Document is copied
As filed with the Securities and Exchange Commission on July 13, 2001
                   Registration No. 333-55284
-----------------------------------------------------------------
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
               ----------------------------------
                        AMENDMENT NO. 1 TO
                           FORM 10-KSB
         ANNUAL REPORT PURSUANT TO SETION 13 OR 15(B) OF
               THE SECURITIES EXCHANGE ACT OF 1934
                           ----------
(Mark One)

[X] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act
of 1934 for the Fiscal year ended MARCH 31, 2001,or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange
Act of 1934 for the transition period from ________ to ________.

                COMMISSION FILE NUMBER 33-30476-D

                          CRYOCON, INC.
     (Exact name of registrant as specified in its charter)

COLORADO                                         84-1026503
(State or other jurisdiction                  (I.R.S. Employer
of incorporation or organization)           Identification Number)



2250 North 1500 West, Ogden Utah               84404
(Address of principal executive offices)     (Zip Code)

                         (801) 395-2796
                   (Issuer's telephone number)

  Securities registered under Section 12(b) of the Exchange Act

Title of each class               Name of Exchange on which registered

Common Stock, No par value     NASDAQ, Over-the-Counter Bulletin Board

 Securities registered under Section 12(g) of the Exchange Act:
                              None

Check whether issuer(1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to filing
requirements for the past 90 days.  Yes:__X__        No: ________

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B not contained in this form, and no
disclosure will 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-KSB or any
amendment to this Form 10-KSB [  ]

Cryocon's revenues for fiscal year 2001 was $141,405.

As of May 1, 2001, the aggregate market value of the voting and
non-voting common equity held by non-affiliates computed by the
closing price of Cryocon's shares as of May 1, 2001, was
$14,335,703.


State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practical date:  as of
June 20, 2001 there were 21,856,460 outstanding shares.

Documents incorporated by reference:
None

<PAGE>

Cryocon's annual report is amended to correct changes in numbers
and other minor changes in Item 6, "Management's Discussion
and Analysis or Plan of Operations." Changes made are highlighted.

FORWARD-LOOKING STATEMENTS

    This prospectus contains forward-looking statements that
involve risks and uncertainties., as that term is defined in the
Private Securities Litigation Reform Act of 1995. These
statements relate to future events or our future financial
performance.  In some cases, you can identify forward-looking
statements by terminology such as  "may,"  "will," "should,"
"expects,"   "plans,"   "anticipates,"    "believes,"
"estimates," "predicts," "potential" or  "continue" or the
negative of these terms or other comparable terminology.  These
statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks in
the section entitled "Risk Factors,"  that may cause our or our
industry's  actual results,  levels of  activity,  performance
or achievements to be materially different from any future
results, levels of activity, performance or achievements
expressed or implied by these forward-looking statements.

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

                             PART I

Item 1.

Description of the Business.

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

Recent Changes in Capital Structure.

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

Acquisitions and Nature of Cryocon's Business.

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

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

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

                                    2
<PAGE>

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

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

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

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

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

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

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

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

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

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

                                    3
<PAGE>

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

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

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

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

     Cryocon currently has 12 full time employees and two part
time employees.

Item 2.

Description of Property

     Cryocon's current administrative and operational facility is
located at 2250 North 1500 West, in Ogden, Weber County, Utah.
The building consists of 39,828 sq ft of which approximately
10,000 sq ft is finished office space.  Cryocon is currently the
owner with Bourns Inc., holding a trust deed note payable for a
balance of $1,350,000.  Cryocon has paid approximately $700,000
against the principal of $2,050,000.  On June 4, 2001, Bourn Inc.
filed a Notice of Default with the Weber County Recorder, in its
effort to commence foreclosure on the trust deed.  The promissory
note became due on February 28, 2001.  The remaining balance due
is $1,350,000.

Item 3.

Legal Proceedings.

     On June 4, 2001, Bourn Inc. filed a Notice of Default with
the Weber County Recorder, in its effort to commence foreclosure
on the deed trust on Cryocon's current administrative and
operational facility located at 2250 North 1500 West, in Ogden,
Weber County, Utah. The promissory note became due on February
28, 2001.  The remaining balance due is $1,350,000.

     Cryocon is not involved in any other legal proceedings.

Item 4.

Submission of Matters to a Vote of Security Holders.

None.

PART II

Item 5.

Market for Common Equity and Related Stockholder Matters.

         The Company's Common Stock is currently traded on the
OTC Bulletin
Board, under the symbol "CRYQ." There are approximately 790
shareholders.  No dividends have been declared during the last
two fiscal years.

         On March 30, 2001, Cryocon's common stock was quoted on
the OTC Electronic Bulletin Board at the price of $2.50. The
following sets for the quarterly fluctuations in the reported bid
prices for the period from March 31, 1998 through March 31, 2001.

                                    4
<PAGE>

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

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

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


Item 6.  Managements Discussion and Analysis or Plan of Operation

    The following discussion of Cryocon's past and future
financial condition and results of operations should be read in
conjunction with the financial statements and the notes to those
statements and other financial information included elsewhere in
this document.

Past Financial Condition:

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

     Cryocon's losses for fiscal year 2001 are $6,609,788.  These
losses are attributable to start-up and operational costs, market
development penetration, costs incurred in capital acquisition
and asset expenditures.  Unusually high capital outlays include
$700,000 for shop equipment, land and building; approximately
$313,274 in equipment (computers and printers), approximately
$275,000 for the purchase of the Cryo-Accurizing patent and
related equipment and $282,937 in advertising.

     On December 15, 2000, Cryocon announced corporate
restructuring aimed at achieving administrative and operational
cost savings.  Cryocon estimated cost savings in excess of 50%
through outsourcing key functions and redefining departmental and
employee functions.  As a result of this action, Cryocon's
management reduced Cryocon's full time employees by 10 employees
to a total of 17 full time personnel.  Cryocon has since further
reduced it's personnel to 12 full time and two part time employees.
At the present time here is no anticipated significant changes in
the number of employees;however, management reserves the right to
further redefine employee positions anticipates that it may need
to hire personnel specifically in the research and development
area.  These changes have resulted in significant material
changes in several line items of Cryocon's financial statements.
Additional steps taken to reduce company expenditures include the
sale of company owned vehicles and excess equipment.

Future Financial Condition

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

                                    5
<PAGE>

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

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

     Additional funding is necessary for Cryocon to satisfy it's
cash requirements.  Currently Cryocon does not have sufficient
cash reserves to meet it's obligations for the next 30 days.
However, management is confident in it's abilities to raise short
term funding to meet it's current needs.  Cryocon has filed  a
prospectus and registration statement with the Securities and
Exchange Commission.  Upon the effectiveness of this prospectus
and registration statement, Cryocon has a stock purchase
agreement with Millennium Capital Partners, LLC for 1,500,000
shares of common stock at a 20% discount to the current market
which should produce sufficient revenues for operations and
expansion for approximately six months.  Thereafter it is
anticipated that revenues would substantially increase, but
further capital will need to be raised to implement management's
stated goal to merge Cryocon's technology into mainstream
processes to generate superior results for the customer and
expand the technology into traditional heat treating markets.

     In-house research and development has been focused on the
success of Cryocon's proprietary process with different materials
and the development of more efficient cryogenic processors,
including a table top model and custom, portable processing
technology that can be implemented on the customer's site meeting
the customer's size, dimensional and quantity requirements.
Research and development planned for the next 12 months includes
design enhancement and production of high quality tools and bits
for the petroleum exploration, construction and mining
industries.

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

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

Liquidity and Capital Resources.

     Cryocon Utah commenced operations on January 3, 2000.  Since
start of operations January 2000, Cryocon has realized $163,910
in gross sales and had $30,647 in accounts receivable. Of those
gross sales $82,198 resulted from the treatment of firearm
components through the Cryo-Accurizing Division and $81,712 has
resulted from deep cryogenic tempering of miscellaneous parts for
various individuals and manufacturers.  Cryocon's cumulative
operating loss through March 31, 2001 is $7,679,160.  The loss is
attributable to pre-organizational, start-up and operating costs
of its subsidiary Cryocon Utah, and costs incurred in Cryocon's
financing efforts.  These costs include $1,248,110 assessed for
options granted below market value, $1,640,204 assessed for
common stock for services, and $514,050 additional expense assessed on
convertible debentures.

                                    6
<PAGE>

     Cryocon's operation to date has consumed substantial amounts
of cash.  As of March 31, 2001, Cryocon had a working capital
deficit of $2,953,922.  Since inception the net cash loss from
operations is $3,886,088 and is expected to continue; however it
is anticipated that these losses may decrease in the foreseeable
future due to corporate restructuring. The consumption of capital
during the start-up phase included $700,000 for a building
purchase, equipment purchases of $313,274, and a patent purchase
of $275,000. The rate in which Cryocon expends its resources is
variable and may accelerate, depending on many factors. Many of
the factors are outside of Cryocon's control, including:

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

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

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

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

     Because Cryocon is still in the development stage, it has
limited working capital and limited internal financial resources.
Cryocon's limited cash flows have prevented Cryocon from
borrowing funds from conventional lending institutions.  Since
the Cryocon has not been able to secure funding from commercial
lenders, Cryocon has relied on private investments from third-
parties, including Cryocon's management, to meet its current
obligations. As of July 5, 2001, Cryocon will not have sufficient
cash on hand to fund another month of operations at the current
run rate; however, Management is confident of being able to
obtain operational funds through various means.

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

                                    7
<PAGE>


Item 7.  Financial Statements

               INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

        AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR 2000

Independent Auditor's Report                          F-1

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

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

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

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

Notes to Financial Statements                         F-6

        AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR 2001

Independent Auditor's Report                          F-10

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

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

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

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

Notes to Consolidated Financial Statements            F-18

                                    8
<PAGE>

                  INDEPENDENT AUDITOR'S REPORT

Board of Directors
ISO BLOCK PRODUCTS USA, INC.


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

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

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



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

                                    F-1
<PAGE>
                          ISO BLOCK PRODUCTS USA, INC.
                     CONSOLIDATED COMPARATIVE BALANCE SHEET

                                     ASSETS

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

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


TOTAL ASSETS                     $    16,658   $    74,886


                       LIABILITIES & STOCKHOLDERS' EQUITY

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

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

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


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

                                    F-2
<PAGE>
                          ISO BLOCK PRODUCTS USA, INC.
                            CONSOLIDATED COMPARATIVE
                             STATEMENT OF OPERATIONS


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

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

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


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

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

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

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


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

                                    F-3
<PAGE>

                        ISO BLOCK PRODUCTS USA, INC.
                CONSOLIDATED COMPARATIVE STATEMENT OF
                           STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>


                      Preferred                Common              Contr-        Accumu-
                        Stock                   Stock              ibuted         lated
                  Shares     Amount      Shares       Amount       Capital        Deficit      Total
                  ------     ------       ------      ------       -------        -------      -----
<S>               <C>       <C>          <C>         <C>            <C>        <C>            <C>
Balance at
March 31, 1998     116,370  $  114,690   3,854,730   $ 2,867,464          --   $ (2,860,509)  $121,645

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

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

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

Common
Stock
issued for
Services                                    42,500           542                                   542

Services
paid by
Officer                                                               4,225                      4,225

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

Balance at
March 31, 2000    116,370   $  114,690   4,083,984   $ 2,898,306   $  4,225   $ (3,026,867)  $  (9,646)
</TABLE>
The accompanying notes are an integral part of these financial
statements.

                                    F-4
<PAGE>

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


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

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

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

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

Cash-End of Year                       $     458        $   5,135


Supplemental disclosure of cash flow information

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

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

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

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

                                    F-5
<PAGE>
                  ISO Block Products USA, Inc.
         Notes to the Consolidated Financial Statements
           For the Years ended March 31, 2000 and 1999


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Company Description

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

Franchising Operations

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

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

Consolidation

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

Concentrations of Credit Risk

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

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

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

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

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

                               F-6
<PAGE>
                  ISO Block Products USA, Inc.
         Notes to the Consolidated Financial Statements
           For the Years ended March 31, 2000 and 1999

Foreign Currency Translation

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

Income (Loss) Per Common Stock

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

Use of Estimates

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

NOTE 2. STOCKHOLDERS' EQUITY

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

NOTE 3. NOTE RECEIVABLE -OFFICER
The Company loaned the President of the Company, Egin Bresnig,
$2,000 The note
bears interest at 6% per annum and was retired on March 1, 1999.

NOTE 4. INVENTORY WORK IN PROCESS
Inventory is recorded at cost, on a first-in, first-out basis.
Inventory
consists of lots and construction costs located in Broomfield,
Colorado where
the Company has constructed and sold one home.

NOTE 5. NOTES PAYABLE
The Company had notes payable with interest at 15% per annum
payable to Mr. Hal
Schavet. The notes were due upon completion of the house
constructed by the
Company in Broomfield, Colorado, The notes were secured by
property and house.
The balance outstanding at March 31, 1998 was $135,000. The note
was retired
during the year ended March 31, 1999.

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

                               F-7
<PAGE>
                  ISO Block Products USA, Inc.
         Notes to the Consolidated Financial Statements
           For the Years ended March 31, 2000 and 1999

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

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

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

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

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

Note 6. DISCONTINUED OPERATIONS, DISPOSAL OF SUBSIDIARIES

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

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

Note 7. INCOME TAXES

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

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

                               F-8
<PAGE>


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

                CONSOLIDATED FINANCIAL STATEMENTS

                         March 31, 2001


                               F-9
<PAGE>
                  INDEPENDENT AUDITORS' REPORT

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

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

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

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

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



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

                              F-10
<PAGE>

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

                                 ASSETS
                                                      March 31,
                                                         2001
CURRENT ASSETS

Cash                                               $       8,980
Accounts receivable, net (Note 1)                         30,647
Deposits and prepaid expenses                             34,214

Total Current Assets                                      73,841

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

OTHER ASSETS

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

 Total Other Assets                                      329,267

 TOTAL ASSETS                                      $   2,653,898

             LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

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

Total Current Liabilities
                                                       3,027,763

LONG-TERM LIABILITIES

 Long-term debt (Note 4)                                 146,966

 Total Long-Term Liabilities                             146,966

 TOTAL LIABILITIES                                     3,174,729

STOCKHOLDERS' EQUITY (DEFICIT)

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

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

                                  F-11
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
                  Consolidated Statements of Operations



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

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

EXPENSES

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

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

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

OTHER INCOME (EXPENSE)

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

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

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

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

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


                                  F-12
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
        Consolidated Statements of Stockholders' Equity (Deficit)

                                                               Deficit
                                                             Accumulated
                                                              During the
                                              Common Stock   Development
                                             Shares   Amount    Stage

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                  F-13
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
  Consolidated Statements of Stockholders' Equity (Deficit) (Continued)
<TABLE>
<CAPTION>
                                                               Deficit
                                                             Accumulated
                                                             During the
                                        Common Stock         Development
                                       Shares      Amount       Stage
<S>                                 <C>          <C>           <C>
Balance forward                     10,980,000   $   557,500   $        -

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

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

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

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

Recapitalization                     1,237,724             -            -

Warrants issued below market value           -       980,000            -

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

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

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

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

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

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

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

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

Stock issuance costs                         -      (390,708)           -

Balance Forward                     18,845,929   $ 5,315,590 $ (1,069,931)
</TABLE>
                                  F-14
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
  Consolidated Statement of Stockholders' Equity (Deficit) (Continued)
<TABLE>
<CAPTION>
                                                                       Deficit
                                                                     Accumulated
                                                                     During the
                                               Common Stock          Development
                                           Shares         Amount        Stage
<S>                                      <C>          <C>           <C>
Balance Forward                          18,845,929   $ 5,315,590   $ (1,069,931)
Issuance of common stock upon exercise
 of options at $0.50 per share               13,250         6,625              -

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

Options issued below market value                 -       268,110              -

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

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

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

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

Additional interest recorded on
 convertible  debentures                          -       514,050              -

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

Balance , March 31, 2001                 19,319,837   $ 7,158,329    $ (7,679,160)
</TABLE>
                                  F-15
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
                  Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                 For the           From Inception on
                                                Year Ended     October 20, 1999 Through
                                                 March 31              March 31
                                                   2001          2000            2001
<S>                                           <C>           <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                      $(6,609,229)  $ (1,069,931)  $ (7,679,160)
 Adjustments to reconcile net loss to net
  cash used by operating activities:
Amortization and depreciation                     228,999         42,299        271,298
Options and warrants issued below market value  1,248,110              -      1,248,110
Loss on sale of assets                             27,515              -         27,515
Bad debt expense                                   11,000              -         11,000
Additional expense recorded on convertible
 debentures                                       514,050              -        514,050
 Common stock issued for services rendered      1,104,704        535,500      1,640,204
 (Increase) decrease in:
Accounts receivable                               (29,036)       (12,611)       (41,647)
Deposits and prepaids                             (34,214)             -        (34,214)
Stock deposits                                    284,391              -        284,391
Accounts payable and accrued expenses             791,492        156,025        947,517

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

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

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

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

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

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

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

CASH AND CASH EQUIVALENTS AT
 END OF PERIOD                                $     8,980   $     71,771   $      8,980
</TABLE>


                                  F-16
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
            Consolidated Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>

                                              For the      From Inception on
                                            Year Ended  October 20, 1999 Through
                                             March 31,         March 31,
                                               2001        2000         2001
<S>                                       <C>          <C>         <C>
CASH PAID FOR:
Interest                                  $  115,611   $   3,944   $   119,555
Income taxes                              $        -   $       -   $         -

SCHEDULE OF NON-CASH FINANCING ACTIVITIES:

Common stock issued for services          $1,104,704   $ 535,500   $ 1,640,204
Vehicles purchased under notes payable    $   65,549   $       -   $    65,549
</TABLE>
                                  F-17
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                         March 31, 2001 and 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a.  General Information

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

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

       Cryocon Utah was organized under the laws of the State of Utah  on
       October  20,  1999.   The  Company is  engaged  in  the  study  of
       extremely  low  temperatures  and how  materials  react  to  those
       temperatures   and   treating   various   materials   with   those
       temperatures to improve their characteristics.

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

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

       b.  Accounting Method

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

       c.  Basic Loss Per Share

       The  computation of basic loss per share of common stock is  based
       on  the  weighted average number of shares outstanding during  the
       period  of  the consolidated financial statements.   Common  stock
       equivalents,  consisting of stock options, have not been  included
       in the calculation as their effect is antidilutive for the periods
       presented.
                                  F-18
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                         March 31, 2001 and 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       c.  Basic Loss Per Share (Continued)

                                    For the Year Ended
                                      March 31, 2001
                             Loss          Shares     Per Share
                          (Numerator)  (Denominator)   Amount

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

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

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

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

The  income  tax  benefit  differs from the amount  computed  at  federal
statutory rates of approximately 38% as follows:
                                  For  the Years Ended
                                         March 31,
                                   2001          2000
Income tax benefit
at statutory rate              $ 2,511,500    $ 406,500

Change in valuation allowance   (2,511,500)    (406,500)
                               $         -    $       -

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

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

                                      $          -    $        -

                                  F-19
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                         March 31, 2001 and 2000

NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

       e.  Cash Equivalents

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

       f.  Principles of Consolidation

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

       g.  Revenue Recognition

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

       h.  Property and Equipment

       Property  and  equipment are stated at cost with depreciation  and
       amortization  computed on the straight-line method.  Property  and
       equipment  are  depreciated  over the following  estimated  useful
       lives:
                             Years
Office furniture              5-10
Machinery and equipment       5-10
Building                      39.5
Vehicles                       5

i.  Patents, Trademarks and Licenses
                                                              Net Book
                                                               Value
                         Term       Cost     Amortization       2001
Product rights          5 years   $100,000     $ 26,666     $  73,334
Customer lists, patents
   and trademarks       5 years    349,000       93,067       255,933

                                  $449,000     $119,733     $ 329,267


                                  F-20
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                         March 31, 2001 and 2000


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       i.  Patents, Trademarks and Licenses (Continued)

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

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

       j.  Accounts Receivable

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

       k.  Equity Securities

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

       l. Production Costs

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

       m. Advertising

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

       n.  Estimates

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


                                  F-21
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                         March 31, 2001 and 2000


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


       o.  Change in Accounting Principles

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

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

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

       p.  Stock Options

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


                                  F-22
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                         March 31, 2001 and 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
       p.  Stock Options (Continued)

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

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

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

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

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

NOTE 2 -    PROPERTY AND EQUIPMENT

        Property and equipment as of March 31, 2001 are detailed in the
following summary:

                                                            Net Book

                                               Accumulated   Value
                                    Cost      Depreciation    2001

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


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


                                  F-23
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                         March 31, 2001 and 2000

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

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

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

  Less: current portion                                      (191,964)

  Long-term portion                                        $        -

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

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

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

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

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

  Total long-term debt                                      1,750,857

  Less: current portion                                    (1,603,891)

  Long-term portion                                      $    146,966


                                  F-24
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                         March 31, 2001 and 2000


NOTE 4 -   LONG-TERM DEBT (Continued)

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

       Maturities of long-term debt are summarized below:

                                      Year Ended
                                                     March 31,
                                                      Amount

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

                                       Total     $ 1,750,857

NOTE 5 -   ACCRUED EXPENSES

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

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

           Total Accrued Expenses                     $ 605,965

                                  F-25
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                         March 31, 2001 and 2000

NOTE 6 -   COMMON STOCK

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

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

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

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

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

                                  F-26
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                         March 31, 2001 and 2000

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

  2. The Company will pay the shareholders owning the 139,100 shares of
     common stock, which elect to accept the rescission offer, $2.00 per
     share, plus an amount equal to the interest thereon, at the
     appropriate statutory rate from the date of issuance of the
     securities  until the expiration of the rescission offer.

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

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

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

     The   Company   has  not  contractually  arranged  financing,   by
     underwriters  or  otherwise,  of the  repurchase  of  the  subject
     securities  from offerees who accept the rescission  offer.   Upon
     acceptance  of the rescission offer by the offerees,  the  Company
     will   attempt  to  arrange  financing  or  underwriting  of   the
     rescission or purchase back the subject securities with  operating
     capital.   Assuming  the  rejection of  the  rescission  offer  by
     Millennium  Capital, the Company is confident that  it  will  have
     sufficient capital necessary to fund the rescission offer.

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

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

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

                                  F-27
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                         March 31, 2001 and 2000

NOTE 7 -   STOCK OPTIONS AND WARRANTS

       Stock Options

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

                                      Weighted   Weighted
                                      Average    Average
                                      Exercise   Grant Date
                                      Options     Price      Fair Value

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

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

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

       The total amount of outstanding stock options at March 31, 2001 is
       summarized as follows:
   Shares         Price          Expiration
  306,600         $0.50          December 31, 2001
   30,000         $1.00          October 6,   2003
   30,000         $1.00          December 15, 2003
  250,000         $1.50          November 27, 2001
  250,000         $1.50          October 4, 2001
   41,696         $1.50          March 21, 2002
    8,959         $1.50          September 11, 2001
   50,000        Note 1(b)       Note 1(a)
   37,503         $1.50          September 17, 2001
   60,000        Note 1(b)       Note 1(a)
  250,000        Note 1(b)       Note 1(a)
  250,000        Note 1(b)       Note 1(a)
   30,000         $1.00          Note 1(a)
  250,000        Note 1(b)       Note 1(a)
  250,000         $1.50          December 31, 2005
   92,659         $1.50          January 1, 2004

2,187,417

                                  F-28
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                         March 31, 2001 and 2000


NOTE 7 -        STOCK OPTIONS AND WARRANTS (Continued)

       Stock Options (Continued)

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

       Stock Warrants

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

                                            Weighted     Weighted
                                            Average      Average
                                            Exercise    Grant Date
                               Warrants      Price      Fair Value

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

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

Exercisable, March 31, 200  11,500,000   $    0.10    $    1.41

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

                                  F-29
<PAGE>
                      CRYOCON, INC. AND SUBSIDIARY
                 (Formerly ISO Block Products USA, Inc.)
                      (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                         March 31, 2001 and 2000


NOTE 8 -   GOING CONCERN

       The Company's consolidated financial statements are prepared using
     generally  accepted accounting principles applicable  to  a  going
     concern   which  contemplates  the  realization  of   assets   and
     liquidation  of  liabilities  in the normal  course  of  business.
     However,  the  Company  does not have significant  cash  or  other
     material  assets,  nor  does  it have  an  established  source  of
     revenues  sufficient to cover its operating costs and to allow  it
     to  continue as a going concern.  It is the intent of the  Company
     to  raise additional funds through an SB-2 filing in order to fund
     operations  until revenues are sufficient to cover  the  operating
     expenses.  The Company is also trying to restructure its long-term
     debt  and dispose of certain assets, if needed, in order to reduce
     operating  expenses.   Until  that  time,  the  stockholders  have
     committed to covering the operating costs of the Company.

     Additionally,  the  Company  is  registering  a  rescission  offer
     concerning certain securities that may have been offered or issued
     in  violation with state and/or federal securities laws (see  Note
     6).   There  are no assurances that (1) the existing  stockholders
     and  warrant  holders subject to rescission will elect  to  retain
     their stock ownership and stock warrants and (2) the Company  will
     be able to raise additional working capital through either private
     placements  or  public  offerings.   To  the  extent  that   funds
     generated  from  operations, standby  investors  and  any  private
     placements or public offerings are insufficient, the Company  will
     have  to  raise additional working capital.  No assurance  can  be
     given   that  additional  financing  will  be  available,  or   if
     available,  will  be  on  terms acceptable  to  the  Company.   If
     adequate  working  capital is not available, the  Company  may  be
     required to curtail its operations.

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

NOTE 9 -   SUBSEQUENT EVENTS

     On  March  30,  2001, the Company entered into an  agreement  with
     XTool,   Inc.,  a  Utah  Corporation,  to  exchange  all  of   the
     outstanding  shares  of  XTool, Inc. for  250,000  shares  of  the
     Company's  outstanding stock.  The agreement was effective  as  of
     April 3, 2001 when the 250,000 shares were distributed equally  to
     the   four  stockholders  of  XTool,  Inc..   XTool,  Inc.  is   a
     development stage company which has developed tooling to  be  sold
     in  the  petroleum,  mining  and horizontal  drilling  industries.
     These  tools  are  unique in the industry  and  are  cryogenically
     treated.

     As  part of the acquisition, the Company committed to a minimum of
     $250,000  of  capital  contribution to  the  new  subsidiary.   In
     addition to other compensation, each officer of the new subsidiary
     will  receive  stock  options to purchase 100,000  shares  of  the
     Company's  common stock.  The options will vest 50,000  shares  on
     the  anniversary of the acquisition for two years.   The  exercise
     price of the options will be $1.50 per share for the first vesting
     and  eighty percent (80%) of the average stock price for the month
     of  December preceding the date of vesting for the second  vesting
     shares.

     On June 4, 2001, the note holder of the $1,350,000 promissory note
     filed a Notice of Default with the County Recorder in an effort to
     commence  foreclosure on the trust deed on the  Company's  current
     administrative and operational facility.  The promissory note  was
     originally due February 28, 2001.

                                  F-30
<PAGE>

Item 8.     Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure

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


PART III

Item 9.

Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act.

      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

     The following table sets forth the name, age, and position of each
executive officer and director and the term of office of each director of
Cryocon, as of July 5, 2001.

Director and Officers     Age  Position            Since
J. Brian Morrison         43   Chairman/CEO        March 2001
                               Director            December 2000

Robert W. Brunson         45   Chief,              March 2001
                               Intellectual
                               Property Division

Lyndell Parks             43   Director            December 2000

James S. Cundiff          55   Director/           March 2001
                                Secretary

Sterling Redfern          67    Director           March 2001

Richard L. Lindstrom, MD  54    Director/          April 2001

Vaughn P. Griggs          58    Chief Financial
                                Officer            March 2001


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

Matt Kammeyer             31    Senior VP.,
                                 Marketing         December 2000

Biographical Information

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

J. Brian Morrison

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

Robert W. Brunson

     Mr. Brunson founded Cryocon, Inc., the Utah Corporation, in January
of 2000, together with his spouse Debra L. Brunson.  Previously, Mr.
Brunson had been the president of a major cryogenics firm in the Midwest
(September 1994 to May 1999).  From May 1999 to January 2000, Mr. Brunson
developed the

                                    39
<PAGE>

business plan and presented the plan to potential
investors.  Mr. Brunson has worked as an engineer and consultant in the
area of nuclear, chemical and electrical engineering since 1980, as well
as cryogenic technology.  He authored and held the patent for the deep-
cryogenic tempering of firearm barrels and components, known throughout
the country as Cryo-Accurizing, which is now a division of Cryocon.

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

Lyndell Parks

     Mr. Parks has recruiting, marketing, and management experience
covering the past 18 years.  This includes the organization of project
teams, recruitment of professionals, team projects, and assisting
corporations in both managerial structure and product development. He has
owned and operated several private companies and has also served on many
councils and board of directors.

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


James S. Cundiff

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

Sterling Redfern

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

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

Richard L. Lindstrom

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

Vaughn P. Griggs

     Mr. Griggs has over 30 years experience in corporate finance and
operations.  Mr. Griggs obtained a B.S. in Accounting with an emphasis in
Business Management and Economics from Brigham Young University.  Mr.
Griggs has been with Cryocon since April, 2000.  He served Cryocon as a
controller and a cryogenic consultant.  Mr. Griggs has previously worked
for Precision Tool, Inc. (1993 to April 2000), American Apparel, Inc.,
and Integrated Systems Engineering, Inc.  Mr. Griggs also worked as a
staff auditor for Arthur Andersen & Co., he was Vice President of
Property Management with Price Management Company, served as Controller
for the Grossmont Shopping Center and Huish Management Company, and

                                    40
<PAGE>

CFO/Product Development for Nutrition Management Company.  Mr. Griggs
served as Recorder for the City of Nibley, Utah for three years.  He was
Chairman of the Transportation Committee in the La Mesa, California
Chamber of Commerce and was the Charter Member and Treasurer of the
Grossmont Kiwanis International Club.

James M. Retallick

     Mr. Retallick graduated from the J. Reuben Clark Law School at
Brigham Young University in 1987.  Mr. Retallick served in the U.S. Army
Judge Advocate General's Corps attaining the rank of Major.  His
assignments took him all over the world and included positions as
prosecutor, instructor and doctrine writer for the US Army Intelligence
Community and military magistrate.  Mr. Retallick began private practice
in 1992 with an emphasis in case negotiation and litigation.   Mr.
Retallick later join the firm of Snider, Pace & Retallick, P.C. in 1996
and later created the firm of Retallick & Pace, P.C. in 1997.  Mr.
Retallick left his position as shareholder and managing attorney of
Retallick & Pace, P.C. in January 2000 to accept a position with Cryocon,
Inc.  Mr. Retallick worked closely with founder Robert W. Brunson in the
development of Cryocon, from business plan formulation to the
establishment of Cryocon.  Mr. Retallick brings a varied background in
legal projects execution and personnel management which has lent itself
well to the demands of a public company and management of professionals
of various disciplines.  Mr. Retallick is Debra L. Brunson's brother and
Robert W. Brunson's brother-in-law.

Matthew A. Kammeyer

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


COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

During the last fiscal year, the following officers and/or directors
failed to file on a timely basis, as disclosed on Forms 3 and 5, reports
required by Section 16(a) of the Exchange Act:

Debra L. Brunson.  Ms. Brunson sold 2,000 shares on March 16, 2001 which
should have been reported on a Form 4.  Ms. Brunson had been informed by
her broker that a Form 4 had been filed on her behalf; however, upon
further investigation it was learned that a Form 4 was not filed.  This
was confirmed to Ms. Brunson in correspondence from her broker dated June
29, 2001.  Ms Brunson's Form 5 was filed one day past the deadline of May
15, 2001.  A Form 5A was filed to correct the problem concerning the
missing Form 4 on July 2, 2001.

Richard L. Lindstrom.  Dr. Lindstrom was appointed as Director on April
25, 2001.  A Form 3 should have been filed by May 10, 2001, reflecting
this appointment and indicating the granting of options to him in the
amount of 250,000 shares.  The transaction was reported of Form 5 which
was timely filed on May 15, 2001.

Item 10.  EXECUTIVE COMPENSATION

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

                       SUMMARY COMPENSATION TABLE
<
<TABLE>
<CAPTION>

                                                        Other     Restricted   Securities    LTIP     All Other
                                                        Annual     Stock      underlying    payouts Compensation
Name and Principal Position   Year  Salary    Bonus  Compensation  award(s)  options/SARs     ($)        ($)
    (a)                        (b)     (c)     (d)       (e)       (f)            (g)         (h)        (i)
<S>                           <C>   <C>       <C>        <C>       <C>       <C>              <C>      <C>
ROBERT W. BRUNSON, CEO        2001  125,000    00         00        00             00         00        00 (1)
J. BRAIN MORRISON, CEO        2001  150,000    00         00        00        750,000         00        00 (2)
</TABLE>
                                    41
<PAGE>
<TABLE>

<S>                           <C>   <C>        <C>       <C>      <C>        <C>             <C>        <C>
D. CLARK CARLILE, VP          2001  105,000    00         00       00(3)           00         00        00 (5)
MATT A. KAMMEYER,VP           2001     N/A     00         00       00              00         00        00 (3)(4)
JAMES M. RETALLICK, VP        2001     N/A     00         00       00(3)      250,000         00        00 (6)
VAUGHN P. GRIGGS, CFO         2001     N/A     00         00       00              00         00        00 (7)
EGIN BRESNIG, CEO             2000      00     00         00       00         500,000         00        00
EGIN BRESNIG, CEO             1999      00     00         00       00              00         00        00
EGIN BRESNIG, CEO             1998  45,000     00         00       00              00         00        00
</TABLE>

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

Item 11.  Security Ownership of Certain Beneficial Owners and Management

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

  (i)  BENEFICIAL OWNERS OF MORE THAN 5%:

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

Common    Apollo Holdings       1,450,000             6.7%(2)
          PO Box 793
          Dartford, Kent UK
          DA27ZY

Common   Todd Moore             3,000,000             13.7%(3)
         728 Georgia Street
         Blaine, WA  98230

(ii) DIRECTORS AND NOMINEES:

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

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

Common    J. Brian Morrison          600,000                2.7.0% (4)
          2250 North 1500 West
          Ogden, UT  84404

Common    Lyndell Parks            2,000,000                9.2.0% (5)
          2250 North 1500 West
          Ogden, UT  84404

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

Common    James M. Retallick          270,000               1.2% (6)
          2250 North 1500 West
          Ogden, UT  84404

                                    42
<PAGE>

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

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

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

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

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

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

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

Item 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

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

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

     Robert Wickerschiem was appointed to the Board of Directors in
October 2000.  Mr. Wickerschiem was limited in his participation on the
Board due to health matters.  Mr. Wickersheim resigned from the Board due
to health reasons effective March 29, 2001.  Mr. Wickerschiem loaned
Cryocon $100,000 without interest.  The principal amount of the loan
became due on April 30, 2001.  Cryocon is not currently making any
payment on this debt.

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

                                    43
<PAGE>

Item 13.  Exhibits and Reports on Form 8-K

         (a) Exhibits. The following exhibits are filed with this report,
except those indicated as having previously been filed with the
Securities and Exchange
Commission and which are incorporated by reference to another report,
registration statement or form. Cryocon will furnish any exhibit
indicated in the list below as filed with this report (not incorporated
by reference) upon payment to Cryocon of its expenses in furnishing the
information upon the request of any Shareholder of Record.

3.0      Articles and Bylaws

         3.1 Articles of Incorporation of Cryocon (incorporated by
             reference to Exhibit 3.1 to registration statement on
             Form S-8 of Champion Computer Rentals, Inc., file no.
             33-23257-
D)

        3.2  Bylaws of Cryocon (incorporated by reference to Exhibit
             on Form 10-KSB for fiscal year ended 1993).

        3.3  Certificate of Amendment and Restatement to Articles of
             Incorporation (incorporated by reference to Exhibit 3.4
             to Form 8-K dated February 10, 1994).

        3.4  Certificate of Amendment to Articles of Incorporation,
             changing Champion Computer Rentals, Inc.'s name to Iso-
             Block Products USA, Inc.(incorporated by reference to
             Exhibit 2(c) to registration statement on Form 8-A,
             file no. 0-25810).

       3.5  Certificate of Amendment to Articles of Incorporation,
            changing the company's name to Cryocon, Inc.,
            authorizing a four to one reverse split, authorizing the
            increase of capital stock to 50,000,000 shares of common
            stock, and ratifying the change of auditors to HJ &
            Associates of Salt Lake City, Utah.
            (Incorporated by reference to Exhibit 3.6 to the 10-
            QSB, filed November 14, 2000.)

4.0      Instruments Defining the Rights of Security Rights

       4.1  Convertible Debenture Due January 3, 2003 between Cryocon,
          Inc. and Robert Brunson in the Principal Amount of $50,000.00,
          incorporated by reference to Exhibit 4.1 to Form S-3 filed
          February 9, 2001.

     4.2  Convertible Debenture Due February 1, 2003 between Cryocon,Inc.
          and Paragon Venture Fund LLC in the Principal Amount of
          $28,800.00 incorporated by reference to Exhibit 4.2 to Form S-3
          filed February 9, 2001.

     4.3  Convertible Debenture Due February 1, 2003 between Cryocon,Inc.
          and Paragon Venture Fund LLC in the Principal Amount of
          $647,300.00 incorporated by reference to Exhibit 4.3 to Form S-
          3 filed February 9, 2001.

     4.4  Convertible Debenture Due February 1, 2003 between Cryocon Inc.
          and Paragon Venture Fund LLC in the Principal Amount of
          $1,404,473.00 incorporated by reference to Exhibit 4.4 to
          Form S-3 filed February 9, 2001.

     4.5  Convertible Debenture Due February 1, 2003 between Cryocon,
          Inc. and Paragon Venture Fund LLC in the Principal Amount of
          $475,000.00 incorporated by reference to Exhibit 4.5 to Form S-
          3 filed February 9, 2001.

     4.6  Convertible Debenture Due February 1, 2003 between Cryocon,
          Inc. and Paragon Venture Fund LLC in the Principal Amount of
          $1,564,236.00 incorporated by reference to Exhibit 4.6 to Form
          S-3 filed February 9, 2001.

     4.7  Warrant Issuance to Todd Moore incorporated by reference to
          Exhibit 4.7 to Form S-3 filed February 9, 2001.

     4.8  Warrant Issuance to Bourns, Inc., incorporated by reference to
          Exhibit 4.8 to Form S-3 filed February 9, 2001.

     4.9   Warrant Issuance to J. Brian Morrison incorporated by
           reference to Exhibit 4.9 to Form S-3 filed February 9, 2001.

                                    44
<PAGE>

     4.10 Common Stock Purchase Agreement Millennium Capital Partners,
          L.L.C. incorporated by reference to Exhibit 4.10 in Amendment
          No. 1 to Form SB-2 filed April 17, 2001.

     4.11 Sample Form of Warrant issued to Cryocon's shareholders
          incorporated by reference to Exhibit 4.11 to Amendment No. 1
          to Form SB-2 filed April 17, 2001.

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

9.0  Voting Trust Agreements.

     None

10.0 Material Contracts

     10.1(2)   XTool, Inc. Acquisition Contract incorporated by
     reference to Exhibit 4.11 in Amendment No. 1 to Form SB-2 filed
     April 17, 2001.

16.0 Letter on Change in Certifying Account

     Incorporated by reference to Exhibit 16.0 in Form S-3 filed
     February 9, 2001.

22.0 Subsidiaries of Registrant

     Incorporated by reference to Exhibit 4.11 in Amendment No. 1
      to Form SB-2 filed April 17, 2001.

24.0    Power of Attorney

         24.01    Power of Attorney (See Signature Page)

  (b)  No reports on Form 8-K were filed during the last quarter of fiscal
      year 2000.

                            POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints J. Brain Morrison, with power of
substitution, as his attorney-in-fact for him, in all capacities, to sign
any amendments to this registration statement and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all
that said attorney-in-fact or his substitutes may do or cause to be done
by virtue hereof.
                               SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed below by the following person
on behalf of the registrant and in the capacities and on the date
indicated.



							________/S/_____________________
							J. BRIAN MORRISON
							CHAIRMAN/CHIEF EXECUTIVE OFFICER
                                          July 31, 2001

                                    45
<PAGE>

EXHIBIT 4.12:
ADDENDUM TO COMMON STOCK PURCHASE AGREEMENT WITH
MILLENNIUM CAPITAL
                               ADDENDUM TO
                             STOCK PURCHASE
                                AGREEMENT
                          _____________________


                              CRYOCON, INC.


                           __________________
                                  47
<PAGE>
                           Millennium Capital
               ADDENDUM TO COMMON STOCK PURCHASE AGREEMENT

     THIS ADDENDUM, is entered into by and between Cryocon, Inc. (Issuer)
and Millennium Capital Group, LLC (Buyer).

     The parties hereto agree to extend the Option Period as provided for
in Exhibit 1.1 of the Common Stock Purchase Agreement an additional 120
days from May 31, 2001 to September 30, 2001.

     All other terms and conditions not specifically amended by this
instrument remain if full force and effect.

     Dated May 31, 2001

     Issuer:


     ___/s/________________________________________
     J. Brian Morrison, Chairman/Chief Executive Officer
     Cryocon, Inc.

     Buyer:



     __/s/___________________________________________
     Mark E. Gray, Managing Director
     Millennium Capital Group, LLC

                                     48
<PAGE>