<PAGE>

                          SECURITIES AND EXCHANGE COMMISSION

                               WASHINGTON, D.C.   20549

                                    FORM 10-KSB/A2
(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 [NO FEE REQUIRED]

For the fiscal year ended February 28, 1998

                                          OR

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from                 to
                               ---------------    ---------------

                     Commission file number   1-12680
                                            ---------------

                                ORYX TECHNOLOGY CORP.
--------------------------------------------------------------------------------
             (Name of Small Business Issuer as specified in its charter)

           Delaware                                              22-2115841
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

1100 Auburn Street, Fremont, California                            94538
-----------------------------------------------                  ----------
(Address of principal executive offices)                         (Zip Code)

     Issuer's Telephone Number, including area code:  (510) 492-2080
                                                    ------------------
     Securities registered pursuant to Section 12(b) of the Act:

                                        Name of each exchange
    Title of each class                  On which registered
    -------------------                  -------------------

Common Stock, $.001 par value                  NASDAQ
-----------------------------           ------------------------
Common Stock Purchase Warrants                 NASDAQ
------------------------------          ------------------------

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

                                        None
--------------------------------------------------------------------------------
                                   (Title of class)

   Check whether the Issuer (1) has filed all reports required to be filed by 
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 
months (or for such shorter period that the Issuer was required to file such 
reports), and (2) has been subject to such 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 contained in this form, and no disclosure will be 
contained, to the best of the Issuer'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   [ X ]
                                               ---

   Issuer's revenues from continuing operations for its most recent fiscal 
year were $8,449,000.

   As of May 15, 1998, 13,124,821 shares of Common Stock and Preferred Stock 
convertible into 52,515 shares of Common Stock of Registrant were 
outstanding. The aggregate market value of the shares of Common Stock held by 
non-affiliates of Registrant, based on the average of the closing bid and 
asked prices on April 30, 1998: $1 and $1-1/32 quoted by the National 
Association of Securities Dealers Automated Quotation System ("NASDAQ"), was 
approximately $12,543,561.(1)

   13,124,821 shares of the Company's Common Stock were outstanding as of 
April 30, 1998.

   Transitional Small Business Disclosure Format (check one):  
Yes       No  X
    ---      ---


<PAGE>

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

   (a) EXHIBITS

      23.1  Consent of PricewaterhouseCoopers LLP, Independent Accountants

   (b) FINANCIAL STATEMENTS

         The financial statements listed on the index to financial statements 
on page F-1 are filed as part of this Form 10-KSB/A2.


                                       1

<PAGE>

                                     SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the Registrant has duly caused this Report to be signed 
on its behalf by the undersigned thereunto duly authorized on this 14th day 
of October, 1998.

                                   ORYX TECHNOLOGY CORP.



                                   By: /s/ Philip J. Micciche
                                       ----------------------
                                       Philip J. Micciche,
                                       President & CEO


     In accordance with the Securities Exchange Act of 1934, this Report has 
been signed below by the following persons on behalf of the Registrant and in 
the capacities and on the dates indicated.

Signature                      Title                        Date
---------                      -----                        ----
                                                           
                                                           
                               President, CEO              
/s/ Philip J. Micciche         and Director                October 14, 1998
----------------------         (Principal Executive        
Philip J. Micciche              Officer
                                                           
                                                           
                               Secretary, Treasurer        
/s/ Andrew Intrater            and Director                October 14, 1998
----------------------            
Andrew Intrater                
                                                           
                                                           
                               Chief Financial             
/s/ Mitchel Underseth          Officer and Director        October 14, 1998
----------------------         (Principal Financial     
Mitchel Underseth               and Accounting Officer) 
                                                           
                                                           
/s/ John H. Abeles             Director                    October 14, 1998
----------------------
John H. Abeles


(signatures continued next page)


                                       2

<PAGE>

(signatures continued from previous page)

Signature                      Title                        Date
---------                      -----                        ----
                                                           
                                                           
/s/ Jay M. Haft                Director                    October 14, 1998
----------------------                                     
Jay M. Haft                                                
                                                           
                                                           
                                                           
/s/ Richard Hubbard            Director                    October 14, 1998
----------------------                                     
Richard Hubbard                                            
                                                           
                                                           
/s/ Doug McBurnie              Director                    October 14, 1998
----------------------                                     
Doug McBurnie                                              
                                                           
                                                           
/s/ Ted D. Morgan              Director                    October 14, 1998
----------------------
Ted D. Morgan


                                       3

<PAGE>

ORYX TECHNOLOGY CORP.
Index to Consolidated Financial Statements
February 28, 1998 and February 28, 1997
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                           Page
                                                                           ----
<S>                                                                        <C>
Report of Independent Accountants. . . . . . . . . . . . . . . . . . . .    F-2

Consolidated Balance Sheet at February 28, 1998
     and 1997. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    F-3

Consolidated Statement of Operations for the
     years ended February 28, 1998 and 1997. . . . . . . . . . . . . . .    F-4

Consolidated Statement of Stockholders' Equity for the
     years ended February 28, 1998 and 1997. . . . . . . . . . . . . . .    F-5

Consolidated Statement of Cash Flows for the
     years ended February 28, 1997 and 1997. . . . . . . . . . . . . . .    F-6

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . .    F-7
</TABLE>

                                         F-1

<PAGE>

                         REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors and Shareholders of
Oryx Technology Corp.


In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of stockholders' equity and of cash flows
present fairly, in all material respects, the financial position of Oryx
Technology Corp. and its subsidiaries at February 28, 1998 and 1997, and the
results of their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.  These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits.  We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation.  We
believe that our audits provide a reasonable basis for the opinion expressed
above. 



PRICE WATERHOUSE LLP

San Jose, California
May 22, 1998


                                         F-2

<PAGE>

ORYX TECHNOLOGY CORP.
Consolidated Balance Sheet
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                        FEBRUARY 28,    FEBRUARY 28,
                                                            1998            1997
                      ASSETS
<S>                                                    <C>             <C>
Current assets:
  Cash and cash equivalents                            $    722,000     $   2,389,000
  Accounts receivable, net of allowance for doubtful
   accounts of $93,000 and $60,000                        1,100,000         1,617,000
  Inventories                                               397,000         2,132,000
  Other current assets                                      670,000            73,000
  Net assets of discontinued operations                   1,060,000         3,900,000
                                                       ------------     -------------
     Total current assets                                 3,949,000        10,111,000

Property and equipment, net                                 490,000         1,200,000
Other assets                                              1,114,000           226,000
                                                       ------------     -------------
                                                       $  5,553,000     $  11,537,000
                                                       ============     =============


        LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities: 
  Bank borrowings                                      $    129,000     $           -
  Capital lease obligations                                  16,000            38,000
  Deferred revenue                                          874,000           450,000
  Accounts payable                                          431,000         1,317,000
  Accrued liabilities                                       998,000           900,000
                                                       ------------     -------------
     Total current liabilities                            2,448,000         2,705,000

Deferred gain (Note 5)                                      646,000                 -
Capital lease obligations, less current portion              12,000            35,000
                                                       ------------     -------------
     Total liabilities                                    3,106,000         2,740,000
                                                       ------------     -------------


Commitments and contingencies (Notes 1 and 13)

Stockholders' equity:
  Series A 2% Convertible Cumulative Preferred Stock,
   $0.001 par value; 3,000,000 shares authorized; 
   4,500 shares issued and outstanding, 
   liquidation value $113,000                               107,000           107,000
  Common Stock, $0.001 par value; 25,000,000 shares 
   authorized; 13,124,821 and 12,961,692 issued 
   and outstanding                                           13,000            13,000
  Additional paid-in capital                             19,711,000        18,920,000
  Accumulated deficit                                   (17,384,000)      (10,243,000)
                                                       ------------     -------------
     Total stockholders' equity                           2,447,000         8,797,000
                                                       ------------     -------------
                                                       $  5,553,000     $  11,537,000
                                                       ============     =============
</TABLE>
 

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


                                         F-3

<PAGE>

ORYX TECHNOLOGY CORP.
Consolidated Statement of Operations
--------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>

                                                                          YEAR ENDED               YEAR ENDED
                                                                         FEBRUARY 28,             FEBRUARY 28,
                                                                             1998                     1997
<S>                                                                      <C>                      <C>
Net revenue                                                              $  8,449,000             $  6,470,000
Cost of sales                                                               6,234,000                4,605,000
                                                                         ------------             ------------
  Gross profit                                                              2,215,000                1,865,000
                                                                         ------------             ------------

Operating expenses:
  Marketing and selling                                                     1,141,000                1,109,000
  General and administrative                                                2,911,000                2,939,000
  Research and development                                                  2,669,000                2,157,000
                                                                         ------------             ------------
    Total operating expenses                                                6,721,000                6,205,000
                                                                         ------------             ------------

Loss from operations                                                       (4,506,000)              (4,340,000)
Interest income (expense), net                                               (350,000)                  10,000
Equity in loss of investee                                                          -                  (20,000)
Net gain on sales of investment                                             1,383,000                        -
                                                                         ------------             ------------

Loss from continuing operations                                            (3,473,000)              (4,350,000)

Discontinued operations:
  Income (loss) from discontinued operations                               (3,588,000)               2,348,000
  Loss on disposal of discontinued operations                                 (78,000)                       -
                                                                         ------------             ------------
    Income (loss) from discontinued operations                             (3,666,000)               2,348,000
                                                                         ------------             ------------

Net loss                                                                   (7,139,000)              (2,002,000)
Dividends                                                                      (2,000)                 (10,000)
                                                                         ------------             ------------
    Net loss attributable to Common Stock                                $ (7,141,000)            $ (2,012,000)
                                                                         ============             ============

Basic and diluted loss per common share from continuing operations       $      (0.26)            $      (0.41)
Basic and diluted income (loss) per common share from discontinued 
    operations                                                                  (0.28)                    0.22
                                                                         ------------             ------------
    Basic and diluted net loss per common share (Note 2 )                $      (0.54)            $      (0.19)
                                                                         ============             ============

Weighted average common shares used to compute 
  basic and diluted net loss per share (Note 2 )                           13,105,000               10,650,000
                                                                         ============             ============
</TABLE>
 

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


                                         F-4

<PAGE>

ORYX TECHNOLOGY CORP.
Consolidated Statement of Stockholders' Equity
--------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
 

                                               SERIES A 2%
                                         CONVERTIBLE CUMULATIVE                         ADDITIONAL
                                             PREFERRED STOCK         COMMON STOCK         PAID-IN        ACCUMULATED
                                            SHARES     AMOUNT      SHARES      AMOUNT     CAPITAL          DEFICIT         TOTAL
<S>                                        <C>       <C>        <C>           <C>       <C>             <C>             <C>
Balance at February 29, 1996                34,875   $ 832,000   9,228,668    $  9,000  $ 13,629,000    $ (8,231,000)   $ 6,239,000

Issuance of Common Stock and warrants 
  in private placements, net of issuance
  costs of $681,000                              -           -   2,836,130       4,000     4,139,000               -      4,143,000
Issuance of Common Stock upon exercise 
  of options                                     -           -     187,318           -       230,000               -        230,000
Issuance of Common Stock upon exercise 
  of warrants                                    -           -     349,590           -       599,000               -        599,000
Issuance of warrants in exchange for 
  services                                       -           -           -           -        60,000               -         60,000
Repurchase of underwriter units                  -           -           -           -      (475,000)              -       (475,000)
Conversion of Preferred Stock to Common 
  Stock                                    (30,375)   (725,000)    366,875           -       738,000               -         13,000
Net Loss                                         -           -           -           -             -      (2,002,000)    (2,002,000)
Preferred Stock dividend                         -           -           -           -             -         (10,000)       (10,000)
                                           -------   ---------  ----------    --------  ------------    ------------    -----------
Balance at February 28, 1997                 4,500     107,000  12,968,581      13,000    18,920,000     (10,243,000)     8,797,000

Proceeds from SurgX Corporation 
  subsidiary stock sale, net of issuance
  costs of $15,000                               -           -           -           -       485,000               -        485,000
Issuance of Common Stock upon exercise 
  of warrants                                    -           -     156,240           -       213,000               -        213,000
Issuance of warrants in exchange for 
  financing services                             -           -           -           -        93,000               -         93,000
Net Loss                                         -           -           -           -             -      (7,139,000)    (7,139,000)
Preferred Stock dividend                         -           -           -           -             -          (2,000)        (2,000)
                                           -------   ---------  ----------    --------  ------------    ------------    -----------
Balance at February 28, 1998                 4,500   $ 107,000  13,124,821    $ 13,000  $ 19,711,000    $(17,384,000)   $ 2,447,000
                                           =======   =========  ==========    ========  ============    ============    ===========

</TABLE>
 

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


                                         F-5

<PAGE>

ORYX TECHNOLOGY CORP.
Consolidated Statements of Cash Flows
--------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>

                                                                                    YEAR ENDED     YEAR ENDED
                                                                                   FEBRUARY 28,   FEBRUARY 28,
                                                                                       1998           1997
<S>                                                                               <C>            <C>
Cash flows from operating activities:
  Net loss                                                                        $  (7,139,000) $  (2,002,000)
  Adjustments to reconcile net loss to net cash used in operating activities:
    Loss (income) from discontinued operations                                        3,666,000     (2,348,000)
    Equity in loss of investee                                                                -         20,000
    Gain on sale of investment                                                       (1,383,000)             -
    Value of warrants issued for services and debt issuance                              93,000         60,000
    Depreciation and amortization                                                       458,000        248,000
      Changes in assets and liabilities (net of effects from disposal of
      subsidiaries):
        Accounts receivable                                                            (483,000)      (877,000)
        Inventories                                                                     548,000     (1,546,000)
        Other current assets                                                           (148,000)       105,000
        Other assets                                                                     20,000         14,000
        Deferred revenue                                                                609,000        117,000
        Accounts payable                                                               (622,000)      (862,000)
        Accrued liabilities                                                             694,000        426,000
                                                                                  -------------  -------------
          Net cash used in continuing operating activities                           (3,687,000)    (6,645,000)
          Net cash provided by (used in) discontinued operations                       (826,000)     2,251,000
                                                                                  -------------  -------------
          Net cash used in operations                                                (4,513,000)    (4,394,000)
                                                                                  -------------  -------------
Cash flows from investing activities:
  Capital expenditures                                                                 (321,000)      (931,000)
  Investment in development stage company                                                     -        (25,000)
  Net proceeds from sale of an investment                                             1,383,000              -
                                                                                  -------------  -------------
          Net cash provided by (used in) investing activities                         1,062,000       (956,000)
                                                                                  -------------  -------------
Cash flows from financing activities:
  Accounts receivable financing                                                       1,000,000              -
  Borrowings from (repayment of) bank line of credit                                    129,000       (352,000)
  Repayment of notes payable                                                                  -       (400,000)
  Payment of capital lease obligations                                                  (38,000)       (21,000)
  Proceeds from sale of minority interest in SurgX Corp.                                485,000              -
  Proceeds from issuance of Common Stock and warrants, net                                    -      4,143,000
  Proceeds from exercise of options for Common Stock                                          -        243,000
  Proceeds from exercise of warrants for Common Stock                                   213,000        599,000
  Repurchase of underwriter units                                                             -       (475,000)
  Payment of preferred stock dividend                                                    (2,000)       (10,000)
  Other                                                                                  (3,000)        97,000
                                                                                  -------------  -------------
          Net cash provided by financing activities                                   1,784,000      3,824,000
                                                                                  -------------  -------------
Net decrease in cash and cash equivalents                                            (1,667,000)    (1,526,000)
Cash and cash equivalents at beginning of period                                      2,389,000      3,915,000
                                                                                  -------------  -------------
Cash and cash equivalents at end of period                                        $     722,000  $   2,389,000
                                                                                  =============  =============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Interest paid during the period                                                 $     298,000  $      50,000
                                                                                  =============  =============
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
  Property and equipment acquired under capital lease obligations                 $       8,000  $      54,000
                                                                                  =============  =============

</TABLE>
 


                                         F-6
<PAGE>

Oryx Technology Corp.
Notes to Consolidated Financial Statements
-------------------------------------------------------------------------------

1.   THE COMPANY

     Oryx Technology Corp. ("Oryx" or the "Company"), a Delaware corporation,
     and its subsidiaries manufacture assemblies used in the production of
     computer memory disks, electromagnets, electrostatic discharge test
     equipment, secondary ion mass spectrometer measurement devices, and are
     developing products that provide electrostatic discharge protection.

     In April 1994, the Company completed an initial public offering of 2.2
     million shares of Common Stock which resulted in proceeds to the Company of
     approximately $6.0 million, net of issuance costs of approximately $1.7
     million.  Since its initial public offering, the Company has completed a
     number of private placement sales of its Common Stock.  Common Stock sold
     in private placement offerings during fiscal years 1997, 1996 and 1995
     totaled approximately 2.8 million shares, 4.8 million shares and 0.9
     million shares and resulted in net proceeds of $4,143,000, $4,759,000 and
     $575,000, respectively.

     The Company's cumulative losses and cash used in fiscal 1998 operations
     result in uncertainty about the Company's future viability.  However,
     management believes the recent restructuring, the sale of a portion of the
     Instruments and Materials business (see Note 5), and the sale of Oryx Power
     Product Corporation ("Power Products") (see Note 6) will significantly
     reduce operating losses, and the net proceeds generated from these
     transactions and outstanding credit facilities will enable the Company to
     continue as a going concern through February 28, 1999.

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


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     BASIS OF PRESENTATION
     The Company's fiscal year ends on the last day of February.  The year ended
     February 28, 1998 is referred to as fiscal 1998.

     PRINCIPLES OF CONSOLIDATION
     The consolidated financial statements include the accounts of Oryx
     Technology Corporation and its wholly owned subsidiaries.  All significant
     intercompany transactions and accounts have been eliminated.


                                         F-7
<PAGE>

     CASH AND CASH EQUIVALENTS
     The Company considers all highly liquid instruments with an original
     maturity of three months or less to be cash equivalents.

     INVENTORIES
     Inventories are stated at the lower of cost, determined on a first-in,
     first-out basis, or market.

     PROPERTY AND EQUIPMENT
     Property and equipment are stated at cost.  Depreciation is computed using
     the straight-line method over the estimated useful lives of the assets,
     generally three to ten years.  Leasehold improvements are amortized using
     the straight-line method over the shorter of the lease term or the
     estimated useful lives of the assets.  The Company periodically reviews the
     recovery of property and equipment based upon estimated cash flows.

     INTANGIBLE ASSETS
     The cost of intangible assets is amortized using the straight line method
     over the estimated useful lives of the assets, seventeen years for patents
     and seven years for goodwill and purchased technology.  The Company
     periodically reviews recoverability of intangible assets based upon
     estimated future cash flows. Intangible assets have been included in net
     assets of discontinued operations.

     EQUITY IN DAS DEVICE INC.
     The fiscal 1997 consolidated statements of operations include charges of
     $20,000 for the equity in net loss of an investee accounted for on the
     equity method.  As a result of additional outside investors in the
     investee's common stock during fiscal 1997, the Company's net ownership in
     the investee was reduced from 40% to less than 5%.  As a result of this
     reduction, the Company's investment was accounted for using the cost method
     for the year ended February 28, 1998. In fiscal 1998, the Company sold 42%
     of its holdings in DAS Device Inc. and realized a gain of $1,383,000.

     REVENUE RECOGNITION
     Revenues are generally recognized upon shipment of product.  However, where
     a shipment is subject to customer acceptance criteria, revenue is deferred
     until customer acceptance. Revenue from research contracts in process is
     recognized under the percentage of completion method.

     INCOME TAXES
     Deferred income taxes are provided for temporary differences between the
     financial reporting basis and the tax basis of the Company's assets and
     liabilities.  The benefits from utilization of net operating loss
     carryforwards will be reflected as part of the income tax provision if and
     when realizable.


                                         F-8
<PAGE>

     NET LOSS PER SHARE
     Basic earnings per share is computed by dividing loss available to common
     stockholders by the weighted average common shares outstanding for the
     period. Diluted earnings per share reflects the weighted average common
     shares outstanding plus the potential effect of dilutive securities which
     are convertible to common shares such as option, warrants, and preferred
     stock. Due to the net losses from continuing operations incurred in fiscal
     1998 and 1997, all common stock equivalents outstanding were considered
     anti dilutive and were excluded from the calculations of diluted net loss
     per share. No adjustments were made to net loss attributable to common
     stock in the calculation of basic or diluted earnings per share in fiscal
     1998 or 1997. Anti dilutive securities and common stock equivalents at
     February 28, 1998 which could be dilutive in future periods include common
     stock options to purchase 2,562,000 shares of common stock, warrants to
     purchase 4,224,000 shares of common stock, 4,500 shares of Series A
     preferred stock which may be converted into 53,000 shares of common stock
     and the minority interest investment and subsidiary stock options to
     purchase 304,000 shares in the Company's SurgX subsidiary which could
     reduce the Company's share of profits in the calculation of earnings per
     share in future periods.

     RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
     In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
     No. 130 ("SFAS 130"), "Reporting Comprehensive Income." SFAS 130
     establishes standards for reporting and display of comprehensive income and
     its components in a financial statement that is displayed with the same
     prominence as other financial statements for the periods beginning after
     December 15, 1997. Comprehensive income, as defined, includes all changes
     in equity (net assets) during a period from nonowner sources including
     unrealized gains and losses an available-for-sale securities.
     Reclassification of financial statements for earlier periods for
     comparative purposes is required. The Company will adopt SFAS 130 beginning
     in fiscal 1999 and does not expect such adoption to have a material effect
     on the consolidated financial statements.

     In June 1997, the FASB issued SFAS No. 131 ("SFAS 131"), "Disclosure about
     Segments of and Enterprise and Related Information." This statement
     establishes standards for the way companies report information about
     operations segments in annual financial statements for the periods
     beginning after December 15, 1997. It also establishes standards for
     related disclosures about products and services, geographic areas, and
     major customers. It is not expected that adoption of SFAS 131 will have an
     impact to the Company's consolidated financial statements.

                                         F-9
<PAGE>

3.   DETAILS OF BALANCE SHEET COMPONENTS
<TABLE>
<CAPTION>

                                                  FEBRUARY 28,   FEBRUARY 28,
                                                       1998         1997
<S>                                                <C>          <C>
     Inventories:
       Raw materials                               $  84,000    $ 1,211,000
       Work-in-progress                                    -        153,000
       Finished goods                                313,000        768,000
                                                   ---------    -----------
                                                   $ 397,000    $ 2,132,000
                                                   =========    ===========

     Property and equipment:
       Machinery and equipment                     $ 459,000    $   852,000
       Furniture and fixtures                        225,000        759,000
       Automobiles                                    11,000         11,000
       Leasehold improvements                        105,000        225,000
                                                   ---------    -----------
                                                     800,000      1,847,000
       Less:  Accumulated depreciation              (310,000)      (647,000)
                                                   ---------    -----------
                                                   $ 490,000    $ 1,200,000
                                                   =========    ===========

     Accrued liabilities:
       Compensation                                $ 316,000    $   205,000
       Professional fees                             199,000        203,000
       Warranty                                            -        150,000
       Facilities                                     31,000         72,000
       Disposal related costs                        138,000              -
       Other                                         314,000        270,000
                                                   ---------    -----------
                                                   $ 998,000    $   900,000
                                                   =========    ===========
</TABLE>


                                         F-10
<PAGE>

4.   ACQUISITION OF POWER SENSORS CORPORATION

     In December 1996, the Company acquired certain assets and assumed certain
     liabilities of Power Sensors Corporation ("PSC") in exchange for 600,000
     shares of Class A Common Stock of Oryx Power Products Corporation, a
     wholly-owned subsidiary of the Company.  The stock issued represented
     approximately 6% of the outstanding stock of Power Products at February 28,
     1997.  The acquisition was accounted for as a purchase; accordingly, the
     purchase price and costs of the acquisition were allocated to the assets
     and liabilities acquired based upon their estimated fair market values at
     the date of acquisition as follows:

<TABLE>
<S>                                               <C>
     Current assets                               $  338,000
     Furniture and equipment                         300,000
     Research and development in process             670,000
     Purchased technology                            340,000
     Goodwill                                        355,000
                                                  ----------
       Total assets                                2,003,000
                                                  ----------

     Accounts payable and accrued liabilities        460,000
     Capital lease assumed                           268,000
     Bank loans assumed                              555,000
                                                  ----------
       Total liabilities                           1,283,000
                                                  ----------
          Total purchase price                    $  720,000
                                                  ==========
</TABLE>

     The total purchase price was derived based on the estimated fair value of
     the stock issued of $600,000 and acquisition expenses of $120,000.  The
     agreement allowed the holders of such stock, under certain conditions, on
     the three year anniversary of the acquisition to require the Company to
     redeem the stock issued for a promissory note of $1.5 million payable in
     equal annual installments over four years commencing in the year 2000.
     Accordingly, the stock was accounted for as mandatorily redeemable
     securities at estimated fair value and accretes up to the redemption value
     in accordance with the terms of the agreement. In connection with the
     disposal of Power Products (see Note 6) the stock balance was included in
     net assets from discontinued operations and the accretion of redemption
     value in the amount of $189,000 and $37,000 for the years ended February
     28, 1998 and 1997, respectively, were included in income (loss) from
     discontinued operations.

     On March 2, 1998, the Company disposed of Power Products, and accordingly,
     the results of PSC as well as Power Products have been accounted for as a
     discontinued operation (see Note 6).


                                         F-11
<PAGE>

5.   DISPOSITION

     On February 27, 1998, a third party acquired 8,000,000 newly issued shares
     of the authorized  Class A Common Stock of Oryx Instruments and Materials
     Corporation ("I&M") from I&M in exchange for $500,000 in cash (the "Sale").
     Prior to the Sale, I&M was essentially a wholly owned subsidiary of the
     Company.

     As part of the Sale, I&M repurchased 8,000,000 of the 10,000,000 shares of
     Class A Common Stock held by the Company for an aggregate redemption price
     of $1,500,000 payable $500,000 in cash and a $1,000,000 in a non-interest
     bearing note (the "Note Receivable"). The Note Receivable balance is
     payable one-third on February 27, 1999 and two-thirds on February 27, 2000.
     The transaction resulted in a gain of $646,000 for the Company, which is
     being deferred until receipt of payments under the Note Receivable. As a
     result of the transaction, the Company has fully reserved its remaining
     19.9% ownership investment in I&M at February 28, 1998. The Note Receivable
     is included in other assets at February 28, 1998.

     Immediately prior to the repurchase, I&M distributed to the Company
     substantially all of the assets and liabilities comprising the materials
     business previously conducted by I&M as well as certain other assets. Net
     assets retained by the Company totaled $1,300,000. Revenues from the sold
     Instruments portion of I&M were $3,688,000 and $2,194,000 for the years
     ended February 28, 1998 and 1997, respectively.

6.   DISCONTINUED OPERATIONS

     On March 2, 1998, the Company sold substantially all of the properties,
     assets, rights, business and certain liabilities of Oryx Power Products
     Corporation ("Power Products") for $2,000,000 in cash and a contingent
     additional amount up to $4,000,000 to be calculated based upon sales of
     certain specified products to specified customers during the fourteen month
     period immediately following the closing of the transaction. The disposal
     of Power Products has been accounted for as a discontinued operation and
     accordingly the net assets held for disposal and operating results of Power
     Products were segregated and reported as discontinued operations. As the
     Company has estimated a loss on disposal, all losses were recognized as if
     the transaction was completed as of February 28, 1998. Prior year financial
     statements have been restated to reflect the discontinuance of the Power
     Products operations. Revenue from Power Products were $10,022,000 and
     $20,390,000 for the years ended February 28, 1998 and 1997, respectively.


                                         F-12
<PAGE>

     The components of net assets of discontinued operations included in the
     Consolidated Balance Sheet are as follows:

<TABLE>
<CAPTION>

                                                FEBRUARY 28,   FEBRUARY 28,
                                                    1998          1997
<S>                                             <C>            <C>
     Cash                                        $    13,000    $   691,000
     Accounts receivable                             228,000      1,840,000
     Inventory                                     2,571,000      2,663,000
     Other current assets                             95,000         98,000
                                                  ----------     ----------
       Current Assets                              2,907,000      5,292,000

     Property & equipment, net                     1,158,000      1,474,000
     Non current assets                              632,000        909,000
                                                  ----------     ----------
       Total assets                                4,697,000      7,675,000

     Current liabilities                          (2,567,000)    (2,284,000)
     Non current liabilities                      (  245,000)    (  854,000)
     Mandatorily redeemable securities            (  825,000)    (  637,000)
                                                  ----------     ----------
       Total liabilities                          (3,637,000)    (3,775,000)
                                                  ----------     ----------
       Net assets of discontinued operations     $ 1,060,000    $ 3,900,000
                                                 ===========    ===========
</TABLE>

     Income (loss) from discontinued operations are net of income taxes of
     $25,000 and $40,000 for the years ended February 28, 1998 and 1997,
     respectively. The tax benefit resulting from the loss on disposal of Power
     Products was immaterial. Transaction costs related to the disposal were
     $1,018,000.

7.   FINANCING ARRANGEMENTS

     On December 4, 1996, the Company entered into a credit facility with a
     financial institution for borrowings of $530,000 bearing interest at 10.5%.
     The credit facility is payable over 48 monthly payments of principal and
     interest and is collaterized by specified manufacturing equipment.  At
     February 28, 1998, the Company had borrowings outstanding of $360,000 under
     this facility which was included in net assets of discontinued operations.

     At February 28, 1997, the Company had outstanding borrowings of $530,000
     under a loan assumed in connection with PSC acquisition. The loan was
     collaterized by business assets of the Company. During the year ended
     February 28, 1998, the Company paid off the entire balance of this loan.


                                         F-13
<PAGE>

     In May 1997, the Company entered into a facility which included an Accounts
     Receivable Revolving Batch Facility and an Inventory Line of Credit with a
     financial institution.  The Inventory Line of Credit provides for
     borrowings of up to $1.5 million ($750,000 of which is subject to an
     inventory appraisal).  The Accounts Receivable Revolving Batch Facility
     allows the Company to factor up to a maximum of $4 million, provided that
     any amount in excess of $3.5 million is supported by an equal amount of
     unused availability under the Inventory Line of Credit.  Under the
     facility, the Company is required to sell on an undiscounted, non recourse
     basis all accounts receivable.  In exchange, advances are available to the
     Company up to 85% of the face amount of eligible accounts receivable (as
     defined) up to a maximum amount of $4 million. Accounts receivable in the
     amount of $1,100,000 at February 28, 1998 were due from lender. Financing
     costs under the arrangement are equal to the greater of the institution's
     base rate plus 1.25% or 7.0%. In March 1998, the agreement was amended to
     reduce the Account Receivable Revolving Batch Facility and the Inventory
     Credit Line to a maximum borrowings of $500,000 each. Under the amended
     agreement, the Accounts Receivable Revolving Batch Facility expires in
     March 1999 and the Inventory Line of Credit expires in May 1999.

     At February 28, 1998, the Company had borrowings outstanding of $465,000
     under the Inventory Line of Credit, of which $336,000 was included in net
     assets of discontinued operations, and advances of $1,691,000 under the
     Accounts Receivable Revolving Batch Facility, of which $691,000 related to
     discontinued operations.

     In February 1998, the Company entered into a bridge loan facility with a
     financial institution for borrowings of amounts up to $1,000,000 bearing
     interest at the institution's base rate plus 4% with a minimum of 7% per
     annum. The facility expires on September 15, 1998. As consideration upon
     signing the facility, the financial institution received warrants to
     purchase 174,546 shares of common stock exercisable through February 2001
     at an exercise price of $1.15. The Company recorded an expense of $93,000
     upon issuance of the warrants. At February 28, 1998, there were no
     borrowings under this credit facility.

8.   SERIES A 2% CONVERTIBLE CUMULATIVE PREFERRED STOCK

     The Company has authorized 3,000,000 shares of Preferred Stock with a par
     value of $0.001 per share of which 45,000 of such shares are designated
     Series A 2% Convertible Cumulative Preferred Stock (the Series A Stock).
     Each share of Series A Stock may be converted, at the option of the holder,
     into approximately 11.67 shares of Common Stock.  As of February 28, 1998,
     the Company had reserved 52,515 shares of Common Stock for issuance upon
     conversion of the Series A Stock.  The holders of Series A Stock are
     entitled to receive a cumulative dividend of $0.50 per share per annum,
     subject to any restrictions imposed by the Delaware General Corporation
     Law.  The dividend is payable semi-annually.  In the event of


                                         F-14
<PAGE>

     liquidation and to the extent assets are available, the holders of the
     Series A Stock are entitled to a liquidation preference distribution of
     $25.00 per

     share plus accrued but unpaid dividends.  Each share of the Series A Stock
     is entitled to one vote per share on all matters submitted to a vote of
     stockholders of the Company.

9.   STOCK PLANS AND WARRANTS

     ORYX STOCK PLANS
     In March 1993, the Company adopted the Incentive and Nonqualified Stock
     Option Plan (the "1993 Plan").  The 1993 Plan, which expires in 2003,
     provides for incentive as well as nonstatutory stock options.  The Board of
     Directors may terminate the 1993 Plan at any time at its discretion.

     Options under the 1993 Plan are granted at prices determined by the Board
     of Directors, subject to certain conditions.  Generally, these conditions
     require that the exercise price of options granted may not be below 110%
     for persons owning more than 10% of the Company's capital stock and 100%
     for options issued to other persons for incentive options, or 85% of the
     fair market value of the stock at the date of grant for non statutory
     options.  Options granted to persons owning more than 10% of the Company's
     capital stock may not have a term in excess of five years, and all other
     options must expire within ten years.  Options vest over a period
     determined by the Board of Directors, generally four years, and are
     adjusted pro rata for any changes in the capitalization of the Company,
     such as stock splits and stock dividends.

     In 1995 and 1996, the Company adopted the 1995 and 1996 Directors Stock
     Option Plan (the "Directors' Plans").  The 1995 and 1996 Directors' Plan,
     which expires in 2005 and 2006, respectively, provide for nonstatutory
     stock options to be granted to nonemployee directors of the Company.  The
     Board of Directors may terminate the Directors' Plans at anytime at its
     discretion.  Options under the Directors' Plans are granted at prices
     determined by the Board of Directors, subject to certain conditions more
     fully described in the Directors' Plans.  Generally, these conditions
     require that the exercise price of options granted may not be below 110%
     for persons owning more than 10% of the Company's capital stock and 100%
     for options issued to other persons of the fair market valve of the stock
     at the date of grant.  Options must expire within ten years of grant.  The
     1995 and 1996 Directors' Plan provides that each nonemployee director
     receive options to purchase 45,000  and 30,000 shares, respectively, of the
     Company's Common Stock with 15,000 and 10,000, respectively, vested and
     exercisable upon grant with the remainder vesting in equal annual
     installments over a three year period.  The Company has 225,000 shares
     authorized under the 1995 Directors' Plan of which 195,000 options were
     outstanding with an average exercise price of $1.56 per share as of
     February 28, 1998.   The Company has 120,000 shares authorized under the
     1996


                                         F-15
<PAGE>

     Directors' Plan of which 90,000 options were outstanding with an average
     exercise price of $1.77 per share as of February 28, 1998.

     A summary of stock option activity under the 1993 Plan and the Directors'
     Plans is as follows:

<TABLE>
<CAPTION>
                                                     OPTIONS OUTSTANDING
                                                   -------------------------
                                                                    WEIGHTED-
                                        SHARES                       AVERAGE
                                       AVAILABLE                     EXERCISE
                                          FOR                         PRICE
                                         GRANT          SHARES      PER SHARE
<S>                                  <C>            <C>             <C>
     Balance at February 28, 1996       608,382        738,618        $1.54

     Additional shares authorized       620,000              -            -
     Options granted                   (786,500)       786,500        $1.94
     Options canceled                   143,253       (143,253)       $1.90
     Options exercised                        -       (187,318)       $1.22
                                      ---------     ----------
     Balance at February 28, 1997       585,135      1,194,547        $1.81

     Additional shares authorized     1,000,000              -            -
     Options granted                 (1,530,000)     1,530,000        $1.54
     Options canceled                   162,621       (162,621)       $1.96
     Options exercised                        -              -            -
                                      ---------     ----------
     Balance at February 28, 1998       217,756      2,561,926        $1.64
                                      =========     ==========
</TABLE>

     The following table summarizes information about employee stock options
     outstanding at February 28, 1998:
 
<TABLE>
<CAPTION>
                                  OPTIONS OUTSTANDING                    OPTIONS EXERCISABLE
                      ---------------------------------------------- -----------------------------
                                    WEIGHTED-AVERAGE
                                       REMAINING         WEIGHTED-                    WEIGHTED-
     RANGE OF            NUMBER       CONTRACTUAL         AVERAGE        NUMBER        AVERAGE
     EXERCISE PRICES   OUTSTANDING       LIFE          EXERCISE PRICE  EXERCISABLE  EXERCISE PRICE
     ---------------   -----------  ----------------   --------------  -----------  --------------

<S>                   <C>           <C>                <C>             <C>          <C>
     $1.00 - 1.38       911,040          8.3            $  1.27        273,589        $  1.14
     $1.58 - 2.25     1,625,886          8.5               1.82        627,458           1.95
     $2.38 - 3.00        25,000          6.2               2.95         18,770           2.95
                      ---------                                       --------
        Total         2,561,926          8.4            $  1.64        919,817        $  1.73
                      =========                                       ========
</TABLE>
 


                                         F-16


<PAGE>

     FAIR VALUE DISCLOSURES
     Had compensation cost for the Plans been determined based on the fair value
     of each stock option on its grant date, as prescribed in SFAS 123, the
     Company's net loss and net loss per share in fiscal 1998 would have been
     $7,491,000 and $0.57, respectively, and in fiscal 1997 would have been
     $2,395,000 and $0.22, respectively.

     The fair value of each option is estimated on the date of grant using the
     Black-Scholes option pricing model with the following weighted average
     assumptions used for grants during the applicable period:  dividend yields
     of 0% for both periods; expected volatility of 77% for fiscal 1998 and 60%
     for fiscal 1997; risk-free interest rate of 6.10% for fiscal 1998 and 6.29%
     for fiscal 1997 for options granted; and a weighted average expected option
     term of five years for both periods.  The weighted average fair value of
     options granted during fiscal years 1998 and 1997 was $0.87 and $0.73,
     respectively.  The weighted average fair value of options to purchase
     common shares of the Company's subsidiaries were not material during fiscal
     years 1998 and 1997.

     SUBSIDIARY STOCK PLAN
     In November 1995, the Company's subsidiary, SurgX Corporation, adopted
     stock option plans under which the Board of Directors granted options to
     management to purchase Class B common shares in the subsidiary at their
     fair market values as determined by the Board of Directors.  Class B common
     shares authorized for issuance in the subsidiary are identical to the ten
     million shares of Class A common shares owned by the Company, except the
     Class A shares possess a liquidation preference.  The Board of Directors
     authorized 1.5 million shares of Class B common shares to be available for
     issuance under this stock plan.  Such options are not transferable except
     in the event of a public offering of the subsidiary's stock or an
     acquisition of the subsidiary, and may be repurchased by the Company at its
     option.  Grants under the plan are for amounts, vesting periods and option
     terms established by the Company's Board of Directors.  The Company's
     ownership percentage of this subsidiary will change as a result of future
     exercises of stock options and, to the extent this subsidiary contributes
     profits, outstanding subsidiary stock options may dilute the Company's
     share of profits in the calculation of earnings per share.

     At February 28, 1998, there were 304,000 options to purchase shares of
     SurgX Corporation class B common stocks of which 161,000 were vested. These
     options had an average exercise price of $0.80 and an average remaining
     contractual life of 7.4 years.

     During fiscal 1998, the Company sold 333,000 Class A shares of SurgX
     Corporation for net proceeds of $485,000. At February 28, 1998, there were
     10,333,000 Class A common shares of SurgX Corporation outstanding and with
     the exception of 333,000 shares of SurgX Corporation sold in fiscal 1998,
     all of the subsidiary Class A shares outstanding were owned by the Company.


                                         F-17
<PAGE>

     WARRANTS
     The following warrants at February 28, 1998, and the number of shares of
     the Company's Common Stock which may be purchased at exercise, were
     outstanding and exercisable at February 28, 1998:

<TABLE>
<CAPTION>


      ORIGINAL      ISSUABLE          WARRANT       WARRANT          WARRANT
      WARRANTS       COMMON        COMMENCEMENT   EXPIRATION         EXERCISE
     OUTSTANDING     SHARES            DATE          DATE             PRICE

    <S>            <C>             <C>            <C>                <C>
      1,173,900    2,291,495         Apr. 1994     Apr. 1999          $3.50
         37,500       37,500         Oct. 1994     Oct. 2004          $2.00
        379,000      558,585         Nov. 1994     Oct. 2004          $2.00
        322,551      322,551         Feb. 1996     Jan. 2001          $1.25
        400,000      400,000         Feb. 1996     Mar. 2001          $1.00
        100,000      100,000         Feb. 1996     Mar. 2001          $5.00
        100,000      100,000         Apr. 1996     Mar. 2001          $1.31
         90,730       90,730         Dec. 1996     Dec. 2001          $1.90
         40,000       76,000         Dec. 1996     Apr. 1999          $3.50
         72,800       72,800         Feb. 1997     Feb. 2002          $1.90
        174,546      174,546         Feb. 1998     Feb. 2001          $1.15
      ---------    ---------
      2,891,027    4,224,207
      =========    =========
</TABLE>


     In addition to the foregoing, in connection with the Company's initial
     public offering, the Company sold to the underwriters, for an aggregate
     price of $110, noncallable warrants ("Underwriters' Warrants") entitling
     the holder to purchase from the Company 110,000 units at an exercise price
     of $11.55 per unit, subject to dilution provisions.  Each unit consisted of
     two shares of Common Stock and one callable warrant to purchase one
     additional share of Common Stock at an exercise price of $3.50 (also
     subject to dilution provisions).  As a result of subsequent dilutive
     offerings, the Underwriters' Warrants were convertible into 323,916 units
     at a exercise price of $3.71 per unit and each underlying warrant was
     convertible into 1.9 common shares.  During fiscal 1997, 100,000 units were
     exercised resulting in proceeds of $371,000.  In December 1996, the Company
     repurchased and retired the remaining units in exchange for $475,000 and
     40,000 warrants to purchase 76,000 shares at $3.50 per warrant, which may
     be exercised through April 1999.

     In connection with a bridge loan facility described in Note 7, in fiscal
     1998 the Company issued to a financial institution 174,546 shares of common
     stock exercisable through February 2001 at an exercise price of $1.15.

                                         F-18
<PAGE>

     In certain circumstances and defined time frames, the Company may call
     certain of the above warrants.  The terms of most warrants are subject to
     adjustment in certain circumstances including antidilution protection.


10.  RESEARCH CONTRACTS AND DEVELOPMENT FUNDING

     The Company is party to certain research contracts which are accounted for
     on a percentage of completion basis.  Revenues and cost of sales recorded
     under such contracts totaled $716,000 and $734,000 during fiscal 1998 and
     $627,000 and $403,000 during fiscal 1997, respectively.


     During fiscal 1998 and fiscal 1997, the Company received development
     funding from third parties to assist in the commercialization of certain of
     the Company's products.  Such funding is recorded as an offset to research
     and development expenses when contract specified technical milestones have
     been achieved.  During fiscal 1998 and fiscal 1997, $1,307,000 and
     $1,107,000, respectively, was credited to research and development expenses
     under these arrangements.


11.  SALES TO MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK

     The Company's customers are primarily in the office equipment,
     semiconductor and computer disk drive manufacturing industries.  The
     Company maintains reserves for potential credit losses; historically, such
     losses have been minor and within management's expectations.  The Company's
     accounts receivable are principally derived from sales in the United
     States.  All transactions are denominated in U.S. dollars.  At February 28,
     1998, 100% of the accounts receivable balance was due from the lender
     described in Note 7.

                                         F-19
<PAGE>

12.  INCOME TAXES

     Deferred income taxes reflect the tax effects of temporary differences
     between carrying amounts of assets and liabilities for financial reporting
     and income tax purposes. The Company provides a valuation allowance for
     deferred tax assets when it is more likely than not, based on currently
     available evidence, that some portion or all of the deferred tax assets
     will not be realized. Management believes that the available objective
     evidence creates sufficient uncertainly regarding the realizability of
     deferred tax assets such that a full valuation allowance is required at
     February 28, 1998.

     Deferred tax assets (liabilities) comprise the following:

<TABLE>
<CAPTION>

                                                 FEBRUARY 28,   FEBRUARY 28,
                                                    1998           1997

     <S>                                         <C>            <C>
     Net operating loss carryforwards            $ 3,511,000    $ 2,438,000
     Inventory reserves                              149,000         60,000
     R&D credit carryforwards                        366,000        330,000
     Intangibles                                           -        283,000
     Other                                           600,000        394,000
                                                 -----------    -----------
       Gross deferred tax assets                   4,626,000      3,505,000
     Fixed assets                                    (36,000)       (67,000)
                                                 -----------    -----------
     Net deferred tax assets                       4,590,000      3,438,000
     Deferred tax assets from discontinued
       operations                                    750,000        763,000
                                                 -----------    -----------
                                                   5,340,000      4,201,000
     Valuation allowance                          (5,340,000)    (4,201,000)
                                                 -----------    -----------
       Net deferred tax asset                    $         -    $         -
                                                 ===========    ===========
</TABLE>

     No provision for federal income taxes has been recorded because of losses
     incurred.


     At February 28, 1998, the Company had federal net operating loss
     carryforwards of approximately $9,700,000 which may be utilized to reduce
     future taxable income through 2013, subject to certain limitations.  In
     accordance with section 382 of the Internal Revenue Code, the amounts of
     and the benefits from net operating losses that can be carried forward are
     limited in certain circumstances, including a cumulative stock ownership
     change of more than 50% over a three-year period.  The Company's initial
     public offering and subsequent private placements have triggered ownership
     changes of greater than 50% and, accordingly, the future utilization of tax
     carryforwards generated through the date of such offerings are limited.

                                         F-20
<PAGE>

13.  COMMITMENTS AND CONTINGENCIES

     The Company leases its facilities and certain equipment under operating
     lease agreements, which expire in various periods through 2002.  The
     Company also leases certain assets under long-term lease agreements that
     are classified as capital leases.  The total amount of assets acquired
     under capital lease arrangements which are included in property and
     equipment is $47,000 and $324,000 and accumulated amortization on such
     assets totaled of $14,000 and $107,000, at February 28, 1998 and
     February 28, 1997, respectively.


     Future minimum lease obligations are payable as follows:

 
<TABLE>
<CAPTION>

                                                       CAPITALIZED         OPERATING
  YEAR ENDING FEBRUARY                                    LEASES             LEASES            TOTAL

<S>                                                    <C>               <C>                <C>
     1999                                               $  21,000        $    727,000       $    748,000
     2000                                                   9,000             467,000            476,000
     2001                                                       -             358,000            358,000
     2002                                                       -             116,000            116,000
                                                        ---------        ------------       ------------
     Total minimum lease payments                          30,000        $  1,668,000       $  1,698,000
     Less amount representing interest                     (2,000)       ============       ============
                                                        ---------        
     Present value of minimum lease payments               28,000
     Less current portion                                 (16,000)
                                                        ---------
     Long-term portion of obligations
        under capitalized leases                        $  12,000
                                                        =========
</TABLE>


     Rental expense for the years ended February 28, 1998 and 1997 was $516,000
     and $345,000, respectively.


14.  SEGMENT INFORMATION

     The Company groups its business into two operating segments and a corporate
     segment:  (i) Instruments and Materials includes specialized materials
     produced through a patented bonding process and the Company's electrostatic
     discharge and  secondary ion mass spectrometer measurement devices; and
     (ii) SurgX, a development stage operation that utilizes the Company's
     patented technology that protects microchips and related products from
     overvoltage.


     The segment information has been restated to reflect the discontinuance of
     operations of the Power Products segment (see Note 6). All results of 
     operations relating to the Instruments

                                         F-21
<PAGE>

     portion of Instruments and Materials segment prior to its disposition have
     been included in the consolidated information (see Note 5).

     Consolidated business segment information as of February 28, 1998 and
     February 28, 1997, and for each of the years then ended is summarized as
     follows:

<TABLE>
<CAPTION>

                                                         1998                1997

<S>                                                  <C>                <C>
     Revenues:
      Instruments and Materials
        Instruments                                  $  3,688,000       $  2,194,000
        Materials                                       4,678,000          4,240,000
      SurgX                                                83,000             36,000
      Corporate                                                 -                  -
                                                     ------------       ------------
                                                     $  8,449,000       $  6,470,000
                                                     ============       ============

     Operating income/(loss):
      Instruments and Materials
        Instruments                                  $ (2,319,000)      $ (2,651,000)
        Materials                                       1,378,000          1,340,000
      SurgX                                            (1,315,000)          (880,000)
      Corporate                                        (2,250,000)        (2,149,000)
                                                     ------------       ------------
                                                     $ (4,506,000)      $ (4,340,000)
                                                     ============       ============

     Depreciation and amortization expense:
      Instruments and Materials
        Instruments                                  $    312,000       $    181,000
        Materials                                          43,000             37,000
      SurgX                                                88,000             13,000
      Corporate                                            15,000             17,000
                                                     ------------       ------------
                                                     $    458,000       $    248,000
                                                     ============       ============

     Identifiable assets:
      Instruments and Materials :
        Instruments (see Note 5)                     $          -       $  3,931,000
        Materials                                       1,518,000            694,000
      SurgX                                               375,000            507,000
      Corporate                                         2,600,000          2,505,000
                                                     ------------       ------------
                                                        4,493,000          7,637,000
      Plus: Net assets of discontinued operations       1,060,000          3,900,000
                                                     ------------       ------------
                                                     $  5,553,000       $ 11,537,000
                                                     ============       ============

     Capital expenditures:
      Instruments and Materials :
        Instruments (see Note 5)                     $     98,000       $    478,000
        Materials                                          47,000             80,000
       SurgX                                              172,000            317,000
      Corporate                                             4,000             56,000
                                                     ------------       ------------
                                                          321,000            931,000
                                                     ============       ============
</TABLE>


                                         F-22