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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
(Mark One)

[X]     ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

                   For the fiscal year ended February 28, 2001

                                       OR

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

        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
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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 SmallCap Market


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

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

                                      None
--------------------------------------------------------------------------------
                                (Title of class)
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         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. / /

         Issuer's revenues from continuing operations for its most recent fiscal
year were $650,000.

         As of April 30, 2001, 16,704,671 shares of common stock and preferred
stock convertible into 43,750 shares of common stock of Issuer were outstanding.
The aggregate market value of the shares of common stock held by non-affiliates
of Issuer, based on the average of the closing bid and asked prices on April 30,
2001: $0.46 and $0.50 quoted by the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), was approximately $6,914,043.(1)


                       DOCUMENTS INCORPORATED BY REFERENCE

None.

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


         This Annual Report on Form 10-KSB contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995,
particularly statements regarding market opportunities, market share growth,
competitive growth, new product introductions by our licensees, success of
research and development efforts by our licensees and customer acceptance of new
products. These forward-looking statements involve risks and uncertainties, and
the cautionary statements set forth below identify important factors that could
cause actual results to differ materially from those predicted in any such
forward looking statements. Such factors include, but are not limited to,
adverse changes in general economic conditions, including adverse changes in the
specific markets for our products, adverse business conditions, dependence upon
our licensees for the commercial success of our products, adverse changes in
customer order patterns, increased competition, lack of acceptance of new
products, pricing pressures, lack of success in technological advancement, and
factors such as those listed in Risk Factors below.

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

(1) For purposes of this Report, shares held by non-affiliates were determined
by aggregating the number of shares held by officers and directors of the
Issuer, and by others who, to Issuer's knowledge, own 5% or more of Issuer's
common stock, including shares of preferred stock convertible into common stock,
and subtracting those shares from the total number of shares outstanding. The
price quotations supplied by NASDAQ represent prices between dealers and do not
include retail mark-up, markdown or commission and do not represent actual
transactions.

                                       2
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                                     PART I


Item 1.           Description of Business.

         Introduction

         Oryx Technology Corp. is the successor of Advanced Technology, Inc.,
which was incorporated on April 21, 1976 in New Jersey. On July 25, 1993,
Advanced Technology formed Oryx as a wholly-owned Delaware subsidiary, and on
September 29, 1993, Advanced Technology merged with and into Oryx Technology
Corp. References to "Oryx," "we," "our" and "us" refer to Oryx Technology Corp.
and its consolidated subsidiary.

         During fiscal 1998 we initiated a restructuring of our operations.
Through fiscal 1998, we designed, manufactured and marketed specialized
components, analytical equipment and instrumentation products for original
equipment manufacturers, in the information technology industry. We operated
three majority owned subsidiaries, focusing on three distinct market segments:

o        power conversion products (Oryx Power Products Corporation);

o        electrical surge protection products (SurgX Corporation); and

o        materials analysis and test equipment and specialized materials
         products (Oryx Instruments and Materials Corporation).

         During the later part of fiscal 1998 we embarked upon a major
restructuring program which resulted in:

o        the sale on February 27, 1998 of the test equipment portion of the
         business of Oryx Instruments and Materials Corporation;

o        the sale on March 2, 1998 of substantially all of the business of Oryx
         Power Products Corporation in its entirety; and

o        the sale on August 18, 1999 of the remaining operations of Oryx
         Instruments and Materials Corporation, consisting of the carbon target
         assembly and related materials coating business.

         Today we have two primary focuses:

         o    collecting royalties for our SurgX and Intragene technologies from
              our SurgX licensees, Cooper Electronics Technologies, Inc.  and
              IRISO Electronics, Ltd., and from our Intragene licensee, Oryx
              Advanced Materials, Inc.; and

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         o    maintaining our current portfolio of investments in technology
              start-up companies and providing management services in technology
              start-up companies we have invested in and others through our
              wholly-owned investment and management services company, Oryx
              Ventures, LLC.

         As a result of the restructuring of our business, we have disposed of
substantially all of our operating businesses which accounted for substantially
all of our revenue. In the absence of increased royalty revenue from the sale of
our SurgX and Intragene technologies through our licensees, which to date has
not occurred, such restructuring has sharply reduced our revenues without
creating opportunities to offset the lost revenues. The licensees of our SurgX
technology have, to date, not been successful in shipping products incorporating
our SurgX technology in significant volumes and there can be no assurances that
they will be successful in generating substantial sales of SurgX based products
in the future.


         SurgX Corporation

         Business Overview

         SurgX Corporation, or SurgX, is currently the subsidiary through which
we license SurgX, our proprietary surge protection technology. The underlying
technologies developed by SurgX are currently licensed exclusively to two
licensees, Cooper Bussmann, or Cooper Electronics, and IRISO Electronics
Company, Ltd., or IRISO. Products manufactured by these licensees and utilizing
SurgX's proprietary technology are targeted to be sold to original equipment
manufacturers, or OEMs, and contract manufacturers in the computer,
communication, and electronics industries to provide protection against
electrostatic discharge, or ESD, events through discrete devices at the printed
circuit board level.

         Our proprietary SurgX technology for over-voltage protection is
comprised of a specialized polymer formulation containing inorganic solids,
metal particles and adhesion-promoting agents which can be tailored for use
against surge threats at different voltage and power levels. In fiscal 2001 we
transferred all trade secrets and manufacturing know-how for SurgX liquid to our
licensees to facilitate the transfer of manufacturing SurgX liquid from SurgX to
our licensees.

Licensees

Cooper Electronics

         In fiscal year 1997, an exclusive, world wide, except for Japan,
license was granted to Cooper Electronics for the manufacture and marketing of
surface mount and connector array components using the SurgX technology. In
consideration for this license, Cooper Electronics paid us $750,000 in
development funding, and, subject to terms of the license agreement, became
obligated to pay royalties to us for approximately eleven years based upon
Cooper Electronics' sales of SurgX surface mount components and connectors. In
September of 1997, this license agreement was amended, to extend its term to 20
years, expand Cooper Electronics license rights for SurgTape for board-level ESD
protection, and provide SurgX with a cash advance of $1,700,000, in the form of
non-refundable minimum royalties to finance further the development and
commercialization of SurgTape. At this time, SurgTape has not been
commercialized and activities by SurgX to develop SurgTape for board-level ESD
protection have been abandoned.

                                       4
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         Cooper Electronics is a leading manufacturer of fuses and its target
market for SurgX is the electronics market. Cooper Electronics had initially
started the manufacturing of discrete components incorporating SurgX technology
in its St. Louis facility. In order to address the market requirements of high
volume and low cost, which could not be achieved in Cooper Electronics'
manufacturing facilities, Cooper Electronics initiated an offshore manufacturing
arrangement with an Asian based contract manufacturer. Based upon initial
forecasts, Cooper Electronics' contract manufacturer production capacity was
initially sized to a capacity of ten million units of its 0805 products per
month with the ability to scale capacity to handle anticipated increased demand
for products incorporating SurgX technology, which to date has not materialized.
Cooper Electronics' contract manufacturer has temporarily suspended producing
SurgX components due to high levels of inventory. It will resume manufacturing
operations once it receives additional requirements for the four line array and
the new 0603 product which is currently in evaluation at numerous OEMs, such as
Motorola, Olivetti, Mobicom, Nvidia, a contractor for Toshiba, and others,
worldwide. Cooper Electronics expects to start shipping the 0603 discrete
component in volume in late summer 2001.

          During fiscal 2000, Cooper Bussmann also formed Cooper Electronics
Technologies, Inc. to handle research and development and sales and marketing
functions in support of Cooper Bussmann, marketing products incorporating SurgX
and other technologies. Cooper Electronics has a worldwide network of direct
sales and representative entities and technical distribution groups responsible
for the promotion and sales support of SurgX electronic protection devices.

         Due to the transfer of SurgX product manufacturing offshore by Cooper
Electronics and the reorganization of Cooper Electronics in fiscal 2000, sales
of SurgX products for fiscal 2001 were under three million units, which is
substantially lower than previously anticipated. However, Cooper Electronics'
restructuring of its manufacturing and other operations has improved its
capacity to market of our SurgX technology. SurgX technology has now been
designed-in products offered by twenty five OEMs and is also in active product
evaluation with numerous major OEM's. However, volume shipments have yet to
occur. Due to the long lead times from design wins to production orders, risk of
cancellation of product programs, coupled with the recent significant downturn
in the electronic components market, there can be no assurances that these
design wins will result in significant sales of SurgX products in the near
future, or at all.

           During fiscal year 2000, all SurgX research and development efforts
were transferred from Oryx to Cooper Electronic Technologies, Inc. In fiscal
2001, a Cooper Electronics Technologies polymer devices facility was established
to support the polymer development, manufacturing and marketing activities. This
facility also includes technologies for several other devices, such as
supercapacitors. Cooper Electronics' manufacturing and process know-how have
been utilized to improve the processing yields, the consistency and the
logistics of SurgX liquid manufacturing, and to properly integrate the SurgX
liquid technology with the finished ESD protection device manufacturing.

         Cooper Electronics is actively working on new product development and
has developed and introduced a four-line array product which was developed to
address the requirements of the cellular market. It is completing the
development cycle of an 0603 package with better protection capability, lower
clamp (trigger voltage) and has begun to develop a much smaller footprint
component, an 0402 package style. In addition, Cooper Electronics has initiated
a program to evaluate and develop low-cost product offerings to compete directly
with low-priced diodes which will require electrical performance improvements to
the liquid polymer. The above programs aim to expand the available market
segment for the SurgX polymer devices.

                                       5
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IRISO

         In November 1997, IRISO, a manufacturer of high engineering connectors
and precision metal pins for electronic equipment, made an investment of
$500,000 in SurgX Corporation in exchange for an equity ownership interest of
approximately three percent of the total outstanding shares of SurgX
Corporation. In conjunction with this equity investment, IRISO received a
fifteen-year co-license to manufacture and sell our SurgX technology exclusively
in Japan for board level ESD protection. These products are marketed under the
SurgX trademarks. In fiscal 1999 IRISO started volume production and sales of
0805 surface mount components. Sales in fiscal 2000, were minimal with IRISO
shipping production quantities to two major OEMs and in lesser amounts to five
other customers. While shipments in fiscal 2001 were up significantly at
approximately 12 million units for the year, this sales level is much lower than
initially forecasted. IRISO is currently shipping to nine major OEMs.
Additionally, there are five customers currently evaluating IRISO products
incorporating the SurgX technology. In fiscal 2001, IRISO paid us $100,000 in
licensing royalties for shipments during the year.

         In fiscal 2000, Iriso launched a SurgX component in a standard passive
component package style, its 0805 package. Current development efforts for
future products are chip and network chip for optical devices and the next
generation cellular phone. Electrical performance improvements of reduced clamp
voltage (trigger voltage) and electrical shorting need to be achieved to open up
additional sales opportunities. Without these improvements, sales volume in the
near term will only rise modestly.

         SurgX has recently transferred the manufacturing of SurgX liquid
material to IRISO in Japan. IRISO is currently in the final stages of qualifying
its manufacturing process, which is expected to be complete by the end of June
2001. Currently, Cooper Electronics is providing SurgX liquid to IRISO for its
manufacturing requirements. Future liquid manufacturing enhancements and liquid
development activities will be borne by IRISO.

Market for the SurgX Technology

         As the information technology industry increases capacity and
performance, it is requiring faster speeds, smaller chip geometries and lower
operating voltages. These developments have been accompanied by increases in
product susceptibility to failures from over-voltage threats mainly from ESD.
Failure to address these problems can result in the destruction of chips and
circuitry. These threats can originate from inside or outside the products and
can arise from such factors as ESD, induced lightning effects, spurious line
transients and other complex over-voltage sources. During the last decade, new
products have emerged to address protection of integrated circuits from ESD.
Related specialized products range from wrist straps worn by electronics
assembly workers, to special anti-static packaging of both components and
sub-assemblies as well as board level protection devices such as diodes and
varistors.

                                       6
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         The global market for all over-voltage protection devices currently is
estimated at approximately $2.1 billion and includes some more mature transient
voltage suppression, or TVS, devices such as gas discharge tubes, varistors, and
diodes. The major markets targeted for new surge protection devices and
technologies such as those represented by our technology are telecommunication,
automotive and computers. Sales of surge protection devices are divided among
varistors (40%), diodes (40%), and gas discharge tubes and surge resistor
networks (20%).

         Gas discharge tubes, varistors, and diodes are all used as protection
from over-voltage transients. Our SurgX technology is a polymer based
technology, used to protect against the ESD type over-voltage transients.

         Gas discharge tubes are traditionally used for protection of signal
lines such as phone lines, computer data line communications and antennae
because low capacitance of the tubes does not interfere with the bandwidth of
high frequency communication circuits. Gas discharge tubes are also used for the
protection of AC powerlines since they can handle high currents. Gas discharge
tubes are inherently bipolar, have low capacitance, in the .5 to 2pF range, and
handle the high currents in the 5 to 20,000 amps range. A negative attribute of
the gas discharge tubes is their slow turn on, which allows some of the over
voltage pulse to get through and damage sensitive electronics, and conversely,
the difficulty in turning off after the transient has ended.

         Varistors are typically used for protection of electronic components
from transients generated on the power lines supplying electronic systems. The
varistor is bipolar in nature but has the largest capacitance of the common
overvoltage protection devices, commonly ranging between 200 to 10,000pF. As
long as the varistor is large enough, it can handle high currents. Varistors'
typical response times cited are slow.

         Diodes offer the tightest clamping voltage and fastest response times
of standard over-voltage protection devices. For this reason, diodes have been
the preferred over-voltage protection device for integrated circuits protection
at the board level. Diodes are used extensively on signal lines, and on printed
circuit boards used in communications, computer, industrial and automotive
electronics. Diode response times are one nanosecond or less, capacitances are
commonly greater than 10 to 100's of pF, and the response to voltages is
unidirectional. Diodes include Zener diodes, silicon avalanche diodes, and
sidactors. In some specific instances switching diodes may also be used as
transient voltage surge diodes, although these are not true suppressors and are
offered as low cost alternatives to Zeners and silicon avalanche diodes.

         SurgX is an over-voltage protection component, which is designed for
extensive use on printed circuit boards. It addresses many of the same
applications as diodes. Like the varistors and the gas discharge tubes, SurgX is
bipolar in nature, allowing a single SurgX component to replace two diode
devices. The capacitance of SurgX devices is typically less than one pF, lower
than that of any of the standard overvoltage protection components it is
intended to replace. SurgX devices can therefore be used at high frequencies
without interfering with signal transmission. The low capacitance is
particularly important as the frequencies of today's electronics go beyond 10
mega hertz. Over-voltage devices with capacitances greater than 10 pF interfere
with megahertz signals. The slow response time of the gas discharge tubes
prohibits their use for ESD protection of signal lines, even though they have
the low capacitance required.

                                       7
<PAGE>

         SurgX can be used as a diode replacement in ESD over-voltage transient
applications since it has nanoseconds response, with a fold back trigger
response similar to a sidactor diode, low capacitance, a very small footprint,
lower leakage current than either a diode or a varistor, and high current
shunting capability. In larger packages with larger electrodes, the energy
handling capability of SurgX increases, thereby allowing its use in applications
such as modems, where gas discharge tubes and varistors would typically be used.

         Though proven for performance and reliability, each of the traditional
over-voltage protection technologies has only a narrow range of application. In
addition, none achieves the desired combination of high speed, elevated power
handling capability, low clamping voltage and low capacitance. Furthermore,
present conventional devices and methodologies are expensive for use on all
signal lines on a given circuit board. SurgX components are intended to address
the low cost, low capacitance needs required for signal line protection in
electronics. The major suppliers for traditional over-voltage protection
products include General Semiconductor, Harris Semiconductor, Inc., Motorola
Corp., Siemens Components, Inc, Semtech and Vishay.

Primary Market Segment

         Our licensees, Cooper Electronics and IRISO, have sole responsibility
for marketing products using our SurgX technology. The TVS protection function
traditionally served by the discrete TVS diode is the primary market targeted by
our licensees. This market in total was approximately $800 million in calendar
2000 and consists of two segments: one is the low energy high frequency ESD type
protection where the SurgX device is optimal in its function, the other is the
much lower clamp (trigger voltage) application currently outside the SurgX
specification area. Each of these segments was at approximately $400 million in
total sales in calendar year 2000. To a lesser extent, our licensees will seek
to participate in the varistor market, which is approximately the same size as
the diode segment. In order to participate in this segment the SurgX device
needs to be designed to be capable of higher operating voltage and cycle
capability. Within these markets the most important use criteria tend to be
cost. After cost, the trigger voltage, level of capacitance, response time,
size, energy handling and leakage current are important criteria. It is the
latter criteria on which SurgX will initially compete. The low capacitance
requirement of ESD protection devices in many circuit designs will provide the
initial entry into the diode market segment. Our licensees have not focused on
the low price, high volume diode market since, to date, they have not been able
to achieve product costs competitive with diodes or required electrical
performance. However, the high volume, low-cost diode market may provide the
most significant opportunity for our licensees and they are currently evaluating
cost reduction and electrical enhancement initiatives to be able to compete in
the high volume, low price diode market.

Product Development

         Prior to fiscal year 2000, SurgX employees were dedicated to product
development and SurgX's approach to the market consisted of two parallel product
paths: on board-level ESD protection and on-chip ESD protection. During fiscal
year 2000, all SurgX research and development efforts were transferred to Cooper
Electronics.

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          SurgTape, which was to provide on-chip protection by placing
SurgX-based tape inside the IC package on the leadframe was abandoned due to
inconclusive test results and became expected expenditures necessary to test and
commercialize this product did not warrant further development. In fiscal 2000,
we entered into an agreement with Rexam Image Products which allowed Rexam, a
wholly owned subsidiary of Rexam PLC, a U.K. based high technology coated films
company with annual revenues of approximately $3 billion, to determine the
technical feasibility of our SurgTape technology for use in on-board line
transient protection and on-chip electrostatic discharge protection. Rexam paid
for this evaluation in anticipation of entering an agreement with us to be the
manufacturer of SurgTape. In September of 2000, Rexam put its evaluation
activities on hold until we could provide a license for SurgTape to a third
party and demonstrate the financial viability of this product. We are currently
in discussions with an entity on licensing our SurgTape technology for a field
of use that does not conflict with outside the rights granted to Cooper
Electronics in our existing license agreements. However, their can be no
assurances that we will be able to enter into a commercially viable agreement
for a limited field of use SurgTape license, that if a license agreement is
granted that it would not be challenged by our existing licensees or that Rexam
would reengage its feasibility efforts.


Competition

         Other than conventional manufacturers of over-voltage transient
protective devices, the main competitor to SurgX technology is Littlefuse, Inc.
which has announced a polymer base over-voltage protection product which
competes directly with SurgX products. As SurgX components become price
competitive and available in high volumes, our licensees will attempt to compete
with conventional over-voltage transient protection manufacturers such as
General Semiconductor, Harris Semiconductor, Inc., Motorola Corp., Siemens
Components, Inc, Semtech and Vishay.


         Intellectual Property

         Proprietary protection for our products, processes and know-how is
important to our business. We currently have numerous patents issued and in
process. We also rely upon trade secrets, know-how and continuing technological
innovation to develop and maintain our competitive position. Our policy is to
file patent applications to protect our technology, inventions and improvements
as soon as practicable. To the extent applicable, we will continue to work on
patent applications currently in process at the Patent Office. However, since we
have transferred all product development and manufacturing to our licensees, it
is the responsibility of our licensees to file patent applications or amendments
or otherwise protect the intellectual property that they develop in connection
with the SurgX technology we license to them.

         The trademark SurgX was issued by the US Patent and Trademark Office on
March 17, 1998.

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         The two foundation patents filed by us in 1995 on manufacturing
processes, methods of making the SurgX compositions and SurgX devices have been
divided by the U.S. Patent and Trademark Office into 11 different inventions for
filings as individual patents. To date, three of these patents have been filed;
In September 1998, one of the three patents filed, method of manufacturing SurgX
overvoltage protection devices, was issued in the U.S. In 1997. A total of 4 US
patents have been granted and 2 more have been approved, which will issue as US
patents in mid-2001. Foreign filings were initiated in 10 countries plus Europe
on the two foundation patents. Six of the foreign patents have been granted. The
remaining foreign patents are in process. A third patent on surface mount
devices and connector component designs was filed in the U.S. in 1996 and in
Europe in 1997 and is still in the review process. We believe our patent
application disclosures cover significant proprietary art in devices, processes
and materials.

         We expect that our licensees will file improvement patent applications
with respect to the SurgX patents, which may effectively broaden proprietary
protection. There can be no assurance, however, that such improvement patent
applications will be granted.


         Oryx Ventures, LLC

         We established Oryx Ventures, LLC, a Delaware limited liability
company, in May 2000 to act as an investment and management services entity for
us. Oryx Ventures is wholly-owned by Oryx Technology and is managed by Oryx
Technology employees. Oryx Technology has contributed investment funds to Oryx
Ventures from its existing cash balances and it plans to contribute funds from
internal cash flow generated from future royalty income received from licensing
our SurgX and Intragene technologies. However, at present, due to a lack of
capital and adverse conditions in the capital markets, coupled with the
uncertainty of future royalty income from SurgX, we are limiting the activities
of Oryx Ventures primarily to management services. We have not been actively
seeking additional investments since September 2000, in order to conserve cash
resources at Oryx Technology Corp. As the sole member of Oryx Ventures, Oryx
will receive the profits and losses from Oryx Ventures as well as any assets
distributed by Oryx Ventures upon liquidation or otherwise.

         Oryx Ventures is maintaining its current portfolio of investments in
early stage high technology companies and is providing management services,
primarily with technology-oriented start-up companies we have invested in and
others. In addition to providing capital, the Oryx Venture team will work
closely with early stage companies' founders providing strategic and management
services in all areas of business, including administration, operations,
finance, marketing and sales. We believe there is a significant opportunity for
Oryx Ventures to help these companies bridge the funding gap between friends and
family investors and the higher minimum investment levels required by the major
venture funds. Typically, Oryx Ventures will receive equity, warrants, cash
remuneration or a combination of both, in such companies as consideration for
the services it provides. These services may include:

         o    senior executive mentoring,

         o    sales and marketing strategy,

         o    business development activities,

         o    assistance in fund raising; and

         o    administrative services such as accounting, human resources and
              information technology services.

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         To date, we have invested in three technology companies:

         o    LOTS Technology, Inc., a developer of digital optical storage
              technology,

         o    NetConversions, an early-state, data marketing company with a
              proprietary technology that allows for real-time analysis of
              consumer online buyer behavior; and

         o    S2 Technologies, Inc., an early-stage middleware and software
              tools development company.

         LOTS Technology ("LOTS") proprietary technology is a replacement
product for the high-end magnetic media drives that can no longer keep pace
with the growth in digital data storage. The company, which developed the
technology with major funding from government contracts, plans to supply
large-volume data storage systems to three broad markets of commercial and
government customers, including general purpose computing, networked data
storage, digital video and data acquisition system companies. We made a direct
investment of $500,000 in this company and have received additional equity in
the form of stock options for our senior advisory services with our total
ownership in excess of 6.5%. As of April 2001 we have fulfilled our obligations
under our management service agreement and are no longer providing any other
services. Based upon the adverse conditions of the private equity capital
markets there is greater uncertainty concerning the outlook for privately funded
companies and there can be no assurance that LOTS will be successful raising
sufficient funding to support its current business model. We fully reserved our
$500,000 investment during the fourth quarter of fiscal 2001.

         NetConversions, Inc, ("NetConversions") has a solution that
incorporates an innovative approach to behavior profiling and promotions,
allowing e-commerce managers maximum flexibility to change their website
marketing. The product is a turnkey ASP solution that requires minimal client
integration and engineering. Oryx has provided a bridge loan of $100,000 to
NetConversions that is convertible to equity at a discounted rate. We fully
reserved the balance due to NetConversions' industry and financing issues as of
November 30, 2000. Based upon the adverse conditions of the private equity
capital markets there is greater uncertainty and there can be no assurance that
NetConversions will be successful raising sufficient funding to support its
current business model.

         In August 2000, we invested $500,000 in S2 Technologies ("S2"). We are
also providing senior management advisory services in exchange for additional
equity in the company. Our total ownership in S2 is in excess of 25.5%. S2's
focus is to provide value-added tools that address the development, integration
and verification phases of the embedded software. The goal is to increase
software developers' and engineers' productivity and improve their products time
to market. S2 has entered into a beta agreement with LSI Logic and it expects to
release its first product in late summer 2001. S2 is currently in the process of
raising its second round of financing and is currently in the process of
presenting to numerous top tier venture capital funds. We have made a commitment
to fund approximately $250,000 of a total $350,000 bridge loan to S2. Given the
limited capital resources of S2 at the time the we made our original investment,
we began recognizing losses in our investments in S2 based upon our pro-rata
share of the most recent S2 financing round. We recognized losses of S2 for the
year ended February 28, 2001, totaling $257,000, which are included in loss on
investments. At February 28, 2001, this investment value was $243,000.

                                       11
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         Investors Risks

         Our investment strategy involves a number of special risks, including:

         o    increased operating expenses to support investment in our new
              management services venture;

         o    strain on limited managerial and operational resources as
              management tries to support multiple businesses;

         o    potential issuance of securities to fund investments or otherwise
              using our equity in connection with our investment strategy may
              lessen the rights of holders of our currently outstanding
              securities;

         o    being deemed as investment company and subjected to the
              requirements of the Investment Company Act of 1940; and

         o    the need to incur additional debt if we are unable to raise
              additional funds in the equity market.


         We may not be able to successfully address these problems. Moreover,
our future operating results will depend to a significant degree upon our
ability to assist our portfolio companies in obtaining their follow-on
financing, which, in light of current conditions in the capital markets for
high-technology companies, may be difficult. In addition, many of the investment
opportunities we have invested in are early-stage companies with limited
operating histories and limited or no revenues. These investments have had a
negative impact on our financial statements. Further, we may not be able to
successfully develop these young companies and there can be no assurances that
we will either recoup our investments or receive any return on our investment in
any company we invest in.


Effects of Various Accounting Methods on our Results of Operations

         Our portfolio companies are early stage development companies that
generate net losses, and we expect these losses to continue in the future. On a
quarterly basis we evaluate the carrying value of our ownership interest and
advances in each of our portfolio companies for possible impairment. In our
assessment of carrying value for each portfolio company, we consider achievement
of financial plan objectives and milestones, overall market conditions for their
products or services, assessment of competitive technologies and the ability to
raise capital for future funding requirements.

                                       12
<PAGE>

         The various interests that we have acquired in our portfolio companies
are accounted for by either the equity method or cost method. We do not
anticipate accounting for any investments using the consolidation method, as
Oryx's investment strategy does not contemplate obtaining greater than 50%
voting rights or effective control of its portfolio companies. The applicable
accounting method used to record our investments in our portfolio companies is
determined by our voting interest and level of influence we exercise over each
portfolio company. In general we use the equity method when our ownership level
exceeds 20% but is not greater than 50%. When our ownership is less than 20% and
we do not exercise significant influence we use the cost method. Whether or not
we exercise significant influence with respect to a portfolio company depends on
an evaluation of several factors including: our management capacity and decision
making authority relative to our management services we provide to the portfolio
company, level of representation on the portfolio company's board of directors
and level of voting rights associated with our equity holdings.


         Our portfolio companies as of February 28, 2001 were:

<TABLE>
<CAPTION>
                                       Date of                        Derivative
                     Accounting        Initial          Voting        Ownership from
Company              Method            Investment       Ownership     Management Services
-----------------    -------------     -------------    ---------     -------------------
<S>                  <C>               <C>              <C>           <C>
Lots Technologies    Cost Method       July 7, 2000      2.2%          4.4%

S2-Technologies      Equity Method     July 20, 2000    18.5%          7.0%

Net Conversions      Cost Method       June 19, 2000     N/A           0%
</TABLE>

         Cost to support Oryx Ventures activities are primarily related to
salaries expenses associated with providing management services to our portfolio
companies. As of February 28, 2001 there were four executives providing
management services through Oryx Ventures. Currently Oryx Ventures receives
equity, fees or a combination of both as payment for providing management
services to its portfolio companies and other companies in which Oryx Ventures
does not have an equity investment.


         Evolution of Our Business

         During fiscal 1998 we initiated a restructuring of our operations.
Through fiscal 1998, we designed, manufactured and marketed specialized
components, analytical equipment and instrumentation products for original
equipment manufacturers, in the information technology industry. This industry
includes office equipment, computers, telecommunications and consumer
electronics. Through fiscal 1998, we operated three majority-owned subsidiaries,
focusing on three distinct market segments:

                                       13
<PAGE>

         o    power conversion products (Oryx Power Products Corporation);

         o    electrical surge protection products (SurgX Corporation); and

         o    materials analysis and test equipment and specialized materials
              products (Oryx Instruments and Materials Corporation).

     During the later part of fiscal 1998 we embarked upon a major restructuring
program that resulted in

         o    the sale on February 27, 1998 of the test equipment portion of the
              business of Oryx Instruments and Materials Corporation;

         o    the sale on March 2, 1998 of substantially all of the business of
              Oryx Power Products Corporation in its entirety.

         o    the sale on August 18, 1999 of the remaining operations of Oryx
              Instruments and Materials Corporation, consisting of the carbon
              target assembly and related materials coating business.

         Sale of Oryx Instruments and Materials Corporation (Test Equipment
Business). Prior to February 27, 1998, Oryx Instruments and Materials
Corporation, or Oryx Instruments and Materials, designed, manufactured and
marketed test equipment, specialized materials and electromagnet systems for the
hard disk drive and semiconductor industries. On February 27, 1998, a third
party acquired 8,000,000 shares of class A common stock of Oryx Instruments and
Materials for a purchase price of $500,000. As part of the sale transaction,
Oryx Instruments and Materials then redeemed 8,000,000 shares of our holdings of
10,000,000 shares of class A common stock for an aggregate price of $1,500,000.
Original terms of the redemption included $500,000 paid to us on the closing,
$333,000 payable on February 27, 1999 and $667,000 payable on February 27, 2000,
pursuant to a promissory note and stock pledge agreement. As part of the sale,
Oryx Instruments and Materials distributed all the assets and liabilities of the
materials business segment and certain other assets of the instruments business
segment to us. On November 24 1998, we sold our $1,000,000 promissory note and
1,000,000 of our 2,000,000 shares of class A common stock for $500,000 in cash
to the majority shareholder of Oryx Instrument and Materials. We currently
retain an ownership interest in Oryx Business Instruments and Materials of less
than 10.0%.

         Sale of Oryx Power Products Corporation. On March 7, 1998, Todd Power
Corporation, or Todd, acquired substantially all of the properties, assets,
rights, business and certain liabilities of Oryx Power Products Corporation, or
Power Products, for a purchase price of $2,000,000 in cash and a contingent
additional amount of up to $4,000,000 to be calculated based upon future sales
of certain of Power Products' specified products to named customers during the
fourteen month period immediately following the sale. Sales during this
fourteen-month period (ended May 1, 1999) were at a level whereby there were no
amounts due out of the total $4,000,000 contingent payment. We will not receive
any further payments from the sale of Power Products. 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. We recognized a loss on
disposal and all losses were recognized as if the transaction were completed as
of February 28, 1998. Prior year financial statements have been restated to
reflect the discontinuance of the Power Products operations.

                                       14
<PAGE>

         Sale of Oryx Instruments and Materials Corporation (Carbon Target
Assembly and Materials Coating Business). On August 18, 1999, we sold to Oryx
Advanced Materials, Inc., or OAMI, certain specified assets associated with the
carbon target assembly manufacturing and related materials coating business for
a cash payment of $400,000 and the assumption of substantially all of the
liabilities associated with such business. We retained ownership of
approximately $280,000 in accounts receivable balances relating to the materials
business subsequent to the disposition. In addition, we licensed to OAMI certain
patents and other technology associated with the purchased assets. OAMI will pay
us royalty payments over ten years, with a maximum royalty payment of $2.2
million for the first three years, based on OAMI's gross profits. As of February
28 2001, OAMI had paid us a total of $486,000 in royalty payments. In February
2001, in consideration for a one time payment of $100,000 and a promissory note
for $120,000 payable to us for past due royalties, we restructured the license
agreement with OAMI to change the method of calculation of the royalty payment
from a percentage of gross profits to a percentage of sales. Royalty revenue is
recognized as the cash is received.

         The disposal of OAMI and Oryx Instruments and Materials have been
aggregated as they represent the final sale of one business segment and the
operating results of OAMI and Oryx Instruments and Materials have been
segregated and reported as discontinued operations. Prior year financial
statements have been restated to reflect discontinuance of the OAMI and Oryx
Instruments and Materials operations.


         Research and Development

         In fiscal year 2000, we transferred all of our SurgX research and
development to Cooper Technologies, Inc., a subsidiary of Cooper Bussmann.

         Prior to fiscal 2000, our operations in the ESD and materials
businesses had been partially funded through third party development funding and
government contracts. We recognized development funding received from
non-government third parties to assist in the development of certain products,
as an offset to our research and development expenses. In fiscal year 2000 we
completed our two remaining government contracts which accounted for $128,000 of
revenue and $216,000 of cost of sales. We now have no open government
development contracts nor do we anticipate obtaining research and development
government contracts or non-government development funding in the future.


         Regulation and Environmental Matters

         We are subject to various federal, state and local laws, regulations
and recommendations relating to safe working conditions, laboratory and
manufacturing practices, and the use and disposal of hazardous or potentially
hazardous substances. We believe that our facility and practices for controlling
and disposing of the limited amount of waste and potentially hazardous materials
it produces comply with applicable environmental laws and regulations. While we
have not experienced any material adverse effect on operations from compliance
with government regulations, the development of any manufacturing operations by
us would require us in the future to comply with government regulations designed
to protect the environment from wastes and emissions and from hazardous
substances, particularly with respect to the emission of air pollutants, the
discharge of cooling water, the disposal of residues and the storage of
hazardous substances resulting in the expenditure of additional funds by us to
comply with those government regulations. The extent of government regulation
that might result from any future legislation or administrative action cannot be
accurately predicted.

         Employees

         As of April 30, 2001, we employed 5 people on a full-time basis. Full
time employees consist of one executive officer, one other executive employee,
one engineering employee and two administrative employees. Our employees are not
covered by any collective bargaining agreements, and we believe our employee
relations are satisfactory.


                                       15
<PAGE>

         RISK FACTORS

         If you purchase shares of our common stock, you will take on financial
risk. In deciding whether to invest, you should carefully consider the following
factors, the information contained in this 10-KSB and the other information that
we have referred to you.

         It is especially important to keep these risk factors in mind when you
read forward-looking statements. These are statements that relate to future
periods and include statements about our:

         o    expected operating results;

         o    market opportunities;

         o    acquisition opportunities;

         o    ability to compete; and

         o    stock price.

         Generally, the words "anticipates," "believes," "expects," "intends"
and similar expressions identify forward-looking statements. Forward-looking
statements involve risks and uncertainties, and our actual results could differ
materially from the results discussed in the forward-looking statements because
of these and other factors.

         Forward-looking statements are current only as of the date of these
offering materials. We do not have any obligation to inform you if
forward-looking statements, or the circumstances they are based on, change.

Company Risks

Our corporate restructuring strategy from an operating company to a technology
licensing and investment and management services company may not be successful.

         During fiscal years 1998 and 1999 we disposed of substantially all of
our operating businesses and we are now a licensing entity with our primary
source of income deriving from royalties from our SurgX technology licensed to
Cooper Electronics and IRISO and our Intragene technology licensed to Oryx
Advanced Materials, Inc. In the course of selling various business units, we
disposed of operations, which had accounted for substantially all of our
revenues. While we believe that this downsizing has substantially reduced our
losses and enabled us to focus on key strategic businesses, the actual impact
cannot be certain. In the absence of increased sales of our SurgX and Intragene
technologies through our licensees which has not yet materialized, such
restructuring has sharply reduced our revenues without creating opportunities to
offset equally the lost revenues.

                                       16
<PAGE>

Our strategy of relying on licensing royalties and using the proceeds to fund
the acquisition of other businesses and technologies presents special risks.

         We have shifted the strategic focus of our business from an operating
business exploiting our own developed technologies to a licensing and investment
and management services business where we intend to use the royalty revenues
from our licensed SurgX and Intragene technologies to fund investments in
start-up technology companies. This investment strategy involves a number of
special risks, including:

         o    increased operating expenses to support investment in our new
              management services venture;

         o    strain on limited managerial and operational resources as
              management tries to support multiple businesses;

         o    potential issuance of securities to fund investments or
              otherwise using our equity in connection with our investment
              strategy may lessen the rights of holders of our currently
              outstanding securities; and

         o    the need to incur additional debt if we are unable to raise
              additional funds in the equity market.

         We may not be able to successfully address these problems. Moreover,
our future operating results will depend to a significant degree upon our
ability to invest in early stage development companies and insure their
follow-on financing, growth and success. In addition, many of the investment
opportunities we have invested in early-stage companies with limited operating
histories and limited or no revenues. These investments may have a negative
impact on our financial statements. Further, we may not be able to successfully
develop these young companies and there can be no assurances that we will either
recoup our investments or receive any return on our investment in any company.

We are dependent on the licensees of our SurgX and Intragene technologies for
substantially all of our revenues.

         Our future royalties from the licenses of our SurgX and Intragene
technologies are based solely upon the successful sales, marketing,
manufacturing and development efforts of our licensees.

         While the license agreements for our SurgX technology contain minimum
annual royalty payment requirements for the licensees to maintain their
exclusive rights, there can be no assurance that the licensees will pay the
minimum royalty or that these minimum payments will provide enough revenue to
continue to support our operations. In the case of Cooper Electronics, minimum
royalty payments through June 2001 have already been satisfied to maintain
exclusivity, and there can be no assurances that we will receive any royalty
payments from Cooper Electronics through this time period unless Cooper
Electronics is successful in selling products using SurgX technology in excess
of the minimum royalty payments, and such sales have not yet been material. To
date, Cooper Electronics and IRISO have shipped only limited quantities to
customers of products incorporating SurgX technology.

                                       17
<PAGE>

         Although we have received approximately $486,000 in royalty revenue
from licensing our Intragene technology to OAMI, there can be no assurances that
we will receive any future royalty revenue from OAMI. There are no minimum
annual royalty payment requirements under our license with OAMI. Our future
royalties from our license of the Intragene technology will be based solely upon
the successful sales, marketing and manufacturing efforts of OAMI. Although we
previously employed management of OAMI, OAMI is a new entity and there can be no
assurances that it will be successful in manufacturing and selling products
based upon the Intragene technology. We recently restructure the royalty
arrangement with OAMI to take into account a slow-down in OAMI's business. There
can be no assurance that we will receive any royalties in the future.

We may not be able to raise sufficient funds to finance further investments by
Oryx Ventures.

         At present, our primary sources of revenue are from licensing royalties
payable by the licensees of our SurgX and to a lesser extent management service
fees from Oryx Ventures and royalties from our Intragene technologies. We
anticipate, based on management's internal forecasts and assumptions relating to
our operations, that our existing capital resources will be sufficient to
satisfy our contemplated cash requirements for at least the next twelve months.

         However, we may not have sufficient funds to finance our proposed
strategy of seeking investments in or acquisitions of new technologies. In
addition, in the event that our plans change or our cash projections and
assumptions prove inaccurate, we could be required to seek additional financing
to support existing operations. Our present business plan may require us to
raise additional funds, however we have no current arrangements with respect to
sources of additional financing, and there can be no assurance that we would be
able to obtain additional financing if and when needed, or that, if available,
such additional financing would be on the terms acceptable to us.

                                       18
<PAGE>

We may incur significant costs to avoid investment company status and may suffer
adverse consequences if deemed to be an investment company.

         We may incur significant costs to avoid investment company status and
may suffer other adverse consequences if deemed to be an investment company
under the Investment Company Act of 1940. Some equity investments in other
businesses made by us may constitute investment securities under the 1940 Act. A
company may be deemed to be an investment company if it owns investment
securities with a value exceeding 40% of our total assets, subject to certain
exclusions. Investment companies are subject to registration under, and
compliance with, the 1940 Act unless a particular exclusion or Commission safe
harbor applies. If we were to be deemed an investment company, we would become
subject to the requirements of the 1940 Act. As a consequence, we would be
prohibited from engaging in business or issuing our securities as we have in the
past and we might be subject to civil and criminal penalties for noncompliance.
In addition, certain of our contracts might be voidable, and a court-appointed
receiver could take control of Oryx and liquidate our business.

         Although our investment securities currently comprise less than 40% of
our assets, fluctuations in the value of these securities or of our other assets
may cause this limit to be exceeded. This would require us to attempt to reduce
our investment securities as a percentage of our total assets. This reduction
can be attempted in a number of ways, including the disposition of investment
securities and the acquisition of non-investment security assets. If we sell
investment securities, we may sell them sooner than we otherwise would. These
sales may be at depressed prices and we may never realize anticipated benefits
from, or may incur losses on, these investments. Some investments may not be
sold due to contractual or legal restrictions or the inability to locate a
suitable buyer. Moreover, we may incur tax liabilities when we sell assets. We
may also be unable to purchase additional investment securities that may be
important to our operating strategy. If we decide to acquire non-investment
security assets, we may not be able to identify and acquire suitable assets and
businesses.

We depend on certain key employees, and the loss of any of those employees may
harm our business.

         Our performance is substantially dependent on the performance of our
executive officers and other key employees, in particular, Philip Micciche, our
president and chief executive officer, and Mitchel Underseth who works part time
as our chief financial officer. The familiarity of these individuals with the
industry makes them especially critical to our success. In addition, our success
in our investment strategy is dependent on our ability to attract and retain
high quality personnel with skills necessary to evaluate and manage investments
in high-tech startup companies. The loss of the services of any of our executive
officers or key employees may harm our business. Competition for such personnel
is intense.

We have a history of unprofitability; recent operating losses and accumulated
deficit and may not be profitable in the future.

         Since our initial public offering in April 1994, we have not been
profitable on a quarterly or annual basis except for the quarters ended May 31,
1996, August 31, 1996 and November 30,

                                       19
<PAGE>

1996. At February 28, 2001, we had an accumulated deficit of $20,087,000. We
anticipate operating losses will continue through fiscal year 2002. There can be
no assurance that we will receive any licensing royalty revenues from the
licensees of our SurgX and Intragene technologies or that our licensees will be
successful in marketing and selling products incorporating our SurgX or
Intragene technologies. There can also be no assurances that our new management
services and investment business related to start-up companies will be
profitable in the future.

We rely on our licensees, Cooper Electronics, IRISO and Oryx Advanced Materials,
to manufacture and market products incorporating our SurgX and Intragene
technologies and there can be no assurance that they will be successful in doing
so.

         We rely exclusively on our licensees to manufacture and market products
incorporating our SurgX and Intragene technologies. Our SurgX licensees have
developed low-cost manufacturing processes using our licensed technology.
However, there can be no assurance that they will be able to incorporate
manufacturing process improvements in future products using SurgX technology to
further reduce product cost and enhance product performance to allow them to
compete in the high volume, low price diode market.

         Further, manufacturing development results produced by our licensees in
the future will be influenced by numerous factors, including:

         o    the availability of funding;

         o    technological developments by our licensees, their customers and
              competitors;

         o    increases in expenses associated with product development;

         o    market acceptance of products incorporating the SurgX and
              Intragene technologies;

         o    our licensees' ability to successfully control their costs of
              development, overhead and other costs; and

         o    our licensees' capacity to develop and manage the introduction of
              new products.

We rely exclusively on our licensees for research and development in connection
with our SurgX and Intragene technologies.

         The development, design and manufacture of technology constantly
undergo rapid and significant change. We rely on our licensees, Cooper
Electronics and IRISO, for technological improvements to the SurgX technology
and our licensee, Oryx Advanced Materials, for technological improvements to the
Intragene technology. At present, we do not support any research and development
or manufacturing activities internally. Our success will depend upon our
licensees' ability to maintain a competitive position with respect to our
proprietary and other enhanced technology and to continue to attract and retain
qualified personnel in all phases of our operations. Our business is, to a large
degree, dependent upon the enhancement of the SurgX

                                       20
<PAGE>

technology. Critical to our success and future profitability will be the
capacity of our licensees to improve this technology. Product development and
enhancement involve substantial research and development expenditures and a high
degree of risk, and there is no assurance that these product development efforts
will be successful, will be accepted by the market, or that such development
efforts can be completed on a cost-effective or timely basis, or that there will
be sufficient funds to support development efforts. There can be no assurance
that future technological developments by other companies will not render
existing or proposed SurgX or Intragene products uneconomical or obsolete.

We may experience fluctuations in future operating results that may adversely
affect the price of our common stock.

         Our quarterly operating results have in the past been, and will in the
future be, subject to significant fluctuation, which could adversely affect the
price of our common stock. Our operating results are impacted by numerous
factors, such as

         o   market acceptance of SurgX products;

         o   Cooper Electronics' and IRISO's continued marketing, sales and
             financial support of SurgX technology;

         o   overall economic trends; and

         o   possible negative impact on our balance sheet due to the accounting
             treatment of our investment in portfolio companies.

         In addition, customer orders may involve design-in requirements, thus
making the timing of customer orders difficult to predict and uneven.

         Our expense levels are based in part on our expectations as to future
royalty revenues and, in particular, volume shipments of SurgX products by
Cooper Electronics and IRISO. We may be unable to adjust spending in a timely
manner to compensate for any delay in product development or revenue shortfall.
Any weakening in demand for products using our SurgX technology or delays in
acceptance of products using SurgX technology would have a material adverse
effect on our operating results.

Potential intellectual property claims and litigation could subject us to
significant liability for damages and invalidation of our proprietary rights.

         Litigation may be necessary in the future to enforce our patents and
other intellectual property rights, to protect our trade secrets or to determine
the validity and scope of the proprietary rights of others.

         Litigation could harm our business and result in:

         o    substantial settlement or related costs, including indemnification
              of customers;

                                       21
<PAGE>

         o    diversion of our or our licensee's management and technical
              resources;

         o    discontinuing the use and sale of infringing products;

         o    expending significant resources to develop non-infringing
              technology; and

         o    obtaining licenses to infringed technology.

         Our success is heavily dependent upon our proprietary technologies. We
rely on a combination of patent, trademark, copyright and trade secret laws,
nondisclosure and other contractual provisions, and technical measures to
protect our intellectual property rights. Our patents, trademarks or copyrights
may be challenged and invalidated or circumvented. Our patents may not be of
sufficient scope or strength or be issued in all countries where our products
can be sold. The expiration of some of our patents may harm our business.

         Others may develop technologies that are similar or superior to our
technologies, duplicate our technologies or design around our patents. Effective
intellectual property protection may be unavailable or limited in some foreign
countries. Despite efforts to protect our proprietary rights, unauthorized
parties may attempt to copy or otherwise use aspects of processes and devices
that we regard as proprietary. Policing unauthorized use of our proprietary
information is difficult, and the steps we have taken may not prevent
misappropriation of our technologies.

                                       22
<PAGE>

         Industry Risks

If our licensees are unable to successfully compete in the market for products
using our SurgX and Intragene technologies, our business would be adversely
affected.

         The licensees of our SurgX and Intragene technologies are engaged in
certain highly competitive and rapidly changing segments of the electronic
components industry in which technological advances, costs, consistency and
reliability of supply are critical to competitive position. Our licensees
compete or may subsequently compete, directly or indirectly, with a large number
of companies, which may provide products or components comparable to those
provided by us. In addition, competitors are likely to be larger,
better-capitalized, more established and have greater access to resources
necessary to produce a competitive advantage.

         We do not have the financial resources, facilities or personnel to
perform research and development and manufacturing operations if a licensee of
our SurgX technology terminates its license with us.

         We rely exclusively on our licensees, Cooper Electronics and IRISO, for
research and development and manufacturing of products incorporating our SurgX
technology. At present, we do not support any research and development or
manufacturing activities internally. Our business is significantly dependent
upon enhancement and increasing sales of products incorporating the SurgX
technology. Such activities involve substantial expenditures and a high degree
of risk. At present, we do not have the financial resources, personnel or
facilities to support or manufacture products incorporating the SurgX
technology. If either Copper Bussmann or IRISO choose to terminate their license
agreement with us, we would not be able to support products incorporating the
SurgX technology and the market position of SurgX products as well as our
financial results would be materially adversely affected.

Oryx's common stock may be delisted from Nasdaq which would make it more
difficult to trade Oryx shares and for Oryx to raise capital in the equity
markets.

         In December 2000 Oryx received a notice from Nasdaq that Oryx common
stock would be subject to delisting from the Nasdaq SmallCap Market, effective
with the close of business on March 20, 2001 unless the common stock had a
closing bid price of $1.00 per share for ten consecutive trading days prior to
March 19, 2001. Oryx failed to meet this requirement and on March 20, 2001 we
received a letter from Nasdaq that Oryx common stock would be delisted effective
at the opening of business on March 28, 2001. We applied to Nasdaq for a hearing
to review the delisting decision. The hearing was held on April 25, 2001. On May
22, 2001 we received notification from Nasdaq that Oryx common stock would
continue to be listed on the Nasdaq SmallCap Market until June 20, 2001 pursuant
to an exception to the $1.00 minimum bid price requirement. If Oryx fails to
meet the minimum bid price requirement of at least $1.00 on or before June 20,
2001 and for a minimum of consecutive ten days immediately thereafter, Oryx
common stock will be delisted from the Nasdaq SmallCap Market. If Oryx common
stock is delisted, the common stock will be traded on the "pink sheets" and Oryx
may be subject to the "penny stock" rules promulgated by the SEC, which require,
among other things that, prior to any transaction in Oryx common stock by a
broker or dealer, that such broker or dealer provide its customer with a
disclosure document summarizing certain risks of investing in penny stocks and
obtains from the customer a signed written acknowledgement of receipt of the
document. Further, any broker or dealer effecting a transaction in Oryx common
stock must disclose the bid and offer quote for the stock as well as the broker
or dealer compensation in connection with such transaction. Delisting of Oryx
common stock from the Nasdaq SmallCap Market may make it more difficult to trade
Oryx shares and for Oryx to raise funds through the issuance of stock.

Our proposed 1:10 reverse stock split could have negative impact on the
valuation and liquidity of our common stock

         Oryx has called for a special meeting of stockholders on June 15, 2001
to obtain approval to amend its restated certificate of incorporation to effect
a 10:1 reverse stock split to increase the minimum bid price of its common stock
above $1.00 to meet the continued listing requirement for inclusion on the
Nasdaq SmallCap Market. The principal purpose of the reverse split proposal is
to increase the market price of Oryx common stock above the Nasdaq $1.00 minimum
bid requirement discussed above. Any such reverse split is intended to increase
the price of Oryx's common stock by a proportionate amount.

         While we expect that the reverse split will result in an increase in
the market price of Oryx common stock, there can be no assurance that the
reverse split will increase the market price of the common stock by a multiple
equal to the exchange number or result in the permanent increase in the market
price, which is dependent upon many factors, including Oryx's performance and
prospects. Also, should the market price of Oryx common stock decline, the
percentage decline as an absolute number and as a percentage of our overall
market capitalization may be greater than would pertain in the absence of a
reverse split. Furthermore, the possibility exists that liquidity in the market
price of our common stock could be adversely affected by the reduced number of
shares that would be outstanding after the reverse split. In addition, the
reverse split will increase the number of Oryx's stockholders who own odd lots,
that is, less than 100 shares. Stockholders who hold odd lots typically will
experience an increase in the cost of selling their shares, as well as possible
greater difficulty in effecting such sales. Consequently, there can be no
assurance that the reverse split will achieve the desired results.

         Therefore, there can be no assurance that, even after effectuating the
reverse split, Oryx will continue to meet the minimum bid price and other
requirements of Nasdaq for continued inclusion for trading on the Nasdaq
SmallCap Market. The history of similar stock split combinations for companies
in like circumstances is varied. Frequently, after a reverse stock split, the
adjusted price of a company's shares drifts down to the price prior to the
reverse split being taken, a consequence which could occur if Oryx implements a
reverse stock split.

         We will take reasonable steps to counter such a trend, but there can be
no assurance that the steps to be taken, such as obtaining greater analyst
coverage for Oryx among the brokerage community, will be successful.

                                       23
<PAGE>

Our revenue growth is dependent upon licensing revenue from our SurgX
licensees. The recent downturn in sales of electronic products has had and will
have an adverse effect on sales of products incorporating our SurgX technology
by our licensees.

         We are substantially dependent upon licensing revenue received from
Cooper Bussmann and IRISO, the licensees of our SurgX technology. The products
sold by these licensees are incorporated into a variety of electronics products.
The current downturn and any future slowdown in the market for electronics
products will adversely affect sales of products incorporating our SurgX
technology which, in turn, will result in lower royalty revenue received by us
from our licensees. This would have a material adverse effect on our financial
condition.

Investment Risks

We have not paid and do not intend to pay any dividends on our common stock.

         We have not paid any cash dividends on our common stock since our
inception and do not anticipate paying cash dividends on our common stock in the
foreseeable future. The future payment of dividends is directly dependent upon
our future earnings, our financial requirements and other factors to be
determined by our board of directors, as well as the possible consent of
lenders, underwriters or others. For the foreseeable future, it is anticipated
that any earnings that may be generated from our operations will be used to
finance our growth and will not be paid to holders of common stock.

The price of our common stock has been volatile and may continue to experience
volatility.

         The market price of our common stock has been, and in the future could
be, significantly affected by factors such as:

         o    actual or anticipated fluctuations in operating results;

         o    announcements of technical innovations;

         o    new products or new contracts;

         o    competitors or their customers;

         o    developments with respect to patents or proprietary rights;

         o    changes in financial estimates by securities analysts; and

         o    general market conditions.

         Further, the trading prices of the stocks of many technology companies,
including our share price, are at or near historical highs and reflect
price/earnings ratios substantially above historical levels. There can be no
assurance that these trading prices and price/earnings ratios will be sustained.

                                       24
<PAGE>

Charter provisions may limit the voting power of holders or our common stock,
and therefore minority stockholders may not be able to significantly influence
Oryx's governance or affairs.

         Our board of directors has the authority to issue shares of preferred
stock and to determine the price, rights, preferences, privileges and
restrictions, including voting rights, of those shares without any further vote
or action by shareholders. The rights of the holders of common stock will be
subject to, and may be adversely affected by, the rights of the holders of any
preferred stock that may be issued in the future. The issuance of preferred
stock, while providing flexibility in connection with possible acquisitions and
other corporate purposes, could have the effect of making it more difficult for
a third party to acquire a majority of our outstanding voting stock.

The conversion or exercise of currently outstanding convertible securities and
warrants would result in significant dilution to holders of our common stock.

         As a result of various other transactions previously entered by us, as
of April 30, 2001, there were convertible securities and private warrants and
options currently outstanding for the conversion and purchase of up to
approximately 3,466,000 shares of common stock. These represent significant
additional potential dilution for our existing stockholders. These underlying
shares of common stock are not included in currently outstanding shares. In
addition, as a result of the anti-dilution provisions included in certain of
these derivative securities, there may be further dilution based on the price at
which we issue other securities in the future.

Item 2.           Description of Property.

         We presently operate our businesses in one facility located in Fremont,
California. On August 12, 1996, we entered into an agreement with E.B.J.
Partners LP to lease a 22,000 square foot facility in Fremont, California. The
monthly rental fee is $19,286 and the lease terminates August 30, 2001. We are
currently subleasing a portion of our facility at market rates.

         The property described above is in satisfactory condition for the
purpose for which it is used.

Item 3.           Legal Proceedings.

         We know of no material litigation or claims pending, threatened or
contemplated to which Oryx is or may become a party.

Item 4.           Submission of Matters to a Vote of Security Holders.

         During the fourth quarter of our fiscal year ended February 28, 2001,
no matters were submitted to a vote of security holders.

                                       25
<PAGE>

PART II


Item 5.           Market for Common Equity and Related Stockholder Matters.

         Since our initial public offering of common stock and warrants on April
6, 1994, our common stock and warrants have traded principally on the NASDAQ
SmallCap Market under the symbols "ORYX" AND "ORYXW," respectively. Prior to
April 6, 1994, there was no public market for our securities. From April 6, 1994
through June 6, 1994, we had Units which were also traded on NASDAQ, at which
time we requested withdrawal of such listing. The following table sets forth the
high and low sale prices for our common stock and warrants for the periods
indicated, as reported by NASDAQ. These quotations reflect prices between
dealers, do not include retail mark-ups, markdowns or commissions and may not
necessarily represent actual transactions.

<TABLE>
<CAPTION>
                             Common Stock               Warrants
                            -----------------       -------------------
                            High       Low          High        Low
                            ----       ---          ----        ---
<S>                         <C>        <C>          <C>         <C>
2000 Fiscal year
1st Quarter                 $2.500     $1.688       $0.9375     $0.0313
2nd Quarter                 $2.375     $1.438       Expired
3rd Quarter                 $2.125     $1.000       Expired
4th Quarter                 $5.125     $1.625       Expired

2001 Fiscal year
1st Quarter                 $4.313     $1.750       Expired
2nd Quarter                 $2.219     $1.188       Expired
3rd Quarter                 $1.625     $0.375       Expired
4th Quarter                 $1.375     $0.281       Expired
</TABLE>

         On April 30, 2001 the closing price for our common stock was $0.50 per
share. On April 6, 1999 our public warrants, exercisable for an aggregate of
2,549,190 shares of common stock, expired. Prior to expiration, 939,536 warrants
were exercised resulting in the issuance of 1,973,022 shares of common stock.

         Our common stock and warrants had also been listed for trading on the
Pacific Exchange under the symbols "ORYX" and "ORYXW," respectively. We
requested that the common stock and warrants be removed from the Pacific
Exchange, which occurred in May 1998.

         As of April 30, 2001 the number of record holders of our common stock
was approximately 86.

         We have never paid cash dividends on our common stock, but as noted
above, we pay a $0.50 annual dividend on its outstanding shares of preferred
stock. We presently intend to retain future earnings, if any, to finance the
expansion of our business and do not anticipate that any cash dividends will be
paid in the foreseeable future. Future dividend policy will depend on our
earnings, capital requirements, expansion plans, financial condition and other
relevant factors as well as the possible need to obtain the consent of any of
its lenders.

                                       26
<PAGE>

Item 6.           Management's Discussion and Analysis or Plan of Operation.

         This Annual Report on Form 10-KSB contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995,
particularly statements regarding market opportunities, market share growth,
competitive growth, new product introductions by our licensees, success of
research and development efforts by our licensees and customer acceptance of new
products. These forward-looking statements involve risks and uncertainties, and
the cautionary statements set forth below identify important factors that could
cause actual results to differ materially from those predicted in any such
forward looking statements. Such factors include, but are not limited to,
adverse changes in general economic conditions, including adverse changes in the
specific markets for our products, adverse business conditions, dependence upon
our licensees for the commercial success of our products, adverse changes in
customer order patterns, increased competition, lack of acceptance of new
products, lack of success in technological advancement, our ability to attract
and retain key executives, adverse capital markets and other business conditions
that may negatively affect companies we have invested in and other factors.

         Business Segments

         Through fiscal year 2001, we operated in two main business segments:
SurgX, a 97% owned subsidiary, and Oryx Ventures, an investment management
service entity. These businesses operated independently and are supported by a
corporate segment providing for all administrative, accounting, and financial
activities. As noted above in Part I, during fiscal year 1998, we embarked upon
a major restructuring program. This resulted in the sale on February 27, 1998 of
approximately 80% of our interest in Oryx Instruments and Materials Corporation
and the sale on March 2, 1998 of substantially all of the assets and the entire
business of Power Products Corporation. As part of the sale of its majority
position in Instruments and Materials, we retained certain assets from
Instruments and Materials relating to sputtering targets assembly, or Materials.
We sold this remaining business during the second quarter of fiscal 2000, for a
cash payment of $400,000. We retained approximately $280,000 in accounts
receivable for this business and the purchaser of the business assumed
substantially all of the liabilities associated with this business. Management
took these steps to reduce losses and enable us to concentrate on our
electrostatic discharge protection business through our SurgX subsidiary.

Segment/Subsidiary                           Businesses
------------------                           ----------
         SurgX Corporation                   -licensing SurgX Technology

         Oryx Ventures, LLC                  -Management Services
                                             -Investment in start up companies


         Consolidated Results of Continuing Operations

         For the fiscal year ended February 28, 2001, revenues from continuing
operations decreased $105,000 or 14% from $755,000 for the year ended February
29, 2000 to $650,000 for the year ended February 28, 2001. The decrease in
revenue was primarily attributed to a decrease of sales of SurgX liquid and the
absence of government contract revenue, offset by management services fees
generated from Oryx Ventures. The decrease of sales of SurgX liquid is the
result of the transfer of the manufacturing of SurgX liquid to our licensing
companies. Revenue in the future will be mainly derived from royalties from our
SurgX technology and to a lesser extent from our Intragene technology and
management service fees from Oryx Ventures. Future revenue will be based solely
upon the successful sales, marketing, manufacturing and development efforts of
our licensees and ability to charge fees for management services through our
Oryx Ventures entity.

                                       27
<PAGE>

         Cost of sales decreased $482,000 or 60% from $808,000 for the fiscal
year ended February 29, 2000 to $326,000 for the year ended February 28, 2001.
The decrease is primarily attributable to lower sales of SurgX liquid and to the
elimination of costs associated with government contract sales. The cost of
sales in fiscal 2001 were significantly reduced as we transferred our SurgX
Liquid manufacturing operations and equipment to our licensee during the first
quarter of fiscal 2001. Cost of sales also includes the cost associated with
providing management service from Oryx Ventures.

         Our gross profit increased $377,000 or 711% from a gross loss of
$53,000 for the fiscal year ended February 29, 2000 to a gross profit of
$324,000 for the year ended February 28, 2001. The increase in gross profit for
the year ended February 28, 2001 was primarily attributed to lower sales of
SurgX liquid and to the elimination of government contract sales both of which
were generating negative margins during fiscal 2000 and the addition of
management services fees from Oryx Ventures which was established in fiscal
2001.

         We did not have any revenue or costs from government contracts in
fiscal 2001 and we do not have plans to pursue any new government contracts in
the future. Funding recognized as revenue and cost of sales associated with
government contracts for the fiscal year ended February 29, 2000 were $128,000
and $216,000 respectively.

         General and administrative expenses decreased $183,000 or 10% from
$1,782,000 for the fiscal year ended February 29, 2000 to $1,599,000 for the
year ended February 28, 2001. The decrease in general and administrative
expenses is related to a decrease in corporate compensation, travel, and
investor relation expenses, partially offset by an increase in expenses related
to new Oryx Ventures investment entity. The general and administrative expenses
related to Oryx Ventures were $407,000 for the year ended February 28, 2001
compared to zero in Fiscal 2000. We anticipate a decrease in general and
administrative costs during fiscal year 2002 due to our decision to suspend
investment activities and reduced headcount in Oryx Ventures.

         Research and development expenses decreased $770,000 or 81% from
$954,000 for the fiscal year ended February 29, 2000 to $184,000 for the year
ended February 28, 2001. The decrease in research and development expenditures
was primarily as a result of the transfer of all of our SurgX research and
development activities to Cooper Electronic Technologies. Patent costs accounted
for $128,000, or 70% of the total research and development expenses for the
fiscal 2001. We anticipate minimal research and development expenses during
fiscal 2002, which will be made up primarily costs associated with maintaining
our portfolio of patents.

         For fiscal year ended February 28, 2001 we recorded net interest income
of $215,000. This compares to $177,000 of net interest income for the fiscal
year ended February 29, 2000. This increase is attributable to higher cash and
cash equivalent balance during fiscal 2001. We anticipate less interest income
in the future since cash and cash equivalent balance and interest rates have
decreased.

         During the fiscal year ended February 28, 2001, we recorded $877,000 of
expenses related to our investments, of which $257,000 is our pro-rata share of
the losses on S-2 Technologies, Inc. as a result of applying the equity method
to the S2 Technologies, Inc. investment and $620,000 due to the full reserve on
the initial investments on Lots Technologies for $500,000, Net Conversions for
$100,000 and I-Lease for $20,000. These transactions reflect the investment
activities of our Oryx Ventures entity that was formed in fiscal 2001.

                                       28
<PAGE>

         We believe our operating losses will continue through fiscal 2002 as
the anticipated royalty revenue from our SurgX and Intragene technology will not
be sufficient to cover expected operation expenses for fiscal 2002.

Oryx Instruments and Materials Discontinued Operations

         On August 18, 1999, pursuant to the terms of an Asset Purchase
Agreement dated as of June 1, 1999 by and among Oryx Technology Corp. or Oryx,
and Oryx Advanced Materials Inc. or OAMI, Oryx sold to OAMI certain specified
assets associated with Oryx' carbon target assembly manufacturing and related
materials coating business (the "Materials" business) for a cash payment of
$400,000 and the assumption of substantially all of the liabilities associated
with such business. The Company retained ownership of approximately $280,000 in
accounts receivable balances relating to the Materials business subsequent to
the disposition. In addition, Oryx licensed to OAMI certain patents and other
technology associated with the purchased assets. OAMI will pay Oryx royalty
payments over ten years, with a maximum royalty payment of $2.2 million for the
first three years, based on OAMI's gross profits. As of February 28, 2001, the
Company has received and recognized a total of $486,000 in royalty payments from
OAMI in the following periods: $249,000 for the year ended February 29, 2000,
and $237,000 for the year ended February 28, 2001, which includes $100,000
received in February 2001, in exchange to an amendment of the license agreement
to change the method of calculation of the royalty payment from a percentage of
gross profits to a percentage of sales.

         On February 27, 1998, Corus Investments Ltd., a Bahamas Company,
acquired 8,000,000 shares of the authorized Class A Common Stock of Oryx
Instruments and Materials Corporation (the "Instruments" business) for a
purchase price of $500,000 (the "Sale"). Prior to the Sale, Instruments was a
wholly owned subsidiary of the Company. As part of the Sale, Instruments
redeemed 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.

         The disposal of OAMI and Oryx Instruments and Materials have been
aggregated as they represent the final sale of one business segment, and the
operating results of OAMI and Oryx Instruments and Materials have been
segregated and reported as discontinued operations. Prior year financial
statements have been restated to include the results of operations of OAMI and
Oryx Instruments and Materials as discontinued operations. Revenue from
discontinued operations was $1,049,000 for the year ended February 29, 2000.
Income taxes related to the discontinued operations and the tax benefit
resulting from the gain on disposal of the OAMI business were immaterial.
Transaction costs related to the OAMI disposal were $55,000. The Company has no
remaining assets or liabilities relating to the Instruments and Materials
business as of February 28, 2001.


                                       29
<PAGE>

Segment Results

     SURGX CORPORATION

                                                     February 28     February 29
(dollars in thousands)                                  2001            2000
--------------------------------------------------------------------------------

Revenues                                                $ 200         $   379
Cost of sales                                             233             593
                                                        -----         -------
        Gross Profit                                      (33)           (214)

Operating Expenses                                        254           1,011
                                                        -----         -------
Operating Income (Loss)                                 $(287)        $(1,225)
                                                        =====         =======


         Revenues for fiscal 2001 decreased $179,000 or 47% to $200,000 for the
year ended February 28, 2001 from $379,000 for the year ended February 29, 2000.
This decrease in revenue is primarily associated a decrease of sales of SurgX
liquid as a result of the transfer of the manufacturing of SurgX liquid to our
licensing companies. Future royalties will be based solely upon the successful
sales, marketing, manufacturing and development efforts of our licensees, and we
have no view of what level of revenue will be achieved in the future.

         Cost of sales decreased $360,000 or 61% from $593,000 for the fiscal
year ended February 29, 2000 to $233,000 for the year ended February 28, 2001.
The decrease is primarily associated to lower sales of SurgX liquid.

         The cost of sales in fiscal 2001 were significantly reduced as we
transferred our SurgX Liquid manufacturing operations and equipment to our
licensee during the first quarter of fiscal 2001.

         Operating expenses decreased $757,000 or 75%, from $1,011,000 for the
fiscal year ended February 29, 2000 to $254,000 for the year ended February 28,
2001. The decrease in operating expenses primarily reflects the substantial
reduction of costs associated with transfer of all of our SurgX research and
development activities to Cooper Electronic Technologies. Patent cost expenses
account for $128,000, or 70% of the total research and development expenses for
the fiscal 2001. We anticipate minimal research and development expenses during
fiscal 2002, which will be made up primarily costs associated with maintaining
our portfolio of patents.

                                       30
<PAGE>

     ORYX VENTURES, LLC

                                                     February 28     February 29
(dollars in thousands)                                  2001            2000
--------------------------------------------------------------------------------
Revenues                                                $ 213           $  0
Cost of sales                                              93              0
                                                        -----           ----
        Gross Profit                                    $ 120           $  0

Operating Expenses                                        407              0
                                                        -----           ----
Operating Income (Loss)                                 $(287)          $  0
                                                        =====           ====

         Revenues consist of management and consulting fees provided to third
     party companies in which Oryx Ventures does not have an equity investment.
     We anticipate similar level of revenues during fiscal 2002. Cost of sales
     is directly related to the allocated salaries associated with generating
     revenues.

         Operating expenses are primarily related to salaries expenses
     associated with providing management services to our portfolio companies
     where we receive equity in lieu of cash remuneration. We anticipate a
     significant decrease in operating expenses during fiscal 2002 due to its
     decision to suspend investments activities and reduced headcount in Oryx
     Ventures.


     CORPORATE

                                                     February 28     February 29
(dollars in thousands)                                  2001            2000
--------------------------------------------------------------------------------
Revenues                                                $  237        $   377
Cost of sales                                                0            216
                                                        ------        -------
        Gross Profit                                    $  237        $   161

Operating Expenses                                       1,122          1,725
                                                        ------        -------
Operating Income (Loss)                                 $ (885)       $(1,564)
                                                        ======        =======


         Revenue in the corporate business segment includes royalty from our
     Intragene Technology and government contract revenue. Revenue decreased
     $140,000 or 37% from $377,000 for the year ended February 29, 2000 to
     $237,000 for the year ended February 28, 2001. The decrease in revenue was
     primarily attributed to the absence of government contract revenue. In the
     future, we do not have plan to pursue any new government contract. Revenue
     in the future will be lower since sales of carbon targets using our
     Intragene technology are in decline.

         The decrease in operating expenses from corporate operations of
     $603,000 or 35% from $1,725,000 for the fiscal year ended February 29, 2000
     to $1,122,000 for the fiscal year ended February 28, 2001 primarily relates
     to reduction in salaries, severance costs and investor relations costs.

                                       31
<PAGE>

         Liquidity and Capital Resources

         Our working capital decreased $1,864,000 or 38% from a surplus of
$4,961,000 at February 29, 2000, to a surplus of $3,097,000 at February 28, 2001
primarily attributed to cash used for investments by Oryx Ventures and net loss
from continued operation during fiscal 2001. Our ratio of current assets to
current liabilities was 9.1:1 at February 28, 2001 and 7.8:1 at February 29,
2000.

         Net cash used in operations for the year the ended February 28, 2001
was $1,393,000 from continuing operations primarily in the form of operating
losses. Net cash used in operations for the fiscal year ended February 29, 2000,
was $1,206,000 consisting of $1,826,000 of cash used in continuing operations
primarily in the form of operating losses, offset by $620,000 net cash provided
by discontinued operations resulting from the sale of the Material business.

         Net cash used in investing activities was $164,000 for the fiscal year
ended February 28, 2001 compared to net cash used by investing activities of
$522,000 for the fiscal 2000. The net cash used in investing activities for the
fiscal year ended February 28, 2001 was primarily attributable to $1,120,000
cash used for investments by Oryx Ventures partially offset by $993,000 cash
provided by proceeds from the sale of short-term investments. The net cash used
in investing activities for the fiscal year ended February 29, 2000 consisted
primarily of the purchase of short-term investments partially offset by cash
provided by proceeds from the sale of the Material business. We do not expect to
have any material capital expenditures for the year ended February 28, 2002.

         Net cash provided by financing activities was $334,000 for the fiscal
year ended February 28, 2001. This represents a decrease of $4,353,000 or 93%
from $4,687,000 net cash provided by financing activities in fiscal 2000. Net
cash provided by financing activities for the fiscal year ended February 28,
2001 was primarily from the exercise of stock options for common stock. Cash
provided by financing activities during fiscal 2000 was primarily attributed to
$4,246,000 provided by the exercise of public and private warrants and $471,000
provided by the exercise of stock options for common stock.

         We believe that we have sufficient capital to meet our anticipated
working capital requirements through fiscal year 2002. However, in the event we
fail to meet our fiscal year 2002 operating plan, we might need additional
funding to be obtained by raising additional equity or taking other steps. If we
require additional equity, there can be no assurance that such transactions can
be effected in time to meet our needs, if at all, or that any such transaction
will be on terms acceptable to us or in the interest of its stockholders.

                                       32
<PAGE>

Item 7.           Financial Statements.

         The response to this item is submitted in Item 13.

Item 8.           Changes In and Disagreements With Accountants on Accounting
                  and Financial Disclosure.

         Not applicable.

Item 9.           Directors,  Executive Officers,  Promoters and Control
                  Persons; Compliance with Section 16(a) of the Exchange Act.

         The names and ages of our directors and executive officers as of
February 28, 2001 are as follows:

Name                        Position                                      Age
----                        --------                                      ---
Philip J. Micciche          President, CEO and Director                   67
Mitchel Underseth           CFO and Director                              44
Andrew Intrater             Secretary, Treasurer and Director             39
Dr. John H. Abeles          Director                                      56
Jay M. Haft                 Director                                      65
Richard Hubbard             Director                                      41
Doug McBurnie               Director                                      58
Thomas Guzek                Director                                      46

         PHILIP J. MICCICHE has served as Oryx' President and Chief Executive
Officer and a director of Oryx since on April 25, 1997. From 1993 through 1995,
Mr. Micciche was Chief Executive Officer of AXCIS Information Networks, a
provider of sports information data. From 1990 through 1992, Mr. Micciche was
President of Dysan International/Magnetics L.P. and oversaw its initial public
offering in Hong Kong in 1991. From 1983 through 1990, he held several executive
management positions at Xidex Corp. In one of those positions, Mr. Micciche
brought the division from a loss to a substantial profit in less than 15 months.
From 1983 through 1985, Mr. Micciche was Senior Vice President Marketing at
Xidex Magnetics, where sales increased $42 million in that two-year time period.
Xidex merged with Dysan Corp. in 1985. Prior to 1983, Mr. Micciche held
positions as Chief Executive Officer, Vice President Sales, Product Sales
Manager and Chief Engineer for various companies. Mr. Micciche received his BSEE
from Northeastern University in Boston.

         MITCHEL UNDERSETH has served as Chief Financial Officer of Oryx since
November 25, 1996, with additional responsibilities for human resources. Mr.
Underseth currently works part-time for Oryx and also serves as the Chief
Financial Officer and interim CEO for Manage.Com a privately held software
supplier providing management software to large global 2000 companies. From
September 1999 to October 2000 Mr. Underseth was also the Chief Financial
Officer for Aptix Corporation, a privately held electronic design automation
company providing software and hardware. Mr. Underseth was elected as a director
of Oryx in October 1997. From August 1992 through November 1996, Mr. Underseth
was Chief Financial Officer of Triptych CD/San Joaquin Packaging in Stockton,
California. From March 1990 through April 1992, Mr. Underseth was Chief
Financial Officer of Dysan International/Magnetic L.P., a spin-off of Xidex's
Flexible Disk Group. From September 1986 through March 1990, Mr. Underseth was
Vice President-Finance of Xidex Flexible Disk Group and Rigid Oxide Group in
Santa Clara, California. Mr. Underseth received his M.B.A. from the University
of Washington in Seattle and his B.S. in Business from Lewis and Clark College
in Portland, Oregon.

                                       33
<PAGE>

         ANDREW INTRATER has been a director, Secretary and Treasurer of Oryx
since its organization in July 1993. He was employed in various executive
capacities with Oryx from July 1993 until March 1998 when he resigned following
the sale of Oryx' majority ownership position in Oryx Instruments & Materials
Corporation, since renamed as Oryx Instruments Corporation. Mr. Intrater is
currently the President and Chief Executive Officer of Oryx Instruments
Corporation. Mr. Intrater previously held various executive positions with ATI,
the predecessor corporation to Oryx. Between September 1988 and May 1993, Mr.
Intrater served as President of ATI and was a director since 1983. Mr. Intrater
received his B.S. in Chemical Engineering from Rutgers University and a M.S. in
Materials Science from Columbia University.

         JOHN H. ABELES, M.D., has been a director of Oryx since its
organization in July 1993 and was Chairman of the Board of Oryx from October
1993 until April 1997. Since March 1992, Dr. Abeles has been a General Partner
of Northlea Partners Ltd., Boca Raton, Florida, a private investment
partnership. Since 1980, Dr. Abeles has also been President of MedVest, Inc.,
Boca Raton, Florida, a business and financial consulting firm. Dr. Abeles serves
on the board of directors of I-Flow Corporation, Irvine, California, a publicly
traded company which manufactures infusion devices, DUSA Pharmaceuticals, Inc.,
a publicly traded company, which is developing photodynamic therapy products,
Pharma Print Corporation, which manufactures botanical products, Encore Medical
Corporation, which is an orthopedic implant, concern and Ambersand Medical Inc.,
which is researching medical diagnostic equipment.

         JAY M. HAFT has been a director of Oryx since February 1995. He is a
strategic and financial consultant for growth stage companies and is active in
international corporate finance, mergers and acquisitions, as well as in the
representation of emerging growth companies. He has actively participated in
strategic planning and fund raising for many high-tech companies, leading edge
medical technology companies and technical product, service and marketing
companies. He is a Managing General Partner of Gen Am "1" Venture Fund, an
international venture capital fund. Mr. Haft is also a director of numerous
public and private corporations, including Robotic Vision Systems, Inc., NCT
Group, Inc., DECAP Group, Encore Medical Corporation, PC Service Source, Inc.,
DUSA Pharmaceuticals, Inc., and Thrift Management, Inc. He serves as Chairman of
the Board of Noise Cancellation Technologies, Inc. He is currently of counsel to
the law firm of Parker Duryee Rosoff & Haft, in New York. Mr. Haft was
previously a senior corporate partner of such firm, from 1989 to1994, and prior
to that a founding partner of Wofsey, Certilman, Haft et al. from 1966 to 1988.
Mr. Haft is a past member of the Florida Commission for Government
Accountability to the People, Treasurer of the Miami Ballet and a trustee of
Florida International University. He is a graduate of Yale College and Yale Law
School.

         RICHARD HUBBARD has been a director of Oryx since October 1997. Mr.
Hubbard has been a director and an analyst with the VMR High Octane Fund at
Value Management & Research GmbH since September 1996. The High Octane Fund
invests in small to mid-cap companies worldwide. Since 1991, Mr. Hubbard has
been a founding member of Namco, an African marine diamond mining and
exploration company. He was a director at Acomex Ltd. where he was involved in
the launch of Video Plus, a video coding and recording system, in the United
Kingdom market. Mr. Hubbard was a founding partner in Connolly and Hubbard
Trading, a trading company specializing in foreign exchange and commodities.

                                       34
<PAGE>

         DOUG MCBURNIE has been a director of Oryx since July 1997. Mr. McBurnie
is retired. From September 1997 to December 1998, he was Senior Vice President,
Computer, Consumer & Network Products Group, of VLSI Technology. In that
position he was responsible for VLSI's businesses in Advanced Computing, ASIC's,
Consumer Digital Entertainment and Local/Wide Area Networking. Prior to joining
VLSI, Mr. McBurnie was with National Semiconductor from May 1994 to September
1997 where he was senior vice president and general manager of their
Communications and Consumer Group. Previously, he was vice president and general
manager of National's Local Area Network Division. Under his leadership,
National became the recognized leader in networking circuits, one of the top
telecom IC suppliers, and made a strong push into consumer entertainment
markets. Prior to joining National Semiconductor, he held key executive
positions at a number of Silicon Valley companies, including Xidex Corporation,
Precision Monolithics and Fairchild Semiconductor. Mr. McBurnie holds a bachelor
of arts degree in business administration from Baldwin Wallace College in Berea,
Ohio.

         THOMAS GUZEK has been a director of Oryx since April 2000. Mr. Guzek is
Chief Marketing Officer of Tii Network Technologies (NASD:Tiii) a leading
developer of home gateway communications products since July 2000. Prior to
joining Tii , Mr. Guzek held the position of V.P., General Manager, Cooper
Electronic Technologies, a leading manufacturer of circuit protection and power
management components. Mr. Guzek spent almost twenty years in various sales and
marketing positions with Cooper Industries, (NYSE:CBE), a Fortune 100
manufacturer of electrical, electronic and tools products. Mr. Guzek joined
Cooper Industries in 1981. Mr. Guzek holds a BSEE from the State University of
New York at Buffalo.

         All directors are elected annually by the stockholders of Oryx and
serve until their respective successors are duly elected and qualified.

Board Committees and Meetings

         During the fiscal year ending February 28, 2001, there were seven
meetings of our board of directors. Each Board member attended 70% or more of
the aggregate of the meetings of the board of directors and the meetings of all
committees of the board of directors on which he served except for John Abeles
who attended 57% of such meetings.

         The compensation committee was established on March 28, 1995. The
members of the compensation committee are Dr. John H. Abeles, Jay M. Haft and
Richard Hubbard, none of whom is employees of Oryx. The compensation committee
makes recommendations with respect to compensation of senior officers and
granting of stock options and stock awards. The compensation committee met once
during the fiscal year ended February 28, 2001.

         The audit committee was established on March 28, 1995. The members of
the audit committee are Jay Haft, and Ted Morgan, neither of whom is an employee
of Oryx. The functions of the audit committee are to approve the scope of the
audit, review the auditor's reports and comments, and monitor the internal
auditing procedures of Oryx. The audit committee met once every quarter during
the fiscal year ended February 28, 2001.

         There is no nominating committee of the board of directors.

                                       35
<PAGE>

Compliance with Section 16(a) of the Securities Exchange Act of 1934

         Section 16(a) of the Securities Exchange Act of 1934, as amended
requires our directors and executive officers, and persons who own more than 10%
of a registered class of the Company's equity securities, to file with the
Commission initial reports of ownership and reports of changes in ownership of
common stock and other equity securities of Oryx. Officers, directors and
greater than 10% stockholders are required by Commission regulation to furnish
us with copies of all Section 16(a) forms they file.

         To our knowledge, based solely on a review of the copies of such
reports and amendments thereto furnished to us and written representations from
the reporting persons that no other reports were required during the fiscal year
ended February 28, 2001, we believe that all Section 16(a) filing requirements
applicable to its officers, directors and greater than 10% beneficial owners
were complied with during the fiscal year ended February 28, 2001.

Item 10.          Executive Compensation.

Cash Compensation

         The following table sets forth the total compensation earned by the
Chief Executive Officer and the other executive officers of Oryx whose total
salary and compensation exceeded $100,000 for services rendered in all
capacities for the year ended February 28, 2001 and for the years ended February
29, 2000 and February 28, 1999.

Summary Compensation Table

<TABLE>
<CAPTION>
Name and                Fiscal                              Other Annual    All Other
Principal Position      Year       Salary       Bonus       Compensation    Compensation
------------------      ------     --------    -------      ------------    ------------
<S>                     <C>        <C>         <C>          <C>               <C>

Philip Micciche,        2001       $176,000                  $   6,228(1)     $     -
President & Chief       2000       $160,000                  $   3,817(1)     $     -
Executive Officer       1999       $158,542                  $       -        $     -

Mitchel Underseth       2001       $90,500     $    -        $       -        $     -
Chief Financial         2000       $135,750    $    -        $   8,765(2)     $     -
Officer                 1999       $126,377    $    -        $   3,600(3)     $     -
</TABLE>

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

(1)  All other compensation consists of vehicle allowance provide to Mr.
     Micciche

(2)  Consisting of $1,800 in payments to Mr. Underseth in lieu of Oryx supplied
     health benefits and $6,965 for payment in lieu of accrued vacation time.

(3)  Other annual compensation consists of payments to Mr. Underseth in lieu of
     Oryx supplied health benefits.

         The following table sets forth as to the Chief Executive Officer and
each of the executive officers named under the Summary Compensation Table,
certain information with respect to options to purchase shares of common stock
of Oryx as of and for the year ended February 28, 2001. We did not grant any
options to officers for the fiscal year ended February 28, 2001.

                                       36
<PAGE>

Year and Fiscal Year-End Option SAR/Values

<TABLE>
<CAPTION>
                                                                         Number of              Value of unexercised
                                                                         unexercised            in-the-money
                             Shares                                      Options/SARS at        Options/SARS
                             Acquired                                    FY-end (#)              at FY-end ($)
                             on                  Value                   exercisable/           exercisable/
Name                         Exercise (#)        Realized ($)            unexercisable          unexercisable(1)
-----------------            ------------        ------------            ---------------        --------------------
<S>                           <C>                 <C>                    <C>                    <C>
Philip Micciche               -                   -                      755,014/124,986        0/0
Mitchel Underseth             -                   -                      322,942/147,058        0/0
Andrew Intrater               -                   -                      340,345/45,282         0/0
</TABLE>

--------------------
(1)  Calculated on the basis of the closing price of $0.8125 per share on
     February 28, 2001 minus the exercise price.

Employment Agreements

         We entered into an employment agreement dated as of March 15, 1999 with
Mr. Philip Micciche, Chief Executive Officer, terminable by either party,
providing for annual compensation of $160,000 to Mr. Micciche from March 1, 1999
through the end of February 2000 and $176,000 from March 1, 2000 through the end
of February 2001. Bonuses or incentive compensation and additional stock option
grants may be paid or granted in the sole discretion of the board of directors.
In the event Mr. Micciche is terminated without cause by us, he will receive all
compensation and benefits for the remaining term of the employment agreement. In
May 2001, this employment agreement was extended an additional twelve months
through the end of February 2002, at the current compensation of $ 176,000 per
annum.

         We entered into an employment agreement dated as of November 1, 1996
with Mr. Mitchel Underseth, Chief Financial Officer, terminable immediately by
either party, providing for annual compensation of $120,000, with increases in
salary based upon the recommendation of the Compensation Committee. In the event
Mr. Underseth is terminated without cause by us, he will receive his annual
compensation for six months. Mr. Underseth is currently a part-time employee
with us and his compensation has been proportionately adjusted to reflect hours
worked.

         We currently offer basic health and major medical insurance to our
employees. We have adopted a non-contributory 401(k) plan for our employees who
wish to participate on a voluntary basis, but no retirement, pension or similar
program has been adopted by us.

Remuneration of Non-Employee Directors

         Each member of the board of directors who is not an employee of Oryx is
compensated for his services as director as follows: $750.00 for each board
meeting attended in person, and $250.00 for each board meeting attended by
telephone. In addition, each non-employee member of the board of directors is
granted stock options under the director's non-qualified stock option plans as
described below.

                                       37
<PAGE>

Description of Incentive and Nonqualified Stock Option Plan

         On March 3, 1993, we adopted the incentive and nonqualified stock
option plan, or the plan, pursuant to which, 3,625,000 shares of common stock
have been reserved for issuance to officers, directors, employees and
consultants of Oryx upon exercise of options granted under the plan. The primary
purpose of the plan is to attract and retain capable executives, employees,
directors, advisory board members and other consultants by offering such
individuals a greater personal interest in our business by encouraging stock
ownership. Options granted under the plan may be designated as "incentive stock
options" within the meaning of Section 422 of the Internal Revenue Code of 1986
or nonstatutory options. The plan is administered by a compensation committee
consisting of outside members of the board of directors which will determine,
among other things, the persons to be granted options, the number of shares
subject to each option and the option price. The plan terminates on March 3,
2003.

         Options under the plan may be granted to officers, directors, employees
and consultants of Oryx, provided that only employees may be granted incentive
stock options. The exercise price of any incentive stock option granted under
the plan must be equal to the fair market value of the shares on the date of
grant, and with respect to persons owning more than 10% of the outstanding
common stock, the exercise price may not be less than 110% of the fair market
value of the shares underlying such option on the date of grant. The exercise
price of nonstatutory stock options may not be less than 85% of the fair market
value of the shares underlying such options, and the term of such nonqualified
options may not extend beyond ten years and one week. The Compensation Committee
determines the term of each option and the manner in which it may be exercised
provided that no incentive stock option may be exercisable more than ten years
after the date of grant, except for optionees who own more than 10% of the our
common stock, in which case the option may not have a term greater than five
years. The Compensation Committee has the power to impose additional
limitations, conditions and restrictions in connection with the grant of any
option.

         There are issued and outstanding options to purchase an aggregate of
2,801,578 shares of common stock pursuant to the plan. The following officers
and key employees of Oryx have been granted options under the plan at the
weighted-average exercise prices described below as of April 30, 2001:

                                                         Average
                                     Number              Exercise
Name                                 of Shares           Price
-------------------                  ----------          ----------
Philip Micciche                      880,000             $    1.449
Mitchel Underseth                    470, 000            $    1.666
Andrew Intrater                      385,627             $    1.666


Directors' Non-Qualified Stock Option Plans

         At our 1995 annual stockholders' meeting, our stockholders approved the
establishment of the 1995 directors non-qualified stock option plan, or the 1995
directors plan, providing for grants to our non-employee directors, or outside
directors, in order to attract and retain outside directors who possess a high
degree of competence, experience, leadership and motivation.

                                       38
<PAGE>

         A total of 225,000 shares of common stock have been reserved for
issuance exercise of non-qualified options under the 1995 directors plan. The
1995 director's plan is administered by the compensation committee of our board
of directors, which will at all times consist solely of outside directors. Under
the 1995 directors plan, outside directors received options to purchase 45,000
shares of our common stock, effective as of February 6, 1995. Each outside
director who joins our board of directors subsequent to the approval of the 195
directors plan will initially receive options to purchase 45,000 shares of our
common stock, effective as of the date he or she is appointed or elected to our
board of directors. Each outside director will also receive options to purchase
15,000 shares of our common stock at such time as his or her initial grants are
fully vested. All options granted under the 1995 directors plan vest in three
equal annual installments on the first, second and third anniversaries of the
date of the grant, provided that the outside director continues to serve on our
board of directors as of such dates.

         At our 1996 annual stockholders' meeting, our stockholders approved the
1996 directors non-qualified stock option plan, or the 1996 directors plan,
providing for grants to our outside directors in order to attract and retain
outside directors who possess a high degree of competence, experience,
leadership and motivation.

         A total of 250,000 shares of Common Stock have been reserved for
issuance upon exercise of non-qualified options under the 1996 directors plan.
The 1996 director's plan is administered by the compensation committee of our
board of directors, which will at all times consist solely of outside directors.
Under the 1996 directors plan, outside directors received options to purchase
30,000 shares of our common stock, effective as of April 1, 1996. Each outside
director who joins our board of directors subsequent to the approval of the 1996
directors plan will initially receive options to purchase 30,000 shares of our
common stock, effective as of the date he or she is appointed or elected to our
board of directors. Ten thousand of the option shares granted under the 1996
directors plan vest on the date of grant and the balance vest in equal annual
installments on the first and second anniversaries of the date of grant,
provided that the outside director continues to serve on our board of directors
as of such dates.

         The exercise price of the options granted under the 1995 and 1996
directors plans will equal the fair market value of our common stock on the date
of grant. The options are not transferable, except upon the death of the
optionee. In the event of an optionee's disability, all options granted will
immediately vest, and in the event of an optionee's death, all options will
similarly vest but expire one year thereafter. In the event the optionee
voluntarily resigns from the board of directors or ceases to serve as a board
member, options that are vested through the date of such resignation or
cessation may be exercised for a period of three months thereafter. Both the
1995 and 1996 directors plans provide, respectively, that such plan may not be
amended more than once every six months, other than to comport with changes in
the Internal Revenue Code of 1986, as amended, the Employee Retirement Income
Security Act, or the rules thereunder. The Compensation Committee has the power
to impose additional limitations, conditions and restrictions in connection with
the grant of any option under the 1995 directors plan or the 1996 directors
plan.

                                       39
<PAGE>

         On April 20, 2000, Tom Guzek was granted options to purchase an
aggregate of 30,000 shares of our common stock, issued from the 1996 directors
plan.


Subsidiary Stock Plans

         In November 1995, our subsidiary, SurgX Corporation, adopted a stock
option plan under which the board of directors of SurgX granted options to
management to purchase Class B common shares in the subsidiary at the fair
market value of such shares as determined by the SurgX board of directors. Class
B common shares authorized for issuance in SurgX are identical to the 10,000,000
shares of Class A common shares owned by us, except that the Class A common
shares possess a liquidation preference. 1,500,000 million shares of SurgX Class
B common shares are 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, and may be re-purchased by us at our option. Grants under
the plan are for amounts, vesting periods and option terms established by the
SurgX board of directors. As of April 30, 2000, there were 304,000 SurgX stock
options granted which are all fully vested and exercisable.


Item 11.          Security Ownership of Certain Beneficial Owners and Management

         The following table sets forth information regarding the beneficial
ownership of the our common stock as of April 30, 2001

         o    by each person who is known to us to be the owner of more than 5%
              of our common stock;

         o    by each of our directors;

         o    by each of our executive officers; and

         o    by all directors and executive officers of Oryx as a group.

         As of April 30, 2001, there were issued and outstanding 16,704,671
shares of our common stock.


                                       40
<PAGE>


                                       Number of Shares of         Percent of
Name and Address                       common stock                Beneficial
or Identity of Group                   Beneficially Owned          Ownership
-----------------------------          -------------------         ----------
Philip J. Micciche (1)                        821,676                 4.9%
1100 Auburn Street
Fremont, CA  94538

Mitchel Underseth (2)                         350,814                 2.1%
1100 Auburn Street
Fremont, CA  94538

Andrew Intrater (3)                           561,365                 3.4%
1100 Auburn Street
Fremont, CA  94538

Dr. John Abeles (4)                           429,132                 2.6%
2365 Northwest 41st Street
Boca Raton, FL  33431

Jay M. Haft (5)                               142,650                 *
1001 Brickell Bay Dr, 9th Fl.
Miami, FL 33131

Richard Hubbard (6)                            45,000                 *
130, The Minories
London EC3N1NT
United Kingdom

Doug McBurnie (7)                              45,000                 *
18346 You Bet Road
Grass Valley, CA 95945

Thomas Guzek (8)                               20,000                 *
16261 Berry View Court
Ballwin, Missouri 63011

Windstar Investments N.V. (9)               1,084,220                 6.5%
200 East Broward Blvd.,
Suite 1900
Fort Lauderdale, FL  33302

VMR High Octane Fund (10)                     842,105                 5.0%
c/o Meespierson Fund Services
18-20 North Quay
Douglas, Isle of Man 1M991M

All executive officers and                  2,372,739                14.2%
directors as a group
(8 persons) (11)


                                                        (Footnotes on next page)

                                       41
<PAGE>

(Footnotes from previous page)

*    Represents less than 1% of the outstanding shares

(1)  Represents shares subject to stock options exercisable as of April 30, 2001
     or within 60 days thereafter.

(2)  Represents shares subject to stock options exercisable as of April 30, 2001
     or within 60 days thereafter.

(3)  Includes 182,833 shares of common stock held by Mr. Intrater. Also includes
     310,157 shares subject to stock options exercisable as of April 30, 2001 or
     within 60 days thereafter.

(4)  Includes 227,007 shares of common stock held by Northlea Partners Ltd. of
     which Dr. Abeles is the General Partner, and 35,000 shares issuable upon
     conversion of Series A preferred stock also held by Northlea Partners. Also
     includes 9,375 shares of common stock issuable upon exercise of certain
     bridge warrants. Includes 37,750 shares of common stock issuable upon
     conversion of warrants, held by Northlea Partners. Also includes 105,000
     shares subject to stock options exercisable as of April 30, 2001 or within
     60 days thereafter.

(5)  Includes 105,000 shares subject to stock options exercisable as of April
     30, 2001 or within 60 days thereafter. Also includes 22,650 shares of
     common stock issuable upon conversion of warrants.

(6)  Represents shares subject to stock options exercisable as of April 30, 2001
     or within 60 days thereafter.

(7)  Represents shares subject to stock options exercisable as of April 30, 2001
     or within 60 days thereafter.

(8)  Represents shares subject to stock options exercisable as of April 30, 2001
     or within 60 days thereafter.

(9)  Includes 507,553 shares of common stock issuable upon conversion of
     warrants.

(10) Includes an aggregate of 1,611,370 shares issuable upon exercise of
     warrants and stock options and conversion of Preferred Stock, included
     pursuant to notes (1)-(9).


Item 12.          Certain Relationships and Related Transactions

         In July, 1998, we extended an unsecured loan in the aggregate principal
amount of $35,000 to Mitchel Underseth, Chief Financial Officer and a director
of the Oryx to the terms of a promissory note. The note bears interest of seven
percent (7.0%) per annum and is payable in full on the earlier of July 15, 2000
or thirty days after Mr. Underseth's full-time employment with Oryx is
terminated. Principal and interest under the note are payable in full on such
maturity date. As of February 28, 2001, there was outstanding principal and
interest of $9,041 under the note. Due to Mr. Underseth's current part-time
employment status, the term of his note was extended to July 15, 2001.

                                       42
<PAGE>

         In February 1999, we received approximately 55,000 shares of common
stock of Applied Magnetics Corp., or Applied Magnetics, assigned to us by our
Chief Executive Officer, Philip Micciche. Mr. Micciche received shares pursuant
to a non-competition agreement executed by Mr. Micciche in connection with his
providing consulting services to DAS Devices, Inc., a magnetic read-write head
manufacturer that recently merged with Applied Magnetics. The shares of Applied
Magnetics common stock received by us were sold on July 1, 1999.

         Oryx is paying legal costs incurred by Philip Micciche, our Chief
Executive Officer, and Mitchel Underseth, our Chief Financial Officer, in
connection with Comdisco, Inc. v. Micciche, Underseth, et al filed in Santa
Clara County Superior Court, in which Messrs. Micciche and Underseth have been
named, individually, as defendants. At our request, Messrs. Micciche and
Underseth were named as advisors to DAS Devices, Inc. prior to its acquisition
by Applied Magnetics in order to attempt to maximize our equity investment in
DAS Devices. Messrs. Micciche and Underseth were named as defendants in a
lawsuit brought by Comdisco, Inc. in connection with alleged defaults under a
leasing agreement between Comdisco and DAS Devices. As of April 30, 2001, Oryx
had paid an aggregate of $62,044 in legal expenses in connection with this
matter.

         In July 2000, we purchased 1,851,851 shares of Series A Preferred Stock
of S2 Technologies, Inc. for a total purchase price of $500,000. Mark Underseth,
Chief Executive Officer of S2 Technologies, Inc. is the brother of Mitchel
Underseth, Chief Financial Officer of Oryx. Mitchel Underseth did not
participate in Oryx's due diligence or negotiation with respect to Oryx's
transaction with S2 Technologies, Inc. and abstained from voting or discussion
when Oryx's Board of Directors considered this matter.

Item 13.          Exhibits and Reports on Form 8-K.

         (a)      Financial Statements and Schedules

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

         (b)      Reports on Form 8-K

         We did not file any Reports on Form 8-K with the Commission during the
fiscal quarter ended February 28, 2001.

         (c)      Exhibits

Exhibit No.       Description of Exhibits
-----------       -----------------------

2.2               Asset Purchase Agreement dated as of June 1, 1999 by and
                  between the Registrant and Oryx Advanced Materials, Inc. (1)
3.1               Certificate of Incorporation of the Registrant dated July 26,
                  1993 (2)
3.2               Bylaws of the Registrant dated July 26, 1993 (2)
3.3               Certificate of Amendment to Certificate of Incorporation dated
                  July 23, 1993 (4)
3.3A              Certificate of Amendment of Certificate of Incorporation dated
                  February 7, 1996 (5)
4.1               Specimen Common Stock Certificate (2)
4.2               Specimen Common Stock Purchase Warrant (2)
4.3               Warrant Agency Agreement including Statement of Rights, Terms
                  and Conditions for Callable Stock Purchase Warrants (3)
4.4               Incentive and Nonqualified Stock Option Plan, as Amended (6)
4.4A              1996 Directors Stock Option Plan (6)
4.4B              1995 Directors Stock Option Plan (7)
4.5               Form of Promissory Note issued to Series A Preferred Stock
                  investors (2)
4.6               Unit Purchase Warrant (2)
4.7               Form of Warrants issued to Yorkton Securities, Inc. in
                  December 1996 and February 1997 (9)
4.8               Nonstatutory Stock Option Agreement, dated as of March 1,
                  1998, between the Registrant and Bharat Shah (6)
4.9               Nonstatutory Stock Option Agreement, dated as of March 1,
                  1998, between the Registrant and Bharat Shah (6)

                                       43
<PAGE>

Exhibit No.       Description of Exhibits
-----------       -----------------------

4.10              Nonstatutory Stock Option Agreement, dated as of March 1,
                  1998, between the Registrant and Paul Dickerson (6)
4.11              Nonstatutory Stock Option Agreement, dated as of March 1,
                  1998, between the Registrant and Thomas Landgraf (6)
4.12              Nonstatutory Stock Option Agreement, dated as of March 1,
                  1998, between the Registrant and Charles Ray (6)
4.13              Nonstatutory Stock Option Agreement, dated as of March 1,
                  1998, between the Registrant and Gary Sollner (6)
4.14              Warrant dated as of August 10, 1998, between the Registrant
                  and Continental Capital & Equity Corporation (15)
4.15              Stock Warrant dated as of February 27, 1998, between the
                  Registrant and KBK Financial, Inc. (15)
10.1              Lease Agreement with Renco Investment Company re: Fremont,
                  California office, a laboratory and manufacturing facility (2)
10.2              Lease Agreement with FINSA re: Reynosa, Mexico, manufacturing
                  facility (4)
10.3              Lease Agreement with Greer Enterprises re: Fremont, California
                  manufacturing facility (4)
10.4              Lease Agreement with Hospitak/Meditron re: McAllen, Texas,
                  warehouse facility (4)
10.5              Lease Agreement with Security Capital Industrial Trust re:
                  Fremont, California manufacturing facility (5)
10.6              Lease Agreement with OTR, State Teachers Retirement System of
                  Ohio re: Mt. Prospect, Illinois office (5)
10.7              Lease Agreement with E.B.J. Partners LP re: Fremont,
                  California office and manufacturing facility (13)
10.8              Letter of Separation Agreement with Andrew Wilson (13)
10.9              Letter of Employment Agreement with Mitchel Underseth (13)
10.10             Letter of Employment Agreement with Philip Micciche (13)
10.11             Letter of Employment and Non-Competition Agreement with Andrew
                  Intrater (2)
10.12             Agreement for the Purchase and Sale of Stock with Intek
                  Diversified Corporation (2)
10.13             Asset Purchase Agreement with Zenith Electronics
                  Corporation (2)
10.14             Promissory Notes issued in interim debt financing (2)
10.15             Common Stock Purchase Warrants issued in interim debt
                  financing (4)
10.16             Placement Agency Agreement between the Registrant and Yorkton
                  Securities, Inc. dated February 8, 1996, as amended April 22,
                  1996 (5)
10.17             Form of Subscription Agreement between the Registrant and
                  various investors in Yorkton Private Placement dated February
                  29, 1996 and May 13, 1996 (5)
10.18             Offering Memorandum dated February 8, 1996 and Supplement
                  thereto dated April 22, 1996, relating to Yorkton private
                  placement (5)
10.19             Settlement Agreement between the Registrant and Zenith
                  Electronics Corporation dated February 29, 1996, as amended
                  April 16, 1996 (5)

                                       44
<PAGE>

Exhibit No.       Description of Exhibits
-----------       -----------------------

10.20             Agreement between the Registrant and Cooper Bussmann dated
                  July, 1996 (13)
10.21             Agreement between the Registrant and National Semiconductor
                  dated June 7, 1996 (13)
10.22             Agreement between the Registrant and LSI Logic dated September
                  30, 1996 (13)
10.23             Agency Agreement between the Registrant and Yorkton
                  Securities, Inc. dated December 4, 1996, as amended January
                  23, 1997 (9)
10.24             Form of Subscription Agreement between the Registrant and
                  various investors in Yorkton Private Placement dated December
                  4, 1996 (10)
10.25             Asset Purchase Agreement relating to the acquisition of Power
                  Sensors Corporation by Oryx Power Products Corporation dated
                  December 19, 1996 (8)
10.26             Stock Purchase and Reorganization Agreement by and among the
                  Registrant, Corus Investment, Ltd. and Oryx Instruments and
                  Materials Corporation Dated February 27, 1998 (11)
10.27             Stockholders' Agreement Dated February 27, 1998 (11)
10.28             Pledge Agreement Dated February 27, 1998 (11)
10.29             Promissory Note Dated February 27, 1998 (11)
10.30             Asset Purchase Agreement by and among the Registrant, Todd
                  Power Corporation and Oryx Power Products Corporation Dated
                  March 2, 1998 (12)+
10.31             License Agreement with IRISO Electronics Limited (14)
10.32             Stock Purchase Agreement with IRISO Electronics Limited (14)
10.33             Agreement with Office of Naval Research (14)
10.34             DAS Devices Inc. Preferred Stock Purchase Agreement (14)
10.35             Arvind Patel Separation Agreement (14)
10.36             Amended Cooper Bussmann License Agreement (14)
10.37             Revolving Account Transfer and Purchase Agreement (14)
10.38             First Amendment to Loan Agreement (14)
10.39             Revolving Credit Promissory Note (14)
10.40             Second Amendment to Loan Agreement (14)
10.41             Market Access Program Marketing Agreement dated as of August
                  7, 1998, by and between the Registrant and Continental Capital
                  & Equity Corporation. (15)
10.42             Term Promissory Note dated February 27, 1998 payable to KBK
                  Financial, Inc. (14)
10.43             Loan Agreement dated May 29, 1997 with KBK Financial, Inc.(14)
10.44             Note and Stock Purchase Agreement and Release dated November
                  6, 1998 by and among the Registrant, Corus Investment LTD. and
                  Oryx Instruments and Materials Corporation. (16)
10.45             Promissory Note payable by Mitch Underseth dated July 15,
                  1998 (17)
10.46             Assignment Agreement between Philip J. Micciche and Registrant
                  dated November 24, 1998 (17)
10.47             Extension Rent Agreement between ProLogis LP and Registrant
                  dated April 12, 1999 (17)
10.48             Employment Agreement between Registrant and Phillip J.
                  Micciche dated March 15, 1999.(18)
10.49             Oryx Ventures, LLC Operating Agreement dated as of May 18,
                  2000. *
10.50             Amendment No. 1 to Intellectual Property Rights License
                  Agreement by and between the Registrant and Cooper Bussmann,
                  dated April 10, 2000. *
10.51             Consulting Agreement by and between Oryx Ventures, LLC and
                  Aptix Corporation dated as of November 1, 2000 (services
                  provided by Philip Micciche). *
10.52             Consulting Agreement by and between Oryx Ventures, LLC and
                  Aptix Corporation dated as of November 1, 2000 (services
                  provided by Mitchel Underseth). *
10.53             Intellectual Property Rights License Agreement by and between
                  SurgX Corporation and Cooper Bussmann dated as of October 2,
                  1997, as amended. * (14)
10.54             Manufacturing and Supply Agreement by and between SurgX
                  Corporation and Cooper Electronics Technologies dated as of
                  May 1, 2000. *
10.55             First Amendment to License Agreement by and between the
                  Registrant and Oryx Advanced Materials, Inc. dated as of March
                  1, 2001. *
10.56             Series A Preferred Stock Purchase Agreement by and among LOTS
                  Technology, Inc., Oryx Ventures, LLC and the other investors
                  named therein dated as of July 30, 1999. *
10.57             Series A Preferred Stock Purchase Agreement by and among S2
                  Technologies, Inc., Oryx Ventures, LLC and the other investors
                  named therein dated as of July 20, 2000. *
10.58             NetConversions, Inc. Unsecured Convertible Promissory Note
                  payable by NetConversions, Inc. to Oryx Ventures, LLC dated as
                  of June 12, 2000. *
10.59             Business Consultant and Management Agreement by and between
                  Oryx Ventures, LLC and LOTS Technology, Inc. dated as of June
                  13, 2000. *
10.60             Business Consultant and Management Agreement by and between
                  Oryx Ventures, LLC and S2 Technologies, Inc dated as of July
                  20, 2000. *
10.61             Employment Agreement by and between between the Registrant and
                  Phillip J. Micciche dated May 16, 2001. *
10.62             Amendment to Promissory Note for Mitchel Underseth dated July
                  15, 2000. *
21                Subsidiaries of the Registrant (5)
23.1              Consent of Independent Accountants*

                                       45
<PAGE>

*        Filed herewith.

+        Confidential treatment has been requested with respect to certain
         portions of these Exhibits. Such portions have been omitted from this
         filing and have been filed separately with the Securities and Exchange
         Commission.

(1)      Previously filed as an exhibit to the Registrant's Current Report on
         Form 8-K filed with the Commission on September 2, 1999.

(2)      Previously filed as an exhibit to the Registrant's Registration
         Statement on Form SB-2 (Registration No. 33-72104) which became
         effective on April 6, 1994 incorporated herein by reference.

(3)      Previously filed as an exhibit to the Registrant's Current Report on
         Form 8-K filed with the Commission on March 27, 1995.

(4)      Previously filed as an exhibit to the Registrant's Annual Report on
         Form 10-KSB for the fiscal year ended February 28, 1995.

(5)      Previously filed as an exhibit to the Registrant's Annual Report on
         Form 10-KSB (as amended) for the fiscal year ended February 29, 1996.

(6)      Previously filed as an exhibit to the Registrant's Registration
         Statement on Form S-8 (Registration No. 333-62767) filed with the
         Commission on September 1, 1998 and incorporated herein by reference.

(7)      Previously filed as an exhibit to the Registrant's Registration
         Statements on Form S-8 (Registration No. 333-07409) filed with the
         Commission on July 2, 1996 and incorporated herein by reference.

(8)      Previously filed as an exhibit to the Registrant's Current Report on
         Form 8-K filed with the Commission on January 3, 1997.

(9)      Previously filed as an exhibit to the Registrant's Current Report on
         Form 8-K filed with the Commission on February 21, 1997.

(10)     Previously filed as an exhibit to the Registrant's Registration
         Statement on Form S-3 Registration No. 333-23317) filed with the
         commission on March 31, 1997 and incorporated herein by reference.

(11)     Previously filed as an exhibit to the Registrant's Current Report on
         Form 8-K filed with the Commission on March 16, 1998.

(12)     Previously filed as an exhibit to the Registrant's Current Report on
         Form 8-K filed with the Commission on March 23, 1998.

(13)     Previously filed as an exhibit to the Registrant's Annual Report on
         Form 10-KSB for the fiscal year ended February 28, 1997.

(14)     Previously filed as an exhibit to the Registrant's Annual Report on
         Form 10-KSB for the fiscal year ended February 28, 1998.

(15)     Previously filed as an exhibit to the Registrant's Registration
         Statement on Form S-3 Registration No. 333-63991 which became effective
         on September 22, 1998 and is incorporated herein by reference.

(16)     Previously filed as an exhibit to the Registrant's Current Report on
         Form 8-K filed with the Commission on April 14, 1999.

(17)     Previously filed as an exhibit to the Registrant's Annual Report on
         Form 10-KSB for the fiscal year ended February 28, 1999.

(18)     Previously filed as an exhibit to the Registrant's Annual Report on
         Form 10-KSB for the fiscal year ended February 29, 2000.
                                       46
<PAGE>

                                  SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this Report to be signed on its behalf by the undersigned
thereunto duly authorized on this 25th day of May, 2001.

                           ORYX TECHNOLOGY CORP.


                           By: /s/ Philip J. Micciche
                               ----------------------
                               Philip J. Micciche,
                               President and Chief
                               Executive Officer

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

<TABLE>
<CAPTION>
Signature                                Title                                  Date
---------                                -----                                  ----
<S>                                      <C>                                    <C>
/s/ Philip J. Micciche                   President, Chief                       May 24, 2001
----------------------                   Executive Officer
Philip J. Micciche                       and Director
                                         (Principal Executive
                                         Officer)

/s/ Andrew Intrater                      Secretary, Treasurer                   May 24, 2001
-------------------                      and Director
Andrew Intrater

/s/ Mitchel Underseth                    Chief Financial                        May 24, 2001
---------------------                    Officer and Director
Mitchel Underseth                        (Principal Financial
                                         Officer and Principal
                                         Accounting Officer)

/s/ John H. Abeles                       Director                               May 24, 2001
------------------
John H. Abeles

/s/ Jay M. Haft                          Director                               May 24, 2001
---------------
Jay M. Haft

/s/ Thomas Guzek                         Director                               May 24, 2001
----------------
Thomas Guzek

/s/ Richard Hubbard                      Director                               May 24, 2001
-------------------
Richard Hubbard

/s/ Doug McBurnie                        Director                               May 24, 2001
-----------------
Doug McBurnie
</TABLE>

                                       47
<PAGE>

Oryx Technology Corp.
Index to Consolidated Financial Statements
--------------------------------------------------------------------------------
February 28, 2001 and February 29, 2000


                                                                            Page

Report of Independent Accountants......................................     F-2

Consolidated Balance Sheet at February 28, 2001
      and February 29, 2000............................................     F-3

Consolidated Statement of Operations for the
       years ended February 28, 2001 and February 29, 2000.............     F-4

Consolidated Statement of Stockholders' Equity for the
      years ended February 28, 2001 and February 29, 2000..............     F-5

Consolidated Statement of Cash Flows for the
      years ended February 28, 2001 and February 29, 2000..............     F-6

Notes to Consolidated Financial Statements.............................     F-7


                                      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 sheets 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, 2001 and February 29,
2000, and the results of their operations and their cash flows for the years
then ended in conformity with accounting principles generally accepted in the
United States of America. 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 auditing standards generally accepted in the
United States of America 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 our opinion.



PricewaterhouseCoopers LLP

San Jose, California
April 27, 2001

                                      F-2
<PAGE>

Oryx Technology Corp.
Consolidated Balance Sheets
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
              Assets                                                           February 28,        February 29,
                                                                                   2001                2000
                                                                             -----------------   -----------------
<S>                                                                               <C>                 <C>
Current assets:
  Cash and cash equivalents                                                       $ 3,306,000         $ 4,529,000
  Short term investments                                                                    -             989,000
  Accounts receivable, net of allowance for doubtful
    accounts of $0 and $40,000                                                         46,000              50,000
  Other current assets                                                                126,000             127,000
                                                                                  -----------         -----------
    Total current assets                                                            3,478,000           5,695,000

Property and equipment, net                                                           135,000             262,000
Investments                                                                           243,000                   -
Other assets                                                                            1,000              32,000
                                                                                  -----------         -----------
                                                                                  $ 3,857,000         $ 5,989,000
                                                                                  ===========         ===========

              Liabilities, Mandatorily Convertible Redeemable
                  Preferred Stock and Stockholders' Equity

Current liabilities:
  Accounts payable                                                                $    29,000         $    43,000
  Accrued liabilities                                                                 352,000             672,000
  Deferred revenue                                                                          -              19,000
                                                                                  -----------         -----------
    Total current liabilities                                                         381,000             734,000

Commitments and Contingencies (Note 11)

Series A 2% mandatorily convertible redeemable Preferred Stock
    $0.001 par value; 3,000,000 shares authorized;
    3,750  shares issued and outstanding                                               89,000              89,000

Stockholders' equity:
  Common Stock, $0.001 par value; 25,000,000 shares
    authorized; 16,704,671 and 16,457,682 issued and outstanding                       17,000              16,000
Additional paid-in capital                                                         25,587,000          25,237,000
Accumulated deficit                                                               (22,217,000)        (20,087,000)
                                                                                  -----------         -----------
      Total stockholders' equity                                                    3,387,000           5,166,000
                                                                                  -----------         -----------
                                                                                  $ 3,857,000         $ 5,989,000
                                                                                  ===========         ===========

</TABLE>


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

                                       F-3



<PAGE>


Oryx Technology Corp.
Consolidated Statements of Operations
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                                          Year Ended         Year Ended
                                                                                         February 28,       February 29,
                                                                                             2001               2000
                                                                                         -------------      ------------

<S>                                                                                        <C>                 <C>
Revenue:
    Services                                                                               $    213,000        $          -
    Other                                                                                       437,000             755,000
                                                                                           -------------       ------------
                                                                                                650,000             755,000
                                                                                           -------------       ------------

Cost of Sales:
    Services                                                                                     93,000                   -
    Other                                                                                       233,000             808,000
                                                                                           -------------       ------------
                                                                                                326,000             808,000
                                                                                           -------------       ------------

Gross profit (loss)                                                                             324,000             (53,000)
                                                                                           -------------       ------------

Operating expenses:
   General and administrative                                                                 1,599,000           1,782,000
   Research and development                                                                     184,000             954,000
                                                                                           -------------       ------------
    Total operating expenses                                                                  1,783,000           2,736,000
                                                                                           -------------       ------------


Loss from operations                                                                         (1,459,000)         (2,789,000)
Interest income, net                                                                            215,000             177,000
Loss on investments, net                                                                       (877,000)                  -
Other expenses                                                                                   (7,000)            (11,000)
                                                                                           -------------       ------------
          Loss from continuing operations                                                    (2,128,000)         (2,623,000)
                                                                                           -------------       ------------

Discontinued operations:
  Income from discontinued operations                                                                 -             268,000
  Income on disposal of discontinued operations                                                       -             345,000
                                                                                           -------------       ------------
          Income from discontinued operations                                                         -             613,000
                                                                                           -------------       ------------

Net loss                                                                                     (2,128,000)         (2,010,000)
Dividends                                                                                        (2,000)             (2,000)
                                                                                           -------------       ------------
    Net loss attributable to Common Stock                                                  $ (2,130,000)       $ (2,012,000)
                                                                                           =============       ============

Basic and diluted loss per common share from continuing operations                              $ (0.13)            $ (0.17)
Basic and diluted income per common share from discontinued operations                                -                0.04
                                                                                           -------------       ------------
Basic and diluted net loss per common share                                                     $ (0.13)            $ (0.13)
                                                                                           =============       ============

Weighted average common shares used to compute basic and
                              diluted net loss per share                                     16,677,000          15,271,000
                                                                                           =============       ============
</TABLE>

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

                                       F-4
<PAGE>

Oryx Technology Corp.
Consolidated Statements of Stockholder's Equity
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                         Additional
                                                                 Common Stock          -------------
                                                                 ------------             Paid-In       Accumulated
                                                            Shares         Amount         Capital         Deficit         Total
                                                            ------         ------      -------------    -----------       -----

<S>                                                        <C>             <C>         <C>             <C>               <C>
Balance at February 28, 1999                               13,290,464      13,000       20,144,000      (18,075,000)      2,082,000

Issuance of Common Stock upon exercise of options             446,906           -          471,000                 -        471,000

Issuance of Common Stock upon exercise of
   warrants                                                 2,639,312       3,000        4,243,000                 -      4,246,000
Issuance of stock option in exchange for
   services and employee terminations                               -           -          215,000                 -        215,000
Issuance of Common Stock in exchange
   for investor relations services                             81,000           -          152,000                 -        152,000

Issuance of warrants in exchange for investor
   relations services                                               -           -           12,000                 -         12,000

Net Loss                                                            -           -                -        (2,010,000)    (2,010,000)

Preferred Stock dividend                                            -           -                -            (2,000)        (2,000)
                                                           ----------    --------      -----------    --------------     ----------


Balance at February 29, 2000                               16,457,682      16,000       25,237,000       (20,087,000)     5,166,000

Issuance of Common Stock upon exercise of options             232,125       1,000          323,000                 -        324,000

Issuance of Common Stock upon exercise of warrants              14,864          -           12,000                 -         12,000

Issuance of stock options in exchange for services                  -           -           15,000                 -         15,000

Net Loss                                                            -           -                -       (2,128,000)     (2,128,000)

Preferred Stock dividend                                            -           -                -           (2,000)         (2,000)
                                                           ----------    --------      -----------    --------------     ----------
Balance at February 28, 2001                               16,704,671    $ 17,000      $25,587,000    $ (22,217,000)     $3,387,000
                                                           ==========    ========      ===========    ==============     ==========



</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 29,
                                                                                             2001               2000
                                                                                         -----------        ------------
<S>                                                                                        <C>                 <C>
Cash flows from operating activities:
  Net loss                                                                                 $ (2,128,000)       $(2,010,000)
  Adjustments to reconcile net loss to net cash used in operating activities:
    Income from discontinued operations                                                               -           (268,000)
    Gain from sale of discontinued operations                                                         -           (345,000)
    Loss on investments                                                                         877,000                  -
    Loss from asset disposition                                                                   7,000              8,000
    Depreciation and amortization                                                               153,000            135,000
    Non-cash stock compensation                                                                  15,000            392,000
      Changes in assets and liabilities
        Accounts receivable                                                                       4,000             85,000
        Other current assets                                                                      1,000            (20,000)
        Other assets                                                                             31,000            109,000
        Deferred revenue                                                                        (19,000)           (59,000)
        Accounts payable                                                                        (14,000)           (82,000)
        Accrued liabilities                                                                    (320,000)           229,000
                                                                                            ------------       -----------
            Net cash used in continuing operations                                           (1,393,000)        (1,826,000)
            Net cash provided by discontinued operations                                              -            620,000
                                                                                            ------------       -----------
            Net cash used in operations                                                      (1,393,000)        (1,206,000)
                                                                                            ------------       -----------

Cash flows from investing activities:
  Capital expenditures                                                                          (47,000)          (100,000)
  Proceeds from assets disposition                                                               14,000             16,000
  Purchase of short term investments                                                             (4,000)          (989,000)
  Proceeds from sale of short term investments                                                  993,000            151,000
  Purchase of Investments                                                                    (1,120,000)                 -
  Proceeds from sale of discontinued operations                                                       -            400,000
                                                                                            ------------       -----------
            Net cash used by investing activities                                              (164,000)          (522,000)
                                                                                            ------------       -----------

Cash flows from financing activities:
  Payment of capital lease obligations                                                                -             (9,000)
  Repayment of notes payable                                                                          -            (19,000)
  Proceeds from exercise of warrants for Common Stock                                            12,000          4,246,000
  Proceeds from exercise of options for Common Stock                                            324,000            471,000
  Payment of dividends                                                                           (2,000)            (2,000)
                                                                                            ------------       -----------
            Net cash provided by financing activities                                           334,000          4,687,000
                                                                                            ------------       -----------
Net increase (decrease) in cash and cash equivalents                                         (1,223,000)         2,959,000
Cash and cash equivalents at beginning of period                                              4,529,000          1,570,000
                                                                                            ------------       -----------
Cash and cash equivalents at end of period                                                  $ 3,306,000        $ 4,529,000
                                                                                            ============       ===========
</TABLE>

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

                                       F-6
<PAGE>

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

1.   The Company

     During fiscal 2000, Oryx Technology Corp. ("Oryx" or the "Company"), a
Delaware corporation, and its subsidiaries completed its strategic repositioning
of the Company to a licensing entity. During fiscal 2001, the Company
established a wholly owned subsidiary, Oryx Ventures, LLC, to act as an
investment and management services entity. At February 28, 2001, the Company was
primarily involved in the business of licensing its proprietary SurgX and
Intragene technology and providing capital and management services to early
stage development companies. The Company transferred the research and
development of its SurgX electrostatic discharge protection technology --- SurgX
liquid manufacturing processes and know-how to its licensees. Additionally,
during fiscal 2000, the Company sold its Material business (see Note 4) which it
has accounted for as a discontinued operations and subsequently licensed its
Intragene technology.


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, 2001 is referred to as fiscal 2001. Certain prior year
amounts have been reclassified to conform to current year presentation.

     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.

     Cash and Cash Equivalents
         The Company considers all highly liquid instruments with an original
maturity of three months or less to be cash equivalents. The Company accounts
for its short-term investments in accordance with Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities."

         The Company's investments consist primarily of commercial papers,
agency debt obligations and US treasury bills, and are classified as available
for sale securities. There were no material unrealized gains or losses on
investments at February 29,2000.

     Concentration of credit Risks
         Our customers are primarily the licensees of our proprietary SurgX
technology and the Intragene technology, and the companies we provide management
services. The Company maintains reserves for potential credit losses;
historically, such losses have been minor. The Company's accounts receivable are
principally derived from sales in the United States.

         All transactions are denominated in U.S. dollars. Significant customers
who represented 10% or more of revenue for the respective periods were as
follows:

                                                  Year Ended       Year Ended
                                                 February 28,     February 29,
                                                     2001             2000
                                                 ------------     ------------

        Oryx Advanced Materials, Inc.                36%              33%
        Aptix Corporation                            27%               -
        Iriso Electronics, Co. LTD.                  18%              10%
        Cooper Electronics Technologies               9%              40%
        Government Contracts                          -               17%

                                       F-7
<PAGE>

     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.

     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.

     Investments
         The investments in the Company's portfolio companies are accounted for
by either the equity method or cost method, based upon voting interests and
level of influence. See Note 5 for related investment activity.

     Revenue recognition
         Revenue from research contracts in process is recognized under the
percentage of completion method. Royalty and management services revenues are
recognized when they are earned, contractually payable and collectability is
probable. Other revenue represents royalty revenue for fiscal 2001 and royalty
and research contract revenue for fiscal 2000.

     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.

     Net loss per share
         Basic and diluted earnings per share for the periods presented have
been computed by dividing income or loss available to common stockholders by the
weighted average common shares outstanding for the period. Due to the net losses
from continuing operations incurred in fiscal 2001 and 2000, all common stock
equivalents (options, warrants and preferred stock) 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 2001 or 2000. Anti
dilutive securities and common stock equivalents at February 28, 2001 which
could be dilutive in future periods include common stock options to purchase
3,087,000 shares of common stock, warrants to purchase 1,110,000 shares of
common stock, 3,750 shares of Series A preferred stock which may be converted
into 44,000 shares of common stock 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.

     Comprehensive Income
         In March 1998, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 130, "Reporting Comprehensive Income." Comprehensive income
includes all changes in equity during a period from non-owner sources including
unrealized gains and losses on available-for-sale securities. There is no
difference between net loss attributable to common stock and comprehensive loss
for all periods presented.

                                      F-8
<PAGE>

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

3.   Details of Balance Sheet Components

<TABLE>
<CAPTION>
                                                                                       February 28,       February 29,
                                                                                            2001               2000
                                                                                       ------------       ------------
<S>                                                                                       <C>               <C>
      Other current assets:
        Receivable from Todd Power                                                        $       -         $  65,000
        Receivable from licensees                                                            20,000                 -
        Receivable from  OAMI for sales of equipment                                         15,000                 -
        Security deposit on facility                                                         19,000                 -
        Other                                                                                72,000            62,000
                                                                                          ---------------------------
                                                                                          $ 126,000         $ 127,000
                                                                                          ===========================

      Property and equipment:
        Machinery and equipment                                                           $ 415,000         $ 467,000
        Furniture and fixtures                                                              234,000           231,000
        Leasehold improvements                                                               77,000            84,000
                                                                                          ---------------------------
                                                                                            726,000           782,000
      Less:  Accumulated depreciation                                                      (591,000)         (520,000)
                                                                                          ---------------------------
                                                                                          $ 135,000         $ 262,000
                                                                                          ===========================

      Accrued liabilities:
        Compensation                                                                      $  65,000         $ 336,000
        Professional fees                                                                   103,000           106,000
        Facilities                                                                           18,000            10,000
        Other                                                                               166,000           220,000
                                                                                          ---------------------------
                                                                                          $ 352,000         $ 672,000
                                                                                          ===========================
</TABLE>


                                      F-9
<PAGE>

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

4.   Instruments and Materials Discontinued Operations

         On August 18, 1999, pursuant to the terms of an Asset Purchase
Agreement dated as of June 1, 1999 by and among Oryx Technology Corp. or Oryx,
and Oryx Advanced Materials Inc. or OAMI, Oryx sold to OAMI certain specified
assets associated with Oryx' carbon target assembly manufacturing and related
materials coating business (the "Materials" business) for a cash payment of
$400,000 and the assumption of substantially all of the liabilities associated
with such business. The Company retained ownership of approximately $280,000 in
accounts receivable balances relating to the Materials business subsequent to
the disposition. In addition, Oryx licensed to OAMI certain patents and other
technology associated with the purchased assets. OAMI will pay Oryx royalty
payments over ten years, with a maximum royalty payment of $2.2 million for the
first three years, based on OAMI's gross profits. As of February 28, 2001, the
Company has received and recognized a total of $486,000 in royalty payments from
OAMI in the following periods: $249,000 for the year ended February 29, 2000,
and $237,000 for the year ended February 28, 2001, which includes $100,000
received in February 2001, in exchange for an amendment to the license agreement
to change the basis of the royalty payment from a percentage of gross profits to
a percentage of sales.

         On February 27, 1998, Corus Investments Ltd., a Bahamas Company,
acquired 8,000,000 shares of the authorized Class A Common Stock of Oryx
Instruments and Materials Corporation (the "Instruments" business) for a
purchase price of $500,000 (the "Sale"). Prior to the Sale, Instruments was a
wholly owned subsidiary of the Company. As part of the Sale, Instruments
redeemed 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.

         The disposal of OAMI and Oryx Instruments and Materials have been
aggregated as they represent the final sale of one business segment, and the
operating results of OAMI and Oryx Instruments and Materials have been
segregated and reported as discontinued operations. Prior year financial
statements have been restated to include the results of operations of OAMI and
Oryx Instruments and Materials as discontinued operations. Revenue from
discontinued operations was $1,049,000 for the year ended February 29, 2000.
Income taxes related to the discontinued operations and the tax benefit
resulting from the gain on disposal of the OAMI business were immaterial.
Transaction costs related to the OAMI disposal were $55,000. The Company has no
remaining assets or liabilities relating to the Instruments and Materials
business as of February 28, 2001.

5.   Investments

     During fiscal 2001, the Company established Oryx Ventures, LLC to act as an
investment and management services entity.

         The Company's investment portfolio are early stage development
companies that generate net losses, and it expects these losses to continue in
the future. On a quarterly basis, the carrying value of the Company's ownership
interest and advances in each of its portfolio companies is evaluated for
possible impairment. In assessing the carrying value for each portfolio company,
the achievement of financial plan objectives and milestones, overall market
conditions for their products or services, assessment of competitive
technologies and the ability to raise capital for future funding requirements is
considered.

                                      F-10
<PAGE>

         The various interests that the Company has acquired in its portfolio
companies are accounted for by either the equity method or cost method. The
Company does not anticipate accounting for its investment using the
consolidation method, as the Company's investment strategy does not contemplate
obtaining greater than 50% voting rights or effective control of its portfolio
companies. The applicable accounting method used to record investments in
portfolio companies is determined by the Company's voting interest and level of
influence the Company exercises over each portfolio company. In general the
Company will use the equity method when its ownership level exceeds 20% but is
not greater than 50%. When the Company's ownership is less than 20% and the
Company does not exercise significant influence it uses the cost method.
Whether or not the Company exercises significant influence with respect to a
portfolio company depends on an evaluation of several factors including: its
management capacity and decision making authority relative to the management
services the Company provides to the portfolio company, level of representation
on the portfolio company's board of directors and level of voting rights
associated with its equity holdings.

         To date, the Company has invested in three technology companies: LOTS
Technology, Inc., a developer of digital optical storage technology,
NetConversions, an early-stage, data marketing company with a proprietary
technology that allows for real-time analysis of consumer online buyer behavior,
and S2 Technologies, Inc., an early-stage middleware and software tools
development company.

         LOTS Technology ("LOTS") proprietary technology is a replacement
product for the high-end magnetic media drives that can no longer keep pace with
the growth in digital data storage. LOTS, which developed the technology with
major funding from government contracts, plans to supply large-volume data
storage systems to three broad markets of commercial and government customers,
including general purpose computing, networked data storage, digital video and
data acquisition system companies. The Company made a direct investment of
$500,000 in LOTS and has received additional equity in the form of stock options
for its senior advisory services with the Company's total ownership in excess of
6.5%. As of April 2001, the Company has fulfilled its obligations under its
management service agreement and is no longer providing any other services.
Based upon the adverse conditions of the private equity capital markets during
the fourth quarter of fiscal 2001, there is greater uncertainty concerning the
outlook for privately funded companies and there can be no assurance that LOTS
will be successful raising sufficient funding to support its current business
model. The Company fully reserved the $500,000 investment during the fourth
quarter of fiscal 2001.

         NetConversions, Inc, ("NetConversions") has a solution that
incorporates an innovative approach to behavior profiling and promotions,
allowing e-commerce managers maximum flexibility to change their website
marketing. The product is a turnkey ASP solution that requires minimal client
integration and engineering. The Company has provided a bridge loan of $100,000
to NetConversions that is convertible to equity at a discounted rate. The
Company fully reserved the balance due to NetConversions' industry and financing
issues as of November 30, 2000. Based upon the adverse conditions of the private
equity capital markets there is greater uncertainty and there can be no
assurance that NetConversions will be successful raising sufficient funding to
support its current business model.

                                      F-11
<PAGE>

         In August 2000, the Company invested $500,000 in S2 Technologies
("S2"). The Company is also providing senior management advisory services in
exchange for additional equity in S2. The Company's total ownership in S2 is in
excess of 25.5%. S2's focus is to provide value-added tools that address the
development, integration and verification phases of the embedded software. The
goal is to increase software developers' and engineers' productivity and improve
their products time to market. S2 has entered into a beta agreement with LSI
Logic and it expects to release its first product in late summer 2001. S2 is
currently in the process of raising its second round of financing and is
currently in the process of presenting to numerous top tier venture capital
funds. Subsequent to year end, the Company has made a commitment to fund
approximately $250,000 out of a total of $350,000 to S2 in the form of a bridge
loan. Given the limited capital resources of S2 at the time the Company made its
original investment, the Company began recognizing losses in its investments in
S2 based upon the Company's pro-rata share of the most recent S2 financing
round. Oryx has recognized losses of S2 for the year ended February 28, 2001,
totaling $257,000, which are included in loss on investments. At February 28,
2001, this investment value was $243,000. The brother of the Company's Chief
Financial Officer serves as Chief Executive Officer of S2.

         Summarized unaudited financial information for S2 Technologies, Inc.
for the fiscal year ended February 28, 2001 is as follows:

                                            At February 28, 2001
                                           ---------------------

Current assets                                   $ 322,000
Non-current assets                                  54,000
Current liabilities                                 36,000
Non-current liabilities                                  -
Redeemable preferred stock                         700,000


                                                 Year Ended
                                              February 28, 2001
                                           ---------------------

Net Sales                                                -
Gross Profit                                             -
Loss from continuing operations                   (376,000)
Net loss                                          (359,000)


6.   Continental Capital & Equity Corporation Transaction

         During fiscal 1999, the Company entered into a seventeen-month
marketing agreement to receive investor relations services from Continental
Capital and Equity Corporation. In consideration for services to be rendered,
the Company agreed to issue 162,000 shares of common stock over defined periods,
40,500 shares of common stock which are contingently issuable upon certain
milestones and an immediately exercisable warrant to purchase 60,000 shares of
common stock at $1.09, with a two-year term. The Company issued 81,000 and
121,500 shares of common stock to Continental Capital & Equity Corporation in
fiscal 2000 and 1999, respectively, under this agreement. The Company recorded
expense of $177,000 and $147,000 during fiscal 2000 and fiscal 1999,
respectively, relating to the services received which was based on the Company's
stock price during the fiscal years. The Company also issued the warrant during
fiscal 1999 and amortized the value of $29,000 relating to the warrant over the
agreement term.

                                      F-12
<PAGE>

7.   Series A 2% Mandatorily Redeemable 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% Mandatorily Redeemable 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. The Company had
reserved 43,763 shares of Common Stock for issuance upon conversion of the
Series A Stock as of February 28, 2001. The holders of Series A Preferred 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 a 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. A change in the majority of the voting control of the outstanding
stock is considered a liquidation event which could cause the Series A stock to
be redeemed. 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.

8.   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. Under the 1995 Director's Plan, shares vest in three
equal annual installments of 15,000 shares on the first, second and third
anniversaries of the date of the grant. Under 1996 Director's Plan, 10,000
shares vest and are exercisable upon grant with the remainder vesting in equal
annual installments on the first and second anniversaries of the date of grant.
The Company has 225,000 shares authorized under the 1995 Directors' Plan of
which 135,000 options were outstanding with an average exercise price of $1.67
per share as of February 28, 2001. The Company has 250,000 shares authorized
under the 1996 Directors' Plan of which 150,000 options were outstanding with an
average exercise price of $1.80 per share as of February 28, 2001.

                                      F-13
<PAGE>

         In fiscal 1999, as part of its sale of the Power Products business, the
Company issued non-statutory options under a special Stock Option Plan to former
key employees of Oryx Power Products to purchase a total of 205,000 shares of
the Company's Common Stock at an exercise price of $0.95 per share and 50,000
shares at an exercise price of $0.25 per share. As of February 28, 2001, there
were no outstanding shares under this plan.

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

<TABLE>
<CAPTION>
                                          Shares                                  Weighted-
                                        Available                                  Average
                                           For                                 Exercise Price
                                          Grant              Shares               Per Share
                                        --------             ------            ---------------

<S>                                       <C>               <C>                     <C>
Balance at February 28, 1999              377,800           3,507,421               $ 1.47

Additional shares authorized              215,000                   -
Options granted                          (270,000)            270,000               $ 1.96
Options canceled and expired              114,062            (114,062)              $ 1.43
Options exercised                               -            (446,906)              $ 1.06
                                         --------           ---------
Balance at February 29, 2000              436,862           3,216,453               $ 1.57

Additional shares authorized                    -                   -
Options granted                          (376,750)            376,750               $ 2.31
Options canceled and expired              274,500            (274,500)              $ 2.01
Options exercised                                            (232,125)              $ 1.39
                                         --------           ---------
Balance at February 28, 2001              334,612           3,086,578               $ 1.63
                                         ========           =========
</TABLE>


                                      F-14
<PAGE>

         The following table summarizes information about employee stock options
at February 28, 2001:

<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>
$0.69 - 1.00             106,500           5.6                  $0.80                 71,500               $0.86
$1.07 - 1.58           1,610,078           6.4                   1.39              1,342,012                1.39
$1.79 - 2.31           1,370,000           6.3                   1.98                991,892                1.93
                       ---------                                                   ---------
   Total               3,086,578           6.3                  $1.63              2,405,404               $1.60
                       =========                                                   =========
</TABLE>


     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, 2001, there were 304,000 fully vested and exercisable
options to purchase shares of SurgX Corporation class B common stocks. These
options had an average exercise price of $0.80 and an average remaining
contractual life of 4.4 years. There was no activity under the SurgX subsidiary
stock option plan during fiscal 2001 and fiscal 2000. At February 28, 2001 and
February 29, 2000 there were 1,196,000 shares available for grant.

         During fiscal 1998, the Company sold 333,000 Class A shares of SurgX
Corporation for net proceeds of $485,000. At February 28, 2001, 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.

     Fair Value Disclosures

         Had compensation cost for all 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 2001 would have been
$2,281,000 and $0.14, respectively, and in fiscal 2000 would have been
$2,687,000 and $0.18, 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 97% for fiscal 2001 and 86% for fiscal
2000; risk-free interest rate of 6.33% for fiscal 2001 and 5.98% for fiscal 2000
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 2001 and 2000 was $1.85 and $1.45, respectively. The weighted
average fair value of options to purchase common shares of the Company's
subsidiaries were not material during fiscal years 2001 and 2000.

                                      F-15
<PAGE>

     Warrants

         The following warrants at February 28, 2001, and the number of shares
of the Company's Common Stock which may be purchased at exercise, were
outstanding and exercisable at February 28, 2001:

  Original            Issuable        Warrant           Warrant         Warrant
  Warrants             Common       Commencement      Expiration       Exercise
 Outstanding           Shares          Date              Date            Price
 -----------          -------       ------------      ----------       --------

    37,500             37,500        Oct. 1994         Oct. 2004         $2.00
   379,000            572,290        Nov. 1994         Oct. 2004         $2.00
   400,000            400,000        Feb. 1996         Mar. 2001         $1.00
   100,000            100,000        Feb. 1996         Mar. 2001         $5.00
   -------          ---------
   916,500          1,109,790
   =======          =========


9.   Research Contracts and Development Funding

         The Company has been 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 $128,000 and $216,000 during fiscal 2000.
These contracts were completed during the fiscal 2000. During fiscal 2001, the
Company was no longer engaged in any research contracts and no amounts for
research contracts or development funding were recorded.


10.  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
uncertainty regarding the realizability of deferred tax assets such that a full
valuation allowance is required at February 28, 2001.

                                      F-16
<PAGE>

         The tax effects of temporary differences and carryforwards that give
rise to significant portions of deferred tax assets and liabilities at February
28, 2001 and February 29, 2000 are as follows:

                                                  February 28,     February 29,
                                                  2001             2000
                                                  ------------------------------

     Net operating loss carryforwards             $ 5,704,000      $  4,884,000
     R&D credit carryforwards                         309,000           436,000
     Deferred revenue                                       -             8,000
     Intangibles                                       44,000            48,000
     Fixed assets                                      (2,000)            7,000
     Other                                            277,000           271,000
                                                  ------------------------------
          Net deferred tax assets                   6,332,000         5,654,000
     Valuation allowance                           (6,332,000)       (5,654,000)
                                                  ------------------------------
          Net deferred tax assets                 $         -      $          -
                                                  ==============================


         No provision for federal income taxes has been recorded because of
losses incurred. The provision for (benefit from) income taxes reconciles to the
amounts computed by applying the statutory federal rate to loss before income
taxes as follows:

                                                 February 28,     February 29,
                                                 2001             2000
                                                 -------------------------------

     Statutory U.S. federal tax rate             $   (724,000)    $   (683,000)
     Valuation allowance with respect
        to federal deferred tax assets                678,000          727,000
     Other                                             46,000          (44,000)
                                                 -------------------------------
     Effective tax                               $          -     $          -
                                                 ===============================


                                      F-17
<PAGE>

         At February 28, 2001, the Company had federal net operating loss and
research and development credit carryforwards of approximately $15,640,000 and
$158,675, respectively. Approximately $695,000 of the Company's net operating
losses resulted from the exercise of non-qualified stock options. The benefit
derived from these net operating loss carryforwards will be recorded directly to
stockholders equity when realized rather than as a reduction of the income tax
provision. Federal net operating loss and research and development credit
carryforwards will expire on various dates from 2004 through 2021, 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 change of greater than 50% and, accordingly, the future utilization of
federal net operating loss and research and development credit carryforwards
generated through dates of such offerings may be limited.

11.  Commitments and Contingencies

         The Company leases its facilities and certain equipment under operating
lease agreements, which expire in various periods through 2002.

         Future minimum lease obligations are payable as follows:

                                                            Operating
Year Ending February                                          Leases
                                                            ---------
    2002                                                    $ 132,000
    2003                                                        1,000
                                                            ---------
    Total minimum lease payments                            $ 133,000
                                                            =========

         Rental expense for the years ended February 28, 2001 was $260,000
offset by rent payments received from sublessees for $264,000. This compares to
rental expense for the year ended February 29,2001 of $260,000, offset by rent
payments received from sublessees for $87,000.

12.  Related Parties

         On February 1999, the Company received 54,455 shares of Common Stock of
Applied Magnetics Corp. ("Applied Magnetics") assigned to it by the Company's
Chief Executive Officer. The CEO received the shares in connection with his
providing consulting services to DAS Devices, a magnetic read-write head
manufacturer that recently merged with Applied Magnetics. The shares of Applied
Magnetics Common Stock received by the Company in this transaction were
restricted until a registration statement filed by Applied Magnetics with the
Securities and Exchange Commission was declared effective by the Commission. As
a result, the Company recorded $218,000 as other income equal to the fair market
value of the shares received as of February 29, 2000. These shares were sold by
the Company in July 1999 recording proceeds of $151,000 and a loss on sale of
investment of $67,000.

         During fiscal 1999, the Company made a loan to an employee for $35,000,
at a rate of 7% per annum, repayable at the earlier of July 15, 2000, or thirty
days after the debtor ceases to be a full-time employee of the Company. During
fiscal 2000, the due date of this loan was extended to July 15, 2001. The
outstanding balance was $9,000 as of February 28, 2001 and $13,000 as of
February 29, 2000.

                                      F-18
<PAGE>

13.  Segment Information

         The Company groups its business into two operating segments and a
corporate segment (as defined by SFAS No. 131 "Disclosure about Segments and
Enterprise and Related Information."): (i) SurgX, the subsidiary through which
it licenses its surge protection technology; (ii) Oryx Ventures, the entity
which provides strategic and management services and investment to
technology-oriented start-up companies; and (iii) the corporate segment which
supports and provides administrative, accounting and financial services to the
operating segments, and collects royalties from our Intragene Technology.

<TABLE>
<CAPTION>
                                                           Year Ended         Year Ended
                                                          February 28,       February 29,
                                                              2001               2000
                                                          ------------       ------------
<S>                                                           <C>                <C>
Revenues:
  Surgx                                                     $   200,000       $    378,000
  Oryx Ventures                                                 213,000                  -
  Corporate                                                     237,000            377,000
                                                            -----------       ------------
                                                            $   650,000       $    755,000
                                                            ===========       ============

Operating loss:
  Surgx                                                     $  (287,000)      $ (1,225,000)
  Oryx Ventures                                                (287,000)                 -
  Corporate                                                    (885,000)        (1,564,000)
                                                            -----------       ------------
                                                            $(1,459,000)       $(2,789,000)
                                                            ===========       ============

Depreciation and amortization expense:
  Surgx                                                     $   144,000       $    111,000
  Corporate                                                       9,000             22,000
                                                            -----------       ------------
                                                            $   153,000       $    133,000
                                                            ===========       ============

Identifiable assets:
  Surgx                                                     $   164,000       $    292,000
  Oryx Ventures                                                 299,000                  -
  Corporate                                                   3,394,000          5,697,000
                                                            -----------       ------------
                                                            $ 3,857,000       $  5,989,000
                                                            ===========       ============

</TABLE>
         Loss on investments, net of $877,000 for the year ended February 28,
2001 relates to the Oryx Ventures segment of which $257,000 represents losses on
equity investments and $620,000 represents the loss on investments accounted for
under the cost method. Included in identifiable assets of Oryx Ventures at
February 28, 2001, is $243,000 which represents the value of investments
accounted for under the equity method (see Note 5).

                                      F-19
<PAGE>


         The Company licenses its technologies both domestically and
internationally and provides management services primarily domestically. Revenue
by geographic region is as follows:

                                     Year Ended             Year Ended
                                    February 28,           February 29,
                                        2001                   2000
                                    -----------            ------------

Net Revenues:
  United States                       $ 530,000             $ 676,000
  Japan                                 120,000                79,000
                                      ---------             ----------
  Net Revenues                        $ 650,000             $ 755,000
                                      =========             ==========

         All sales are denominated in United States dollars. All of the
Company's assets are located within the United States.





                                      F-20