redeemable, in whole or in part, at the option of the Company by


                                      F-19


<PAGE>

<PAGE>



                             Cryenco Sciences, Inc.

             Notes to Consolidated Financial Statements (continued)

7. COMMON STOCK, PREFERRED STOCK, WARRANTS, AND OPTIONS (CONTINUED)

resolution of its Board of Directors,  at any time and from time to time, at the
liquidation  value of such shares,  plus all dividends payable on such shares up
to the date fixed for redemption. In consideration for the exchange, the Company
issued  warrants to purchase up to 65,000 shares of the Company's Class A common
stock, at an exercise price of $3.55 per share.  The warrants expire January 29,
2000. The warrants' fair value of $13,000 at time of issuance,  as determined by
an independent  appraiser,  was  capitalized as a deferred  expense and is being
amortized to expense over five years.

As  described in Note 10, in June 1994,  the Company  received  $780,000  from a
limited partnership to fund the development of a 500 gallon per day TADOPTR. The
partnership  received  warrants as a part of the transaction to purchase 200,000
shares of Class A common stock at $3.00 per share. The warrants expire March 20,
2000. The warrants' fair value, as determined by an independent  appraiser,  was
$60,000 at the time of issuance.

On November 29, 1994, the Company entered into a Purchase Agreement with a group
of purchasers  which  provided for the sale of 800,000  shares of Class A common
stock and  warrants to purchase  700,000  shares of Class A common  stock in the
future at an exercise price of $4.00 per share. The aggregate purchase price for
the shares and warrants was approximately $2,700,000. The purchase was completed
in two  closings,  on December  20, 1994 and  January 30,  1995,  from which the
Company realized net proceeds of approximately $2,300,000.  Warrants for 507,503
and  192,497  shares  are  exercisable  for a period  of five  years  commencing
December 20, 1994 and January 30, 1995, respectively.  The warrants' fair value,
as determined by the Company, was $70,000 at the time of issuance.

On May 18, 1995, the Company agreed,  among other things, to reduce the exercise
price of the warrants referred to in the preceding  paragraph to $3.00 per share
and the  purchasers  agreed to  exercise a portion of the  warrants.  On June 8,
1995, the purchasers  exercised  warrants to purchase  539,900 shares of Class A
common  stock,  from which the Company  realized net  proceeds of  approximately
$1,600,000.

In  connection  with the  aforementioned  Purchase  Agreement,  the Company also
issued warrants to purchase 25,000 shares of Class A common stock at an exercise
price of $4.00 per share.  The warrants  expire December 20, 1999. The warrants'
fair value, as determined by the Company, was $2,500 at the time of issuance.


                                      F-20


<PAGE>

<PAGE>


                             Cryenco Sciences, Inc.

             Notes to Consolidated Financial Statements (continued)

7. COMMON STOCK, PREFERRED STOCK, WARRANTS, AND OPTIONS (CONTINUED)

The Company's 1992 Employee  Incentive and Non-Qualified  Stock Option Plan (the
1992 Plan) was adopted effective April 1, 1992. The 1992 Plan provides for up to
187,500 shares of the Company's Class A common stock pursuant to the exercise of
stock options which may be granted to employees  and  directors.  Options may be
issued at not less than the fair market value on the date of grant.

Information  for each of the three years in the period  ended  August 31,  1996,
with respect to activity of the 1992 Plan, is as follows:

<TABLE>
<CAPTION>


                                                      NUMBER OF      EXERCISE
                                                       OPTIONS        PRICE
                                                    -----------------------------
<S>                                                     <C>         <C>     <C> 
        Options outstanding at August 31, 1993          26,000      $4.00 - 6.75
        Granted in 1994                                 19,500      $3.00 - 6.38
                                                    --------------
        Options outstanding at August 31, 1994          45,500      $3.00 - 6.75
        Granted in 1995                                 58,000             $5.38
        Forfeited in 1995                              (17,500)     $4.00 - 6.38
                                                    --------------
        Options outstanding at August 31, 1995          86,000      $3.00 - 6.75
        Granted in 1996                                 96,500             $4.50
        Forfeited in 1996                              (52,000)     $4.50 - 6.38
                                                    ==============
        Options outstanding at August 31, 1996         130,500      $3.00 - 6.75
                                                    ==============
</TABLE>



The Company's 1995 Incentive and Non-Qualified Stock Option Plan (the 1995 Plan)
was adopted  effective  November  16,  1995.  The 1995 Plan  provides  for up to
300,000 shares of the Company's Class A common stock pursuant to the exercise of
stock options which may be granted to employees  and  directors.  Options may be
issued at not less than the fair market  value on the date of grant.  No options
have been granted under the 1995 Plan at August 31, 1996.

The Company  adopted the 1993  Non-Employee  Director  Stock Option Program (the
Program)  effective  September  1, 1993,  whereby  each  director  who is not an
officer or employee  of the  Company is entitled to receive  options to purchase
500 shares of the Company's  Class A common stock for each fiscal quarter served
as a director,  commencing with the quarter ending  November 30, 1993.  Eligible
directors  are  limited  to a total of  20,000  shares  under the  Program.  The
purchase  price is  determined  based on the fair  market  value of  outstanding
shares as of the last business day of the  applicable  fiscal quarter (the Award
Date). Options are exercisable for a period of ten years subsequent to the Award
Date. In connection with the Program, the Company has


                                      F-21

<PAGE>

<PAGE>



                             Cryenco Sciences, Inc.

             Notes to Consolidated Financial Statements (continued)

7. COMMON STOCK, PREFERRED STOCK, WARRANTS, AND OPTIONS (CONTINUED)

reserved  40,000  authorized  and  unissued  shares of Class A common  stock for
issuance and delivery upon exercise of the options.

Information  for each of the three years in the period  ended  August 31,  1996,
with respect to activity of the Program, is as follows:

<TABLE>
<CAPTION>

                                                      NUMBER OF      EXERCISE
                                                       OPTIONS        PRICE
                                                    -----------------------------
<S>                                                 <C>             <C>       
        Options outstanding at August 31, 1993               -
        Granted in 1994                                  3,000      $2.50 - 6.13
                                                    --------------
        Options outstanding at August 31, 1994           3,000      $2.50 - 6.13
        Granted in 1995                                  4,000      $3.75 - 4.25
                                                    --------------
        Options outstanding at August 31, 1995           7,000      $2.50 - 6.13
        Granted in 1996                                  4,000      $3.50 - 4.75
                                                    --------------
        Options outstanding at August 31, 1996          11,000      $2.50 - 6.13
                                                    ==============
</TABLE>

8. INCOME TAXES

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts


                                      F-22


<PAGE>

<PAGE>



                             Cryenco Sciences, Inc.

             Notes to Consolidated Financial Statements (continued)

8. INCOME TAXES (CONTINUED)

used for income tax purposes.  Significant  components of the Company's deferred
tax liabilities and assets at August 31 are as follows:

<TABLE>
<CAPTION>

                                                               1996           1995
                                                           -----------------------------
                                                                  (In Thousands)

<S>                                                           <C>            <C> 
    Deferred tax liabilities:
      Prepaid expenses                                        $    9         $  35
                                                           -----------------------------

    Deferred tax assets:
      Inventory obsolescence                                      56            37
      Warranty                                                    52            75
      Inventory capitalization                                    23            25
      Accrued liabilities                                         64            50
      Tax basis of assets in excess of book basis                 35            87
      Other                                                        4             6
                                                           -----------------------------
        Total deferred tax assets                                234           280
    Valuation allowance for deferred tax assets                 (225)         (245)
                                                           -----------------------------
    Net deferred tax assets                                        9            35
                                                           -----------------------------
                                                               $   -        $    -
                                                           =============================
</TABLE>

Components of income tax expense (benefit) are as follows:

<TABLE>
<CAPTION>

                                                  CURRENT      DEFERRED       TOTAL
                                                ----------------------------------------
                                                            (In Thousands)
<S>                                                 <C>            <C>         <C>   
    1996
    Federal                                         $ 389          $(26)       $  363
    State                                               -             -             -
                                                ----------------------------------------
                                                    $ 389          $(26)       $  363
                                                ========================================
    1995
    Federal                                         $ 194         $   -        $  194
    State                                               -             -             -
                                                ----------------------------------------
                                                    $ 194         $   -        $  194
                                                ========================================
</TABLE>

                                      F-23

<PAGE>

<PAGE>


                             Cryenco Sciences, Inc.

             Notes to Consolidated Financial Statements (continued)

8. INCOME TAXES (CONTINUED)

<TABLE>
<CAPTION>

                                                  CURRENT      DEFERRED       TOTAL
                                                ----------------------------------------
                                                            (In Thousands)

<S>                                                 <C>           <C>           <C>   
    1994
    Federal                                         $(403)        $   -         $(403)
    State                                               -             -             -
                                                ----------------------------------------
                                                    $(403)        $   -         $(403)
                                                ========================================

</TABLE>

A  reconciliation  between the actual  income tax expense  (benefit)  and income
taxes computed by applying the statutory tax rates is as follows:

<TABLE>
<CAPTION>

                                                    1996         1995          1994
                                                ----------------------------------------
                                                            (In Thousands)
<S>                                                 <C>           <C>          <C>   
    Computed "expected" tax expense (benefit)       $334          $189         $(442)
    Goodwill and other permanent differences          99            86             -
    Other                                            (70)          (81)           39
                                                ----------------------------------------
    Actual tax expense (benefit)                    $363          $194         $(403)
                                                ========================================
</TABLE>

The Company has net operating loss  carryforwards  for state income tax purposes
of  approximately  $2,668,000 which expire in various amounts from 2008 to 2009.
Net operating loss  carryforwards of approximately  $1,048,000 and $977,000 were
used for state income tax purposes in 1996 and 1995, respectively.

9. EMPLOYEE BENEFIT PLAN

The  Company's  401(k)  savings  plan  provides  for both  employee and employer
contributions.  Employees  who have  reached  the age of 21  years  and who have
completed one year of service are eligible to participate in the Plan. Employees
may  contribute  up to 15% of their annual  compensation  limited to the maximum
contribution  allowable under Internal Revenue Service guidelines.  The employer
matches  25%  of  each   employee's   contribution,   up  to  $1,000.   Employee
contributions vest immediately,  while amounts  contributed by the employer vest
based upon the  employee's  term of service.  Contributions  for the years ended
August 31, 1996, 1995 and 1994 were $68,000, $52,000 and $41,000, respectively.


                                      F-24


<PAGE>

<PAGE>


                             Cryenco Sciences, Inc.

             Notes to Consolidated Financial Statements (continued)

10. RELATED PARTY TRANSACTIONS

In June 1994, the Company entered into an arrangement with a limited partnership
in which the  partnership  would  contribute  $780,000  to the  Company  for the
development  of a 500 gallon per day  TADOPTR.  A director  of the  Company is a
general partner of the limited  partnership.  In exchange for this funding,  the
Company  issued  warrants to purchase  200,000 shares of Class A common stock at
$3.00 per share,  and entered into a Royalty Rights and  Technology  Development
Agreement with the partnership  pursuant to which royalties of between 1% and 5%
of net revenues from the sale of TADOPTRs will be paid to the partnership  until
the partnership  receives an aggregate of $1,600,000,  after which the royalties
decrease to between 0.6% and 0.75% of net  revenues.  The  royalties are payable
for a period of 20 years from the execution of the agreement.  In addition,  the
partnership was given a security interest in the Company's rights in the TADOPTR
to secure the  royalty  payments.  The  Company  was  obligated  to spend  funds
provided by the  partnership for the development of a 500 gallon per day TADOPTR
over a period of 12 to 18 months.  For the years ended August 31, 1996 and 1995,
the Company incurred approximately $455,000 and $325,000, respectively, in costs
for this  development,  for  which  it has  been  fully  reimbursed  under  this
agreement.

In fiscal year 1992, the Company  entered into an agreement with an affiliate of
several of the Company's  principal  stockholders  pursuant to which such entity
provides  a  variety  of  management  advisory  services  to  the  Company.  The
agreement, which terminates on August 30, 1997, provides for monthly payments of
approximately  $10,000 by the Company.  At August 31, 1996 and 1995, the Company
has accrued  management  advisory fees of approximately  $324,000 related to the
agreement.

In  connection  with the  Purchase  Agreement  described  in Note 7, the Company
issued warrants to purchase 700,000 and 25,000 shares of Class A common stock to
two entities  within the  purchaser  group in which two directors of the Company
have a financial interest.

In June 1995, a limited  liability company agreement was signed between Cryenex,
Inc.  (Cryenex),  a wholly owned subsidiary of the Company,  and an affiliate of
Jack B.  Kelley,  Inc. for the  establishment  of a limited  liability  company,
Applied LNG Technologies  USA, LLC (ALT), to develop turnkey projects  utilizing
liquefied  natural  gas.  Cryenex is a 49% owner of ALT,  and  accounts  for its
investment  using the equity method,  under which  Cryenex's share of income and
losses  of ALT is  reflected  in  income as  earned  and  distributions  will be
credited against the investment when received.  As of August 31, 1995, Cryenex's
investment of $49,000 was reduced to zero. Under terms of the


                                      F-25


<PAGE>

<PAGE>



                             Cryenco Sciences, Inc.

             Notes to Consolidated Financial Statements (continued)

10. RELATED PARTY TRANSACTIONS (CONTINUED)

agreement,  Cryenex agreed to provide certain  services to ALT,  reimbursable to
Cryenex,  in an amount up to $490,000.  During the fiscal years ended August 31,
1996 and 1995,  Cryenex has  provided  services to ALT in the amount of $189,000
and $83,000,  respectively. In addition, during the fiscal year ended August 31,
1996, revenue resulting from sales to ALT amounted to approximately  $1,344,000.
At August 31, 1996 and 1995,  receivables  from ALT  represented  $1,423,000 and
$83,000, respectively.

11. FAIR VALUES OF FINANCIAL INSTRUMENTS

FASB No. 107,  Disclosures about Fair Value of Financial  Instruments,  requires
the disclosure of the fair value of all financial  instruments,  both on and off
balance sheet,  for which it is  practicable to estimate their value.  Financial
instruments are generally defined as cash, equity instruments or investments and
contractual  obligations to pay or receive cash or another financial instrument.
In defining  fair value,  the Statement  indicates  quoted market prices are the
preferred means of estimating the value of a specific  instrument,  but in cases
where market quotes are not  available,  fair values should be determined  using
various valuation  techniques such as discounted cash flow  calculations.  Those
techniques are  significantly  affected by the assumptions  used,  including the
discount  rate and estimates of future cash flows.  In that regard,  the derived
fair value  estimates  cannot be  substantiated  by  comparison  to  independent
markets and, in many cases, could not be realized in immediate settlement of the
instrument.  FASB  No.  107  excludes  certain  financial  instruments  and  all
nonfinancial  instruments  from its disclosure  requirements.  Accordingly,  the
aggregate  fair  value  amounts do not  represent  the  underlying  value of the
Company.


                                      F-26


<PAGE>

<PAGE>




                         Report of Independent Auditors

The Board of Directors and Stockholders
Cryenco Sciences, Inc.

We have audited the consolidated financial statements of Cryenco Sciences,  Inc.
as of August 31,  1996 and 1995,  and for each of the three  years in the period
ended August 31, 1996,  and have issued our report thereon dated October 5, 1996
(included  elsewhere in this Form 10-K).  Our audits also included the financial
statement schedule of Cryenco Sciences, Inc. listed in Item 14(a). This schedule
is the  responsibility  of the Company's  management.  Our  responsibility is to
express an opinion based on our audits.

In our  opinion,  the  financial  statement  schedule  referred  to above,  when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents fairly in all material respects the information set forth therein.

                                                   ERNST & YOUNG LLP

Denver, Colorado
October 5, 1996


                                       S-1

<PAGE>

<PAGE>


                             Cryenco Sciences, Inc.

                 Schedule II - Valuation and Qualifying Accounts

<TABLE>
<CAPTION>

                           BALANCE AT    CHARGED TO    CHARGED TO                   BALANCE
                           BEGINNING     COSTS AND        OTHER                      AT END
       DESCRIPTION         OF PERIOD      EXPENSES      ACCOUNTS     DEDUCTIONS    OF PERIOD
-----------------------------------------------------------------------------------------------
<S>                         <C>           <C>                          <C>          <C>     
YEAR ENDED AUGUST 31, 1996
Deducted    from    asset
accounts:
  Allowance for excess and
    obsolete inventory      $100,000      $268,726                     $218,726(1)  $150,000
  Allowance for doubtful
    accounts                  14,240        11,900                       14,240       11,900
                          ---------------------------------------------------------------------
                            $114,240      $280,626                     $232,966     $161,900
                          =====================================================================

  Accrued warranty reserve  $200,000      $379,259                     $438,713(2)  $140,546
                          =====================================================================

YEAR ENDED AUGUST 31, 1995

Deducted from asset accounts:

  Allowance for excess and
    obsolete inventory     $  52,226     $  55,309                   $    7,535(1)  $100,000
  Allowance for doubtful
    accounts                  22,070        14,240                       22,070       14,240
                          ---------------------------------------------------------------------
                           $  74,296     $  69,549                    $  29,605     $114,240
                          =====================================================================
  
  Accrued warranty reserve  $143,697      $662,988                     $606,685(2)  $200,000
                          =====================================================================

YEAR ENDED AUGUST 31, 1994

Deducted from asset accounts:

  Allowance   for  excess
    and obsolete inventory  $105,801      $142,319                     $195,894(1) $  52,226
  Allowance for doubtful
    accounts                   1,791        20,279                            -       22,070
                          ---------------------------------------------------------------------
                            $107,592      $162,598                     $195,894    $  74,296
                          =====================================================================
 
  Accrued warranty reserve  $327,791      $287,955                     $472,049(2)  $143,697
                          =====================================================================
</TABLE>



(1)  Obsolete and excess inventories written off, net of recoveries
(2)  Warranty claims honored during the year

                                       S-2

<PAGE>
<PAGE>



                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>

    Exhibit                          Description of Exhibit                            Page
    -------                          ----------------------                            ----

<S>              <C>                                                                   <C>
      3.1        - Restated  Certificate  of  Incorporation  of the  Registrant,
                   incorporated by reference to Exhibit 3.1 to the  Registrant's
                   Registration Statement on Form S-2, File No. 33-48738,  filed
                   on June 19, 1992 (the "S-2 Registration Statement").

      3.2        - By-laws  of the  Registrant,  incorporated  by  reference  to
                   Exhibit 3.2 to the  Registrant's  Registration  Statement  on
                   Form S-1, File No. 33-7532,  filed on July 25, 1986 (the "S-1
                   Registration Statement").

      3.3        - Certificate  of  Amendment  to the  Restated  Certificate  of
                   Incorporation of the Registrant, incorporated by reference to
                   Exhibit 3.3 to the  Registrant's  Annual  Report on Form 10-K
                   for the fiscal year ended  August 31, 1995 (the "1995  Annual
                   Report").

      3.4        - Certificate  of  Designation,  Preferences  and Rights of the
                   Series A Preferred Stock of the  Registrant,  incorporated by
                   reference to Exhibit 3.4 to the 1995 Annual Report.


      3.5        - Corrected Certificate of Amendment of Restated Certificate of
                   Incorporation of the Registrant, incorporated by reference to
                   Exhibit 3.5 to the 1995 Annual Report.

      4.1        - See   Article   Fourth  of  the   Restated   Certificate   of
                   Incorporation,  as amended and  corrected,  of the Registrant
                   (Exhibit 3.5 hereof) ,  incorporated  by reference to Exhibit
                   4.1 to the 1995 Annual Report.

      4.2        - Forms of Common Stock and Class B Common  Stock  certificates
                   of the  Registrant,  incorporated by reference to Exhibit 4.3
                   of the Registrant's  Registration Statement on Form S-4, File
                   No.   33-43782,   filed  on  December   19,  1991  (the  "S-4
                   Registration Statement").
</TABLE>



                                      E-1

<PAGE>
<PAGE>

<TABLE>
<CAPTION>

    Exhibit                          Description of Exhibit                            Page
    -------                          ----------------------                            ----

<S>              <C>                                                                   <C>

4.3              - Registration  Rights  Agreement  dated as of August 30,  1991
                   among  CHI,  CIT,  Chemical  Bank  and  the  Investors  named
                   therein, incorporated by reference to Exhibit 4.3 to the 1995
                   Annual Report.

4.4              - Warrant  Agreement  dated  as  of  August  30,  1991  between
                   Chemical  Bank,  CHI  and  the  Registrant,  incorporated  by
                   reference to Exhibit 4.4 to the 1995 Annual Report.

4.5              - Letter  Agreement  dated April 15, 1992 among the Registrant,
                   CIT and Chemical  Bank  relating to the Warrants  referred to
                   herein at Exhibits 4.8 and 4.9,  incorporated by reference to
                   Exhibit 4.9 to the S-2 Registration Statement.

4.6              - Letter Agreement dated August 12, 1992 between the Registrant
                   and Chemical Bank relating to the Warrants referred to herein
                   at Exhibit 4.8,  incorporated  by reference to Exhibit 4.6 to
                   the 1995 Annual Report.

4.7              - Letter Agreement dated August 12, 1992 between the Registrant
                   and CIT  relating  to the  Warrants  referred  to  herein  at
                   Exhibit 4.9,  incorporated by reference to Exhibit 4.7 to the
                   1995 Annual Report.

4.8              - Warrants  issued to Chemical  Bank each dated April 27, 1992,
                   incorporated  by  reference to Exhibit 4.8 to the 1995 Annual
                   Report.

4.9              - Warrants   issued  to  CIT  each   dated   April  27,   1992,
                   incorporated  by  reference to Exhibit 4.9 to the 1995 Annual
                   Report.

4.10             - Warrant issued to Dain Bosworth Incorporated dated August 20,
                   1992,  incorporated  by  reference to Exhibit 4.12 to the S-2
                   Registration Statement.

4.11             - Warrant  Agreement  dated as of March 12,  1993  between  the
                   Registrant and Alfred Schechter, incorporated by reference to
                   Exhibit 4.11 to the 1995 Annual Report.
</TABLE>


                                      E-2

<PAGE>
<PAGE>


<TABLE>
<CAPTION>

    Exhibit                          Description of Exhibit                            Page
    -------                          ----------------------                            ----

<S>              <C>                                                                   <C>

4.12             - Warrant  Agreement  dated as of March 12,  1993  between  the
                   Registrant and Don M. Harwell,  incorporated  by reference to
                   Exhibit 4.12 to the 1995 Annual Report.

4.13             - Warrant  Agreement  dated as of March 12,  1993  between  the
                   Registrant and MCC, incorporated by reference to Exhibit 4.13
                   to the 1995 Annual Report.

4.14             - Warrant  issued to Alfred  Schechter  dated  March 12,  1993,
                   incorporated  by reference to Exhibit 4.14 to the 1995 Annual
                   Report.

4.15             - Warrant  issued  to Don M.  Harwell  dated  March  12,  1993,
                   incorporated  by reference to Exhibit 4.15 to the 1995 Annual
                   Report.

4.16             - Warrant issued to MCC dated March 12, 1993,  incorporated  by
                   reference to Exhibit 4.16 to the 1995 Annual Report.

4.17             - Letter  Agreement  dated  as of  June  9,  1993  between  the
                   Registrant and Alfred  Schechter with respect to the Exercise
                   Price for the  Warrant  referred  to herein at Exhibit  4.14,
                   incorporated  by reference to Exhibit 4.17 to the 1995 Annual
                   Report.

4.18             - Letter  Agreement  dated  as of  June  9,  1993  between  the
                   Registrant  and Don M.  Harwell  with respect to the Exercise
                   Price for the  Warrant  referred  to herein at Exhibit  4.15,
                   incorporated  by reference to Exhibit 4.18 to the 1995 Annual
                   Report.

4.19             - Letter  Agreement  dated  as of  June  9,  1993  between  the
                   Registrant  and MCC with  respect to the Warrant  referred to
                   herein at Exhibit 4.16,  incorporated by reference to Exhibit
                   4.19 to the 1995 Annual Report.

4.20             - Warrant  issued to Chemical  Bank dated  November  24,  1993,
                   incorporated  by reference to Exhibit 4.20 to the 1995 Annual
                   Report.

4.21             - Warrant issued to CIT dated  November 24, 1993,  incorporated
                   by reference to Exhibit 4.21 to the 1995 Annual Report.
</TABLE>



                                      E-3

<PAGE>
<PAGE>




<TABLE>
<CAPTION>

    Exhibit                          Description of Exhibit                            Page
    -------                          ----------------------                            ----

<S>              <C>                                                                   <C>

4.22             - Warrant  Agreement  dated as of January 26, 1995  between the
                   Company and Alfred  Schechter,  incorporated  by reference to
                   Exhibit 4.22 to the 1995 Annual Report.

4.23             - Warrant  Agreement  dated as of January 26, 1995  between the
                   Company and Don M.  Harwell,  incorporated  by  reference  to
                   Exhibit 4.23 to the 1995 Annual Report.

4.24             - Warrant  Agreement  dated as of January 26, 1995  between the
                   Company and MCC, incorporated by reference to Exhibit 4.24 to
                   the 1995 Annual Report.

4.25             - Warrant  issued to Alfred  Schechter  dated January 26, 1995,
                   incorporated  by reference to Exhibit 4.25 to the 1995 Annual
                   Report.

4.26             - Warrant  issued to Don M.  Harwell  dated  January 26,  1995,
                   incorporated  by reference to Exhibit 4.26 to the 1995 Annual
                   Report.

4.27             - 
                   Warrant issued to MCC dated January 26, 1995, incorporated by
                   reference to Exhibit 4.27 to the 1995 Annual Report.

4.28             - See the Certificate of Designation, Preferences and Rights of
                   the Series A Preferred  Stock of the Registrant  (Exhibit 3.4
                   hereof) ,  incorporated  by  reference to Exhibit 4.28 to the
                   1995 Annual Report.

4.29             - Warrant  Agreement  dated  as of June  8,  1994  between  the
                   Registrant and Cryogenic  TADOPTR Company,  L.P. and the Form
                   of Warrant Certificate issued pursuant thereto,  incorporated
                   by reference to Exhibit 4.29 to the 1995 Annual Report.

4.30             - Warrant  Agreement  dated as of December 20, 1994 between the
                   Registrant  and The  Edgehill  Corporation,  incorporated  by
                   reference to Exhibit 4.30 to the 1995 Annual Report.
</TABLE>


                                      E-4

<PAGE>
<PAGE>





<TABLE>
<CAPTION>

    Exhibit                          Description of Exhibit                            Page
    -------                          ----------------------                            ----

<S>              <C>                                                                   <C>

4.31             - Warrant  issued  to  The  Edgehill  Corporation  dated  as of
                   December 20, 1994,  incorporated by reference to Exhibit 4.31
                   to the 1995 Annual Report.

4.32             - Registration  Rights  Agreement dated as of December 20, 1994
                   among the  Registrant,  certain  parties  named  therein  and
                   International   Capital  Partners,   Inc.,   incorporated  by
                   reference to Exhibit 4.32 to the 1995 Annual Report.

4.33             - Form of  Warrant  issued  to each  of  International  Capital
                   Partners,  Inc.  and the  parties  named in the  Registration
                   Rights  Agreement dated as of December 20, 1994 (Exhibit 4.32
                   hereof),  incorporated  by  reference  to Exhibit 4.33 to the
                   1995 Annual Report.

10.1             - 1986  Non-Qualified  Stock Option Agreement,  incorporated by
                   reference to Exhibit 10.1 to the 1995 Annual Report.

10.2             - Stockholders  Agreement dated as of August 30, 1991 among the
                   Registrant,  CHI and other stockholders of CHI,  incorporated
                   by reference to Exhibit 10.2 to the 1995 Annual Report.

10.3             - Securities  Purchase  Agreement  dated as of August 30,  1991
                   among CIT, CHI, the  Registrant,  CEC  Acquisition  Corp. and
                   Cryogenic  Energy  Company,   incorporated  by  reference  to
                   Exhibit 10.3 to the 1995 Annual Report.

10.4             - Credit  Agreement  dated as of August 30, 1991 among Cryenco,
                   Inc., the Lenders named therein, and Chemical Bank, as Agent,
                   incorporated   by  reference  to  Exhibit  10.7  to  the  S-4
                   Registration Statement.

10.5             - Form of Amended and Restated Pledge  Agreement dated February
                   11,  1992  relating to the  capital  stock of  Cryenco,  Inc.
                   executed  by CSCI  Corporation  in  favor of  Chemical  Bank,
                   incorporated   by  reference  to  Exhibit  10.6  to  the  S-4
                   Registration Statement.
</TABLE>



                                      E-5

<PAGE>
<PAGE>

<TABLE>
<CAPTION>

    Exhibit                          Description of Exhibit                            Page
    -------                          ----------------------                            ----

<S>              <C>                                                                   <C>

10.6             - Employment  Agreement  dated as of  September 1, 1991 between
                   Cryenco, Inc. and Alfred Schechter, incorporated by reference
                   to Exhibit 10.8 of the S-4 Registration Statement.

10.7             - 1992 Employee Incentive and Non-Qualified  Stock Option Plan,
                   incorporated by reference to Exhibit 4.1 to the  Registrant's
                   Registration Statement on Form S-8, File No. 33-65864,  filed
                   on July 12, 1993 (the "S-8 Registration Statement").

10.8             - Form of Option  Agreement  under the 1992 Employee  Incentive
                   and   Non-Qualified   Stock  Option  Plan,   incorporated  by
                   reference to Exhibit 4.2 to the S-8 Registration Statement.

10.9             - 1993 Non-Employee Director Stock Option Program, incorporated
                   by  reference   to  Exhibit  4.3  to  the  S-8   Registration
                   Statement.

10.10            - Form of Option Agreement under the 1993 Non-Employee Director
                   Stock  Option  Program  (contained  in the 1993  Non-Employee
                   Director Stock Option  Program  referred to herein at Exhibit
                   10.9),  incorporated  by  reference to Exhibit 4.4 to the S-8
                   Registration Statement.

10.11            - 1991  Incentive   Compensation  Plan  of  Cryenco,  Inc.,  as
                   amended, incorporated by reference to Exhibit 10.9 to the S-2
                   Registration Statement.

10.12            - Lease,  as  amended,  dated  August 22, 1989  concerning  the
                   property  leased  by the  Registrant  located  at 5995  North
                   Washington   Street,   Denver,   Colorado,   incorporated  by
                   reference to Exhibit 10.10 to the S-2 Registration Statement.

*10.13           - Lease,  as  amended,  dated  June  19,  1996  concerning  the
                   property  leased by the  Registrant  located  at 3811  Joliet
                   Street, Denver, Colorado.

</TABLE>


                                      E-6

<PAGE>
<PAGE>
<TABLE>
<CAPTION>

    Exhibit                          Description of Exhibit                            Page
    -------                          ----------------------                            ----

<S>              <C>                                                                   <C>

10.14            - Consulting  Agreement  dated  August  30,  1991  between  the
                   Registrant  and  Charterhouse,  incorporated  by reference to
                   Exhibit 10.12 to the S-2 Registration Statement.

10.15            - Waiver and Amendment  Agreement dated as of February 28, 1993
                   among  Cryenco,  Inc., the Lenders named therein and Chemical
                   Bank,  amending the Credit  Agreement  dated as of August 30,
                   1991, as amended,  incorporated by reference to Exhibit 10.15
                   to the 1995 Annual Report.

10.16            - Waiver and Amendment  Agreement dated as of February 28, 1993
                   among Cryenco,  Inc.,  the  Registrant and CIT,  amending the
                   Securities Purchase Agreement dated as of August 30, 1991, as
                   amended, incorporated by reference to Exhibit 3.4 to the 1995
                   Annual Report,  incorporated by reference to Exhibit 10.16 to
                   the 1995 Annual Report.


10.17            - Funding   Agreement   dated  March  12,  1993  among   Alfred
                   Schechter,   Don  M.   Harwell,   MCC  and  the   Registrant,
                   incorporated by reference to Exhibit 10.17 to the 1995 Annual
                   Report.

10.18            - Intentionally left blank.


10.19            - 
                   Form of  Indemnification  Agreement  entered into between the
                   Registrant  and certain of its officers and  directors  dated
                   March 16, 1993, incorporated by reference to Exhibit 10.19 to
                   the 1995 Annual Report.

10.20            - Second Waiver and Amendment  Agreement dated as of August 31,
                   1993 among  Cryenco,  Inc.,  the  Lenders  named  therein and
                   Chemical  Bank,  amending  the Credit  Agreement  dated as of
                   August 30,  1991,  as amended,  incorporated  by reference to
                   Exhibit 10.20 to the 1995 Annual Report.
</TABLE>


                                      E-7

<PAGE>
<PAGE>



<TABLE>
<CAPTION>

    Exhibit                          Description of Exhibit                            Page
    -------                          ----------------------                            ----

<S>              <C>                                                                   <C>
10.21            - Second Waiver and Amendment Agreement dated as of October 31,
                   1993 among Cryenco,  Inc.,  the Registrant and CIT,  amending
                   the  Securities  Purchase  Agreement  dated as of August  30,
                   1991, as amended,  incorporated by reference to Exhibit 10.21
                   to the 1995 Annual Report.

10.22            - Letter  Agreement  dated April 13, 1994 among the Registrant,
                   Cryenco,   Inc.,  Chemical  Bank  and  CIT,  incorporated  by
                   reference to Exhibit 10.22 to the 1995 Annual Report.

10.23            - Exchange   Agreement   dated  April  13,  1994  among  Alfred
                   Schechter,   Don  M.   Harwell,   MCC  and  the   Registrant,
                   incorporated by reference to Exhibit 10.23 to the 1995 Annual
                   Report.

10.24            - Royalty Rights and  Technology  Development  Agreement  dated
                   June 8, 1994 between the  Registrant  and  Cryogenic  TADOPTR
                   Company, L.P.,  incorporated by reference to Exhibit 10.24 to
                   the 1995 Annual Report.

10.25            - Third Waiver and Amendment Agreement dated as of November 29,
                   1994 among  Cryenco,  Inc.,  the  Lenders  named  therein and
                   Chemical Bank, as Agent,  amending the Credit Agreement dated
                   as of August 30, 1991, as amended,  incorporated by reference
                   to Exhibit 10.25 to the 1995 Annual Report.

10.26            - Third Waiver and Amendment Agreement dated as of November 29,
                   1994 among Cryenco,  Inc.,  the Registrant and CIT,  amending
                   the  Securities  Purchase  Agreement  dated as of August  30,
                   1991, as amended,  incorporated by reference to Exhibit 10.26
                   to the 1995 Annual Report.

10.27            - Purchase  Agreement  dated as of November  29, 1994 among the
                   Registrant,  International  Capital  Partners,  Inc.  and the
                   Purchasers  named  therein,   incorporated  by  reference  to
                   Exhibit 10.27 to the 1995 Annual Report.


</TABLE>


                                      E-8

<PAGE>
<PAGE>

<TABLE>
<CAPTION>

    Exhibit                          Description of Exhibit                            Page
    -------                          ----------------------                            ----

<S>              <C>                                                                   <C>

10.28            - Fourth  Waiver and Amendment  Agreement  dated as of December
                   20, 1994 among the  Registrant,  Cryenco,  Inc.,  the Lenders
                   named  therein and  Chemical  Bank,  as Agent,  amending  the
                   Credit  Agreement  dated as of August 30,  1991,  as amended,
                   incorporated by reference to Exhibit 10.28 to the 1995 Annual
                   Report.

10.29            - Fourth  Waiver and Amendment  Agreement  dated as of December
                   20,  1994  among  Cryenco,  Inc.,  the  Registrant  and  CIT,
                   amending the Securities Purchase Agreement dated as of August
                   30, 1991,  as amended,  incorporated  by reference to Exhibit
                   10.29 to the 1995 Annual Report.

10.30            - First  Amendment  to  the  Purchase  Agreement  dated  as  of
                   December 20, 1994 among the Registrant, International Capital
                   Partners, Inc. and the Purchasers named therein, amending the
                   Purchase   Agreement   dated  as  of   November   29,   1994,
                   incorporated by reference to Exhibit 10.30 to the 1995 Annual
                   Report.

10.31            - Second  Amendment  to  the  Purchase  Agreement  dated  as of
                   January 30, 1994 among the Registrant,  International Capital
                   Partners, Inc. and the Purchasers named therein, amending the
                   Purchase Agreement dated as of November 29, 1994, as amended,
                   incorporated by reference to Exhibit 10.31 to the 1995 Annual
                   Report.

10.32            - Amended and Restated  Employment  Agreement dated January 18,
                   1995 between Cryenco, Inc. and Dale A. Brubaker, incorporated
                   by reference to Exhibit 10.32 to the 1995 Annual Report.

10.33            - Letter  Agreement  dated May 18,  1995 among the  Registrant,
                   International Capital Partners, Inc. and the Purchasers named
                   therein,  incorporated  by reference to Exhibit  10.33 to the
                   1995 Annual Report.
</TABLE>


                                      E-9

<PAGE>
<PAGE>






<TABLE>
<CAPTION>

    Exhibit                          Description of Exhibit                            Page
    -------                          ----------------------                            ----

<S>              <C>                                                                   <C>
10.34            - Fifth Waiver and Amendment Agreement dated as of May 30, 1995
                   among  Cryenco,  Inc., the Lenders named therein and Chemical
                   Bank,  as Agent,  amending the Credit  Agreement  dated as of
                   August 30,  1995,  as amended,  incorporated  by reference to
                   Exhibit 10.34 to the 1995 Annual Report.

10.35            - Credit and Security  Agreement  dated as of December 19, 1995
                   and Supplement A thereto between  Cryenco,  Inc., the Company
                   and  FBS  Business  Finance   Corporation,   incorporated  by
                   reference  to  Exhibit  10.1  to the  Registrant's  Quarterly
                   Report on Form 10-Q for the fiscal quarter ended November 30,
                   1995.

10.36            - First  Amendment  dated as of January  16,  1996  between FBS
                   Business Finance Corporation,  Cryenco, Inc., the Company and
                   Cryenex,  Inc.,  amending the Credit and  Security  Agreement
                   dated as of December 19, 1995,  incorporated  by reference to
                   Exhibit  10.1 to the  Registrant's  Quarterly  Report on Form
                   10-Q for the fiscal  quarter  ended  February  29,  1996 (the
                   "February 29, 1996 Quarterly Report").

10.37            - Letter  Agreement  dated January 12, 1996 between CIT and FBS
                   Business  Finance  Corporation,  incorporated by reference to
                   Exhibit 10.2 to the February 29, 1996 Quarterly Report.

*21              - Subsidiaries of the Registrant

*23.1            - Consent of Ernst & Young LLP

*27              - Financial  Data Schedule  pursuant to Article 5 of Regulation
                   S-X filed with EDGAR filing only.
</TABLE>


-------------------------
*    Filed herewith


                                      E-10



                    STATEMENT OF DIFFERENCES

The trademark symbol shall be expressed as........... (R)
The section symbol shall be expressed as............. 'SS'


<PAGE>