ENTROPIN INC, POS EX, 2000-03-22

ENTROPIN INC
POS EX, 2000-03-22
MANAGEMENT SERVICES

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As filed with the Securities and Exchange Commission on March 22, 2000

Registration No. 333 - 11308
- ---------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________

POST EFFECTIVE AMENDMENT NO. 1
to

FORM SB-2
REGISTRATION STATEMENT
under the
SECURITIES ACT OF 1933

ENTROPIN, INC.
(Name of small business issuer in its charter)

Colorado 283 84-1090424
-------- --------------------------- ----------
(State or jurisdiction (Primary Standard Industrial I.R.S. Employer
of incorporation or Classification Code Number) Identification Number)
organization)

Entropin, Inc.
45926 Oasis Street
Indio, California 92201
(760)775-8333
(Address and telephone number of principal
executive offices and principal place of business)
_______________________

Higgins D. Bailey
Chairman of the Board
Entropin, Inc.
45926 Oasis Street
Indio, California 92201
(760) 775-8333
(Name, address and telephone number of agent
for service)

COPIES TO:

A. Thomas Tenenbaum, Esq. Gary A. Agron, Esq.
Brenman Bromberg & Tenenbaum, P.C. 5445 D.T.C. Parkway, Suite 520
Mellon Financial Center Englewood, Colorado 80111
1775 Sherman Street, Suite 1001 (303) 770-7254
Denver, Colorado 80203 (303) 770-7257 FAX
(303) 894-0234
(303) 839-1633 FAX

APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT.

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering.[ ]

If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.[X]

If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.[X]

The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this registration statement shall thereafter become effective in accordance
with section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said section 8(a), may determine.

<PAGE>

<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE

===================================================================================================
Title of each
class of Amount Proposed maximum
securities to to be Proposed maximum aggregate offering Amount of
be registered registered offering price(1) price(1) registration fee
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock(2) 2,300,000 $4.25 $9,775,000 $2,717
- ---------------------------------------------------------------------------------------------------

Warrants to purchase one share 2,300,000 $ .25 $ 575,000 $ 160
of Common Stock(3)
- ---------------------------------------------------------------------------------------------------

Common Stock issuable upon 200,000 $5.10 $1,020,000 $ 284
exercise of the Representative's
Warrants(4)
- ---------------------------------------------------------------------------------------------------

Warrants to purchase one share 200,000 $ .30 $ 60,000 $ 17
of Common Stock issuable upon
exercise of the Representative'
Warrants(4)
- ---------------------------------------------------------------------------------------------------

Common Stock issuable upon
exercise of Warrants, including
Warrants underlying the
Representative's Warrants(5) 2,500,000 $6.375(6) $15,937,500 $4,431
- ---------------------------------------------------------------------------------------------------

TOTAL $27,367,500 $7,609

- ---------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rules 457(a) and (g).
(2) Includes 300,000 shares of Common Stock that the underwriters have the
option to purchase to cover over-allotments, if any.
(3) Includes 300,000 Warrants to purchase one share of Common Stock that
the underwriters have the option to purchase to cover over-allotments,
if any.
(4) In connection with the sale of the Common Stock and Warrants, the
Registrant is granting the representative: a.) warrants to purchase
200,000 shares of Common Stock; and, b.) warrants to purchase warrants
which are exercisable to purchase 200,000 shares of Common Stock (the
"Representative's Warrants").
(5) Pursuant to Rule 416, there are also being registered such additional
shares of Common Stock as may be issuable pursuant to the anti-dilution
provisions of the Warrants and the Representative's Warrants.
(6) Pursuant to Rule 457(i) the registration fee for the Warrants is
calculated based on the exercise price of the Warrants.

____________________

<PAGE>
PROSPECTUS

ENTROPIN, INC. [Logo]

2,000,000 Shares of Common Stock
and
2,000,000 Redeemable Common Stock Purchase Warrants

We are offering shares of common stock and warrants to purchase shares
of common stock in units consisting of one share and one warrant. The
common stock and warrants will trade as separate securities immediately
after this offering. For a description of the terms of the warrants, see
"Prospectus Summary - The Offering - Warrants" on page 7.

Our common stock is traded on the NASD OTC Bulletin Board under the
symbol "ETOP". On March 13, 2000, the closing bid price of the common
stock was $8.625 per share. Our common stock and warrants will be listed
under the symbols "ETOP" and "ETOPW" on the Nasdaq SmallCap Market
after this offering.

THESE ARE SPECULATIVE SECURITIES. INVESTING IN THE SHARES AND
WARRANTS INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 9.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
PER PER
SHARE WARRANT TOTAL
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Public offering price. . . . . . . . . . . . . $7.00 $0.25 $7.25
- ----------------------------------------------------------------------------------
Underwriting discounts and commissions . . . . $0.56 $0.02 $0.58
- ----------------------------------------------------------------------------------
Proceeds to Entropin, Inc. . . . . . . . . . .$12,880,000 $460,000 $13,340,000
- ----------------------------------------------------------------------------------
</TABLE>

We have granted a 45-day option to the underwriter to purchase up to
300,000 additional shares and 300,000 additional warrants to cover over-
allotments.

NEIDIGER, TUCKER, BRUNER, INC.

WESTPORT RESOURCES INVESTMENT SERVICES, INC.

March 14, 2000

<PAGE>
3 PHOTOS INSIDE FRONT COVER:

[PHOTO 1]

Vial containing Esterom(R) solution

[PHOTO 2]

Esterom(R) solution being applied to patient's shoulder

[PHOTO 3]

Mobility measurement of patient's shoulder

<PAGE>
Please read this prospectus carefully. It describes our business, our
product and our finances. We have prepared this prospectus so that you
will have the information necessary to make an investment decision.

You should rely only on the information contained in this prospectus.
We have not authorized anyone to provide you with information different
from that contained in this prospectus. We are offering to sell, and
seeking offers to buy shares and warrants only in jurisdictions where
offers and sales are permitted. The information contained in this
prospectus is accurate only as of the date of this prospectus, regardless
of the time of delivery of this prospectus or any sale of our securities.

STATE NOTICES

ARIZONA RESIDENTS: The securities offered pursuant to this prospectus may
only be purchased by Arizona residents who satisfy us that they meet the
following financial suitability requirements: The Arizona resident
purchaser must have either (a) annual gross income of at least $100,000, or
$150,000 combined with spouse, during the year prior to this offering and
a reasonable expectation of such income in the current year, or, (b) a
minimum net worth of $250,000, or $300,000 when combined with spouse,
(exclusive of home, home furnishings and automobiles) and the investment in
the securities does not exceed 10% of the net worth of the investor,
together with spouse if applicable.

CALIFORNIA RESIDENTS: The securities offered pursuant to this prospectus
may only be purchased by California residents who satisfy us that they meet
the following financial suitability requirements: The California resident
purchaser must have either (a) annual gross income of at least $65,000 and
a minimum net worth (exclusive of home, home furnishings and automobiles)
of $250,000; or, (b) a minimum net worth (exclusive of home, home
furnishings and automobiles) of $500,000.

NEW JERSEY RESIDENTS: Offers and sales in this offering in New Jersey may
only be made to accredited investors as defined in Rule 501 of Regulation D
under the Securities Act of 1933. Under Rule 501, to be an accredited
investor an individual must have (a) a net worth or joint new worth with
the individual's spouse of more than $1,000,000 or (b) income of more than
$200,000 in each of the two most recent years or joint income with the
individual's spouse of more than $300,000 in each of those years and a
reasonable expectation of reaching the same income level in the current year.
Other standards apply to investors who are not individuals. There will be no
secondary sales of the securities to persons who are not accredited investors
for 90 days after the date of this offering in New Jersey by the underwriter
and selected dealers.

NORTH DAKOTA RESIDENTS: The securities offered pursuant to this prospectus
may only be purchased by North Dakota residents who satisfy us that they
meet the following financial suitability requirements: The North Dakota
resident purchaser must have either (a) annual gross income of at least
$45,000 and a minimum net worth (exclusive of home, home furnishings and
automobiles) of $45,000; or, (b) a minimum net worth (exclusive of home,
home furnishings and automobiles) of $100,000.

WASHINGTON RESIDENTS: Offers and sales in this offering in Washington may
only be made to accredited investors as defined in Rule 501 of Regulation D
under the Securities Act of 1933. Under Rule 501, to be an accredited
investor an individual must have (a) a net worth or joint new worth with
the individual's spouse of more than $1,000,000 or (b) income of more than
$200,000 in each of the two (2) most recent years or joint income with the
individual's spouse of more than $300,000 in each of those years and a
reasonable expectation of reaching the same income level in the current year.
Other standards apply to investors who are not individuals.

3
<PAGE>

TABLE OF CONTENTS

Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Dividend Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Price Range of our Common Stock. . . . . . . . . . . . . . . . . . . . 13
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . 15
Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . . . . . . . 16
Our Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Summary Compensation Table . . . . . . . . . . . . . . . . . . . . . . 26
Principal Stockholders . . . . . . . . . . . . . . . . . . . . . . . . 28
Related Party and Other Material Transactions. . . . . . . . . . . . . 29
Description of Securities. . . . . . . . . . . . . . . . . . . . . . . 30
Shares Eligible for Future Sale. . . . . . . . . . . . . . . . . . . . 32
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . 36
Index to Financial Statements. . . . . . . . . . . . . . . . . . . . .F-1

We are a reporting company under the Securities Exchange Act of 1934.
We have filed periodic reports, including Annual Reports containing
financial statements of the Company audited by independent public
accountants, and quarterly reports, which contain unaudited financial
statements, with the Securities and Exchange Commission. Copies of such
reports can be obtained at prescribed rates by written request addressed to
the Commission, Public Reference Section, 450 Fifth Street, NW, Washington,
D. C. 20549. In addition, we have filed with the Securities and Exchange
Commission, a registration statement on Form SB-2 under the Securities Act
with respect to the shares and warrants offered.

4
<PAGE>
PROSPECTUS SUMMARY

This summary highlights selected information that we present more
fully in other sections of this prospectus. To understand this offering,
you should read the entire prospectus carefully, including the risk factors
and financial statements.

ENTROPIN

Entropin, is a development stage pharmaceutical company that has
developed Esterom(R) solution, a topical formulation for the treatment of
conditions involving impaired range of motion. Impaired range of motion
often accompanies injuries and disorders of the shoulder and lower back, as
well as other conditions of the joints. Esterom(R) solution is derived
from a process involving the chemical breakdown of cocaine into new and
different molecules, three of which have been patented by us. We have
completed four preclinical animal studies and Phase I and Phase II human
clinical trials for Esterom(R) solution. These trials indicated that
Esterom(R) solution was well tolerated at the dose used. Moreover, the
range of motion with patients suffering from shoulder and back conditions
was improved significantly when compared with patients receiving a placebo.
The trials also indicated that Esterom(R) solution did not appear to have
any potential for addiction or abuse. We began Phase III trials for
treatment of impaired range of motion due to shoulder injuries and
functionality in November 1999. We expect to complete our Phase III trials
and submit a new drug application to the FDA in early 2001.

OUR MARKET OPPORTUNITY

If we obtain FDA approval, we believe that there will be a substantial
market for Esterom(R) solution based on the following:

* 40 million Americans suffer from lower back conditions, according to
a 1999 report by the American Academy of Orthopedic Surgeons.

* Over 7 million Americans suffer from shoulder injuries or disorders,
according to a 1996 report by the Center for Disease Control, National
Center for Health Statistics.

* Nearly 17.5 million Americans seek prescriptive drug therapy annually
for the treatment of painful shoulder, acute back strain or related
conditions, according to the National Ambulatory Medical Care Survey
1998 report by the National Center for Health Statistics.

* In its most recent report on lower back pain issued in 1994, the U.S.
Agency for Health Care Policy and Research indicated that back pain
was the second most common reason, after the common cold, for seeing
a doctor and costs associated with back pain, including lost
productivity, exceeded $50 billion a year.

* Treatments for impaired range of motion for lower back and shoulder
conditions include steroidal drugs, non-steroidal anti-inflammatory
drugs such as ibuprofen and muscle relaxants, all of which reduce pain
but do not necessarily improve impaired range of motion.

OUR STRATEGY

Our initial goal is to complete the commercialization of Esterom(R)
solution. If we succeed, we will seek to develop products for related
muscle and joint disorders. In order to achieve our goals, we plan to:

* Seek FDA approval to market Esterom(R) solution for the treatment of
impaired range of motion associated with shoulder function;

* Seek FDA approval to market Esterom(R) solution for the treatment of
impaired range of motion associated with lower back sprain;

5
<PAGE>

* Identify and develop other related medical applications for Esterom(R)
solution, such as the treatment of arthritis and other joint disorders;

* Identify and develop international markets; and

* Minimize our fixed costs by outsourcing clinical studies, regulatory
activities, manufacturing and sales and marketing.

Entropin is a Colorado corporation. Our corporate offices are located
at 45926 Oasis Street, Indio, California 92201, telephone number (760)
775-8333. Esterom(R) solution is a trademark registered with the United
States Patent and Trademark Office. Our Web site is located at
www.entropin.com. Information contained in our Web site should not be
considered a part of this prospectus.

6
<PAGE>
THE OFFERING

Unless otherwise indicated, all information in this prospectus assumes
no exercise of the over-allotment option granted to the underwriters to
purchase additional shares and warrants.

Securities offered. . . . . 2,000,000 shares of common stock and
2,000,000 warrants to purchase 2,000,000
shares of common stock. The securities are
offered in units consisting of one share and
one warrant. The common stock and warrants
will trade separately immediately after the
offering.

Warrants. . . . . . . . . . The warrants will be exercisable at $10.50
per share at any time until five years from
the date of this prospectus. We may not
redeem the warrants for at least one year
after the date of this prospectus. After
that date, if the closing bid price of our
common stock on each of the 10 consecutive
trading days preceding our notice of
redemption is greater than or equal to
$17.25, we may redeem some or all of the
outstanding warrants upon 30 days' prior
written notice to the holders. The
redemption price will be $0.25 per warrant.
If we give notice of redemption, holders of
the warrants will have 30 days during which
they may elect to exercise the warrants,
sell the warrants or allow the warrants to
be redeemed for the redemption price.

Common stock outstanding. . 7,382,280 shares of common stock were
outstanding on March 10, 2000. After the
offering, there will be 9,382,280 shares
outstanding. Shares outstanding exclude up
to 3,790,001 shares of common stock issuable
on exercise of outstanding options, warrants
and convertible securities.

Risk Factors. . . . . . . . An investment in the shares and warrants
involves a high degree of risk. You should
not consider purchase of the shares and
warrants unless you can afford to lose your
entire investment.

Use of proceeds . . . . . . To fund costs associated with Phase III
clinical trials; the FDA approval process
for Esterom(R) solution; research and
development of additional applications of
Esterom(R) solution; general and
administrative expenses; and working capital.

7
<PAGE>
SUMMARY FINANCIAL DATA

The following selected financial data should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the Financial Statements and notes thereto. The
selected financial data as of December 31, 1998 and 1999, and for the years
then ended are derived from audited financial statements included in this
prospectus.

<TABLE>
<CAPTION>
Cumulative
amounts from
inception
through
STATEMENT OF OPERATIONS Years ended December 31, December 31,
DATA: ------------------------ ------------
1999 1998 1999
---- ---- ----
<S> <C> <C> <C>
Revenue $ -0- $ -0- $ -0-

Research and development 1,743,837 906,719 6,597,410

Other costs and expenses 3,195,425 1,857,908 5,920,654
------------ ------------ ------------

Net loss (4,939,262) (2,764,627) (12,518,064)

Accrued dividends applicable
to Series B preferred stock (119,300) (56,260) (175,560)
------------ ------------ ------------

Net loss applicable to
common shareholders $ (5,058,562) $ (2,820,887) $(12,693,624)
============ ============ ============

Basic and diluted net loss per
common share $ (.75) $ (.47) $ (2.36)
============ ============ ============

Weighted average number of
shares outstanding 6,749,000 5,968,000 5,374,000
============ ============ ============
</TABLE>

BALANCE SHEET DATA:
The unaudited proforma balance sheet data reflects the issuance of
securities in this offering.

Unaudited
Pro forma
December 31, December 31,
1999 1999
------------ ------------

Cash and cash equivalents . . . . . . . . $2,260,526 $15,059,951
Working capital . . . . . . . . . . . . . 1,937,721 14,737,146
Total assets. . . . . . . . . . . . . . . 2,825,225 15,455,225
Total liabilities . . . . . . . . . . . . 506,876 506,876
Redeemable preferred stock. . . . . . . . 4,303,662 4,303,662
Stockholders' equity (deficit). . . . . . (1,985,313) 10,644,687

8
<PAGE>
RISK FACTORS

The offering involves a high degree of risk. You should carefully
consider the risks and uncertainties of this offering described below and
other information in this prospectus before investing in our common stock.
If any of these risks occur, our business, results of operation and
financial condition could be adversely affected. This could cause the
trading price of our common stock to decline, and you might lose part or
all of your investment.

Many of the statements in this prospectus constitute forward-looking
statements. These statements involve known and unknown risks,
uncertainties, and other factors that may cause our results, levels of
activity, performance or achievements to be materially different from those
implied by these forward-looking statements. In some cases, you can
identify forward-looking statements by terminology such as "may," "will,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," "continue" or the negative of these terms or other
comparable terminology.

Although we believe that the expectations reflected in the forward-
looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Moreover, neither we nor
any other person assumes responsibility for the accuracy and completeness
of these statements. We are under no duty to update any of the forward-
looking statements after the date of this prospectus.

WE HAVE A LIMITED OPERATING HISTORY, A HISTORY OF LOSSES AND EXPECT FUTURE
LOSSES.

We have no operating history upon which an investor can base an
evaluation of our company and our prospects. Our auditor's report for year
end December 31, 1999 expressed doubt about our ability to continue as a
going concern. We have had losses from operations since our inception in
1984 to December 31, 1999, totaling $12,518,064, and we expect to incur
future losses from operations. At December 31, 1999 we had a total
stockholders deficit of $1,985,313. We expect our operating expenses to
significantly increase over the next several years due to clinical testing
and other expenses related to seeking FDA approval. Our ability to achieve
profitable operations is dependent on obtaining regulatory approval for
Esterom(R) solution, entering into agreements for product development and
commercialization, and expanding from development into successful
marketing, all of which require significant amounts of capital. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" beginning on page 16 and "Use of Proceeds" on page 13.

WE ARE DEPENDENT ON THE PROCEEDS OF THIS OFFERING AND MAY REQUIRE
ADDITIONAL CAPITAL.

We have financed our business through the sale of securities and
advances from stockholders and have had no revenue from operations. We are
dependent upon the proceeds of this offering to fund continuing operations
and management has broad discretion as to the application of the proceeds.
We may require additional capital to fund our operations.

WE WILL NOT BE ABLE TO MARKET ESTEROM(R) SOLUTION UNLESS WE OBTAIN REQUIRED
REGULATORY APPROVAL.

The FDA approval process generally takes years and consumes
substantial capital resources with no assurance of ultimate success. We
cannot apply for FDA approval to market Esterom(R) solution until the
product successfully completes the required Phase III clinical trials.
Several factors may prevent our successful completion of the Phase III
clinical trials including:

* insufficient capital resources;

* inability to obtain the required number of patients to complete
the trials; and,

* insufficient proof that Esterom(R) solution is safe and
effective.

The regulatory approval processes differ among foreign jurisdictions
and approval in one jurisdiction does not ensure other approvals. As a
result, we may be required to undertake additional trials and incur
additional expense in order to obtain foreign approvals. Even if we
complete the trials, we may be unable

9
<PAGE>
to obtain FDA approval of Esterom(R) solution. Failure to obtain FDA or
foreign jurisdictional approval would negatively impact our business. See
"Our Business - Government Regulation" beginning on page 20.

IF WE LOSE OUR ESTEROM(R) SOLUTION MANUFACTURER, WE WILL BE UNABLE TO BRING
ESTEROM(R) SOLUTION TO MARKET.

We are dependent upon Mallinckrodt, Inc., our sole supplier, to
provide us with cocaine as a raw material from which the active ingredients
in Esterom(R) solution are derived. If Mallinckrodt is unable or unwilling
to supply us, we may be unable to bring Esterom(R) solution to market. See
"Our Business - Outsourcing" on page 19.

OUR SUCCESS DEPENDS UPON ESTEROM(R) SOLUTION'S ACCEPTANCE BY PHYSICIANS,
INSURANCE COMPANIES AND THE PUBLIC.

Sales of Esterom(R)'s solution depend on acceptance of the product by
physicians, insurance companies who provide pharmaceutical coverage and the
public as an alternative to, or in combination with, other therapies for
the treatment of impaired range of motion associated with painful shoulder
and other conditions.

ESTEROM(R) SOLUTION'S CLASSIFICATION AS A CONTROLLED SUBSTANCE MAY LIMIT
SALES AND INCREASE COSTS.

As a controlled substance, Esterom(R) solution will be subject to
expensive and burdensome administrative requirements which will increase
our costs. Moreover, these administrative requirements may discourage
Esterom(R) solution's use and acceptance by the medical community. See
"Our Business - DEA Status" on page 21.

WE WILL BE DEPENDENT UPON THIRD PARTIES TO MARKET ESTEROM(R) SOLUTION.

We have no experience in the sale or marketing of pharmaceutical
products and will be dependent upon third parties to sell and market
Esterom(R) solution. If we are unable to enter into satisfactory marketing
arrangements, our sales will be adversely affected. See "Our Business -
Outsourcing" on page 19.

IF WE ARE UNABLE TO DEFEND OUR ESTEROM(R) SOLUTION PATENTS OR IF OTHERS
DEVELOP SUBSTANTIALLY EQUIVALENT PRODUCTS, OUR BUSINESS COULD BE IMPACTED.

Our patents, trademarks and other intellectual property rights are
important to our success. Patent litigation can be extremely expensive and
time consuming. If we are unable to defend our existing patents or if
others develop similar products beyond the protection of our existing
patents, our business could be impaired. See "Our Business - Patents" on
page 19.

WE WILL BE EXPOSED TO PRODUCT LIABILITY CLAIMS.

We will be exposed to potential product liability claims which are
inherent in the testing, manufacturing, marketing and sale of
pharmaceutical products, and product liability claims may be asserted
against us. Product liability insurance for the pharmaceutical industry is
expensive. There can be no assurance that adequate insurance coverage will
be available to us at acceptable costs, or that a product liability claim
would not adversely affect our business or financial condition. See "Our
Business - Product Liability Insurance" on page 21.

10
<PAGE>
A LARGE NUMBER OF OUR SHARES OF COMMON STOCK ARE ELIGIBLE FOR FUTURE SALE
WHICH COULD LOWER OUR MARKET PRICE.

Sales of common stock after the offering, or even the potential for
those sales, are likely to lower the market price of our common stock. In
addition, these sales may negatively affect our ability to raise needed
capital through the sale of our common stock. The table below indicates
the number of shares outstanding, the number of shares issuable upon
exercise of options, warrants and convertible securities and which of such
shares are free trading and restricted.

NUMBER OF
SHARES DESCRIPTION

7,382,280 Common stock currently outstanding

6,028,082 Free trading common stock outstanding

3,559,501 Common Stock issuable upon exercise of currently
outstanding options and warrants

2,000,000 Common stock issuable upon exercise of warrants
outstanding upon completion of offering

230,500 Common stock issuable upon conversion of Series B
convertible preferred stock
1,354,198 Common stock available for sale under Rule 144 of the
Securities Act

Other than 127,500 shares, all remaining 4,179,564 shares owned by our
directors, officers, and 5% or greater stockholders, and substantially all
of the shares underlying the outstanding options and warrants are subject
to lock-up agreements which expire one year after the date of this
prospectus unless released sooner upon the written consent of the
representatives. When the lock-up period expires, the 4,179,564 shares
subject to lock-up and the shares issuable upon exercise of options and
warrants, and conversion of preferred stock will be eligible for sale which
will have a depressive effect on the market price of our common stock. See
"Shares Eligible for Future Sale" on page 32 and "Description of Securities
- - Other Options, Warrants and Convertible Securities" on page 31.

INVESTORS WILL EXPERIENCE DILUTION OF BOOK VALUE OF SHARES PURCHASED IN THE
OFFERING.

Net tangible book value per share at December 31, 1999 and prior to
the offering is $(.34) per share. Upon the sale of 2,000,000 shares of
common stock at $7.00 per share, net tangible book value per share after
the offering will be $1.10 per share, resulting in dilution of $5.90 or
84% to investors in the offering. Current shareholders purchased their
shares at a price below the price of the shares being offered.

OUR CONTROL WILL NOT CHANGE AFTER THE OFFERING.

After the completion of this offering, the officers, directors and
other principal shareholders will continue to own a majority of our common
stock, and have voting control over us.

OUR STOCK HAS BEEN THINLY TRADED AND IS SUBJECT TO PRICE VOLATILITY.

Before this offering, our stock traded on the NASD OTC Bulletin Board.
Historically:

* our Company has not been covered by regular reports from
financial analysts of established standing;

* the limited amount and distribution of our stock has exacerbated
the effect of relatively small imbalances in supply and demand;
and

* the number of stock brokerage firms trading our common stock has
been limited.

11
<PAGE>
Due to these factors, the trading price of our common stock could be
subject to wide fluctuations in response to quarterly variations in
operating results, changes in financial estimates by securities analysts,
announcements of technological innovations or new products by us or our
competitors or other factors. In addition, the stock market has
experienced extreme price and volume fluctuations that have particularly
affected the market prices for many biotechnology and small capitalization
companies.

OUR STOCK AND WARRANTS MAY BECOME SUBJECT TO "PENNY STOCK" RULES.

If our common stock were to trade for less than $5.00 per share, then
our common stock and warrants would each be considered a "penny stock"
under federal securities law. Additional regulatory requirements apply to
trading of penny stocks by broker-dealers. This could adversely effect the
trading market for our common stock and warrants.

OUR WARRANTS CAN BE REDEEMED ON SHORT NOTICE.

At any time after one year following the date of this prospectus, we
can redeem the warrants for $0.25 per warrant on 30 days' written notice,
provided that the closing price of our common stock has been at least $17.25
for the ten consecutive trading days immediately preceding the notice of
redemption. If we give notice of redemption, a holder would be forced to
sell or exercise the warrants or accept the redemption price. See
"Description of Securities - Warrants" on page 30.

WE CAN ISSUE PREFERRED STOCK WITHOUT THE CONSENT OF OUR SHAREHOLDERS.

Our Board of Directors may issue shares of preferred stock without
stockholder approval on such terms as the Board may determine. 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 we may
issue in the future. See "Description of Securities - Preferred Stock" on
page 31.

A CURRENT PROSPECTUS AND STATE BLUE SKY REGISTRATION IS REQUIRED BEFORE
PURCHASERS MAY EXERCISE THE WARRANTS.

Purchasers of our warrants will be able to exercise the warrants only
if a current prospectus relating to the common stock underlying the
warrants is then in effect, and only if our common stock is qualified for
sale or exempt from qualification under applicable state securities laws of
the states in which the holders of the warrants reside. Although we have
undertaken to maintain the effectiveness of a current prospectus covering
the common stock underlying the warrants, there can be no assurance that we
will be able to do so. The value of the warrants may be impaired if a
current prospectus covering the common stock issuable upon exercise of the
warrants is not kept effective, or if the common stock is not qualified or
exempt from qualification in the states in which the holders of warrants
reside. See "Description of Securities - Warrants" on page 30.

WE HAVE NO AGREEMENTS WITH OUR MANAGEMENT WHICH SECURE THEIR CONTINUING
SERVICE.

Our management members are employed at will. Therefore, a management
member may terminate employment at any time. See "Management" beginning on
page 23.

WE ENTERED TRANSACTIONS WITH RELATED PARTIES WHICH WERE NOT SUBJECT TO
INDEPENDENT DIRECTOR APPROVAL.

Past transactions with related parties were ratified by disinterested
directors and believed to be on terms at least as favorable as obtainable
from third parties. However, until recently, we did not have independent
directors. Future related party transactions will be subject to independent
director ratification. See "Related Party and Other Material Transactions"
on page 29.

<PAGE>
USE OF PROCEEDS

After payment of underwriting commissions and other expenses of the
offering, the net proceeds of the offering are estimated to be $12,600,000,
or $14,600,000 if the over-allotment option is exercised. We expect to
use the net proceeds approximately as follows:

* Phase III clinical trials $7,000,000 55%

* New Drug Application for Esterom(R)
solution $2,500,000 20%

* Research and development of additional
applications of Esterom(R) solution $1,250,000 10%

* General office and administrative expenses
and working capital (includes salaries,
rent, travel, professional fees) $1,850,000 15%

There may be changes in our proposed use of proceeds due to changes in
our business. Proceeds not immediately needed will be invested in treasury
bills, insured bank deposits or similar investments. No proceeds will be
used to redeem preferred stock.

DIVIDEND POLICY

We have never declared or paid dividends on our common stock and do
not intend to pay dividends on our common stock in the foreseeable future.
Instead, we will retain any earnings to finance the expansion of our
business and for general corporate purposes. We are obligated to pay
dividends on our Series A and Series B preferred stock, although we may
elect to pay the dividends on the Series B preferred stock in shares of our
common stock. We have paid no dividends on our Series A preferred stock.
As of December 31, 1999 we have issued 24,550 shares of common stock as
dividends on our Series B preferred stock.

PRICE RANGE OF OUR COMMON STOCK

Since February 25, 1998, our common stock has been traded on the NASD
OTC Bulletin Board under the trading symbol "ETOP". The following table
sets forth the high and low bid prices for the common stock for the
quarters indicated. Prices reflect bids posted by market makers and may
not necessarily reflect actual transactions.

Year ended December 31, 1998 High Bid Low Bid
- ---------------------------- -------- -------
First Quarter $3.375 $3.00
Second Quarter $7.875 $3.25
Third Quarter $7.50 $3.50
Fourth Quarter $4.75 $3.375

Year ended December 31, 1999
- ----------------------------

First Quarter $6.125 $3.00
Second Quarter $7.6875 $5.875
Third Quarter $6.3125 $5.1875
Fourth Quarter $6.875 $4.00

Year ended December 31, 2000
- ----------------------------

First Quarter (through March 10, 2000) $11.00 $6.75

On March 13, 2000, the closing bid price of the common stock on the
NASD OTC Bulletin Board was $8.625 per share. As of March 10, 2000,
there were 410 holders of record of our common stock.

13
<PAGE>
CAPITALIZATION

The following table sets forth as of December 31, 1999:

* our actual capitalization; and

* our proforma capitalization reflecting the sale of 2,000,000
shares and 2,000,000 warrants in the offering at the public
offering price of $7.00 per share and $.25 per warrant, and
the use of the net proceeds of the offering.

<TABLE>
<CAPTION>
December 31, 1999
-----------------
Actual Pro forma
------ ---------
<S> <C> <C>

Redeemable preferred stock:

Series A: 3,210,487 shares issued and outstanding $ 3,210,487 $ 3,210,487
Series B: 230,500 shares issued and outstanding 1,093,175 1,093,175

Stockholders' equity:

Preferred stock, $.001 par value-- 10,000,000 shares
authorized, Series A and Series B outstanding --- ---
(reported above)

Common stock, $.001 par value-- 50,000,000 shares
authorized: 7,382,280 shares issued and outstanding
(actual), and 9,382,280 shares issued and outstanding 7,382 9,382
(proforma)

Additional paid-in capital 13,866,412 26,494,412

Deficit accumulated during the development stage (12,640,814) (12,640,814)

Unearned stock compensation (3,218,293) (3,218,293)
----------- -----------

Total stockholders' equity (deficit) (1,985,313) 10,644,687
----------- -----------

Total capitalization $ 2,318,349 $14,948,349
=========== ===========

</TABLE>

14
<PAGE>
SELECTED FINANCIAL DATA

Cumulative
amounts from
inception
through
STATEMENT OF OPERATIONS Years ended December 31, December 31,
DATA: ------------------------ ------------
1999 1998 1999
---- ---- ----

<S> <C> <C> <C>
Revenue $ -0- $ -0- $ -0-

Research and development 1,743,837 906,719 6,597,410

Other costs and expenses 3,195,425 1,857,908 5,920,654
------------ ------------ ------------

Net loss (4,939,262) (2,764,627) (12,518,064)

Accrued dividends applicable
to Series B preferred stock (119,300) (56,260) (175,560)
------------ ------------ ------------

Net loss applicable to
common shareholders $ (5,058,562) $ (2,820,887) $(12,693,624)
============ ============ ============

Basic and diluted net loss per
common share $ (.75) $ (.47) $ (2.36)
============ ============ ============

Weighted average number of
shares outstanding 6,749,000 5,968,000 5,374,000
============ ============ ============
</TABLE>

BALANCE SHEET DATA:
The unaudited proforma balance sheet data reflects the issuance of
securities in this offering.

Unaudited
Pro forma
December 31, December 31,
1999 1999
------------ ------------

Cash and cash equivalents . . . . . . . . $2,260,526 $15,059,951

Working capital . . . . . . . . . . . . . 1,937,721 14,737,146

Total assets. . . . . . . . . . . . . . . 2,825,225 15,455,225

Total liabilities . . . . . . . . . . . . 506,876 506,876

Redeemable preferred stock. . . . . . . . 4,303,662 4,303,662

Stockholders' equity (deficit). . . . . . (1,985,313) 10,644,687

15
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

We were incorporated in California in 1984 as Entropin, Inc. ("old
Entropin"), and in 1998, completed an agreement and plan of merger with
Vanden Capital Group, Inc. to exchange all of the issued and outstanding
common shares of old Entropin for 5,220,000 shares of Vanden's common
stock. We were merged into Vanden, and Vanden changed its name to Entropin,
Inc. For accounting purposes, the acquisition was treated as a
recapitalization of old Entropin based upon historical cost, with old
Entropin as the acquirer. In conjunction with the merger, Entropin, Inc.
became a Colorado corporation.

From our inception in August 1984, we have devoted our resources
primarily to funding our research and development efforts. We have been
unprofitable since inception and have had no revenue from the sale of
products or other resources, and do not expect revenue for the next two
years, or until Esterom(R) solution has received FDA approval. We expect
to continue to incur losses for the foreseeable future through the
completion of our Phase III clinical trials and the new drug application
process. As of December 31, 1999, our accumulated deficit was
approximately $12.6 million.

PLAN OF OPERATION

We have raised sufficient funds in 1999 to complete the first part of
a two part Phase III clinical trial program associated with the FDA
approval process for the treatment of acute painful shoulder. The trials
began in November 1999 and the first part is scheduled for completion in
mid-2000. We intend to use a substantial portion of the net proceeds of
our secondary offering to fund our Phase III clinical trials through our
new drug application process related to the treatment of acute painful
shoulder and to provide funds for research and development and working
capital. In the future, we plan to seek FDA approval to market Esterom(R)
solution for the treatment of impaired range of motion associated with
lower back pain, and identify and develop other medical applications for
Esterom(R) solution such as applications for arthritis and other joint
disorders. We intend to minimize our fixed costs by outsourcing clinical
studies, regulatory activities, manufacturing and sales and marketing. We
have engaged the services of a full-time chief executive officer and
president beginning November 29, 1999 which will increase our general and
administrative expenses.

RESULTS OF OPERATIONS

Year ended December 31, 1999 compared to year ended December 31, 1998.
Our research and development expenses were $1,743,837 for 1999, as compared
to $906,719 in 1998. The increase in research and development resulted
primarily from initiation of Phase III clinical trials, and approximately
$200,000 from non-cash compensation expenses associated with stock options
granted to Western Center for Clinical Studies (Western). Our general and
administrative expenses were $3,211,809 in 1999, as compared to $1,844,575
in 1998. The increase in general and administrative expenses relates
primarily to our administrative costs for the start of Phase III clinical
trials and fund raising activities. Moreover, the 1999 increase resulted
from an increase of approximately $1,200,000 in non-cash compensation
expense associated with stock options.

Our interest income was $64,888 in 1999, as compared to $24,738 in
1998. The increase was primarily a result of larger temporary cash
investment balances in 1999 from proceeds of private placements.

LIQUIDITY AND CAPITAL RESOURCES

We have financed our operations since inception primarily through the
net proceeds generated from the sale of our common and preferred stock, and
through loans and advances from stockholders that were

16
<PAGE>
subsequently converted into equity securities. From inception through
December 31, 1999, we have received net cash proceeds from financing
activities aggregating approximately $6.8 million from these transactions.
As of December 31, 1999, our working capital was $1,937,721.

Our liquidity and capital needs relate primarily to working capital,
research and development of Esterom(R) solution, and other general
corporate requirements. We have not received any cash from operations
since inception. Based on our current plans, we believe the proceeds from
our secondary offering will provide sufficient capital resources to fund
our operations for at least the next 20 months. Expectations about our
long-term liquidity may prove inaccurate if approval for Esterom(R)
solution is delayed or not obtained. We will not generate revenue from
sales of Esterom(R) solution unless Esterom(R) solution is approved by the
FDA for marketing.

Net cash used in operating activities was approximately $1,480,000 in
1998 and $1,617,000 in 1999. The cash used in operations was primarily
related to funding expansion of research and development activities as well
as establishing an administrative infrastructure. For the year ended
December 31, 1999, cash used in operating activities principally represents
the net loss for the period of $4,939,262 adjusted for non-cash stock
option compensation and an increase in accounts payable.

As of December 31, 1999, our principal source of liquidity was
approximately $2.3 million in cash and cash equivalents.

In April 1998, we entered into an agreement with Western to assist us
in obtaining FDA approval for Esterom(R) solution. We are required to pay
management fees of approximately $880,400 through January 5, 2001 and
$76,400 per quarter beginning January 2001 and continuing until a new drug
application is filed with the FDA. We also issued to Western stock options
to purchase 450,000 shares of our common stock at $1.50 per share.

In August 1999, we entered into an agreement with Therapeutic
Management, Inc. to provide us clinical trial management services and
monitor all aspects of Esterom's Phase III A and B clinical studies. In
November 1999, we entered into an agreement with Western to assume our
obligations under our agreement with Therapeutic Management Agreement to
perform tasks required to comply with FDA regulations applicable to the
conduct, coordination and management of the first Phase III trial. Among
other things, WCCS is to select investigators, train clinical site
personnel, maintain the master file of all pre-study and study documents,
and prepare the Study Report to be submitted to the FDA. We will pay
Western an additional $350,000 based on completion of certain project goals.

Our operating expenses will increase as we proceed with the two part
Phase III clinical trials through the new drug application and other
related FDA approval process. We also expect that our general and
administrative expenses will increase significantly with the addition of
our full time chief executive officer and president. The 20 month period
estimate for which we expect available sources of cash to be sufficient to
meet our funding needs is a forward looking statement that involves risks
and uncertainties as set forth under "Risk Factors" and elsewhere in this
prospectus. In the event our capital requirements are greater than
estimated, we may need to raise additional capital to fund our research and
development activities. Our future liquidity and capital funding
requirements will depend on numerous factors, including the timing of
regulatory actions for Esterom(R) solution, the cost and timing of sales,
marketing and manufacturing activities, the extent to which Esterom(R)
solution gains market acceptance, and the impact of competitors' products.
There can be no assurance that such additional capital will be available on
terms acceptable to us, if at all. If adequate funds are not available, we
may be forced to significantly curtail our operations or to obtain funds
through entering into collaborative agreements or other arrangements that
may be on unfavorable terms. Our failure to raise capital on favorable
terms could have a material adverse effect on our business, financial
condition or results of operations.

17
<PAGE>
YEAR 2000 ISSUE

To date we have not experienced any material difficulties or incurred
significant expenditures in connection with Year 2000 issues. All of our
expenses have related to the opportunity cost of time spent by several of
our employees identifying and evaluating the Year 2000 compliance matters.
The agreements with Western and Therapeutic Management represent that their
software systems are Year 2000 compliant. We contacted all other major
vendors, suppliers, financial institutions and service providers to ensure
they are Year 2000 compliant. Key third party vendors provided a statement
in writing that their software or systems are Year 2000 compliant.

OUR BUSINESS

Entropin is a development stage pharmaceutical company that has
developed Esterom(R) solution, a topical formulation for the treatment of
conditions involving impaired range of motion. Impaired range of motion
often accompanies injuries and disorders of the shoulder and lower back, as
well as other conditions affecting body joints. Esterom(R) solution is
derived from a process involving the chemical breakdown of cocaine into new
and different molecules, three of which have been patented by us. We have
completed four preclinical animal studies and Phase I and Phase II human
clinical trials for Esterom(R) solution. These trials indicated that
Esterom(R) solution was well tolerated and did not appear to have any
potential for addiction or abuse. Moreover, the range of motion with
patients in the Phase II trial suffering from shoulder and lower back
conditions was improved significantly when compared with patients receiving
a placebo. We began Phase III trials for treatment of impaired range of
motion due to shoulder injuries and functionality in November 1999. We
expect to complete our Phase III trials and submit a new drug application
to the FDA in early 2001.

Esterom(R) solution is derived through a manufacturing process
involving hydrolysis and solvolysis of cocaine in a propylene glycol and
water solution. Hydrolysis and solvolysis are chemical processes in which
a substance reacting with a solvent such as propylene glycol and water
solution, is changed into one or more other substances. Through this
process, we have identified three new molecules, derivatives of
benzoylecgonine, ecgonine and ecgonidine, which form the basis of our
formulation of Esterom(R) solution and are claimed under two of our eight
United States patents. A third United States patent claims a method for
preparing Esterom(R) solution.

REGULATORY HISTORY

In March 1987, we filed an investigative new drug application with the
FDA which incorporated the results of our four pre-clinical animal safety
studies in which no significant toxicity was noted. Our subsequent human
Phase I clinical safety trial for Esterom(R) solution was completed in
1991, and involved 24 healthy male subjects. The results of this trial
indicated that Esterom(R) solution was well tolerated and showed no
significant toxicity. Based on these results, the FDA allowed us to
initiate Phase II clinical efficacy and safety trials in 1992.

Our Phase II clinical trial, completed in 1994, was designed to
determine the safety and efficacy of Esterom(R) solution in patients who
had impaired range of motion due to acute lower back strain, acute painful
shoulder or the removal of a cast. The Phase II clinical trial involved 97
patients, each of whom received two topical applications of Esterom(R)
solution or placebo, with the second treatment applied 24 hours after the
first. The results of the trial showed that Esterom(R) solution provided
statistically significant improved range of motion in both back and
shoulder conditions which was sustained for at least seven days. There was
no clinically observed local anesthetic or analgesic effect. The range of
motion for each condition was measured by the number of degrees to which
the subject could move the affected part in one direction or another. The
results for patients who had impaired range of motion resulting from cast
removal were inconclusive and we did not pursue this indication further.

18
<PAGE>
In 1996, we submitted our Phase III Protocol to the FDA, and a revised
Phase III Protocol in 1999. Our Phase III studies will include two trials
in multiple clinical study centers in differing geographic areas of the U.S.
The trials will be double-blind and placebo-controlled in which neither
patient nor doctor will know whether the patient receives Esterom(R) solution
or placebo.

We began the first Phase III trial in November 1999 and we expect to
begin the second trial in several months. In each of the two studies 300
patients will be enrolled for a total of 600 patients. Of the 300 patients
in each study, 100 will receive single strength Esterom(R) solution, 100
double strength, and 100 placebo. The second trial has a longer patient
follow-up period than the first trial.

Our Phase III trials will test Esterom(R) solution for improved range
of motion and functionality associated solely with shoulder injuries.
Functionality involves a patient's ability to perform everyday functions,
such as hair combing or removing a pullover sweater. Subsequently, we
intend to seek FDA approval for treatment by Esterom(R) solution of lower
back sprain.

OUTSOURCING

In January 1997, we entered into an agreement with Mallinckrodt, Inc.,
the only company authorized by the Drug Enforcement Agency (DEA) to provide
cocaine for medical and research purposes, and to supply and manufacture
Esterom(R) solution. Due to federal restrictions, Esterom(R) solution
cannot be manufactured outside of the United States for sale in the United
States. Due to DEA licensing requirements, Mallinckrodt is our sole source
for cocaine and for producing Esterom(R) solution. In addition, our
agreement with Mallinckrodt provides that it will comply with the Good
Manufacturing Practices imposed by the FDA through its facilities
inspection program. In exchange for the services, Mallinckrodt was granted
the right to be our exclusive supplier in North America and a right of
first refusal to be our exclusive world-wide supplier.

In April 1998, we entered into an agreement with Western, to assist us
in administering the clinical trials necessary for obtaining FDA approval
of Esterom(R) solution. Daniel L. Azarnoff, M.D., a director of Entropin,
is a director of Western.

In August 1999, we entered into an agreement with Therapeutic
Management, Inc., a clinical research organization, to provide
comprehensive clinical trial management and monitor our first of two Phase
III clinical trials for Esterom(R) solution.

In November 1999, we entered into an agreement with Western to perform
and assume our obligations under our agreement with Therapeutic Management
for compliance with FDA regulations.

We do not intend to establish our own direct sales force to market
Esterom(R) solution. Instead, we are actively pursuing strategic
relationships with pharmaceutical companies to whom we can outsource the
marketing of Esterom(R) solution.

PATENTS

We hold eight U. S. patents issued between 1984 and 1998 with
expiration dates ranging from September 2001 to June 2014. These patents
include two material composition patents covering the molecules contained
in Esterom(R) solution that expire in 2012 and 2013. Our three initial
patents were based on methods of treatment of rheumatoid arthritis using
benzoylecgonine and related compounds. Our five subsequent patents include
compound, composition and method claims involving derivatives of the
compounds represented in the earlier patents. Since the formula for
Esterom(R) solution contains the derivatives protected by certain of the
subsequent patents, the expiration of the earlier patents in 2001 and 2002
will not permit a replication of Esterom(R) solution by a competitor. We
believe that some of the patents to which we have rights may be eligible
for extensions of up to five years.

In December 1993 we filed an International Patent Application under
the Patent Cooperation Treaty claiming compounds present in the Esterom(R)
formulation from which eight separate patent applications

19
<PAGE>
were derived--Australia, Canada, Europe, Hungary, Japan, New Zealand,
Norway and Poland. In addition, we have filed patent applications in
China, Israel, Mexico, South Africa and Taiwan. From these foreign
applications, nine patents have been issued to date.

GOVERNMENT REGULATION

The research, development, testing, manufacturing, promotion,
marketing and distribution of drug products are extensively regulated by
government authorities in the United States and other countries. Drugs are
subject to rigorous regulation by the FDA in the United States and similar
regulatory bodies in other countries. The steps ordinarily required before
a new drug may be marketed in the United States, which are similar to steps
required in most other countries, include:

* Preclinical safety studies in animals and formulation studies and
the submission to the FDA of an Investigational New Drug (IND)
application for a new drug;

* Adequate and well-controlled clinical trials to establish the
safety and efficacy of the drug for each medical indication;

* The submission of a New Drug Application (NDA) to the FDA; and,

* FDA review and approval of the NDA.

Preclinical animal tests include laboratory evaluation of product
chemistry, stability, pharmaceutical properties and formulation, as well as
studies to prove the product is safe in animals. The results of
preclinical testing are submitted to the FDA as part of an NDA. The FDA
may halt proposed or ongoing clinical trials until it allows the trials to
continue under specified terms.

Clinical trials to support new drug applications are typically
conducted in three sequential phases. During Phase I safety studies, the
initial introduction of the drug on healthy human subjects, the drug is
tested to assess how the drug is handled in the body and the level of drugs
in the body over time, as well as side effects associated with increasing
doses.

Phase II usually involves studies in a limited patient population to:

* assess the efficacy of the drug in specific, targeted indications;

* assess dosage tolerance and optimal dosage; and/or

* identify possible adverse effects and safety risks.

If a compound is found to be potentially effective and to have an
acceptable safety profile in Phase II evaluations, Phase III trials (also
called pivotal studies, major studies or advanced clinical trials) are
undertaken to further demonstrate clinical efficacy and to further test for
safety of the product within an expanded patient population at
geographically dispersed clinical study sites.

After successful completion of the required clinical testing, a NDA is
generally submitted. The FDA may request additional information before
accepting a NDA for filing, in which case the application must be
resubmitted with the additional information. Once the submission has been
accepted for filing, the FDA has 180 days to review the application and
respond to the applicant. The review process is often significantly
extended by FDA requests for additional information or clarification. The
FDA may refer the new drug application to an appropriate advisory committee
for review, evaluation and recommendation as to whether the application
should be approved, but the FDA is not bound by the recommendation of an
advisory committee.

If FDA evaluations of the new drug application and the manufacturing
facilities are favorable, the FDA may issue either an approval letter or an
approvable letter. An approvable letter will usually contain a number of
conditions that must be met in order to secure final approval of the new
drug application and authorization of commercial marketing of the drug for
certain indications. The FDA may refuse to approve the new drug
application or issue a not approvable letter, outlining the deficiencies in
the submission and often requiring additional testing or information.

20
<PAGE>
The manufacturers of approved products and their manufacturing
facilities are subject to continual review and periodic inspections.
Because we intend to contract with third parties for manufacturing our
product, our control of compliance with FDA requirements will be more
complicated. In addition, identification of certain side effects or the
occurrence of manufacturing problems after any of our drugs are on the
market could cause subsequent withdrawal of approval, reformulation of the
drug, additional clinical trials, and changes in labeling of the product.

Outside the United States, our ability to market our products will
also be contingent upon receiving marketing authorizations from the
appropriate regulatory authorities. The foreign regulatory approval
process includes all of the risks associated with the FDA approval set
forth above. The requirements governing the conduct of clinical trials and
marketing authorization vary widely from country to country. At present,
foreign marketing authorizations are applied at a national level, although
within Europe procedures are available to companies wishing to market a
product in more than one European Union, or EU, member state.

Under a new regulatory system in the EU, marketing authorizations may
be submitted at either a centralized, a decentralized or a national level.
The centralized procedure is mandatory for the approval of biotechnology
products and high technology products and available at the applicant's
option for other products. The centralized procedure provides for the grant
of a single marketing authorization that is valid in all EU member states.
The decentralized procedure is available for all medicinal products that are
not subject to the centralized procedure. The decentralized procedure
provides for mutual recognition of national approval decisions, changes
existing procedures for national approval decisions and establishes
procedures for coordinated EU actions on products, suspensions and
withdrawals. Under this procedure, the holder of a national marketing
authorization for which mutual recognition is sought may submit an
application to one or more EU member states, certify that the dossier is
identical to that on which the first approval was based or explain any
differences and certify that identical dossiers are being submitted to all
member states for which recognition is sought. Within 90 days of receiving
the application and assessment report, each EU member state must decide
whether to recognize approval. The procedure encourages member states to
work with applicants and other regulatory authorities to resolve disputes
concerning mutual recognition. Lack of objection of a given country within
90 days automatically results in approval of the EU country.

We will choose the appropriate route of European regulatory filing to
accomplish the most rapid regulatory approvals. However, the regulatory
strategy may not secure regulatory approvals or approvals of the chosen
product indications. We intend to contract with an experienced third party
to assist with our European clinical development and regulatory approvals.

DEA STATUS

The DEA has designated Esterom(R) solution as a Schedule II controlled
substance. The manufacture, storage, shipment and use of a Schedule II
controlled substance is subject to costly and burdensome regulations. We
have submitted a petition to the DEA to delist Esterom(R) solution as a
Schedule II substance based on the data obtained in Phase I and II clinical
studies in human beings which indicated that Esterom(R) solution showed no
effects on the cardiovascular system and did not appear to cross the blood-
brain barrier. The petition is currently under review by the U.S. Attorney
General's office and the FDA. We do not expect a decision unless and until
Esterom(R) solution is approved for marketing by the FDA.

PRODUCT LIABILITY INSURANCE

Sales of Esterom(R) solution entails risk of product liability claims.
Medical testing has historically been litigious, and we face financial
exposure to product liability claims in the event that use of Esterom(R)
solution results in personal injury. We also face the possibility that
defects in the manufacture of Esterom(R) solution might necessitate a
product recall. There can be no assurance that we will not experience
losses due to product liability claims or recalls in the future. We
anticipate purchasing product liability insurance

21
<PAGE>
in reasonable and customary amounts when we begin to sell Esterom(R)
solution. Such insurance can be expensive, difficult to obtain and may
not be available in the future at a reasonable cost or in sufficient amounts
to protect us against losses due to liability. An inability to maintain
insurance at an acceptable cost or to otherwise protect against potential
product liability could prevent or inhibit our commercialization of
Esterom(R) solution. Moreover, a product liability claim in excess of
relevant insurance coverage or product recall could have a material adverse
effect on our business, financial condition and results of operations.

ROYALTY COMMITMENTS

In connection with our acquisition of the rights to the three original
patents for Esterom(R) solution from non-affiliated parties, we agreed to
pay a royalty of approximately 1% of amounts paid to us from the sale of
Esterom(R) solution. We have agreed to pay a minimum royalty from actual
sales consisting of a front end payment of $40,000 and quarterly payments
of $3,572 which is accruing from December 1, 1989, less a credit to us for
50% of patent expenses we incur.

COMPETITION

To our knowledge, there are no products on the market which treat
impaired range of motion associated with injuries and disorders of the
shoulder and lower back. For these conditions, physicians often prescribe
steroidal drugs, non-steroidal anti-inflammatory drugs, pain relievers, and
muscle relaxants. While these products reduce discomfort, they generally
do not address impaired range of motion.

The pharmaceutical industry is characterized by intense competition
and is subject to rapid and significant technological change. Rapid
technological development may cause Esterom(R) solution and any other
products we develop to become obsolete before we can recoup all or any
portion of our development expenses. Our competitors include major
pharmaceutical companies, biotechnology firms, universities and other
research institutions, both in the United States and abroad, which are
actively engaged in research and development of products in the therapeutic
areas being pursued by us. Most of our competitors have substantially
greater financial, technical, manufacturing, marketing and human resource
capabilities than us. In addition, many of our competitors have
significantly greater experience in testing new or improved therapeutic
products and obtaining regulatory approvals of products. Accordingly, our
competitors may succeed in obtaining regulatory approval for their products
more rapidly than we are able to obtain approval for Esterom(R) solution.
If we commence significant commercial sales of our products, we will also
be competing with respect to manufacturing efficiencies and marketing
capabilities, areas in which we have no experience.

EMPLOYEES

We have one full time executive officer, Thomas G. Tachovsky, our
President and Chief Executive Officer and one full time administrative
employee. We have three part-time executive officers, Higgins D. Bailey,
Chairman of the Board and Secretary, Donald Hunter, Vice Chairman of the
Board and Wellington Ewen, Chief Financial Officer. We are
actively seeking a qualified individual to serve as a full-time Chief
Financial Officer.

PROPERTIES

We sublease 800 square feet of office space in Indio, California from
one of our principal stockholders, Thomas T. Anderson, for a monthly rent
of $800 on a month to month basis. We believe the lease is at or below
market price for comparable office space. Following this offering, we
intend to lease separate office space for our corporate headquarters in
Indio, California and terminate our current lease.

22
<PAGE>
MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table lists the names, ages and positions of our
executive officers and directors:

Name Age Position
---- --- --------

Thomas G. Tachovsky 52 President, Chief Executive Officer
and Director

Higgins D. Bailey 69 Chairman of the Board and Secretary

Donald Hunter 65 Vice Chairman of the Board

Daniel L. Azarnoff 73 Director

James E. Wynn 57 Director

Wilson Benjamin 56 Director

Joseph R. Ianelli 61 Directr

Wellington A. Ewen 60 Chief Financial Officer

All members of the board of directors hold office until the next
annual meeting of shareholders and the election and qualification of their
successors, or until death, resignation or removal. Messrs. Benjamin and
Ianelli are independent directors. Officers serve at the discretion of the
Board of Directors. We are actively seeking an individual qualified to
serve as a full time Chief Financial Officer.

THOMAS G. TACHOVSKY, Ph.D. joined us as a director, President and
Chief Executive Officer in November 1999. Since June 1997 he has held a
series of interim senior management positions in development stage bio-
pharmaceutical companies including Redox Pharmaceuticals Corporation;
Novavax, Inc. and Paracelsian, Inc. From June 1995 to November 1997, he
was a director and executive vice-president of Protyde Pharmaceuticals,
Inc. From June 1991 to February 1998, he was general partner of MATCO &
Associates, a bio-pharmaceutical industry consulting firm for corporate
partnering, technology assessment and market valuation. He has held
business development positions with Cytogen Corporation and Creative
Biomolecules and was a research and development manager with Johnson &
Johnson. Dr. Tachovsky received a B.S. degree in biology from Gonzaga
University; a M.S. degree in management from Lesley College; and a Ph.D
degree in microbiology from the University of Rochester School of Medicine.

HIGGINS D. BAILEY, Ed.D. joined us as an officer and director in July
1992 and is currently our Chairman of the Board and Secretary. From July
1995 to December 1996, Dr. Bailey was President and Chief Executive Officer
for the Pharmaceutical Educational and Development Foundation at the
Medical University of South Carolina, Charleston, South Carolina, which
formulates and manufactures pharmaceutical products. Since 1991, he has
served as the business manager for Thomas T. Anderson Law Firm, Indio,
California. Thomas T. Anderson is one of our principal stockholders. Dr.
Bailey received a B.A. degree in biology from Eastern Washington University,
a M.S. degree in program planning and personnel and a Ed.D. degree in
administration and management from the University of California, Berkeley,
California.

DONALD HUNTER joined us as a director and Secretary in February 1998.
In May 1999, he resigned as Secretary and was appointed as our Chief
Executive Officer and Treasurer. He served as Chief Executive Officer
until November 1999 and Treasurer until January 2000. Since 1994, Mr. Hunter
has served as a consultant to Entergy Corporation as well as other concerns
dealing with mergers and acquisitions and other business matters. From 1991
to 1994, he was senior vice president of Entergy Corporation. Mr. Hunter
received a B.S. degree in chemical engineering from Purdue University and a
M.S. degree in nuclear engineering from Iowa State University.

DANIEL L. AZARNOFF, M.D. joined us as a director in February 1998 and
acted as our President on a part-time basis until April 1998. Since 1988,
Dr. Azarnoff has been President of D. L. Azarnoff Associates, a company
engaged in consulting for various pharmaceutical and biotechnology
companies including

23
<PAGE>
Sandoz, Orion Pharma, DeNovo, Inc., Cibus Pharmaceutical and Cellegy
Pharmaceuticals, Inc. Since August 1998, Dr. Azarnoff has held a
clinical faculty position at Stanford University Medical School. Prior
to the time, he held faculty positions at the University of Kansas
Medical School, Northwestern University Medical School, the University
of Chicago Medical School and St. Louis University School of Medicine.
Dr. Azarnoff is a director of Amerimmune, Inc., a publicly held
pharmaceutical drug and development company. Since June 1999, he has
served as Senior Vice President, Medical/Regulatory Affairs for Cellegy
Pharmaceutical, Inc. Dr. Azarnoff received a B.S. degree in biology and
a M.S. degree in zoology from Rutgers University and a M.D. degree from the
University of Kansas Medical School.

JAMES E. WYNN, Ph.D. joined us as a director in February 1998. Since
1977, Dr. Wynn has been a Professor and since September 1995, Assistant
Dean for Research at the Medical University of South Carolina. Prior to
that time, he held various other positions at the University, including
Chairman of the Department of Pharmaceutical Sciences, College of Pharmacy
and principal investigator for the Drug Bioequivalence Evaluation Program.
Dr. Wynn received a B.S. degree in pharmacy and a Ph.D. degree in medicinal
chemistry from the Medical College of Virginia, Virginia Commonwealth
University, Richmond, Virginia.

WILSON BENJAMIN joined us as a director in February 2000. Since 1992
he has been the President and Chief Executive Officer of Al Fawaris Co.
where he is responsible for Al Fawaris' investments and participation in
the management of certain of its portfolio companies. Since 1992 he has
also served as the Chairman of the Board of Directors and Chief Executive
Officer of ATO Ram 2 Ltd. where he is responsible for managing operations
and investments in public and private companies in the United States, Europe
and the Persian Gulf States. Since 1999, he has been the Chairman of the
Board of Directors of Arab Commercial TV Co., a cable television broadcasting
company. Mr. Benjamin received a B.A. in business administration from Al
Hikma University in Baghdad, Iraq.

JOSEPH R. IANELLI joined us as a director in February 2000. Since
January 1999 he has been the President and Chief Executive Officer of
PharmaConnect, Inc. responsible for design and development of an internet
website for physicians. Since January 1999 he has also been the President
and Chief Executive Officer of Renaissance Pharmaceuticals, Inc. a
development stage company involved in drug delivery technologies. From
1983 to January 1999 he served as the Senior Vice President of Business
Development for Astra U.S.A., Inc. where he was responsible for
acquisitions and licensing. At Astra, he served on the Executive Committee
and was a member of the Management Advisory Board. Mr. Ianelli received a
B.A. in Biology from Marist College, a M.A. in Biology from the State
University of New York and an M.B.A. from Iona College.

WELLINGTON A. EWEN, C.P.A., M.B.A. has been the Company's Chief
Financial Officer since April 1998. From 1988 to the present, Mr. Ewen has
been the owner and manager of Wellington A. Ewen & Associates, a business
consulting firm in Malibu, California. He has acted as a financial and
accounting officer for various businesses during that time. Prior to
that, Mr. Ewen served as senior manager at the public accounting firms of
Coopers & Lybrand, Los Angeles, California and Arthur Andersen & Co., New
York, New York. Mr. Ewen is a C.P.A. in the states of New York and
California and has earned M.B.A. and B.S. degrees from Cornell University.

SCIENTIFIC AND MEDICAL ADVISORY BOARD

Our Board of Directors has established a Scientific and Medical
Advisory Board to advise and consult with us as may be requested by the
Board from time-to-time. We pay the members of our Scientific and Medical
Advisory Board $1,500 per meeting, as well as reimbursement for any
expenditures incurred on our behalf. In connection with their appointment
to the Scientific and Medical Advisory Board, in June 1998, each member was
also granted options to purchase 3,000 shares of our common stock,

24
<PAGE>
exercisable at $1.50 per share, vesting at the rate of 1,000 shares per
year over a three year period. Currently, the Scientific and Medical
Advisory Board consists of the following:

ARTHUR HULL HAYES, JR., M.D., since 1991, has been Vice Chairman and
Medical Director, Nelson Communications, Inc. and the President of
MediScience Associates, Inc., the regulatory/medical consulting division of
Nelson Communications. From 1981 to 1983, Dr. Hayes was appointed the
Commissioner of the FDA during which time he was also Assistant Surgeon
General. He was named Provost and Dean at the New York Medical College
from 1983 to 1986, where he also served as Professor of Medicine and
Pharmacology from 1983 to 1999. From 1986 to 1991, Dr Hayes was the
president and chief executive officer and member of the board of directors
of EM Pharmaceuticals, Inc., a North American subsidiary of E. Merck,
Darmstadt, Germany. He is a Diplomate of the American Colleges of
Physicians, Cardiology, and Chest Physicians, the American Academy of
Pharmaceutical Physicians, the New York Academy of Medicine and the Royal
College of Medicine. He has published numerous scientific and public
policy articles.

GERHARD LEVY, Pharm.D., is University Distinguished Professor of
Pharmaceutics Emeritus (active) at the State University of New York at
Buffalo School of Pharmacy, where he has served since 1998. From 1958 to
date, Dr. Levy has authored over 550 publications. He has consulted for
the United States Food and Drug Administration and has consulted for the
World Health Organization. He has received awards for scientific
achievement and excellence, including the first Lifetime Achievement in
the Pharmaceutical Science Award of the International Pharmaceutical
Federation.

WILLIAM CHARLES MCMASTER, M.D., has been Clinical Professor in the
Department of Orthopedic Surgery at the University of California, Irvine
since 1984. He also has a private practice in Orange, California. He is
a member of the American Orthopeadic Association and the American
Orthopedic Society for Sports Medicine. He has held numerous elected
offices in the California Orthopedic Association, the American Academy of
Orthopedic Surgery and the Western Orthopaedic Association. He is a fellow
of the American College of Surgeons and a founding member of the Society
for Biomaterials and Association for Arthritic Hip and Knee Surgery. Dr.
McMaster has published numerous publications and presentations in sports
medicine and orthopedic surgery.

LESTER A. MITSCHER, Ph.D. has been University Distinguished Professor,
Department of Medicinal Chemistry at the University of Kansas since 1975.
Dr. Mitscher has consulted with numerous pharmaceutical companies,
including Proctor and Gamble, Panax Laboratories, Abbott Laboratories, G.D.
Searle, Sandoz Laboratories, and DuPont Merck Labs over the last 31 years.
He served (1981 - 1984) as chairman of the Biological and Natural Products
Section of the National Institute of Health, chairman of the Hematology and
Chemotherapy Study Section of the American Cancer Society (1989 - 1994) and
chairman of the Cooperative Drug Screening Program of the International
Organization for Chemistry in Development, World Health Organization. Dr.
Mitscher has authored several books and over 235 original papers and book
chapters.

KENNETH LLOYD MELMON, M.D., has been Professor of Medicine and
Pharmacology since 1978 and is an Associate Dean for Postgraduate Medical
Education at the Stamford University School of Medicine. Dr. Melmon has
authored numerous original papers and book chapters. He has been a member
of the National Research Council of the Institute of Medicine (1990) the
Committee on Technological Innovation in Medicine of the National Academy
of Science (1990 - 1993) and the National Board of Medical Examiners.
(1989-1996).

25
<PAGE>
SUMMARY COMPENSATION TABLE

The following table provides certain summary information concerning
compensation paid to our Chief Executive Officers for the calendar years
1998 and 1999. No officer was paid compensation for services in excess of
$100,000 per year for either year.

<TABLE>
<CAPTION>
Long Term
Compensation Awards
-------------------
Restricted
Annual Compensation Stock Options & Other
Name and Position Year Salary($) Bonus($) Awards SARs Compensation
- ----------------- ---- --------- -------- ------ ---- ------------

<S> <C> <C> <C> <C> <C> <C>
Thomas G. Tachovsky, 1999 22,051 -0- -0- 400,000 -0-
President and CEO
since 11/99(1)

Donald Hunter, 1999 -0- -0- -0- 217,500 -0-
CEO from 5/99 to 11/99(2)

Higgins D. Bailey, 1998 95,833 -0- -0- -0- -0-
Chairman and CEO from
1/98 until 9/98(3)

A. Thomas Tenenbaum, 1998 -0- -0- -0- -0- -0-
CEO until 1/15/1998
</TABLE>
__________________________________

(1) Dr. Tachovsky received options to purchase 400,000 shares of our common
stock at $5.00 per share of which 100,000 shares are exercisable upon
completion of the first Phase III trial; 150,000 shares upon submission of
the NDA and 150,000 shares upon approval of the NDA. The options expire
five years from the date they become exercisable.

(2) Mr. Hunter received options to purchase 217,500 shares of our common
stock at $4.00 per share, exercisable for five years from date of grant, as
compensation for services performed for us during the period of July 1,
1998 through November 30, 1999. In August 1999, we also granted Mr. Hunter
options to purchase 120,000 shares of our common stock, exercisable at
$4.00 per share for a period of five years, as a bonus for services rendered.

(3) Dr. Bailey's employment agreement terminated January 15, 1999. During
1999, Dr. Bailey received options to purchase 97,500 shares of our common
stock at $4.00 per share, exercisable for five years from date of grant, as
compensation for services performed for us during the period from January
15, 1999 through September 1, 1999. In August 1999, we also granted Dr.
Bailey options to purchase 120,000 shares of our common stock, exercisable
at $4.00 per share for a period of five years, as a bonus for services rendered.

OPTIONS GRANTED TO DIRECTORS AND EXECUTIVE MANAGEMENT

In 1998 our directors were granted a total of 240,000 options to
purchase common stock at $3.00 per share for a period of ten years. In 1998
and 1999 our executive management was granted a total of 610,000 options to
purchase common stock at $4.00 per share for a period of five years. In
1999 our Chief Executive Officer and President was granted 400,000 options
to purchase common stock at $5.00 per share. The options are subject to
vesting on performance standards being met and are exercisable for a period
of five years.

DIRECTOR COMPENSATION

Our directors do not receive cash compensation for services as
directors, although they are reimbursed for out-of-pocket expenses in
attending board of directors' meetings. Each non-salaried director
receives options to purchase 20,000 shares of our common stock for each
year of service as a director.

26
<PAGE>
STOCK COMPENSATORY PLAN

In September 1998 our board of directors authorized an employee
stock-based compensation plan, the 1998 Stock Compensatory Plan, which
provides for the grant of options intended to qualify as "incentive stock
options" or "nonqualified stock options" within the meaning of Section 422
of the United States Internal Revenue Code of 1986 (the "Code"), as well as
stock bonus shares. Incentive stock options are issuable only to
employees. The purposes of the plan are to attract and retain the best
available personnel, to provide additional incentives to our employees, and
to promote the success of our business.

We have reserved 300,000 shares of common stock for issuance under the
plan, which is administered by the entire board of directors. Under the
plan, the board of directors determines which individuals will receive
options or bonus shares, the time period during which options may be
partially or fully exercised, the number of shares of common stock that may
be purchased under each option and the option price. Options granted under
the plan are generally exercisable for a period of ten years from the date
of grant at an exercise price not less than the fair market value of the
shares at the date of grant. Options granted under the plan generally vest
over a one to three year period from the date of the grant. To date, we
have issued 8,031 bonus shares for services and granted no options under
the plan.

NON-QUALIFIED STOCK OPTIONS GRANTED TO EXECUTIVE OFFICERS DURING 1999

The following table sets forth certain information regarding grants of
stock options to our Executive Officers who received stock options during
1999. The fair value of the option grant was estimated on the date of the
grant utilizing the Black-Scholes option pricing model with the following
assumptions: 51% to 100% volatility, five year life, risk free rate of
return of 5.5% to 6.2% and a 0% dividend yield. None of the following
options have been exercised.

<TABLE>
<CAPTION>
Number of % of Total
Securities Options Grant Date
Underlying Granted to Exercise Grant Present
Name Options Employees Price($) Date Value
---- ------- --------- -------- ---- -----
Granted
-------
<S> <C> <C> <C> <C> <C>

Higgins D. Bailey . . . 217,500 25% $4.00 2/99 - $ 680,000
11/99

Donald Hunter . . . . . 217,500 25% $4.00 2/99 - $ 680,000
11/99

Thomas G. Tachovsky . . 400,000 47% $5.00 11/99 $1,260,000

Wellington Ewen . . . . 20,000 2% $4.00 6/99 $ 60,000
</TABLE>

FUTURE GRANTS OF OPTIONS

We will not grant any options to officers, directors, 5% or greater
stockholders, employees or affiliates for a period of one year after this
offering.

27
<PAGE>
PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the
holdings of common stock (1) by each person who, as March 10, 2000
holds of record or is known by us to hold beneficially or of record, more
than 5% of our common stock, (2) by each executive officer and director,
and (3) by all officers and directors as a group. The address of each
person is our address at 45926 Oasis Street, Indio, California 92201. The
beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock
issuable on exercise of currently exercisable or convertible securities or
securities exercisable or convertible within 60 days after the date of this
prospectus are deemed beneficially owned and outstanding for computing the
percentage owned by the person holding such securities, but are not
considered outstanding for computing the percentage of any other person.

Percentage of Shares
Number of Beneficially Owned
Shares -------------------
Beneficially Before After
Name of Beneficial Owners Owned Offering Offering
- ------------------------- ----- -------- --------

Thomas G. Tachovsky . . . -0-(1) * *

Higgins D. Bailey . . . . 1,666,593(2) 21.8 17.3

Thomas T. Anderson. . . . 1,404,093(3) 19.0 15.0

Caroline T. Somers. . . . 862,793 11.7 9.2

James E. Wynn . . . . . . 498,085(4) 6.7 5.3

Daniel L. Azarnoff. . . . 84,444(5) 1.1 0.9

Donald Hunter . . . . . . 533,000(6) 7.0 5.6

Wilson Benjamin . . . . . 87,500(7) 0.1 *

Joseph R. Ianelli . . . . 5,000(8) * *

All directors and
executive officers as
a group (7 persons). . . 2,894,622 35.1 28.2
___________________
* Less than 1/10 of 1%.

(1) Does not include up to 400,000 shares issuable upon exercise of stock
options, none of which are vested.

(2) Includes 1,404,093 shares owned in joint tenancy with Shirley A.
Bailey, the spouse of Dr. Bailey, and 262,500 shares that are issuable
upon exercise of stock options.
(3) Held of record by Dr. Bailey as security for a loan made by Dr. Bailey
to Mr. Anderson.
(4) Represents 433,085 shares which are owned in joint tenancy with Joyce
Wynn, the spouse of Dr. Wynn, 25,000 shares held solely by Joyce Wynn,
and 40,000 shares that are issuable upon exercise of stock options.
(5) Represents the following shares issuable upon exercise of stock
options: options to purchase 40,000 shares granted to Dr. Azarnoff;
and, options to purchase an aggregate of 133,332 shares granted to
Western Center for Clinical Studies, which are fully vested, of which
44,444 shares are attributable to Dr. Azarnoff who owns 1/3 of the
voting shares.
(6) Of these shares, 35,500 shares are held in the name of Deloras Decker
Hunter, Trustee of the Deloras Decker Hunter Generation Skipping
Trust. Deloras Decker Hunter is the spouse of Mr. Hunter and Mr.
Hunter is deemed to have voting control over these 35,500 shares. In
addition, includes 437,500 shares that are issuable upon exercise of
stock options.
(7) Includes 25,000 shares that are issuable upon exercise of stock options.
(8) Represents shares issuable upon exercise of stock options.

28
<PAGE>
RELATED PARTY AND OTHER MATERIAL TRANSACTIONS

During 1996 and 1997, we were advanced an aggregate of $83,873 by
Higgins D. Bailey, our former President, current Chairman and a principal
stockholder. These advances were paid in full January 1998.

We sublease approximately 800 square feet of office space from Thomas
T. Anderson, one of our principal stockholders. The rent on the sublease
is $800 per month. We believe this is a competitive lease rate for similar
real estate in the area where the office is located.

On January 15, 1998, we converted $1,710,487 of long-term debt and
accrued interest incurred for cash advances and past services associated
with research and development into 1,710,487 shares of our redeemable 8%
non-voting, non-cumulative Series A Preferred Stock at $1.00 per share.
The debt was owed to Higgins D. Bailey, Thomas T. Anderson and Lowell Somers.

We owed Dr. James E. Wynn $1,500,000 for research and development
services provided from 1984 through 1997 as evidenced by an 8% Note due
December 31, 2000. In January 1998 we converted this obligation to
1,500,000 shares of our non-voting, non-cumulative redeemable 8% Series A
preferred stock, valued at $1.00 per share. In addition, in December 1997,
certain of our stockholders contributed shares of our common stock to Dr.
Wynn for research and development services (259,042 shares valued at
$712,000, or $2.75 per share). The expense and related capital
contributions were reflected at December 31, 1997. Dr. Wynn was
subsequently appointed one of our directors in February 1998.

In January 1998, we granted Dr. Wynn a non-exclusive right for three
years to develop both improved products and new products from our
proprietary and confidential information. Improved products are those that
contain the same active ingredients as Esterom(R) solution, but that are
formulated differently. New products are those which are developed from
cocaine or a derivative and are separately patentable. We will have all
rights to the improved and new products. Dr. Wynn will receive a two
percent royalty on the net commercial sales of any improved products he
develops. The royalty percentage on any new products he develops is to be
determined through negotiation. If agreement is not reached, the royalty
is to be determined by an arbitrator with pharmaceutical industry experience.

In April 1998 we entered into an agreement, as amended July 21, 1999,
with Western to assist us in completing the Phase III study and new drug
application phase for FDA approval of Esterom(R) solution for limited range
of motion associated with shoulder injuries and disorders. We are paying
$880,400 over the period from April 1998 through January 5, 2001, and
$76,400 per quarter commencing January 2001 and continuing until NDA
submission. We also granted Western options to purchase an aggregate of
450,000 shares of our common stock at $1.50 per share for a term of five
years. The options vest at various times based upon performance. Daniel
L. Azarnoff, M.D., a director of Entropin is also a director of Western.

In November 1999, we entered into an agreement with Western to assume
our obligations under our agreement with Therapeutic Management, Inc. to
perform tasks required to comply with FDA regulations applicable to the
conduct, coordination and management of the first Phase III trial. Among
other things, WCCS is to select investigators, train clinical site
personnel, maintain the master file of all pre-study and study documents,
and prepare the Study Report to be submitted to the FDA. We will pay
Western approximately $350,000 based on completion of certain project goals.

These transactions are believed to be as favorable as obtainable from
third parties and were approved by directors who did not have an interest
in the transactions. However, at the time of the transactions we did not
have any independent disinterested directors to ratify the transactions.
All future material related party transactions and loans will be made or
entered into on terms that are no less favorable than those that can be
obtained from non-related third parties. In addition, all future material
related party transactions and loans, and any forgiveness of loans, must be
approved by a majority of our independent directors who do not have an
interest in the transactions and who have access, at our expense, to our
legal counsel or to independent legal counsel.

<PAGE>
DESCRIPTION OF SECURITIES

Our authorized capital stock consists of 50,000,000 shares of common
stock, $.001 par value per share, and 10,000,000 shares of preferred stock,
$.001 par value per share.

COMMON STOCK

At March 10, 2000 there were 7,382,280 shares of common stock
outstanding held of record by 410 stockholders. Each share of common stock
is entitled to one vote on all matters submitted to a vote of the
stockholders, and cumulative voting is not permitted. Upon issuance,
shares of common stock are not subject to further assessment or call.
Subject to the prior rights of any series of preferred stock that may be
issued by us, holders of common stock are entitled to receive ratably such
dividends that may be declared by the board of directors out of funds
legally available therefor and are entitled to share ratably in all assets
remaining after payment of liabilities in the event of our liquidation,
dissolution or winding up. Holders of common stock have no preemptive
rights or rights to convert their common stock into any other securities.
All outstanding shares of common stock are, and all shares of common stock
to be outstanding upon completion of this offering will be, fully paid and
nonassessable.

WARRANTS

Each warrant will entitle the holder to purchase one share of common
stock at an exercise price of $10.50 per share. The warrants will generally
be exercisable at any time for five years after the date of this prospectus,
unless earlier redeemed. The warrants are redeemable by us, at a price of
$0.25 per warrant:

* upon 30 days' prior written notice;

* no earlier than one year from the date of this prospectus; and then

* only if the closing bid price of the common stock equals or
exceeds $17.25, per share for the 10 consecutive trading days
immediately preceding the date of notice of redemption.

If we give notice of our intention to redeem, a holder must either:

* sell or exercise the warrants before the date specified in the
redemption notice; or

* accept the redemption price.

The warrants will be issued in registered form under a warrant
agreement between us and Corporate Stock Transfer, Inc., as warrant agent.
The shares of common stock underlying the warrants, when issued upon
exercise of a warrant, will be fully paid and nonassessable. We will pay
any transfer tax incurred as a result of the issuance of common stock to
the holder upon its exercise.

The warrants contain provisions that protect the holders against
dilution by adjustment of the exercise price. These adjustments will occur
if there is a merger, stock split or reverse stock split, stock dividend or
recapitalization and they could occur in other situations. We are not
required to issue fractional shares upon the exercise of a warrant. The
holder of a warrant will not possess any rights as our shareholder until he
or she exercises the warrant.

A warrant may be exercised by surrendering the warrant certificate

* on or before the expiration or redemption date of the warrant at
the offices of the warrant agent; with

* the form of "Election to Purchase" on the reverse side of the
warrant certificate completed and executed as indicated; and

* payment of the exercise price by certified or bank check payable
to the order of Entropin, Inc. for the number of shares for to
which the warrant is being exercised.

<PAGE>
In order for a holder to exercise the warrants, there must be

* a current registration statement in effect with the Securities
and Exchange Commission; and,

* qualification in effect under applicable state securities laws or
applicable exemptions from state qualification requirements, with
respect to the issuance of common stock or other securities
underlying the warrants.

We have agreed to use all commercially reasonable efforts to cause a
registration statement with respect to such securities under the Securities
Act to be filed and to become and remain effective in anticipation of and
before the exercise of the warrants and to take such other actions under
the laws of various states as may be required to cause the sale of common
stock or other securities upon exercise of warrants to be lawful. We will
not be required to honor the exercise of warrants if, in the opinion of our
board of directors with the advice of counsel, the sale of securities upon
exercise would be unlawful.

For the life of the warrants, the holders have the opportunity to
profit from a rise in the market price of the common stock without assuming
the risk of ownership of the shares of common stock underlying the
warrants. The warrant holders may be expected to exercise their warrants
at a time when we would, in all likelihood, be able to obtain any needed
capital by an offering of common stock on terms more favorable than those
provided for by the warrants. Furthermore, the terms on which we could
obtain additional capital during the life of the warrants may be adversely
affected.

OTHER OPTIONS, WARRANTS AND CONVERTIBLE SECURITIES

We have outstanding options and warrants to purchase an aggregate of
3,559,501 shares of our common stock, at exercise prices ranging from $1.50
to $5.00 per share and expiration dates ranging from July 2004 to February
2008. Additionally, there are 230,500 shares issuable upon conversion of
the Series B preferred stock.

PREFERRED STOCK

Our Board of Directors has the authority, without further action by
the stockholders, to issue up to 10,000,000 shares of preferred stock in
one or more series and to fix the powers, designations, preferences and
relative, participation, option or other rights thereof, including dividend
rights, conversion rights, voting rights, redemption terms, liquidation
preferences, sinking fund terms and the number of shares constituting any
series. The issuance of preferred stock in certain circumstances may have
the effect of delaying, deferring or preventing a change in control of our
company, may discourage bids for our common stock at a premium over the
market price of the common stock, and may adversely affect the market price
of, and the voting and other rights of the holders of the common stock.

Our Board of Directors has designated 3,210,487 shares of preferred
stock as Series A redeemable non-voting preferred stock, of which all were
issued to four holders of record in exchange for our promissory notes and
deferred compensation. Series A preferred stock is designated as
redeemable eight (8%) percent non-cumulative non-voting preferred stock and
redeemable only from 20% of annual "Earnings", but not to exceed "Net Cash
Flow from Operating Activities" as those terms are defined under GAAP. The
Series A preferred stock will be automatically canceled on January 16,
2005, if not fully redeemed within that time period.

Our Board of Directors has designated 400,000 shares of preferred
stock as convertible Series B redeemable non-voting preferred stock, of
which 245,500 shares were issued and 230,500 shares remain outstanding held
by 33 holders of record. Series B preferred stock is designated as redeemable
ten (10%) percent cumulative non-voting preferred stock with $.001 par
value and convertible on a one for one basis into common stock. At our
election, annual dividends may be paid in cash and/or in shares of our
common stock, at the rate of one share of common stock for each $5.00 in
accrued dividends. We may redeem at any time, in whole or in part based
on a pro rata basis with other holders of the Series B preferred stock, the

<PAGE>
outstanding Series B preferred stock upon 30 days' notice at $5.00 per
share plus accrued and unpaid dividends from the date of issuance up to the
expiration date. All issued and outstanding Series B preferred stock must
be redeemed in full on or before July 15, 2003.

We will not offer preferred stock to officers, directors or holders of
5% or more of our securities except on the same terms as offered to all
other existing shareholders or new shareholders, or unless the issuance of
preferred stock is approved by a majority of our independent directors who
do not have an interest in the transaction and who have access, at our
expense, to our legal counsel or to independent legal counsel.

STOCK TRANSFER AGENT

Corporate Stock Transfer, Inc., Denver, Colorado is our transfer
agent. The transfer agent's address is 3200 Cherry Creek Drive South,
Suite 430, Denver, Colorado 80209, and its telephone number is (303) 282-4800.

LIMITATIONS ON DIRECTORS' AND OFFICERS' LIABILITY

Our Amended Articles of Incorporation limit the liability of directors
to stockholders for monetary damages for breach of a fiduciary duty except
in the case of liability: (i) for any breach of their duty of loyalty to us
or our stockholders; (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; (iii) for
unlawful distributions as provided in Section 7-108-403 of the Colorado
Business Corporation Act; or (iv) for any transaction from which the
director derived an improper personal benefit.

Our Articles of Incorporation and Bylaws provide for the
indemnification of our directors and officers to the maximum extent
permitted by law, including Section 7-109-102 of the Colorado Business
Corporation Act, against all liability and expense (including attorneys'
fees) incurred by reason of the fact that the officer or director served in
such capacity, or in a certain capacity for another entity at our request.
Section 7-109-102 of the Colorado Business Corporation Act provides
generally for indemnification of directors against liability incurred as a
result of actions, suits or proceedings if they acted in good faith and in
a manner they reasonably believed to be in or not opposed to our best interests.

SHARES ELIGIBLE FOR FUTURE SALE

We presently have outstanding 7,382,280 shares of common stock of
which 6,028,082 shares are free trading. However, we entered into lock-up
agreements with our officers and directors and 5% stockholders which,
except for 127,500 shares, requires that all remaining 4,179,564 shares of
common stock owned by such persons may not be sold for a period of one year
following the date of this prospectus without the prior written consent of
the representatives.

We have agreed to register 711,200 shares of common stock under the
Securities Act of 1933, on behalf of certain stockholders. We may be
required to file a registration statement as soon as practicable from the
date of the closing of this offering, at our expense, under the Securities
Act, with respect to these shares of common stock, and to use our best
efforts to effect the registration, subject to some conditions and
limitations. At such time as these shares may be registered, they will be
free trading. If we propose to register any of our securities under the
Securities Act, either for our own account or for the account of other
security holders, the holders of registration rights will be entitled to
notice of the registration and will be entitled to include, at our expense,
their shares in the registration.

We have issued 1,354,198 shares of common stock which are "restricted"
shares subject to restrictions upon resale under Rule 144 under the
Securities Act. In general, under Rule 144, as currently in effect, any
person (or persons whose shares are aggregated), including persons deemed
to be affiliates, whose restricted securities have been fully paid for and
held for at least one year from the later of the date of

<PAGE>
payment therefor to us or acquisition thereof from an affiliate, may
sell such securities in brokers' transactions or directly to market
makers, provided that the number of shares sold in any three month
period may not exceed the greater of 1% of the then outstanding common
stock or the average weekly trading volume of the common stock during the
four calendar weeks preceding such sale. Sales under Rule 144 are also
subject to certain notice requirements and the availability of current public
information about us. After two years have elapsed from the later of the
issuance of restricted securities by us or their acquisition from an
affiliate, such securities may be sold without limitation by persons who are
not affiliates under Rule 144. The 1,354,198 shares of restricted stock
become eligible for sale at various times during the period April through
September 2000, with 35,500 shares subject to the lock-up agreement
described above.

Sales of substantial amounts of common stock by our stockholders under
Rule 144 or otherwise, or even the potential for such sales, are likely to
have a depressive effect on the market price of the shares of common stock
and warrants and could impair our ability to raise capital through the sale
of our equity securities.

<PAGE>
UNDERWRITING

The underwriters named below for whom Neidiger, Tucker, Bruner, Inc.
and Westport Resources Investment Services, Inc. are acting as
representatives, have severally agreed, under the terms and conditions of
an underwriting agreement with us and the underwriters, to purchase from
us, and we have agreed to sell to them, the number of shares and warrants
set forth in the table below at the prices set forth on the cover page of
this prospectus.

Underwriters Number of Shares Number of Warrants
------------ ---------------- ------------------

Neidiger, Tucker, Bruner, Inc. . . . . 625,000 625,000
Westport Resources Investment
Services, Inc. . . . . . . . . . . . 625,000 625,000
American Fronteer Financial. . . . . . 250,000 250,000
EBI Securities . . . . . . . . . . . . 100,000 100,000
First Colonial Securities. . . . . . . 100,000 100,000
Schneider Securities . . . . . . . . . 100,000 100,000
Capital West Securities. . . . . . . . 20,000 20,000
Culverwell & Co. . . . . . . . . . . . 20,000 20,000
Fox & Co. Investments. . . . . . . . . 20,000 20,000
Fredick & Co.. . . . . . . . . . . . . 20,000 20,000
Institutional Equities . . . . . . . . 20,000 20,000
Joseph Gunnar & Co.. . . . . . . . . . 20,000 20,000
Kashner Davidson Securities. . . . . . 20,000 20,000
Mercer Partners. . . . . . . . . . . . 20,000 20,000
National Securities. . . . . . . . . . 20,000 20,000
Smith Moore & Co.. . . . . . . . . . . 20,000 20,000
--------- ---------
TOTAL. . . . . . . . . . . . . . . 2,000,000 2,000,000
========= =========

If any shares and warrants are purchased, the underwriters are
committed to purchase all of the 2,000,000 shares and warrants offered by
this prospectus, but not the 300,000 shares and the 300,000 warrants
subject to the over-allotment option. The underwriting agreement also
provides that if an underwriter defaults, the purchase commitments of the
non-defaulting underwriters may be increased or this offering may be
terminated.

Once the underwriters have purchased the shares and warrants at the
public offering prices of $7.00 per share and $0.25 per warrant less
the 8% underwriting discount, they will offer the shares and warrants in
units consisting of one share and one warrant to the public at the public
offering prices and to other broker-dealers who are members of the selling
group at that price minus a concession of $0.28 per share and $0.01 per
warrant. The underwriters and selling group members may allow a discount
of $0.14 per share and $0.005 per warrant on sales to other broker-
dealers, including the underwriters. After the public offering of the
shares and warrants, the public offering price, the concessions to selling
group members and the discount to other broker-dealers may be changed by
the representatives.

We have granted the underwriters an option, expiring at the close of
business 45 days after the date of this prospectus, to purchase up to
300,000 additional shares and 300,000 additional warrants from us on the
same terms as apply to the sale of the shares and warrants set forth above.
The underwriters may exercise the option only to cover over-allotments
incurred in the sale of the shares and warrants.

The representatives have informed us that they do not expect the
underwriters to confirm sales of shares and warrants on a discretionary basis.

<PAGE>
The following table summarizes the discounts and estimated expenses
that we will pay to the underwriters:
<TABLE>
<CAPTION>
TOTAL
--------------------

PER PER WITHOUT
--- --- WITH OVER- OVER-
SHARE WARRANT ALLOTMENT ALLOTMENT
----- ------- --------- ---------
<S> <C> <C> <C> <C>

Underwriting discounts and commissions
(8% of the offering price). . . . . . . . . . $0.56 $0.02 $1,334,000 $1,160,000

Nonaccountable expense allowance
payable by us (3% of the offering price). . . $0.21 $0.0075 $ 500,250 $ 435,000
</TABLE>

We have also agreed to issue to the representatives warrants that
entitle the holder to purchase up to 200,000 shares at an exercise price of
$8.75 per share and to purchase up to 200,000 warrants to purchase
200,000 shares at $0.30 per warrant. The representatives' warrants may not
be exercised for at least one year and will be restricted from sale,
transfer, assignment, or hypothecation for a period of five years from the
effective date of the offering, except to officers or partners (not
directors) of the representatives and members of the selling group and/or
their officers or partners. The representatives' warrants are not
redeemable by us. We have agreed to maintain an effective registration
statement with respect to the issuance of the securities underlying the
representatives' warrants, if necessary, to allow their public resale
without restriction, at all times during the period in which the
representatives' warrants are exercisable, beginning one year after the
date of this prospectus. Such securities are being registered on the
registration statement of which this prospectus is a part.

The underwriting agreement provides for indemnification between us and
the underwriters against some liabilities, including liabilities under the
Securities Act of 1933 and for contribution by us and the underwriters to
payments that may be required to be made in respect of those liabilities.
Insofar as indemnification for liabilities under the Securities Act may be
permitted to our directors, officers and controlling persons under the
agreement between us and the underwriters, or otherwise, we have been
advised that in the opinion of the SEC this indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.

We have agreed that, for a period of one year following the completion
of this offering, we generally will not offer, sell, contract to sell,
grant any option for the sale or otherwise dispose of any of our common
stock without the consent of the representatives. Our officers, directors
and the holders of 5% or more of our outstanding common stock (aggregating
4,179,564 shares) have agreed that for a period of one year following the
date of this prospectus, they will not offer, sell, contract to sell, grant
any option for the sale or otherwise dispose of any of our common stock,
other than intra-family transfers or transfers to trusts for estate
planning purposes, without the consent of the representatives, which will
not be unreasonably withheld.

We have applied for listing of our common stock and warrants on the
Nasdaq SmallCap Market. If listing is approved, our common stock will
trade under the symbol "ETOP" and our warrants will trade under the symbol
"ETOPW".

Prior to this offering, our common stock has traded on the NASD OTC
Bulletin Board and there has been no public market for our warrants. Stock
that trades on the OTC Bulletin Board can experience a relatively inactive
trading market, or low trading volume, high volatility and/or trading
prices that may not bear any reasonable relationship to the financial
condition or book value of the company.

We can offer no assurances that the public offering price will
correspond to the price at which the common stock and warrants will trade
in the public market subsequent to the offering or that an active trading
market for the common stock and warrants will develop and continue after
the offering.

35
<PAGE>
The representatives on behalf of the underwriters may engage in over-
allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Securities Exchange
Act of 1934.

* Over-allotment involves syndicate sales in excess of the offering
size, which creates a syndicate short position.

* Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a
specified maximum.

* Syndicate covering transactions involve purchases of the common
stock and warrants in the open market after the distribution has
been completed in order to cover syndicate short positions.

* Penalty bids permit the representatives to reclaim a selling
concession from a syndicate member when the shares and warrants
originally sold by the syndicate member are purchased in a
syndicate covering transaction to cover syndicate short
positions.

These stabilizing transactions, syndicate covering transactions and
penalty bids may cause the price of the common stock and warrants to be
higher than it would otherwise be in the absence of such transactions.
These transactions may be effected on the Nasdaq SmallCap Market or
otherwise and, if commenced, may be discontinued at any time.

LEGAL MATTERS

Certain legal matters with respect to the validity of the common stock
and the warrants to purchase common stock offered hereby will be passed
upon for us by Brenman Bromberg & Tenenbaum, P.C., Denver, Colorado.
Members of the firm of Brenman Bromberg & Tenenbaum, P.C. own 59,855 shares
of our common stock. A. Thomas Tenenbaum, a director of Brenman Bromberg
& Tenenbaum, P.C., was our CEO prior to our merger with old Entropin. The
Law Office of Gary A. Agron, Englewood, Colorado has acted as counsel to
the representatives in connection with this offering.

EXPERTS

The financial statements for the years ended December 31, 1999 and
1998, and for the period from August 27, 1984 (inception) to December 31,
1999, included in this prospectus and Registration Statement have been
audited by Causey Demgen & Moore Inc., independent auditors, as set forth
in their report thereon appearing elsewhere herein, and are included in
reliance upon such report given upon the authority of such firm as experts
in accounting and auditing.

ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form SB-2 under
the Securities Act with respect to the shares and warrants offered. This
prospectus omits some information contained in the registration statement
and the exhibits, as permitted by the rules and regulations of the SEC. For
further information with respect to us and our securities, you should
review the registration statement and its exhibits, which may be inspected,
without charge, at the Public Reference Section of the SEC at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
regional office of the SEC located at 7 World Trade Center, Suite 1300, New
York, NY 10048. Copies of all or any portion of the Registration
Statement may be obtained from the Public Reference Section of the SEC,
upon payment of prescribed fees. The SEC maintains a World Wide Web site
that contains reports, proxy and information statements and other
information about registrants that file electronically with the SEC,
including the registration statement. The address of the SEC's World Wide
Web site is http://www.sec.gov.

36
<PAGE>
ENTROPIN, INC.

INDEX TO FINANCIAL STATEMENTS

AUDITED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999:

Report of Independent Certified Public Accountants F-2

Balance Sheets as of December 31, 1998 and 1999 F-3

Statements of Operations for Years Ended December 31, 1998
and 1999, and for the Period from August 27, 1984 (Inception)
Through December 31, 1999 F-4

Statements of Changes in Stockholders' Equity (Deficit)
for the Period from August 27, 1984 (Inception) Through
December 31, 1999 F-5

Statements of Cash Flows For Years Ended December 31, 1998
and 1999, and for the Period from August 27, 1984 (Inception)
Through December 31, 1999 F-6

Notes to Financial Statements December 31, 1998 and 1999 F-8

F-1

<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors and Stockholders
Entropin, Inc.

We have audited the accompanying balance sheet of Entropin, Inc. (a
development stage company) as of December 31, 1998 and 1999, and the related
statements of operations, changes in stockholders' equity (deficit) and cash
flows for the years then ended and for the period from August 27, 1984
(inception) through December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Entropin, Inc. as of
December 31, 1998 and 1999 and the results of its operations and its cash
flows for the years then ended and for the period from August 27, 1984
(inception) through December 31, 1999, in conformity with generally accepted
accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company is in the development stage and has been
primarily involved in research and development activities, resulting in
significant losses and an accumulated deficit at December 31, 1999 of
$12,640,814 These conditions raise substantial doubt about its ability to
continue as a going concern. Management's plans regarding those matters also
are described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

Denver, Colorado

February 4, 2000, except for
Note 9, as to which the date is
March 9, 2000

CAUSEY DEMGEN & MOORE INC.

F-2

<PAGE>

ENTROPIN, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
December 31, 1998 and 1999

ASSETS

1998 1999
---- ----
Current assets:
Cash and cash equivalents $ 445,333 $2,260,526

Property and equipment, at cost:
Leasehold improvements 72,187 61,437
Office furniture and equipment 15,518 23,855
---------- ----------

87,705 85,292

Less accumulated depreciation (5,006) (23,429)
----------- -----------

Net property and equipment 82,699 61,863

Other assets:
Deposits 12,261 12,261
Deferred stock offering costs (Note 5) - 169,425
Patent costs, less accumulated amortization of
$59,600 (1998) and $82,019 (1999) 295,316 321,150
---------- ----------

Total other assets 307,577 502,836
---------- ----------

$ 835,609 $ 2,825,225
========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
Accounts payable $ 59,141 $ 199,042
Accounts payable - related parties 11,314 123,763
---------- ----------
Total current liabilities 70,455 322,805

Deferred royalty agreement (Note 7) 169,783 184,071

Commitments and contingencies (Notes 1 and 7)

Series A redeemable preferred stock,
$.001 par value; 3,210,487 shares
authorized, issued and outstanding,
$1 per share redemption value (Note 4) 3,210,487 3,210,487

Series B redeemable convertible preferred stock,
$.001 par value; 400,000 shares authorized,
245,500 (1998) and 230,500 (1999) shares
issued and outstanding, $5.00 per share
redemption value (Note 4) 1,142,750 1,093,175

Stockholders' equity (deficit) (Note 5):
Preferred stock, $.001 par value; 10,000,000
shares authorized, Series A and B reported
above - -
Common stock, $.001 par value; 50,000,000 shares
authorized, 6,000,051 (1998) and 7,382,280
(1999) shares issued and outstanding 6,000 7,382
Additional paid-in capital 7,474,210 13,866,412
Deficit accumulated during the development stage (7,578,802) (12,640,814)
Unearned stock compensation (3,659,274) (3,218,293)
---------- ----------
Total stockholders' equity (deficit) (3,757,866) (1,985,313)
---------- ----------

$ 835,609 $2,825,225
========== ==========

See accompanying notes.
F-3

<PAGE>

ENTROPIN, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
For the Years Ended December 31, 1998 and 1999
and for the Period from August 27, 1984 (Inception) through December 31, 1999

Cumulative
amounts from
1998 1999 inception
---- ---- ------------
Costs and expenses:
Research and development (Note 5) $ 906,719 $ 1,743,837 $ 6,597,410
General and administrative (Note 5) 1,844,575 3,211,809 5,626,639
Rent-related party (Note 2) 12,314 6,000 18,314
Depreciation and amortization 24,306 40,842 122,516
----------- ----------- ------------

Operating loss (2,787,914) (5,002,488) (12,364,879)

Other income (expense):
Interest income 24,738 64,888 89,626
Interest expense (1,451) (1,662) (242,811)
----------- ----------- ------------

Total other income (expense) 23,287 63,226 (153,185)
----------- ----------- ------------

Net loss (Note 3) (2,764,627) (4,939,262) (12,518,064)

Accrued dividends applicable to Series
B preferred stock (Note 4) (56,260) (119,300) (175,560)
----------- ----------- ------------

Net loss applicable to common share-
holders $(2,820,887) $(5,058,562) $(12,693,624)

Basic net loss per common share
(Note 6) $ (.47) $ (.75) $ (2.36)
=========== ========== ============

Weighted average common shares
outstanding (Note 6) 5,968,000 6,749,000 5,374,000
=========== ========= ============

See accompanying notes.
F-4

ENTROPIN, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
For the Period from August 27, 1984 (Inception) through December 31, 1999
<CAPTION>

Deficit
accumulated
Additional Unearned during the
Common stock paid-in Stock stock development
Shares Amount capital subscriptions compensation stage
------ ------ ---------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>

Balance at August 27, 1984 (inception) - $ - $ - $ - $ - $ -
Sale of common stock for cash
in 1984 ($.005 per share) 991,800 992 4,008 - - -
Issuance of common stock in exchange
for services in 1991 ($.005 per
share) 3,967,198 3,967 16,033 - - -
Cash contribution from shareholder in
1991 - - 50,000 - - -
Net loss for the period from inception
through December 31, 1994 - - - - - (2,824,221)
--------- ------ ---------- ---------- ------------ ------------

Balance, December 31, 1994 4,958,998 4,959 70,041 - - (2,824,221)
Cash received for common stock
subscription - - - 150,000 - -
Net loss for the year - - - - - (263,368)
--------- ------ ---------- ---------- ------------ ------------

Balance, December 31, 1995 4,958,998 4,959 70,041 150,000 - (3,087,589)
Sale of common stock for cash ($1.15
per share) 261,002 261 299,739 (150,000) - -
Net loss for the year - - - - - (375,138)
--------- ------ ---------- ---------- ------------ ------------

Balance, December 31, 1996 5,220,000 5,220 369,780 - - (3,462,727)
Capital contributions - - 927,000 - - -
Net loss for the year - - - - - (1,351,448)
--------- ------ ---------- ---------- ------------ ------------

Balance, December 31, 1997 5,220,000 5,220 1,296,780 - - (4,814,175)
Sale of common stock for cash, $2.75
per share (Note 5) 300,000 300 797,810 - - -
Issuance of common stock pursuant to
recapitalization (Note 5) 480,051 480 219,620 - - -
Unearned stock compensation pursuant
to issuance of common stock options
(Notes 5 and 7) - - 5,160,000 - (5,160,000) -
Amortization of unearned stock
compensation (Note 5) - - - - 1,500,726 -
Net loss for the year - - - - - (2,764,627)
--------- ------ ---------- ---------- ------------ ------------

Balance, December 31, 1998 6,000,051 6,000 7,474,210 - (3,659,274) (7,578,802)
Unearned stock compensation pursuant
to issuance of common stock options
(Note 5) - - 2,504,500 - (2,504,500) -
Amortization of unearned stock
compensation (Note 5) - - - - 2,945,481 -
Issuance of common stock pursuant to
private placements (Note 5) 1,208,700 1,209 3,366,121 - - -
Conversion of promissory notes to
common stock (Note 5) 100,831 101 201,561 - - -
Shares issued from exercise of
options (Note 5) 20,000 20 79,980 - - -
Shares issued for services 13,148 12 67,755 - - -
Conversion of Series B preferred
stock to common stock (Note 4) 15,000 15 74,985 - - -
Shares issued for Series B preferred
stock dividend (Note 4) 24,550 25 122,725 - - (122,750)
Accretion to mandatory redemption
amount for Series B preferred stock - - (25,425) - - -
Net loss for the year - - - - - (4,939,262)
--------- ------ ---------- ---------- ------------ ------------

Balance, December 31, 1999 7,382,280 $7,382 $13,866,412 $ - $(3,218,293)($12,640,814)
========= ====== =========== ========== =========== ===========
</TABLE>

See accompanying notes.
F-5

<PAGE>

ENTROPIN, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
For the Years Ended December 31, 1998 and 1999
and for the Period from August 27, 1984 (Inception) through December 31, 1999

Cumulative
amounts
from
1998 1999 inception
---- ---- ---------
Cash flows from operating activities:
Net loss $(2,764,627) $(4,939,262) $(12,518,064)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization 24,306 40,842 122,516
IBC partner royalty agreement 14,288 14,288 184,071
Services contributed in exchange
for stock and stock options 1,500,726 3,013,248 5,460,974
Services contributed in exchange
for compensation agreements - - 2,231,678
Increase in accounts payable -
related party 11,314 112,449 123,763
Decrease in accounts receivable -
shareholder 5,000 - -
Increase (decrease) in accounts
payable (270,672) 139,901 199,042
Increase in accrued interest - - 169,139
Other - 1,662 1,793
----------- ----------- ------------
Total adjustments 1,284,962 3,322,390 8,492,976
----------- ----------- ------------
Net cash used in operations (1,479,665) (1,616,872) (4,025,088)
Cash flows from investing activities:
Purchase of property and equipment
(net) (87,705) 2,413 (102,499)
Patent costs (48,160) (48,253) (403,169)
Deposits (12,261) - (12,261)
----------- ----------- ------------
Net cash used in investing activities (148,126) (45,840) (517,929)
Cash flows from financing activities:
Proceeds from recapitalization 220,100 - 220,100
Deferred stock offering costs 10,746 (169,425) (169,425)
Proceeds from sale of common stock 798,110 3,447,330 4,600,440
Proceeds from sale of preferred stock 1,142,750 - 1,142,750
Proceeds from stockholder loans - - 809,678
Proceeds from stockholder advances - - 98,873
Repayments of stockholder advances (98,873) - (98,873)
Proceeds from convertible notes payable - 200,000 200,000
----------- ----------- ------------
Net cash provided by financing
activities 2,072,833 3,477,905 6,803,543
----------- ----------- ------------
Net increase in cash 445,042 1,815,193 2,260,526
Cash and cash equivalents at beginning
of period 291 445,333 -
----------- ----------- ------------
Cash and cash equivalents at end of
period $ 445,333 $ 2,260,526 $ 2,260,526
=========== =========== ============

(Continued on following page)
See accompanying notes.
F-6

<PAGE>

ENTROPIN, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
For the years ended December 31, 1998 and 1999
and for the Period from August 27, 1984 (inception) through December 31, 1999

(Continued from preceding page)

Supplemental disclosure of cash flow information:

Cumulative
amounts
from
1998 1999 inception
---- ---- -----------
Cash paid during period for interest $1,451 $ - $61,306

Supplemental disclosure of non-cash financing activities:

Pursuant to an agreement with IBC limited partners, the Company has accrued
a liability totaling $184,071 at December 31, 1999 for advance royalties due
to the individuals (see Note 7).

On January 15, 1998, the Company issued 3,210,487 shares of Series A
preferred stock in exchange for an aggregate $1,710,487 of notes payable to
shareholders plus accrued interest and a $1,500,000 compensation agreement.

During 1998 and 1999, the Company entered into several stock option
agreements with persons and entities that have contributed services to the
Company. In accordance with Statement of Financial Accounting Standards 123,
the Company has recorded deferred compensation related to these agreements
totaling $5,160,000 and $2,504,500 and has amortized compensation expense
totaling $1,500,726 and $2,945,481, during 1998 and 1999, respectively. These
stock option agreements are described more fully in Note 5.

During 1999, the Company converted note payable agreements with outstanding
principal and interest balances totaling $201,662 into 100,831 shares of
common stock.

During 1999, the Company issued 13,148 shares of common stock for services
totaling $67,767.

In 1999, the Company issued 24,550 shares of common stock valued at $5.00 per
share as payment of accrued dividends on Series B preferred stock.

See accompanying notes.
F-7

<PAGE>

ENTROPIN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1999

1. Organization and summary of significant accounting policies

Organization:

Entropin, Inc., a Colorado corporation, was organized in August 1984, to be a
pharmaceutical research company developing Esterom(R) solution, a topically
applied compound for the treatment of impaired range of motion associated
with acute lower back sprain and acute painful shoulder. The Company is
considered to be a development stage enterprise as more fully defined in
Statement No. 7 of the Financial Accounting Standards Board. Activities from
inception include research and development, seeking the U.S. Food and Drug
Administration (FDA) approval for Esterom(R) solution, as well as fund
raising.

On January 15, 1998, the Company consummated an agreement and plan of merger
with Vanden Capital Group, Inc., a Colorado corporation, (Vanden), in which
Vanden acquired all of the issued and outstanding common shares of the
Company (see Note 5). The Company was merged into Vanden, and Vanden changed
its name to Entropin, Inc. For accounting purposes, the acquisition has been
treated as a recapitalization of the Company, based upon historical cost, and
a reverse acquisition with the Company as the acquirer.

Basis of presentation and management's plans:

The Company's financial statements have been presented on a going concern
basis which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company is in the
development stage and has been primarily involved in research and development
activities. This has resulted in significant losses and an accumulated
deficit at December 31, 1999 of $12,640,814. The Company's continued
existence is dependent on its ability to obtain the additional funding
necessary to complete the FDA approval process for Esterom(R) solution and
market the product.

As described in Note 5, the Company successfully completed recapitalization
of the Company in January 1998. The Company also sold private offerings of
245,500 shares of Series B convertible preferred stock for gross proceeds of
$1,227,500 (Note 4), $200,000 of convertible notes payable, and 1,508,700
shares of common stock for gross proceeds of $4,664,800 (Note 5), which
offerings provide liquidity to the Company for current operations. The
Company raised sufficient funds in 1999 to complete the first part of a two
part Phase III clinical trial program associated with the FDA approval
process for the treatment of acute painful shoulder. The trials began in
November 1999 and the first part is scheduled for completion in mid 2000.
Management is confident that it will raise the added funds necessary to
complete the second part of the Phase III trials, ancillary studies and the
New Drug Application (NDA) process, as well as additional funds for research
and development and working capital via a secondary securities offering in
early 2000. The Company estimates it will require additional funding of up to
$10 million to successfully complete the FDA approval process. The financial
statements do not include any adjustment relating to the recoverability and
classification of recorded asset amounts or the amount and classification of
liabilities or other adjustments that might be necessary should the Company
be unable to continue as a going concern in its present form.

F-8

<PAGE>

ENTROPIN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1999

1. Organization and summary of significant accounting policies (continued)

Use of estimates:

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

Income Taxes:

The Company provides for income taxes utilizing the liability approach under
which deferred income taxes are provided based upon enacted tax laws and
rates applicable to the periods in which the taxes become payable.

Property and equipment:

Office furniture and equipment is recorded at cost. Depreciation commences as
items are placed in service and is computed on a straight-line method over
their estimated useful lives of three years.

Leasehold improvements are recorded at cost and amortized over the five-year
term of the lease.

Patents:

Patents are stated at cost less accumulated amortization which is calculated
on a straight-line basis over the useful lives of the assets, estimated by
management to average 16 years. Research and development costs and any costs
associated with internally developed patents (with the exception of legal
costs) are expensed in the year incurred.

The Company holds eight U.S. patents issued between 1984 and 1998 with
expiration dates ranging from September 2001 to June 2014. These patents
include two material composition patents covering the molecules contained in
Esterom(R) solution that expire in 2012 and 2013. The Company's three initial
patents were based on methods of treatment of rheumatoid arthritis using
benzoylecgonine and related compounds, and the five subsequent patents
include compound, composition and method claims involving derivative of the
compounds represented in the earlier patents. The Company believes that some
of the patents may be eligible for extensions of up to five years.

In December 1993, the Company filed an International Patent Application under
the Patent Cooperation Treaty claiming compounds present in the Esterom(R)
solution formulation from which eight separate patent applications were
derived - Australia, Canada, Europe, Hungary, Japan, New Zealand, Norway and
Poland. In addition, the Company filed patent applications in China, Israel,
Mexico, South Africa and Taiwan. From these foreign applications, nine
patents have been issued to date.

Impairment of long-lived assets:

The Company evaluates the potential impairment of long-lived assets in
accordance with Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of". The Company annually reviews the amount of recorded
long-lived
F-9

<PAGE>

ENTROPIN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1999

1. Organization and summary of significant accounting policies (continued)

assets for impairment. If the sum of the expected cash flows from these
assets is less than the carrying amount, the Company will recognize an
impairment loss in such period.

Cash equivalents:

For the purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.

Deferred stock offering costs:

Deferred stock offering costs represent costs incurred to December 31, 1999,
in connection with the proposed offering of common stock (see Note 5). In the
event that such offering is successful, costs incurred as of December 31,
1999, and additional costs incurred subsequent to that date will be charged
against the proceeds of the offering; if the offering is not successful, the
costs will be charged to operations.

Concentrations of credit risk:

Financial instruments which potentially subject the Company to concentrations
of credit risk consist principally of cash and cash equivalents. The Company
places its cash with high quality financial institutions. At times during the
periods, the balances at financial institutions exceeded FDIC limits.

Stock-based compensation:

The Company has adopted Statement of Financial Accounting Standards No.
123, Accounting for Stock-Based Compensation. Compensation costs for stock
options is measured as the excess, if any, of the fair value of the options
at date of grant over the exercise price.

2. Related party transactions

Lease agreement:

The Company subleases approximately 800 square feet of office space from a
principal stockholder, at $800 per month.

Conversion of long-term debt - stockholders:

On January 15, 1998, the Company converted $1,710,487 of long-term debt and
accrued interest, incurred for cash advances and past services associated
with research and development, into 1,710,487 shares of 8% non-voting,
non-cumulative Series A preferred stock at $1.00 per share (see Note 4). The
debt was owed to significant stockholders.

3. Income taxes

The consummation of the stock exchange with Vanden and the issuance of
preferred stock in January 1998 (see Note 5), resulted in a change in the
Company's tax status from an S corporation to a taxable corporation. The
effect of the change is to provide for income tax based upon reported results
of
F-10

<PAGE>

ENTROPIN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1999

3. Income taxes (continued)

operations, and to provide deferred tax assets and liabilities on
temporary differences between reported earnings and taxable income.

At December 31, 1999, the Company has net operating loss carryforwards of
approximately $3,558,000 and future tax deductions of $6,946,000 which may be
used to offset future taxable income. The future tax deductions result
primarily from utilizing the cash basis for income tax reporting purposes and
unearned stock compensation. The difference between the tax loss
carryforwards and future tax deductions and the cumulative losses from
inception result from the losses previously incurred by the S corporation.
The net operating loss carryforwards expire in 2018 and 2019. Approximately
$250,000 of the net operating loss carryforward is limited as to the amount
which may be used in any one year. At December 31, 1998 and 1999, total
deferred tax assets and the valuation allowance are as follows:

1998 1999
---- ----
Deferred tax assets resulting from:
Net operating loss carryforwards $ 480,000 $1,245,000
Accrual to cash adjustments 872,000 875,000
Unearned stock compensation 525,000 1,556,000
---------- ----------
Total 1,877,000 3,676,000
(1,877,000) (3,676,000)
---------- ----------
$ - $ -
========== ==========

A 100% valuation allowance has been established against the deferred tax
assets, as utilization of the loss carryforwards and realization of other
deferred tax assets cannot be reasonably assured.

4. Redeemable preferred stock

In December 1997, the Board of Directors approved an amendment to the
Articles of Incorporation to authorize 10,000,000 shares of $.001 par value
preferred stock. On January 15, 1998, the Company issued 3,210,487 shares of
its Series A redeemable, non-voting, non-cumulative 8% preferred stock in
exchange for an aggregate $1,710,487 of notes payable to shareholders,
accrued interest, and a $1,500,000 compensation agreement. The annual 8%
dividend is based upon a $1.00 per share value, and is only payable out of
earnings.

The Series A preferred stock is subject to mandatory redemption. The shares
are redeemable only from 20% of annual earnings, but not exceeding net cash
flow from operating activities, and will automatically cancel on January 16,
2005, if not fully redeemed. The Company may voluntarily redeem outstanding
shares of preferred stock at $1 per share.

In July 1998, the Company completed a private placement of 245,500 shares of
Series B preferred stock at $5.00 per share, for total net proceeds of
$1,142,750. The Series B preferred stock is designated as redeemable 10%
cumulative non-voting convertible preferred stock with $.001 par value. The
shares are convertible on a one for one basis into common stock. The
dividends accrue at the rate of $.50 per share per annum and are paid
annually commencing July 15, 1999. At the Company's election, annual
dividends were paid in shares of the Company's common stock valued at $5.00
per share at July 15, 1999. Dividends

F-11

<PAGE>

ENTROPIN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1999

4. Redeemable preferred stock (continued)

are added to net loss in determining net loss per common share. 15,000
Series B preferred shares have been converted as of December 31, 1999.
All unconverted shares will be redeemed at $5.00 per share on or before July
15, 2003.

5. Stockholders' equity

Recapitalization:

On December 9, 1997, the Company entered into an agreement and plan of merger
with Vanden to exchange all of the issued and outstanding common shares of
the Company, in exchange for 5,220,000 shares of Vanden's $.001 par value
common stock, in a reverse acquisition.

Pursuant to the agreement, Vanden agreed to have cash of $220,000 and no
unpaid liabilities at the effective date of the transaction. The exchange was
consummated on January 15, 1998 and is presented on the statement of changes
in stockholders' equity as an issuance of 480,051 shares of common stock for
cash proceeds of $220,100 pursuant to recapitalization. In connection with
the recapitalization, the Company issued options to purchase 180,001 shares
of its $.001 par value common stock for cash of $100 and options to purchase
an additional 180,001 shares of common stock for $2.80 per share, as required
by a management advisory services contract as compensation for arranging the
merger. The difference between the fair value of the stock, estimated by the
Company to be $2.75 per share, and the purchase price for the initial 180,001
shares was treated as additional cost of the merger and charged to capital,
consistent with accounting for the reverse acquisition as a recapitalization.
The net effect of this transaction was to record an increase and related
decrease to additional paid-in capital of $495,000. The remaining options to
acquire 180,001 shares are exercisable for a five-year period.

Following the exchange, the Company's shareholders owned approximately 95% of
the outstanding common stock of Vanden. The reverse acquisition has been
accounted for as a recapitalization of the Company based upon historical
cost. Accordingly, the number of authorized and issued common shares, par
value of common stock and additional paid-in capital have been restated on
the balance sheet and the statement of stockholders' equity to give
retroactive effect to the recapitalization.

Private placements:

In January 1998, the Company completed a private placement of 300,000 shares
of its $.001 par value common stock for gross proceeds of $825,000, $2.75 per
share.

In April 1999, the Company completed a private placement of 497,500 shares of
its $.001 par value common stock at $2.00 per share for gross proceeds of
$995,000.

In June 1999, the Company sold 304,750 shares of common stock at $4.00 per
share for gross proceeds of $1,219,000 in a private placement.

In September 1999, the Company sold 406,450 shares of common stock at $4.00
per share for gross proceeds of $1,625,800 in a private placement.

F-12

<PAGE>

ENTROPIN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1999

5. Stockholders' equity (continued)

Proposed public offering:

In June 1999, the Company entered into a letter of intent with an underwriter
to conduct a public offering of 2,000,000 units (consisting of one share of
common stock and one warrant to purchase one share of common stock) with
gross proceeds of approximately $12 to $14 million. The per share price will
be determined by mutual agreement between the Company and underwriter.

Other issuances of common stock:

In March 1999, the Company received cash proceeds aggregating $200,000
pursuant to eight 10% convertible note payable agreements with various
unrelated individuals and entities. Each note was unsecured, and due the
earlier of 90 days from the date of issue or upon the receipt by the Company
of certain proceeds from a private offering of its securities. Each note
agreement also provided a warrant granting the holder the right to purchase
three and one half restricted shares of the Company's common stock for each
dollar of principal received by the Company, for an aggregate of 700,000
shares. The warrants have certain registration rights, an exercise price of
$3.00 per share and are exercisable for five years from the date the shares
become freely tradable. To the extent that the shares underlying the warrants
are not registered within two years of grant date, the holders have the right
to exercise the warrants on a cashless basis for a period of five years. In
April 1999, the Company amended the note agreements to allow the note holders
to convert their promissory notes to shares of common stock at $2.00 per
share. Upon issuing the amendment, all note holders converted their notes,
including accrued interest, to common stock resulting in new issuances of
common stock totaling 100,831 shares. Due to the immediate conversion of the
notes to common stock, none of the proceeds received upon issuance of the
notes payable were allocated to the warrants. The net effect of allocating
proceeds to the warrants would be an increase and corresponding equal
decrease in additional paid-in capital.

Stock options and warrants:

In April 1998, the Company granted stock options to Western Center for
Clinical Studies, Inc. to purchase 450,000 shares of the Company's common
stock at $1.50 per share (see Note 7).

In August 1998, the Company granted to each director options to purchase up
to 60,000 shares of the Company's common stock (300,000 shares in the
aggregate), exercisable for ten years at $3.00 per share. Options to purchase
20,000 shares each were fully vested February 1999, and the remaining 40,000
vest on a pro rata basis monthly through February 2001. Should any of the
directors cease to serve on the board of directors, all non-vested options
shall be forfeited. During 1999, a director resigned and options to purchase
35,000 shares were canceled.

In September 1998, the board of directors approved a compensation plan for
three officers and directors, to serve on a management team, which included
stock options in lieu of salary aggregating 295,000 shares, exercisable for
five years at $4.00 per share. Options to purchase 125,000 shares were fully
vested in December 1998 and January 1999, and the remaining 170,000 vested on
a pro rata basis monthly through June 30, 1999. During 1999, a director
resigned and options to purchase 20,000 shares were canceled. During the
period July through October 1999, the Company provided its management team

F-13

<PAGE>

ENTROPIN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1999

5. Stockholders' equity (continued)

additional stock options in lieu of salary to purchase an aggregate of
430,000 shares of common stock. The options are exercisable at $4.00 per
share, and were fully vested at December 31, 1999.

In October 1998, the Company provided a 100,000 share stock option agreement
to an organization, with whom the Company entered into a one year consulting
agreement. The consultant provided investor relations and development
services, and received compensation of $5,000 per month. The options are
exercisable at $4.00 per share and vest 50,000 shares as of the date of the
agreement, 25,000 shares on March 31, 1999 and 25,000 shares on June 30,
1999. During May and August 1999, the organization exercised options for a
total of 20,000 shares of common stock. In July 1999, the Company also agreed
to provide the organization with an additional cash payment of $10,000, a
warrant to purchase up to an additional 23,500 shares of the Company's common
stock, as well as a finder's fee for all funds received by the Company
related to fund raising activities attributable to the organization. The
warrant is exercisable for five years at $4.00 per share.

In December 1998, the board of directors approved a resolution whereby the
Company granted to a company and an individual two stock options to purchase
up to 17,500 shares of the Company's common stock (35,000 shares in the
aggregate) in exchange for services the Company received during 1998. The
options are exercisable at $4.00 per share for a period of five years and are
fully vested as of the date of the resolution.

On March 11, 1999, the Company provided a 175,000 share stock option
agreement to an organization with whom the Company entered a one year
consulting agreement. The Company may terminate the agreement after six
months. The organization provides investment community relations services,
and receives compensation of $3,000 per month. The option is exercisable at
$3.00 per share. The option provides certain registration rights to the
holder, and is exercisable the earlier of January 1, 2000 or when the shares
become registered. The exercise period is five years from the date the shares
become freely tradable. To the extent that the shares underlying the options
are not registered within two years of grant date, the holders have the right
to exercise the options on a cashless basis for a period of five years.

On March 15, 1999, the Company provided a 300,000 share stock warrant
agreement to an organization, with whom the Company entered into an eight
month consulting agreement. The organization was also to be paid a retainer
of $7,000 per month. The organization was engaged to raise capital
aggregating $8 million and provide financial advisory services. The warrants
were exercisable at $4.50 per share. In July 1999, the Company terminated the
consulting agreement. As final settlement, the organization received $69,084
for fees and expenses earned in conjunction with fund raising and a warrant
to purchase 50,000 shares of the Company's common stock, exercisable for five
years at $4.00 per share. The previous warrants to purchase 300,000 shares of
the Company's common stock were canceled.

On March 22, 1999, the Company provided a 125,000 share stock option
agreement to a partnership, with whom the Company entered into a six month
consulting agreement. The partnership provides financial community relations
and debt funding services. The options are exercisable at $3.00 per share.
The options provide certain registration rights to the holder, and are
exercisable the earlier of January 1, 2000 or when the shares become
registered. The exercise period is five years from the date the shares become
freely tradable. To the extent that the shares underlying the options are not
registered within two

F-14

<PAGE>

ENTROPIN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1999

5. Stockholders' equity (continued)

years of grant date, the holders have the right to exercise the options
on a cashless basis for a period of five years.

On March 31, 1999, the Company provided a 300,000 share stock warrant
agreement to an organization, with whom the Company entered into an eight
month consulting agreement. The organization was engaged to raise capital
aggregating $8 million and provide financial advisory services. The warrants
are exercisable at $3.00 per share, provide certain registration rights, and
vest 100,000 shares as of the date of the agreement, with the remaining
200,000 shares to vest in May and August 1999, subject to certain funding
requirements. The 200,000 shares are subject to ratable reductions to the
extent that any of the funding is not attributable to the organization. The
term of the warrants will be through March 22, 2004. The Company had not
received any funding during 1999 attributable to the organization and
warrants to purchase 200,000 shares have been canceled. The remaining
warrants to purchase 100,000 shares are in dispute.

In June 1999, the Company provided a 60,000 share stock option agreement to
an individual providing intellectual property assistance and advice related
to the Company's technology and products. The options are exercisable at
$5.00 per share for five years. Options to purchase 20,000 shares vest on May
1, 2000, with the remaining shares vesting ratably monthly through May 1,
2002.

In June 1999, the Company provided a 20,000 share stock option agreement to
an officer in exchange for services rendered to the Company. The options are
exercisable at $4.00 per share for five years. The options vest ratably over
a 12 month period from date of grant.

In June and July 1999, the Company provided stock option agreements
aggregating 120,000 shares to an organization providing financial consulting
services. The options are exercisable at $3.00 to $4.00 per share and vest
25,400 shares as of June 30, 1999, 20,000 shares at August 5, 1999, with the
remaining shares vesting through February 1, 2001.

In September 1999, the Company provided a 101,681 share stock warrant
agreement to an organization providing assistance in the June and September
1999 private placements of common stock. The warrants are exercisable at
$4.00 per share for five years and are fully vested (see Note 9).

In November 1999, as partial consideration for consulting services, the
Company issued to a consultant a warrant to purchase 30,000 shares of common
stock, exercisable at $4.00 per share for five years.

Also in November 1999, the Company granted an option to purchase 400,000
shares of common stock to its president at an exercise price of $5.00 per
share. The shares vest as follows: 100,000 shares upon completion of the
first part of the Phase III trials; 150,000 shares upon submission of the New
Drug Application (NDA); and, 150,000 shares upon approval of the NDA. The
options expire five years from the dates they become exercisable.

F-15

<PAGE>

ENTROPIN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1999

5. Stockholders' equity (continued)

The following is a summary of stock option and warrant activity:

<TABLE>
<CAPTION>
Options/warrants
exercisable
-------------------
Wtd. avg. Wtd. avg.
Option/warrant exercise Number exercise Number of
price per share price of shares price shares
-------------- ----- --------- ----- ------
<S> <C> <C> <C> <C> <C>
Balance December 31, 1997 $ - $ - - $ - -
Granted $.001 to $4.00 $2.47 1,540,002 - -
Exercised $0.001 $0.001 (180,001) - -
-------------- ------ ---------

Balance December 31, 1998 $1.50 to $4.00 $2.79 1,360,001 $3.36 635,001
Granted $3.00 to $5.00 $3.71 2,836,181 - -
Canceled $3.00 to $4.00 $3.04 (555,000) - -
Exercised $4.00 $4.00 (20,000) - -
-------------- ----- ---------- ----- ---------

Balance December 31, 1999 $1.50 to $5.00 $3.37 3,621,182 $3.59 1,667,848
========= =========
</TABLE>

The following is additional information with respect to those options and
warrants outstanding at December 31, 1999:

Wtd.avg.
remaining
contractual Number Options
Option/warrant price per share life in years of shares exercisable
------------------------------ ------------- --------- -----------
$1.50 3.4 450,000 75,000
$2.80 3.0 180,001 180,001
$3.00 6.5 1,425,000 314,999
$4.00 4.4 1,076,181 1,067,848
$5.00 4.8 490,000 30,000
--------- ---------
3,621,182 1,667,848
========= =========

F-16

<PAGE>

ENTROPIN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1999

5. Stockholders' equity (continued)

At December 31, 1999, outstanding options and warrants aggregating 1,565,182
shares have certain registration rights and options and warrants aggregating
2,295,181 shares contain certain cashless exercise provisions.

4,114,564 shares of the 4,179,564 shares owned by the Company's directors,
officers, and 5% or greater stockholders, and substantially all of the shares
underlying the outstanding options and warrants are subject to lock-up
agreements which expire one year after the effective date of the proposed
public offering unless released sooner upon written consent.

Unearned stock compensation:

At December 31, 1999, the Company had outstanding an aggregate of 3,621,182
options and warrants of which 2,436,000 were granted at purchase prices lower
than fair value of the stock at date of grant, including the stock options
and warrants disclosed above and the 450,000 granted to the Western Center
for Clinical Studies, Inc. (see Note 7). The excess of the fair value at the
grant date of the options and warrants, over the exercise price has been
recorded as additional paid-in capital and unearned stock compensation.
Unearned compensation is being amortized to research and development and
general and administrative expense over the term of the related agreements,
as follows:

Year ended Cumulative
December 31, amounts from
1998 1999 inception
---- ---- ------------

Research and development $ 502,000 $ 709,224 $1,211,224
General and administrative 998,726 2,236,257 3,234,983
---------- ---------- ----------

$1,500,726 $2,945,481 $4,446,207
========== ========== ==========

The fair value of each option and warrant grant is estimated on the date of
grant using the Black-Scholes option pricing model with the following
assumptions used for grants in 1998 and 1999: dividend yield of 0%, expected
volatility of 51% - 100%, risk-free interest rate of 4.63% - 6.22%, and
expected life of five to nine years.

6. Basic and diluted net loss per share

Basic net loss per share is based on the weighted average number of shares
outstanding during the periods. Shares issued for nominal consideration are
considered outstanding since inception. Diluted loss per share excludes
dilution from common stock equivalents, as exercise of the outstanding stock
options and warrants would have an anti-dilutive effect. The 10% cumulative
dividends on Series B preferred stock have been accrued and added to net loss
for the purpose of determining net loss and net loss per share applicable to
common shareholders.

7. Commitments and contingencies

Compensation agreements:

In 1993, the Company entered into a 30 year compensation agreement with
I.B.C. limited partners owning 64.28% of the I.B.C. Limited Partnership. The
limited partnership participated in the early

F-17

<PAGE>

ENTROPIN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1999

7. Commitments and contingencies (continued)

development of Esterom(R) solution (the medicine) and owned the patent rights
to three patents and all intellectual property rights. Under the terms of the
Agreement, the Company acquired all of the patent and intellectual property
rights in exchange for certain compensation to the limited partners, which is
dependent upon the Company's receipt of a marketing partner's technological
access fee and royalty payments. The limited partnership was subsequently
dissolved. Compensation under the agreement includes a bonus payment of
$96,420 to be paid at the time the Company is reimbursed by a drug company
for past expenses paid for development of the medicine, as well as 64.28%
of a decreasing payment rate (3% to 1%) on cumulative annual royalties
received by the Company. As of December 31, 1999, no liabilities have been
accrued with respect to this agreement.

In a separate agreement with certain former I.B.C. limited partners, the
Company has agreed to pay the partners 35.72% of a decreasing earned payment
(3% to 1% on cumulative annual sales of products by the Company) until
October 10, 2004. From October 10, 2004 until October 10, 2014, the Company
will pay the partners 17.86% of the earned payment. In accordance with the
agreement, the Company has agreed to pay these former limited partners the
amount of $40,000 and a minimum earned payment of $3,572 per calendar quarter
beginning on December 1, 1989. Such minimum earned payment is payable when
the Company is either reimbursed for expenses paid for the development of the
medicine or from the first income received by the Company from net sales of
the medicine. The quarterly payments are to be applied against the earned
payment to be received by the limited partners. As of December 31, 1999, the
liability accrued with respect to this agreement totaled $184,071. The
Company will receive a credit against the earned payments of 50% of monies
which are expended in connection with preparing, filing, obtaining, and
maintaining patents involved with the sold rights.

Development and Supply Agreements:

On January 1, 1997, the Company entered into ten year Development and Supply
Agreements with Mallinckrodt, Inc. to develop all of the chemistry,
manufacturing and controls to comply with the drug master file of the Food
and Drug Administration as well as supply the bulk active product for
marketing. In exchange for these services, Mallinckrodt received exclusive
rights as a supplier of the bulk active product to the Company in North
America. The price of the ingredient is based on the price of the components
in the bulk active product.

In addition, pursuant to the agreements, the Company has granted Mallinckrodt
a right of first refusal to supply the Company's requirements of the bulk
active product in all other parts of the world outside of North America.

The Company is dependent upon Mallinckrodt, Inc. to provide the raw material
from which the active ingredients in Esterom(R) solution are derived.

License Agreement:

In January 1998, the Company entered into an agreement with a director of the
Company, whereby the Company granted the director a non-exclusive right to
make, import and use the Company's product, Esterom(R) solution, under the
Company's licensed patents and to use the Company's confidential information
to develop new products that contain the same active ingredients as
Esterom(R) solution, but

F-18

<PAGE>

ENTROPIN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1999

7. Commitments and contingencies (continued)

are formulated differently. All rights to the improved products will
remain the exclusive property of the Company and the director will receive
a two percent royalty on the net sales of all improved products, and a
negotiated royalty on new products. The expiration date of this agreement is
January 1, 2003.

Management agreements:

During April 1998, the Company entered into an agreement with Western
Center for Clinical Studies, Inc. (WCCS), to provide assistance in taking
Esterom(R) solution through the clinical trials and New Drug Application(NDA)
approval. The agreement was subsequently amended in July 1999 and October
1999. The Company is required to pay management fees of $880,400 through
January 5, 2001 and $76,400 per quarter commencing January 2001 and
continuing until NDA submission. The Company also has granted stock options
to WCCS to purchase 450,000 shares of Entropin common stock at $1.50 per
share. The options will expire five years from the date they become
exercisable. The shares underlying the options are also provided with certain
registration rights. The difference between the fair value of the options at
date of grant and the exercise price, totaling approximately $1,950,000 using
the Black-Scholes option pricing model, has been recorded as additional
paid-in capital and unearned stock compensation. The unearned stock
compensation is being amortized to expense on a straight-line basis over the
initial 33 month term of the agreement.

In August 1999, the Company entered into an agreement with Therapeutic
Management, Inc. to provide clinical trial management services and monitor
all aspects of Esterom(R) solution's Phase III clinical studies. In November
1999, the Company entered into an agreement with WCCS to assume the Company's
obligations under Therapeutic Management Agreement. The Company will pay WCCS
approximately $350,000 based upon completion of certain project goals.

8. Financial instruments

The carrying values of cash and cash equivalents, accounts payable and
accounts payable - related party approximates fair value due to the
short-term maturities of these instruments.

The Company believes that it is not practical to estimate a fair market value
different from the carrying value of long-term debt. Long-term debt,
excluding the deferred royalty agreement, was converted into redeemable
preferred stock on January 15, 1998. Both the redeemable preferred stock and
the deferred royalty agreement have numerous features unique to these
securities and agreements as described in Notes 4 and 7.

9. Subsequent event

On March 9, 2000, the Company entered into an agreement with an organization
to cancel a 101,681 share stock warrant agreement issued in September 1999
in connection with private placements of common stock (see Note 5). The
Company has agreed to pay $330,000 cash as consideration for cancellation of
the warrant agreement.

F19

<PAGE>

ENTROPIN, INC. [Logo]

2,000,000 Shares of Common Stock

and

2,000,000 Redeemable Common Stock Purchase Warrants

-----------

PROSPECTUS

-----------

NEIDIGER, TUCKER, BRUNER, INC.

WESTPORT RESOURCES INVESTMENT SERVICES, INC.

March 14, 2000

<PAGE>
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

A. The Colorado Business Corporation Act (the "Act") allows
indemnification of directors, officers, employees and agents of the Company
against liabilities and reasonable expenses, including attorneys' fees,
incurred in any proceeding in which an individual is made a party because
he was a director, officer, employee or agent of the Company if such person
conducted himself in good faith and reasonably believed his actions were
in, or not opposed to, the best interests of the Company, and with respect
to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. A person must be found to be entitled to
indemnification under this statutory standard by procedures designed to
assure that disinterested members of the Board of Directors have approved
indemnification or that, absent the ability to obtain sufficient numbers of
disinterested directors, independent counsel or shareholders have approved
the indemnification based on a finding that the person has met the
standard. The Company's By-Laws provide that the Registrant shall have the
power to indemnify its officers, directors, employees and agents to the
extent permitted by the Act.

B. Article VIII of the Registrant's Amended and Restated Articles of
Incorporation provides for the elimination of personal liability for
monetary damages for the breach of fiduciary duty as a director except for
liability (i) resulting from a breach of the director's duty of loyalty to
the Registrant or its shareholders; (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of the
law; (iii) for approving payment of distributions to shareholders to the
extent that any such actions are illegal under the Act; or (iv) for any
transaction from which a director derives an improper personal benefit.
This Article further provides that the personal liability of the
Registrant's directors shall be eliminated or limited to the fullest extent
permitted by the Act.

C. The Underwriting Agreement between the Registrant and the Underwriters
provides that the Underwriters will indemnify and hold harmless the
Registrant, the directors of the Registrant, and each person, if any, who
controls the Registrant within the meaning of Section 15 of the Securities
Act of 1933, as amended (the "1933 Act"), against any and all losses,
claims, demands, liabilities and expenses (including reasonable legal or
other expenses) to which it may become subject, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or in any Blue Sky Application or
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, resulting from the use of written information furnished to the
Registrant by the Underwriters or any participating dealer for use in the
preparation of the Registration Statement or in any Blue Sky Application.

There is no pending litigation or proceeding involving a director,
officer, employee or other agent of the Company as to which indemnification
is being or may be sought, and the

II-1

<PAGE>

Company is not aware of any other pending or threatened litigation that may
result in claims for indemnification by any director, officer, employee or
other agent.

Item 25. Other Expenses of Issuance and Distribution
-------------------------------------------

The following is an itemization of all expenses (subject to future
contingencies) incurred or to be incurred by the Registrant in connection
with the issuance and distribution of the securities being offered. All
expenses are estimated except the registration fee.

Registration and filing fee . . . . . . . . . . . . $ 7,609(1)
NASD filing fee . . . . . . . . . . . . . . . . . . 3,237(1)
NASDAQ Application fee . . . . . . . . . . . . . . 10,000(1)
Printing . . . . . . . . . . . . . . . . . . . . . 30,000(2)
Accounting fees and expenses . . . . . . . . . . . 12,000(2)
Legal fees and expenses . . . . . . . . . . . . . . 100,000(2)
Blue Sky fees and filing fees . . . . . . . . . . . 80,000(2)
Transfer and Warrant Agent fees . . . . . . . . . . 5,000(2)
Miscellaneous . . . . . . . . . . . . . . . . . . . 7,154(2)
-------
Total . . . . . . . . . . . . . . . . . . . . . . . $255,000
=======
___________
(1) Reflects filing fees paid with the original filing of the
Registration Statement
(2) Estimated

Item 26. Recent Sales of Unregistered Securities
---------------------------------------

During the past three years, the Registrant and Old Entropin issued
securities to the following persons for the cash or other consideration
indicated in transactions that were not registered under the 1933 Act.

January 1998 Private Placement (Old Entropin)
---------------------------------------------

No. of Shares of
----------------
Name Common Stock Consideration Received
- ---- ------------ ----------------------

Suzanne Oliphant 10,000 $27,500

Albert W. White 10,000 $27,500

Stephen H. West 20,000 $55,000

C. Richard Harrison 10,000 $27,500

II-2

<PAGE>

No. of Shares of
----------------
Name Common Stock Consideration Received
- ---- ------------ ----------------------

Jeanette Y. Mihaly 20,000 $55,000

Joy Ann Svenson 10,000 $27,500

Richard L. Monfort 180,000 $495,000

David T. Treadwell 10,000 $27,500

David Bressler 5,000 $13,750

Gerald Olesh 10,000 $27,500

Arthur Kassoff 10,000 $27,500

Armond A. Azharian 5,000 $13,750
------- -------

Total 300,000 $825,000
======= ========

The offers and sales were made in reliance upon the exemption from
registration provided by Section 4(2) of the 1933 Act and/or Regulation D
and Rule 506 adopted thereunder. All of the purchasers are known by Old
Entropin's (now the Registrant's) Chairman, Higgins D. Bailey, or were
referred to him by other purchasers in this offering. Based upon the
written representations made by the purchasers and other information known
to the Registrant, the Registrant believes all of the purchasers were
Accredited Investors as that term is defined in Rule 501 of Regulation D.
No broker/dealers were involved in the sales and no commissions were paid.
All purchasers represented that they purchased the securities for
investment, and all certificates issued to the purchasers were impressed
with a restrictive legend advising that the shares represented by
certificates may not be sold, transferred, pledged or hypothecated without
having first been registered or the availability of an exemption from
registration established. Stop transfer instructions have been placed
against the transfer of these certificates by the Registrant's Transfer Agent.

II.

In November 1997, Old Entropin issued an 8% note in the principal
amount of $1,500,000 maturing December 31, 2000 payable to James E. Wynn as
compensation for research and development services provided since the
inception of the Company. In January 1998, Old Entropin converted this
obligation to 1,500,000 shares of its redeemable 8% non-voting, non-
cumulative Series A preferred stock, at $1.00 per share. The issuance of
the promissory note and the subsequent conversion into shares of Series A
preferred stock were made in reliance upon the exemption from registration
provided by Section 4(2) of the Act. The purchaser represented that he
acquired the securities for investment, and all certificates issued to the
purchaser were impressed with a restrictive legend advising that the shares
represented by certificates may not be sold, transferred, pledged or
hypothecated without having first been registered or the availability

II-3

<PAGE>

of an exemption from registration established. Stop transfer instructions
have been placed against the transfer of these certificates by the
Registrant's Transfer Agent.

III.

Debt/Equity Exchange (Old Entropin)
-----------------------------------

No. of Shares of Series
-----------------------
Name A Preferred Stock Consideration Received
- ---- ----------------- ----------------------

Higgins D. Bailey 178,000 $178,000

Lowell M. Somers 822,446 $822,446

Thomas T. Anderson Trust 710,041 $710,041
------- --------
Total 1,710,487 $1,710,487
========= ==========

Old Entropin had accrued $1,710,487, including interest, in long-term debt
owed to the abovementioned stockholders at December 31, 1997. On January
15, 1998, Old Entropin converted all of such long-term debt plus accrued
interest into 1,710,487 shares of Old Entropin's redeemable 8% non-voting,
non-cumulative Series A Preferred Stock at $1 per share. The issuance of
the shares of Series A preferred stock was made in reliance upon the
exemption from registration provided by Section 4(2) of the Act. The
purchasers represented that they acquired the securities for investment,
and all certificates issued to the purchasers were impressed with a
restrictive legend advising that the shares represented by certificates may
not be sold, transferred, pledged or hypothecated without having first been
registered or the availability of an exemption from registration
established. Stop transfer instructions have been placed against the
transfer of these certificates by the Registrant's Transfer Agent.

IV.

In December, 1997, Old Entropin entered into an agreement with LMU &
Company ("LMU"). As partial consideration for LMU's services under the
agreement, Old Entropin issued an option to purchase 180,001 shares of Old
Entropin's common stock, exercisable for cash of $100. The issuance of the
option to LMU was made in reliance upon the exemption from registration
provided by Section 4(2) of the Act. LMU represented that LMU acquired
the option for investment and not with a view to distribution. LMU
exercised its option in January 1998. Stop transfer instructions have been
placed against the transfer of these certificates by the Registrant's
transfer agent.

II-4

<PAGE>

January 1998 Vanden- Old Entropin Merger
----------------------------------------

On January 15, 1998, in order to consummate the Agreement and Plan of
Merger with Entropin, Inc., a California corporation ("Old Entropin"), the
Registrant issued 5,700,001 shares of its Common Stock, $.001 par value per
share, and 3,210,487 shares of the Company's redeemable 8% non-voting, non-
cumulative Preferred Stock, $.001 par value per share, in exchange for all
of the issued and outstanding shares of Common Stock and Preferred Stock of
Old Entropin on a one-for-one basis, as follows:

<TABLE>
<CAPTION>
Consideration Received
No. of Old
No. of Shares Entropin Shares
------------------- ----------------------
Series A Series A
Name Common Preferred Common Preferred
- ---- ------ --------- ------ ---------
<S> <C> <C> <C> <C>
Caroline T. Somers 1,145,793 1,145,793

Higgins D. & Shirley A. Bailey 1,404,093 1,404,093

Higgins D. Bailey, Pledge 1,404,093 1,404,093

Higgins D. Bailey 178,000 178,000

Chandler G. Brown 257,085 257,085

CapMac Eighty-Two LP 73,130 73,130

Milton D. McKenzie, Trustee
for The Milton D. McKenzie
Revocable Trust 102,834 102,834

Milton D. McKenzie 52,632 52,632

James E. Wynn 518,085 1,500,000 518,085 1,500,000

CKC Partners 78,300 78,300

Danny and Nancy Yu 10,000 10,000

Brent and Marlene Jackson 50,000 50,000

William J. Currin 10,000 10,000

Jacquelyn D. Anderson Baker 5,455 5,455

Interstate Johnson Lane Corp. 10,000 10,000

Dennis K. Metzler 5,000 5,000
</TABLE>

II-5

<PAGE>

Jerry L. and Nancy Sands 1,000 1,000

The Macy Family Trust 10,000 10,000

Dewey H. and Virginia Crim 20,000 20,000

James W. Toot 7,500 7,500

Robert L. Simpson 5,000 5,000

Gladys F. Decker & Deloras D.
Hunter, Trustees for Gladys F.
Decker Trust No. 1 20,000 20,000

Donald Hunter, Trustee of the
Donald Hunter Residuary
Marital Trust 80,000 80,000

Deloras Decker Hunter, Trustee
of the Deloras Decker Hunter
Generation Skipping Trust 10,000 10,000

Lowell M. Somers 822,446 822,446

Thomas T. Anderson Trust 710,041 710,041

Underwood Family Partners 60,001 60,001

Steven C. and Lynn T. Quoy 60,000 60,000

Suzanne Oliphant 10,000 10,000

Albert W. White 10,000 10,000

Stephen H. West 20,000 20,000

C. Richard Harrison 10,000 10,000

Jeanette Y. Mihaly 20,000 20,000

Joy Ann Svenson 10,000 10,000

Richard L. Monfort 180,000 180,000

David T. Treadwell 10,000 10,000
</TABLE>

II-6

<PAGE>

Gerald Olesh 10,000 10,000

Arthur Kassoff 10,000 10,000

Armond A. Azharian 5,000 5,000
--------- --------- --------- ---------
TOTAL 5,700,001 3,210,487 5,700,001 3,210,487
========= ========= ========= =========
</TABLE>

The exchange of Old Entropin shares for shares of the Registrant was
effected under the exemption from registration provided under Section 4(2)
of the Act and Rule 506 of Regulation D promulgated thereunder, for
transactions not involving a public offering. Based upon the written
representations made by the investors and other information known to the
Registrant, the Registrant believes all of the investors were Accredited
Investors as that term is defined in Rule 501 of Regulation D. All
investors represented that they purchased the securities for investment,
and all certificates issued to the investors were impressed with a
restrictive legend advising that the shares represented by certificates may
not be sold, transferred, pledged or hypothecated without having first been
registered or the availability of an exemption from registration
established. No broker/dealers were involved with the exchange, and no
commissions were paid. Stop transfer instructions have been placed against
the transfer of these certificates by the Registrant's Transfer Agent.

VI.

In January 1998, the Registrant entered into an agreement with LMU &
Company (LMU). As partial consideration for LMU's services under the
agreement, the Registrant granted an option to purchase 180,001 shares of
the Registrant's common stock for a period of five years at an exercise
price of $2.80 per share. The shares are fully vested. The Registrant
claims the exemption from registration provided by Section 4(2) of the 1933
Act for this transaction. No broker/dealers were involved in the sale and
no commissions were paid. The option certificate was impressed with a
restrictive legend advising that the shares represented by the certificate
may not be sold, transferred, pledged or hypothecated without having first
been registered or the availability of an exemption from registration
established.

II-7

<PAGE>

VII

In April 1998, the Registrant entered into an agreement with Western Center
for Clinical Studies (Western). As partial consideration for Western's
services under the agreement, the Registrant granted an option to purchase
450,000 shares of the Registrant's common stock at an exercise price of
$1.50 per share, of which 75,000 are vested. The remaining shares vest as
follows: 90,000 shares upon completion of the first Phase III trial,
110,000 upon completion of the second Phase III trial; and, 175,000 upon
the approval of a New Drug Application to the Food and Drug Administration.
The Registrant claims the exemption from registration provided by Section
4(2) of the 1933 Act for this transaction. No broker/dealers were involved
in the sale and no commissions were paid. The option certificate was
impressed with a restrictive legend advising that the shares represented by
the certificate may not be sold, transferred, pledged or hypothecated
without having first been registered or the availability of an exemption
from registration established. The options expire five years from the dates
they become exercisable.

VIII.

July 1998 Private Placement of Series B Preferred Stock
-------------------------------------------------------

Name No. of Shares Consideration
- ---- ------------- -------------

James Toot 25,000 $125,000

Brian P. Bertelsen 5,000 25,000

Cardiovascular Associates
P.C. Profit Sharing Plan
FBO Lester Lockspeiser M. D. 5,000 $25,000

CKC Partners 5,000 $25,000

Brett Conrad 5,000 $25,000

Russell L. Davis 10,000 $50,000

Gladys F. Decker Trust No. 1 5,000 $25,000

Paul Ernst 15,000 $75,000

Heather M. Evans 2,000 $10,000

Thomas A. Forti 5,000 $25,000

David L. Gertz 5,000 $25,000

Abdallah E. Ghusn 5,000 $25,000

Growth Ventures, Inc.
Pension Plan & Trust 10,000 $50,000

George Guerrieri 5,000 $25,000

II-8

<PAGE>

Name No. of Shares Consideration
- ---- ------------- -------------

Deloras Decker Hunter
Generation Skipping Trust 5,000 $25,000

Interstate/Lane Johnson F/B/O
Kenton R. Holden 5,000 $25,000

Inverness Investments Profit
Sharing Plan 5,000 $25,000

J. Paul Consulting Corporation 10,000 $50,000

Samantha Landy 4,000 $20,000

Arthur M. Lavenue 5,000 $25,000

Myron A. Leon 2,500 $12,500

Macy Family Trust 20,000 $100,000

Jeffrey S. Maen and Leonard L.
Maen 2,500 $12,500

B. Edwin Massey 2,500 $12,500

Sharon M. McDonald 15,000 $75,000

David N. and Arianne B. Nemelka 5,000 $25,000

Pete Perlman 2,000 $10,000

Douglas L. Ray 5,000 $25,000

Dan Rudden 5,000 $25,000

Joseph E. Kovarik 5,000 $25,000

Donald H. Schroeder 5,000 $25,000

Ralph Tash Trust DTD 5/28/71 20,000 $100,000

Richard F. and Barbara A. Van
Dresser, TTEES of the Living
Trust DTD 5-5-92 5,000 $25,000

Stephen H. West 5,000 $25,000

Danny Yu Defined Benefit
Pension Plan 5,000 $25,000
-------- ----------
TOTAL 245,500 $1,227,500
======== ==========

II-9

<PAGE>

The offers and sales were made in reliance upon the exemption from
registration provided by Section 4(2) of the 1933 Act and/or Regulation D
and Rule 506 adopted thereunder. Based upon written representations made
by each of the purchasers, the Registrant believes that all were Accredited
Investors as that term is defined in Rule 501 of Regulation D.
Broker/dealers were involved in the sale of $797,500 of the Series B
Preferred Stock and approximately $79,750 were paid in commissions. All
purchasers represented that they purchased the securities for investment,
and all certificates issued to the purchasers were impressed with a
restrictive legend advising that the shares represented by certificates may
not be sold, transferred, pledged or hypothecated without having first been
registered or the availability of an exemption from registration
established. Stop transfer instructions have been placed against the
transfer of these certificates by the Registrant's Transfer Agent.

IX.

In August 1998, the Registrant granted options to each of its
directors to purchase 60,000 shares of the Registrant's common stock at an
exercise price of $3.00 per share for five years. The grantees are Higgins
D. Bailey, Donald Hunter, Daniel Azarnoff, James D. Wynn and Dewey H. Crim.
The shares vest as follows: 20,000 shares at February 1, 1999 and the
remaining shares on a pro-rata basis monthly through February 1, 2001. Mr.
Crim resigned from the Board of Directors and 25,000 shares are vested.
The Registrant claims the exemption from registration provided by Section
4(2) of the 1933 Act for this transaction. No broker/dealers were involved
in the sale and no commissions were paid. The option certificates were
impressed with a restrictive legend advising that the shares represented by
the certificate may not be sold, transferred, pledged or hypothecated
without having first been registered or the availability of an exemption
from registration established.

In September 1998, the Registrant granted options to purchase an
aggregate of 295,000 shares of the Registrant's common stock at an exercise
price of $4.00 per share for five years to its Executive Management as
follows: Donald Hunter 120,000 shares; Higgins D. Bailey 55,000 shares, and
Dewey H. Crim 120,000 shares. The shares are fully vested as to Messrs.
Hunter and Bailey. Mr. Crim resigned from Executive Management and 100,000
of his shares are vested. The Registrant subsequently granted additional
options on the same terms to Messrs. Hunter and Bailey, its Executive
Management, as follows: 2,500 shares each in February 1999; 5,000 shares
per month each for the period March through June 1999; and 15,000 shares
per month each for the period July through November 1999 . The Registrant
claims the exemption from registration provided by Section 4(2) of the 1933
Act for this transaction. No broker/dealers were involved in the sale and
no commissions were paid. The option certificates were impressed with a
restrictive legend advising that the shares represented by the certificate
may not be sold, transferred, pledged or hypothecated without having first
been registered or the availability of an exemption from registration
established.

II-10

<PAGE>

In December 1998, the Registrant entered into an agreement with J.
Paul Consulting Corporation (JPC). As partial consideration for JPC's
services under the agreement, the Registrant granted an option to purchase
35,000 shares of the Registrant's common stock for a period of five years
at an exercise price of $4.00 per share. The shares are fully vested. The
Registrant claims the exemption from registration provided by Section 4(2)
of the 1933 Act for this transaction. No broker/dealers were involved in
the sale and no commissions were paid. The option certificate was impressed
with a restrictive legend advising that the shares represented by the
certificate may not be sold, transferred, pledged or hypothecated without
having first been registered or the availability of an exemption from
registration established. The options expire five years from the dates they
become exercisable.

XII.

In March 1999, the Registrant entered into an agreement with J. Paul
Consulting Corporation ("JPC"). As partial consideration for JPC's services
under the agreement, the Registrant issued JPC an option to purchase
175,000 shares of the Registrant's common stock, exercisable at $3.00 per
share. The option would become exercisable the earlier of January 1, 2000,
or when the shares become registered. The exercise period is five years
from the date the shares become freely tradeable. The issuance of the
option to JPC was made in reliance upon the exemption from registration
provided by Section 4(2) of the 1933 Act. No broker/dealers were involved
in the sale and no commissions were paid. JPC represented that JPC
acquired the option for investment and not with a view to distribution.

XIII.

In March 1999, the Registrant entered into an agreement with GJM
Trading Partners, Ltd.("GJM"). As partial consideration for GJM's services
under the agreement, the Registrant issued GJM an option to purchase
125,000 shares of the Registrant's common stock, exercisable at $3.00 per
share. The option would become exercisable the earlier of January 1, 2000,
or when the shares become registered. The exercise period is five years
from the date the shares become freely tradeable. The issuance of the
option to GJM was made in reliance upon the exemption from registration
provided by Section 4(2) of the 1933 Act. No broker/dealers were involved
in the sale and no commissions were paid. GJM represented that GJM
acquired the option for investment and not with a view to distribution.

XIV.

In March 1999, the Registrant entered into an agreement with
Transition Partners, Limited ("TPL"). The agreement terminated in July
1999. As part of the termination, TPL surrendered for cancellation a
previously issued warrant to acquire 300,000 shares of the Registrant's
common stock at $4.50 per share for five years, in exchange for a warrant
to purchase 50,000 shares of the

II-11

<PAGE>

Registrant's common stock at $4.00 per share. The issuance of the warrant
to TPL was made in reliance upon the exemption from registration provided
by Section 4(2) of the 1933 Act. No broker/dealers were involved in the
sale and no commissions were paid. TPL represented that TPL acquired the
option for investment and not with a view to distribution.

XV.

In March 1999, the Registrant entered into an agreement with Grayson
& Associates, Inc. ("G&A"). As partial consideration for G&A's services
under the agreement, the Registrant issued G&A a warrant to purchase up to
300,000 shares of the Registrant's common stock at $3.00 per share,
provided however, if the average of the closing bid/ask price for the
Registrant's common stock for the 20 consecutive trading days prior to
March 30, 2000 is less than $3.00 per share, the exercise price for the
first 100,000 shares represented by the Warrant will be adjusted down to
reflect a 25% discount from the average of the closing bid/ask price for
such period, exercisable as follows: 100,000 shares exercisable
immediately; an additional 100,000 shares shall become exercisable provided
that the Registrant has received $2 million in funding on or before May 15,
1999; and, the remaining 100,000 shares shall become exercisable provided
that the Registrant has received an additional $4 million in funding on or
before August 31, 1999, subject to ratable reductions to the extent that
any of the funding is not attributable to G&A. The warrant expires March
22, 2004. The issuance of the warrant to G&A was made in reliance upon the
exemption from registration provided by Section 4(2) of the 1933 Act. No
broker/dealers were involved in the sale and no commissions were paid. G&A
represented that G&A acquired the option for investment and not with a view
to distribution. As of August 31, 1999, G&A has performed no services on
behalf of the Registrant and the Registrant disputes any obligation under
the Warrant agreement.

XVI.

In March 1999, the Registrant conducted a private offering of its 10%
90-Day Promissory Notes, as amended ("Note"), convertible at the election
of the note holders into shares of the Registrant's common stock, at $2.00
per share, to the following:

Name Consideration No. of Warrants*
- ---- ------------- ----------------

J. Paul Consulting Corporation $60,000 210,000

James Toot $30,000 105,000

Claudia McAdam $15,000 52,500

GJM Trading Partners, Ltd. $15,000 52,500

Great Expectations Family L.P. $30,000 105,000

Bateman Dynasty $30,000 105,000

Cambridge Holdings, Ltd. $15,000 52,500

II-12

<PAGE>

Underwood Family Partners $5,000 17,500
------ ------
Total $200,000 700,000
======== =======
______________________
* Three and one-half warrants for each $1 of Promissory Notes
purchased, exercisable over a five year period from the date the shares
become freely tradeable at $3.00 per share.

The offers and sales set forth above were made in reliance upon the
exemption from registration provided by Section 4(2) of the 1933 Act and/or
Regulation D and Rule 506 adopted thereunder. Based upon information known
to the Registrant, and representations made by each of the purchasers, the
Registrant believes that all of the purchasers were Accredited Investors as
that term is defined in Rule 501 of Regulation D. No broker/dealers were
involved in the sale and no commissions were paid. All of such purchasers
represented that they purchased the securities for investment, and all
Notes and Warrants issued to the purchasers were impressed with a
restrictive legend advising that the Notes and Warrants may not be sold,
transferred, pledged or hypothecated without having first been registered
or the availability of an exemption from registration established.

XVII.

In April 1999, the Registrant issued the following shares of
Registrant's common stock at $2.00 per share, in exchange for the surrender
of its 10% 90-Day Convertible Promissory Notes, as amended ("Notes"), and
the unpaid accrued interest on such Notes:

Principal Amount of Note
------------------------
Name plus Interest No. of Shares
- ---- ------------- -------------

J. Paul Consulting Corporation $60,500 30,250

James Toot $30,250 15,125

Claudia McAdam $15,124 7,562

GJM Trading Partners, Ltd. $15,124 7,562

Great Expectations Family L.P. $30,250 15,125
Bateman Dynasty $30,250 15,125

Cambridge Holdings, Ltd. $15,124 7,562

Underwood Family Partners $5,040 2,520
------ ------
Total $201,662 100,831
======== =======

II-13

<PAGE>

The offers and sales set forth above were made in reliance upon the
exemption from registration provided by Section 4(2) of the 1933 Act and/or
Regulation D and Rule 506 adopted thereunder. Based upon information known
to the Registrant, and representations made by each of the purchasers, the
Registrant believes that all of the purchasers were Accredited Investors as
that term is defined in Rule 501 of Regulation D. No broker/dealers were
involved in the sale and no commissions were paid. All of such purchasers
represented that they purchased the securities for investment, and all
certificates issued to the purchasers were impressed with a restrictive
legend advising that the shares represented by the certificates may not be
sold, transferred, pledged or hypothecated without having first been
registered or the availability of an exemption from registration
established. Stop transfer instructions have been placed against the
transfer of these certificates by the Registrant's Transfer Agent.

XVIII.

April 1999 Private Placement
----------------------------

Name Consideration No. of Shares
- ---- ------------- -------------

Deloras Decker Hunter, Trustee $50,000 25,000

W. Douglas Moreland $40,000 20,000

L. Michael Underwood $15,000 7,500

Gladys F. Decker, Trustee $23,000 11,500

Paul C. and Carol A. Rivello $14,000 7,000

Max Gould $15,000 7,500

John J. Turk, Jr. $10,000 5,000

Myron A. Leon $20,000 10,000

Michael J. Kirby $10,000 5,000

Kenton Roy Holden IRA $10,000 5,000

Inverness Investment Profit
Sharing Plan $15,000 7,500

Bleu Ridge Consultants Profit $10,000 5,000

Danny Yu Defined Benefit
Pension Plan $18,000 9,000

Gulfstream Financial
Partners, LLC $15,000 7,500

Frank J. Kostro $15,000 7,500

Samuel F. Trussell $20,000 10,000

II-14

<PAGE>

Name Consideration No. of Shares
- ---- ------------- -------------

David M. Chapman $20,000 10,000

Richard F. and Barbara A.
Vandresser $10,000 5,000

Charles C. Bruner $6,500 3,250

Anthony B. Petrelli $6,500 3,250

Eugene L. Neidiger $7,000 3,500

Heather Evans $2,000 1,000

Steve Schulz Defined Benefit
Trust $25,000 12,500

Nancy Nita Macy, Trustee $40,000 20,000

William E. Ambrose $10,000 5,000

C. Richard and Johanna W.
Harrison $10,000 5,000

Business Development Corporation $10,000 5,000

Nanna B. Schov Custodian for
Davie Mork and Andreas B. Mork $8,000 4,000

Barry A. Bates $15,000 7,500

Thomas A. Forti, DDS $25,000 12,500

Brad Rhodes $10,000 5,000

Ronald Glosser $20,000 10,000

Brian P. and Cheri Bertelsen $10,000 5,000

Jeanette Y. Mihaly $10,000 5,000

Benedetto Casale $20,000 10,000

Colin David Rickson $10,000 5,000

Arthur Kassoff $16,000 8,000

Michael O'Hare $10,000 5,000

Arianne Nemelka $30,000 15,000

Boulder Family Partnership, Ltd. $50,000 25,000

Carla Johnson $10,000 5,000

II-15

<PAGE>

Name Consideration No. of Shares
- ---- ------------- -------------

Patrick N. Kephart $5,000 2,500

Dale Duncan $15,000 7,500

Len Rothstein $15,000 7,500

Abdallah E. Ghusn $12,000 6,000

Leona Connelly $10,000 5,000

Albert W. White $10,000 5,000

David L. Gertz $10,000 5,000

Gregory Pusey $10,000 5,000

Jill Pusey, Custodian for
Jacqueline Pusey $5,000 2,500

Jill Pusey, Custodian for
Christopher Pusey $5,000 2,500

Cambridge Holdings, Ltd. $50,000 25,000

Arthur Marsh Lavenue $10,000 5,000

Paul Ernst $30,000 15,000

Sharon M. McDonald $30,000 15,000

Douglas L. Ray $8,000 4,000

Scott Deitler $10,000 5,000

Michael P. Noonan $15,000 7,500

Russell L. Davis Profit
Sharing Plan $20,000 10,000

Cardiovascular Associates, PC
FBO L. Lockspeiser, M.D. $10,000 5,000

Charles Kirby $24,000 12,000
------- ------
TOTAL $ 995,000 497,500
========== ========

II-16

<PAGE>

no commissions were paid. All of such purchasers represented that they
purchased the securities for investment, and all certificates issued to the
purchasers were impressed with a restrictive legend advising that the
shares represented by the certificates may not be sold, transferred,
pledged or hypothecated without having first been registered or the
availability of an exemption from registration established. Stop transfer
instructions have been placed against the transfer of these certificates by
the Registrant's Transfer Agent.

XIX.

In May 1999, a consultant to the Registrant exercised options for an
aggregate of 8,000 shares of the Registrant's common stock at $4.00 per
share. The Registrant claims the exemption from registration provided by
Section 4(2) of the 1933 Act. The certificate issued to the consultant was
impressed with a restrictive legend advising that the shares represented by
certificate may not be sold, transferred, pledged or hypothecated without
having first been registered or the availability of an exemption from
registration established. No brokers or dealers received compensation in
connection with the sale of these shares.

XX.

June 1999 Private Placement
---------------------------

Name Consideration No. of Shares
- ---- ------------- -------------

Torben Maersk $10,000 2,500

James M. Love $50,000 12,500

Al-Houda Hotels & Tourism $150,000 37,500

Concorde Bank Limited $50,000 12,500

Bobzin Dieter $40,000 10,000

Carlos Goncalves $50,000 12,500

Tectron-Industria de Productos
Electronicos, LDA $100,000 25,000

Jean Paul Desbrueres $30,000 7,500

Wilhelm Giersten $20,000 5,000

Dany Noujeim $2,000 500

Goran Gustafson $10,000 2,500

Lars Kellman $10,000 2,500

Gert Kristensson $20,000 5,000

II-17

<PAGE>

Name Consideration No. of Shares
- ---- ------------- -------------

Sune Persson $20,000 5,000

Johanna Brassert $25,000 6,250

Asuno, Inc. $300,000 75,000

Henri Jacob $26,000 6,500

Sylvie Lapidouse $40,000 10,000

Ernst Schneider $50,000 12,500

Kurt Marty $25,000 6,250

Helaba Schweiz $45,000 11,250

Jean-Pierre Delaloye $24,000 6,000

Coutts Bank LTD $24,000 6,000

Etoile Limited $24,000 6,000

Fondation Brigar $24,000 6,000

Galba Anstalt $50,000 12,500
------- ------

TOTAL $1,219,000 304,750
========== =======

The Company claims the exemption from registration provided by Section
4(2) of the Securities Act of 1933, as amended, and/or Rule 506 of
Regulation D adopted thereunder for the transactions described above. All
of the purchasers were either known to the Registrant, or were referred to
the Registrant by a consultant to the Company. Based upon the written
representations made by the purchasers and other information known to the
Registrant, the Registrant believes all of the purchasers were Accredited
Investors as that term is defined in Rule 501 of Regulation D. All
purchasers represented that they purchased the securities for investment,
and all certificates issued to the purchasers were impressed with a
restrictive legend advising that the shares represented by certificates may
not be sold, transferred, pledged or hypothecated without having first been
registered or the availability of an exemption from registration
established. Stop transfer instructions have been placed against the
transfer of these certificates by the Registrant's Transfer Agent. No
brokers or dealers received compensation in connection with the sale of
these shares.

XXI.

In June 1999, the Registrant granted options to acquire 20,000 shares
of the Registrant's common stock to Wellington Ewen, the Registrant's Chief
Financial Officer, at an exercise price of $4.00 per share for five years
from the dates the options become exercisable. The shares shall

II-18

<PAGE>

vest ratably over a 12 month period from date of grant. The Registrant
claims the exemption from registration provided by Section 4(2) of the 1933
Act for this transaction. No broker/dealers were involved in the sale and
no commissions were paid. The option certificate was impressed with a
restrictive legend advising that the shares represented by the certificate
may not be sold, transferred, pledged or hypothecated without having first
been registered or the availability of an exemption from registration
established.

XXII.

In June 1999, the Registrant granted options to acquire 60,000 shares
of the Registrant's common stock to Wendy Rieder, a consultant of the
Registrant, at an exercise price of $5.00 per share for five years from the
date the options become exercisable. The shares vest as follows: 20,000
shares as of May 1, 2000, with the remaining shares vesting on a pro rata
basis monthly through May 1, 2002. The Registrant claims the exemption from
registration provided by Section 4(2) of the 1933 Act for this transaction.
No broker/dealers were involved in the sale and no commissions were paid.
The option certificate was impressed with a restrictive legend advising
that the shares represented by the certificate may not be sold,
transferred, pledged or hypothecated without having first been registered
or the availability of an exemption from registration established.

XXIII.

In June 1999, the Registrant granted options to acquire 60,000 shares
of the Registrant's common stock to LMU & Company, a consultant of the
Registrant. The options are exercisable at $3.00 per share for nine years
and vest as to 20,000 shares covered hereby on February 1, 1999.
Thereafter, this Option shall vest as to the remaining 40,000 shares
covered hereby on a pro rata basis monthly commencing March 1, 1999, and
ending February 1, 2001. The Registrant claims the exemption from
registration provided by Section 4(2) of the 1933 Act for this transaction.
No broker/dealers were involved in the sale and no commissions were paid.
The option certificate was impressed with a restrictive legend advising
that the shares represented by the certificate may not be sold,
transferred, pledged or hypothecated without having first been registered
or the availability of an exemption from registration established.

XXIV.

In July 1999, the Registrant issued an aggregate of 24,550 shares of
its common stock to the holders of the Registrant's Series B Preferred
Stock as a dividend, valued at $5.00 per share. The issuance of the
dividend shares was exempt from registration in that there was no sale of
the shares by the Registrant. Each holder of the Registrant's Series B
Preferred Stock represented that he received the shares for investment and
not with a view to distribution. All certificates were endorsed with a
legend restricting the sale or transfer of the securities except in
accordance with federal securities laws. Stop transfer instructions have
been placed against the transfer of these certificates by the Registrant's
Transfer Agent.

II-19

<PAGE>

XXV.

In July 1999, a consultant to the Registrant exercised options for an
aggregate of 12,000 shares of the Registrant's common stock at $4.00 per
share. The Registrant claims the exemption from registration provided by
Section 4(2) of the 1933 Act. The certificate issued to the consultant was
impressed with a restrictive legend advising that the shares represented by
certificate may not be sold, transferred, pledged or hypothecated without
having first been registered or the availability of an exemption from
registration established. No brokers or dealers received compensation in
connection with the sale of these shares.

XXVI.

In July 1999, the Registrant granted options to acquire 60,000 shares
of the Registrant's common stock to LMU & Company, a consultant of the
Registrant. The options are exercisable at $4.00 per share for five years
from the dates they become exercisable and vest as follows: 20,000 shares
at August 5, 1999, and the remaining 40,000 shares ratably over a four
month period through December 5, 1999. The Registrant claims the exemption
from registration provided by Section 4(2) of the 1933 Act for this
transaction. No broker/dealers were involved in the sale and no commissions
were paid. The option certificate was impressed with a restrictive legend
advising that the shares represented by the certificate may not be sold,
transferred, pledged or hypothecated without having first been registered
or the availability of an exemption from registration established.

XXVII.

In July 1999, the Registrant granted performance bonus options to
purchase 120,000 shares of the Registrant's common stock to each of the
following executive officers of the Registrants: Higgins D. Bailey and
Donald Hunter. The options are fully vested upon grant and exercisable at
$4.00 per share for five years. The Registrant claims the exemption from
registration provided by Section 4(2) of the 1933 Act for this transaction.
No broker/dealers were involved in the sale and no commissions were paid.
The option certificate was impressed with a restrictive legend advising
that the shares represented by the certificate may not be sold,
transferred, pledged or hypothecated without having first been registered
or the availability of an exemption from registration established.

XXVIII.

In September 1999, the Registrant granted an option to purchase 23,500
shares of the Registrant's common stock to CCRI, a consultant of the
Registrant at an exercise price of $4.00 per share for five years. The
shares are fully vested. The Registrant claims the exemption from
registration provided by Section 4(2) of the 1933 Act for this transaction.
No broker/dealers were involved in the sale and no commissions were paid.
The option certificate was impressed with a restrictive legend advising
that the shares represented by the certificate may not be sold,
transferred,

II-20

<PAGE>

pledged or hypothecated without having first been registered or the
availability of an exemption from registration established.

XXIX.

September 1999 Private Placement
--------------------------------

Name Consideration No. of Shares
- ---- ------------- -------------

Metz Family Trust
John R. Metz and Theresa G.
Metz, TTEE $4,000 1,000

Sunbelt Holdings, Inc.
Dennis D. French 60,000 15,000

MRI, Inc.
Profit Sharing Plan
Dennis D. French 20,000 5,000

Barry Seidman 100,000 25,000

James G. Stevens
Jana C. Stevens 20,000 5,000

Edward Jones Custodian FBO
Sharon Witaker Roth IRA 2,000 500

Edward Jones, Custodian FBO
Ernest Handelin Roth IRA 10,200 2,550

Edward Jones, Custodian FBO
Carl Hendelin Roth IRA 6,000 1,500

Edward Jones, Custodian FBO
Kathleen Rounds Roth IRA 5,800 1,450

Edward Jones,Custodian FBO
Gary Handelin Roth IRA 5,800 1,450

Edward Jones, Custodian FBO
Alan E. Handelin Roth IRA 9,800 2,450

Leslie Rounds and Kathleen Rounds
Husband and Wife, JT 4,000 1,000

II-21

<PAGE>

Name Consideration No. of Shares
- ---- ------------- -------------

Ralph L. Fuentes and Diana C.
Fuentes Husband and Wife,
Community Property 3,000 750

Alan E. Handelin 4,000 1,000

Ernest E. Handelin 73,000 18,250

Joseph P. Sperty
Karen H. Sperty 8,000 2,000

David M. Chapman 20,000 5,000

Danny Yu Defined Benefit
Pension Plan 50,000 12,500

Russell L. Davis, Trustee of the
Davis Family Trust 20,000 5,000

Russell L. Davis, Trustee FBO
Russell L. Davis Attorney at Law
Profit Sharing Plan 20,000 5,000

Sylvia E. Davis, Trustee
Of the Sylvia E. Davis Trust 20,000 5,000

Danny Yu and Nancy Yu, Trustees
Yu Family Living Trust 20,000 5,000

Audrey Spangenberg 20,000 5,000

William H. Golod
Marsha B. Golod 8,000 2,000

Samuel F. Trussell 20,000 5,000

John and Donna Bruce 1996
Living Trust 5,000 1,250

Anders Johnson 2,000 500

Mikael E. Ibsen 8,000 2,000

Mohamed Ali Khawas
Malisco Switch Great Ind. 30,000 7,500

Torben Maersk 10,000 2,500

ATO Ram 2 Ltd. 100,000 25,000

II-22

<PAGE>

Name Consideration No. of Shares
- ---- ------------- -------------

ATO Ram 2 Ltd. 150,000 37,500

Staffan Lindskog 1,000 250

Tawfig S. Mohammed 20,000 5,000

Wilheim Giersten 60,000 15,000

Dany Novjeim 2,000 500

Goram Gustafsson 10,000 2,500

Edouard Rabbat
Riyadh Exhibitions Co. Ltd. 2,000 500

Salah Abdullah Dashti 50,000 12,500

Michael C. Saunders 6,000 1,500

Jean Paul Desbrueres 20,000 5,000

Mohammed Al-Nussif 1,200 300

Mahmound Mohammed Abileh 200,000 50,000

Amir Salim Huneidi 100,000 25,000

Henrik Boyander 4,000 1,000

Raghib Zuberi
Yamama-Al-Kuwait 5,000 1,250

Steen Thomsen 4,000 1,000

Carlos Goncalves 50,000 12,500

Robert and Joanne Penner,
Trustees of the Penner Family
Trust 20,000 5,000

Anders Jonson 2,000 500

Thomas M. Lyvers, Sr. 10,000 2,500
Brenda R. Lyvers

Charles Kirby 50,000 12,500

Heather M. Evans 10,000 2,500

David S. Haydan 20,000 5,000
Shirley C. Haydan

II-23

<PAGE>

Name Consideration No. of Shares
- ---- ------------- -------------

Direct Diamonds and 20,000 5,000
Gold Exchange, Inc.

Len Rothstein 20,000 5,000

Richard D. Reinisch and 40,000 10,000
Grace A. Reinish

David A. Zallar 20,000 5,000

Christopher A. Marlett Living Trust 20,000 5,000

David A. Zallar 20,000 5,000
------ -----
Total $1,625,800 406,450
========== =======

XXX.

In September 1999, as partial consideration for consulting services
the Registrant issued Neidiger Tucker Bruner Inc. a warrant to purchase up
to 101,680 shares of the Registrant's common stock, exercisable at $4.00
per share for five years. The Registrant claims the exemption from
registration provided by Section 4(2) of the 1933 Act for this transaction.
No broker/dealers were involved in the sale and no commissions were paid.
The warrant certificate was impressed with a restrictive legend advising
that the shares represented by the certificate may not be sold,
transferred, pledged or hypothecated without having first been registered
or the availability of an exemption from registration established.

II-24

<PAGE>

XXXI.

In November 1999, as partial consideration for consulting services,
the Registrant issued ATO Ram 2, Ltd. a warrant to purchase up to 30,000
shares of the Registrant's common stock, exercisable at $4.00 per share for
five years. The Registrant claims the exemption from registration provided
by Section 4(2) of the 1933 Act for this transaction. No broker/dealers
were involved in the sale and no commissions were paid. The warrant
certificate was impressed with a restrictive legend advising that the
shares represented by the certificate may not be sold, transferred, pledged
or hypothecated without having first been registered or the availability of
an exemption from registration established.

XXXII.

In November 1999, the Registrant granted an option to purchase 400,000
shares of the Registrant's common stock to Thomas G. Tachovsky, a Director,
President and Chief Executive Officer of the Registrant at an exercise
price of $5.00 per share. The shares vest as follows: 100,000 shares upon
completion of the first Phase III trial; 150,000 shares upon submission of
the NDA; and, 150,000 shares upon approval of the NDA. The options expire
five years from the dates they become exercisable. The Registrant claims
the exemption from registration provided by Section 4(2) of the 1933 Act
for this transaction. No broker/dealers were involved in the sale and no
commissions were paid. The option certificate was impressed with a
restrictive legend advising that the shares represented by the certificate
may not be sold, transferred, pledged or hypothecated without having first
been registered or the availability of an exemption from registration
established.

XXXIII.

As of September 1999, the holders of 15,000 shares of the Registrant's
Series B Preferred Stock converted their shares into 15,000 shares of the
Registrant's common stock. The issuance of the shares of common stock upon
the conversion is exempt from registration in that there was no sale of the
shares by the Registrant. Each holder of the Registrant's Series B
Preferred Stock represented that he received the shares for investment and
not with a view to distribution. All certificates were endorsed with a
legend restricting the sale or transfer of the securities except in
accordance with federal securities laws. Stop transfer instructions have
been placed against the transfer of these certificates by the Registrant's
Transfer Agent.

II-25

<PAGE>

Item 27. Exhibits and Financial Schedules
--------------------------------

The following is a complete list of exhibits filed as part of this
Registration Statement, which Exhibits are incorporated herein.

Exhibit
Number Description
- ------- -----------

3.1 Articles of Incorporation(1)

3.2 Bylaws(1)

3.3 Articles of Merger, as filed with the Colorado Secretary of
State on January 15, 1998(2)

3.4 Amended and Restated Articles of Incorporation, as filed with
the Colorado Secretary of State on January 15, 1998, as
corrected(2)

3.5 Amended Articles of Incorporation, as filed with the Colorado
Secretary of State on July 20, 1998(6)

3.6 Amended and Restated Bylaws, dated March 20, 1999(9)

4.1 Specimen copy of stock certificate for Common Stock,
$.001 par value(2)

4.2 Specimen copy of stock certificate for Series A Preferred Stock,
$.001 par value(2)

4.3 Form of Common Stock Purchase Warrant Certificate(9)

5.1 Form of Opinion of Brenman Bromberg & Tenenbaum, P.C.

10.1 Stock Option Plan(1)

10.2 Stock Bonus Plan(1)

10.3 Agreement and Plan of Merger, dated December 9, 1997 between
Vanden Capital Group, Inc. and Entropin, Inc.(2)

10.4 Agreement dated January 1, 1997, between the Registrant and
Mallinckrodt, Inc. (Development and Supply Agreement)(4)

10.5 Lease Agreement, dated February 1, 1998, between the Registrant
and Thomas T. Anderson(4)

10.6 License Agreement dated January 1, 1998, between the Registrant
and Dr. James E. Wynn(4)

II-26

<PAGE>

10.7 Assignment of Patent #4,556,663 dated September 24, 1992, by
Lowell M. Somers, M.D. to Entropin, Inc(4)

10.8 Assignment of Patent #4,512,996 dated September 24, 1992, by
Lowell M. Somers, M.D. to Entropin, Inc (4)

10.9 Assignment of Patent #4,469,700 dated September 24, 1992, by
Lowell M. Somers, M.D. to Entropin, Inc.(4)

10.10 Assignment of rights in the application for Letters Patent
under Serial Number 07/999,307 by Lowell M. Somers and James E.
Wynn to Entropin, Inc., dated February 16, 1993(4)

10.11 Assignment of rights in the application for Letters Patent
under Serial Number 08/260,054 by Lowell M. Somers and James E.
Wynn to Entropin, Inc., dated July 29, 1994(4)

10.12 Agreement dated April 18, 1998 by and between the Registrant
and the Western Center for Clinical Studies, Inc.(5)

10.13 Agreement Among Shareholders, dated June 29, 1998(6)

10.14 1998 Compensatory Stock Plan (7)

10.15 Agreement dated August 16, 1999, by and between the Registrant
and Therapeutic Management, Inc. [Confidential treatment has
been granted](8)

10.16 Agreement Among Shareholders, dated March 3, 1999(9)

10.17 Amendment, dated August 3, 1998, by and between the Registrant
and Western Center for Clinical Studies, Inc.(9)

10.18 Second Amendment, dated July 21, 1999, between the Registrant
and the Western Center for Clinical Studies, Inc.(9)

10.19 Amendment to License Agreement, dated June 5, 1999, between the
Registrant and Dr. James E. Wynn(9)

10.20 Wrap Around Agreement dated November 10, 1999, by and between
the Registrant and Therapeutic Management, Inc. [Confidential
treatment has been granted.](9)

10.21 Underwriting Agreement between the Registrant and
Neidiger, Tucker, Bruner, Inc.

II-27

<PAGE>

16.0 Statement from Schumacher & Associates, the prior certifying
accountant in response to the information disclosed in the
Company's Form 8-K dated March 25, 1998, captioned "Changes in
Registrant's Certifying Accountant"(3)

24.1 Consent of Brenman Bromberg & Tenenbaum, P.C. (included in
Exhibit 5.1)

24.2 Consent of Causey Demgen & Moore Inc.(9)

27 Financial Data Schedule

___________
(1) Incorporated by reference from the like numbered exhibits filed with
the Registrant's Registration Statement on Form S-1, No. 33-23693
effective October 21, 1989.
(2) Incorporated by reference from the like numbered exhibits filed with
the Registrant's Current Report on Form 8-K, as amended, dated
January 15, 1998.
(3) Incorporated by reference from an exhibit numbered 4.0 as filed with
the Registrant's Current Report on Form 8-K, as amended, dated
March 25, 1998.
(4) Incorporated by reference from the like numbered exhibits filed with
the Registrant's Annual Report on Form 10-KSB, dated April 15, 1998,
as amended.
(5) Incorporated by reference from the like numbered exhibit filed with
the Registrant's Current Report on Form 8-K, dated April 23, 1998.
(6) Incorporated by reference from the like numbered exhibits filed with
the Registrant's Registration Statement on Form S-1, No. 333-51737
effective August 21, 1998.
(7) Incorporated by reference from the like numbered exhibit as filed with
the Registrant's Registration Statement on Form S-8 as filed on
December 30, 1998.
(8) Incorporated by reference from the like numbered exhibit as filed with
the Registrant's Current Report on Form 8-K, as amended, dated
August 20, 1999.

(9) Incorporated by reference from the like numbered exhibits as filed with
the Registrant's Pre-Effective Amendment No. 1 to Form SB-2 Registration
Statement, Reg. No. 333-11308, dated March 9, 2000.

Item 28. Undertakings
------------

The undersigned Registrant will:

(a)(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement to:
(i) include any prospectus required by Section 10(a)(3) of the Securities
Act; (ii) reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
registration statement; and (iii) include any additional or changed
material information on the plan of distribution.

(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.

(3) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.

II-28

<PAGE>

The undersigned Registrant will provide to the Underwriters at the
closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the Underwriters
to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

II-29

<PAGE>

SIGNATURES
----------

In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form SB-2 and authorized this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City and County of Denver, State of
Colorado on March 22, 2000.

ENTROPIN, INC.

By: /s/ Higgins D. Bailey
-----------------------------------
Higgins D. Bailey, Chairman

In accordance with the requirements of the Securities Act of 1933,
this Registration Statement was signed by the following persons in the
capacities and on the dates indicated.

Signatures Title Date
- ---------- ----- ----

/s/ Thomas G. Tachovsky President, CEO, Principal March 22, 2000
- --------------------------- Executive Officer and Director
Thomas G. Tachovsky

/s/ Higgins D. Bailey Chairman of the Board March 22, 2000
- --------------------------- of Directors, Secretary
Higgins D. Bailey and Director

/s/ Donald Hunter Vice Chairman of the Board March 22, 2000
- --------------------------- of Directors, Treasurer and
Donald Hunter Director

/s/ Daniel L. Azarnoff Director March 22, 2000
- ---------------------------
Daniel L. Azarnoff

/s/ James E. Wynn Director March 22, 2000
- ---------------------------
James E. Wynn

/s/ Wellington Ewen Chief Financial Officer and March 22, 2000
- --------------------------- Principal Financial Officer
Wellington Ewen

II-31

EXHIBIT 5.1

BRENMAN BROMBERG & TENENBAUM, P.C.
ATTORNEYS AT LAW

MELLON FINANCIAL CENTER
SUITE 1001
1775 SHERMAN STREET FACSIMILE
TELEPHONE DENVER, COLORADO 80203-4314 303-839-1633
303-894-0234 303-830-8890

March 14, 2000

Board of Directors
Entropin, Inc.
45926 Oasis Street
Indio, CA 92201

RE: ENTROPIN, INC.
REGISTRATION STATEMENT ON FORM SB-2

Gentlemen:

We have acted as counsel to Entropin, Inc., a Colorado corporation
(the "Company"), in connection with the preparation and filing with the
U.S. Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"), the Company's registration
statement on Form SB-2 (the "Registration Statement"). The Registration
Statement relates to the registration under the Act of: (i) 2,500,000
shares of Common Stock (the "Shares"); (ii) 2,500,000 Warrants each to
purchase one share of Common Stock (the "Warrants"); and, (iii) and the
2,500,000 shares of Common Stock underlying the Warrants (the "Underlying
Shares").

In rendering this opinion, we have reviewed the Registration
Statement, as well as a copy of the Company's articles of incorporation and
bylaws, each as amended to date. We have also reviewed such documents and
such statutes, rules and judicial precedents as we have deemed necessary
for the opinions expressed herein.

In rendering this opinion, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of
documents submitted to us as originals, the conformity to original
documents of documents submitted to us as certified or photostatic copies,
and the authenticity of originals of such photostatic copies.

Based upon and in reliance upon the foregoing, and subject to the
qualifications and limitations herein set forth, we are of the opinion that
the Shares and Warrants have been duly and validly authorized and issued,
and that the Underlying Shares, when issued for the consideration and in
the manner contemplated by the Registration Statement, will be validly
issued, fully paid and nonassessable.

<PAGE>

Board of Directors
Entropin, Inc.
March 14, 2000

The opinion set forth in this letter is limited by, subject to and
based on the following:

1. We are admitted to practice before the Bar of the State
of Colorado and are not admitted to practice in any
other jurisdiction.

2. The foregoing opinion is limited in all respects to the
laws of the State of Colorado and applicable federal
securities laws of the United States.

We consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement.

This opinion may not be used, circulated, quoted or otherwise referred
to for any other purpose without prior written consent and may not be
relied upon by any person or entity other than the Company and its
successors and assigns. This opinion is based upon our knowledge of law
and facts as of this date. We assume no duty to communicate to you with
respect to any matter which comes to our attention hereafter.

Very truly yours,

/s/ Brenman Bromberg & Tenenbaum, P.C.

EXHIBIT 10.21

ENTROPIN, INC.

2,000,000 SHARES OF COMMON STOCK
2,000,000 COMMON STOCK PURCHASE WARRANTS

UNDERWRITING AGREEMENT
----------------------

March 14, 2000

Neidiger Tucker Brunner, Inc.
1675 Larimer Street, Suite 300
Denver, CO 80202

Gentlemen:

Entropin, Inc., a Colorado corporation (the "Company"), hereby
confirms its agreement with Neidiger Tucker Brunner, Inc. ("NTB"), as
managing representative (the "Representative") of the several underwriters
listed on Schedule 1 annexed hereto (the "Underwriters"), as set forth
below.

The Company proposes to issue and sell to the Underwriters 2,000,000
shares of the Company's $.001 par value common stock (the "Common Stock")
and 2,000,000 redeemable common stock purchase warrants (the "Warrants").
The Common Stock and Warrants being sold by the Company are referred to
as the "Firm Securities."

In addition, for the sole purpose of covering over-allotments from the
sale of the Firm Securities, the Company proposes to grant to the
Underwriters an option to purchase an additional 300,000 shares of Common
Stock and 300,000 Warrants (the "Firm Option Securities" or the "Option
Securities"), all as provided in Section 2(c) of this agreement (the
"Agreement") and to issue to you the Representative's Warrant (as defined
in Section 2 hereof) to purchase certain additional shares of Common Stock
and Warrants. The Firm Securities and the Option Securities are
collectively referred to herein as either the "Securities."

1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the Underwriter that:

(a) A registration statement on Form SB-2 (File No. 333-11308),
with respect to the Securities and the Representative's Warrant (as
hereinafter defined), including a prospectus subject to completion, has
been filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act "),
and one or more amendments to that registration statement may have been so
filed. Copies of such registration statement and of each amendment
heretofore filed by the Company with the Commission have been

<PAGE>
delivered to the Underwriters. After the execution of this Agreement, the
Company will file with the Commission either (i) if the registration
statement, as it may have been amended, has been declared by the Commission
to be effective under the Act, a prospectus in the form most recently
included in that registration statement (or, if an amendment thereto shall
have been filed, in such amendment), with such changes or insertions as are
required by Rule 430A under the Act or permitted by Rule 424(b) under the
Act and as have been provided to and approved by the Underwriters prior to
the execution of this Agreement, or (ii) if that registration statement, as
it may have been amended, has not been declared by the Commission to be
effective under the Act, an amendment to that registration statement,
including a form of prospectus, a copy of which amendment has been
furnished to and approved by the Underwriters prior to the execution of
this Agreement. The Company also may file a related registration statement
with the Commission pursuant to Rule 462(b) under the Act for purposes of
registering certain additional Securities, which registration statement
shall become effective upon filing with the Commission (the "Rule 462(b)
Registration Statement"). As used in this Agreement, the term
"Registration Statement" means that registration statement, as amended at
the time it was or is declared effective, and any amendment thereto that
was or is thereafter declared effective, including all financial schedules
and exhibits thereto and any information omitted therefrom pursuant to Rule
430A under the Act and included in the Prospectus (as hereinafter defined),
together with any Rule 462(b) Registration Statement; the term "Preliminary
Prospectus" means each prospectus subject to completion filed with the
Registration Statement (including the prospectus subject to completion, if
any, included in the Registration Statement at the time it was or is
declared effective); and the term "Prospectus" means the prospectus first
filed with the Commission pursuant to Rule 424(b) under the Act or, if no
prospectus is so filed pursuant to Rule 424(b), the prospectus included in
the Registration Statement. The Company has caused to be delivered to the
Underwriters copies of each Preliminary Prospectus and has consented to the
use of those copies for the purposes permitted by the Act. If the Company
has elected to rely on Rule 462(b) and the Rule 462(b) Registration
Statement has not been declared effective, then (i) the Company has filed
a Rule 462(b) Registration Statement in compliance with and that is
effective upon filing pursuant to Rule 462(b) and has received confirmation
of its receipt and (ii) the Company has given irrevocable instructions for
transmission of the applicable filing fee in connection with the filing of
the Rule 462(b) Registration Statement, in compliance with Rule 111
promulgated under the Act or the Commission has received payment of such
filing fee.

(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When each Preliminary
Prospectus and each amendment and each supplement thereto was filed with
the Commission it (i) contained all statements required to be stated
therein, in accordance with, and complied with the requirements of, the Act
and the rules and regulations of the Commission thereunder and (ii) did not
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. When
the Registration Statement was or is declared effective, it (i) contained
or will contain all statements required to be stated therein in accordance
with, and complied or will comply with the requirements of, the Act and the
rules and regulations of the Commission thereunder and (ii) did not or will
not include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not

2
<PAGE>
misleading. When the Prospectus and each amendment or supplement thereto is
filed with the Commission pursuant to Rule 424(b) (or, if the Prospectus or
such amendment or supplement is not required so to be filed, when the
Registration Statement containing such Prospectus or amendment or
supplement thereto was or is declared effective) and on the Firm Closing
Date and any Option Closing Date (as each such term is hereinafter
defined), the Prospectus, as amended or supplemented at any such time, (i)
contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply with the requirements of, the
Act and the rules and regulations of the Commission thereunder and (ii) did
not or will not include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
The foregoing provisions of this paragraph (b) do not apply to statements
or omissions made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any amendment or supplement thereto in reliance upon
and in conformity with written information furnished to the Company by the
Underwriters specifically for use therein.

(c) The Company is duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and is
duly qualified or authorized to transact business as a foreign corporation
and is in good standing in each jurisdiction where the ownership or leasing
of its properties or the conduct of its businesses require such
qualification or authorization. The Company has no subsidiaries.

(d) The Company has full corporate power and authority, and all
necessary material authorizations, approvals, orders, licenses,
certificates and permits of and from all governmental regulatory
authorities, to own or lease its property and conduct its business as now
being conducted and as proposed to be conducted as described in the
Registration Statement and the Prospectus (and, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).

(e) The Company does not own, directly or indirectly, an
interest in any corporation, partnership, limited liability company, joint
venture, trust or other business entity.

(f) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus (and, if the Prospectus is
not in existence, the most recent Preliminary Prospectus). All of the
issued shares of capital stock of the Company, have been duly authorized
and validly issued and are fully paid, nonassessable and free of preemptive
rights. There are no outstanding options, warrants or other rights granted
by the Company to purchase shares of its Common Stock or other securities,
other than as described in the Prospectus (and, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). The Firm Securities
have been duly authorized, by all necessary corporate action on the part of
the Company and, when the Firm Securities are issued and delivered to and
paid for by the Underwriter pursuant to this Agreement, the Firm Securities
will be validly issued, fully paid, nonassessable and free of preemptive
rights and will conform to the description thereof in the Prospectus (and,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus). No holder of outstanding securities of the Company is
entitled as such to any preemptive or other right to subscribe for any of
the Securities, and no person

3
<PAGE>
is entitled to have securities registered by the Company under the
Registration Statement or otherwise under the Act other than as described
in the Prospectus (and, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).

(g) The capital stock of the Company conforms to the description
thereof contained in the Prospectus (and, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).

(h) All issuances of securities of the Company have been
effected pursuant to an exemption from the registration requirements of the
Act. Except as previously disclosed in writing to the Representative, no
compensation was paid to or on behalf of any member of the National
Association of Securities Dealers, Inc. ("NASD"), or any affiliate or
employee thereof, in connection with any such issuance.

(i) The financial statements of the Company included in the
Registration Statement and the Prospectus (and, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) fairly present the
financial position of the Company as of the dates indicated and the results
of operations of the Company for the periods specified. Such financial
statements have been prepared in accordance with generally accepted
accounting principles in effect in the United States of America,
consistently applied, except to the extent that certain footnote
disclosures regarding unaudited interim periods may have been omitted in
accordance with the applicable rules of the Commission under the Securities
Exchange Act of 1934, as amended (the "1934 Act"). The financial data set
forth under the caption "Summary Financial Information" in the Prospectus
(and, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) fairly present, on the basis stated in the Prospectus (or such
Preliminary Prospectus), the information included therein.

(j) Causey Demgen & Moore Inc., Certified Public Accountants,
which has audited certain financial statements of the Company and delivered
its report with respect to the financial statements included in the
Registration Statement and the Prospectus (and, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), is an independent
public accountant with respect to the Company as required by the Act and
the applicable rules and regulations thereunder.

(k) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus (and, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), (i) except as
otherwise contemplated therein, there has been no material adverse change
in the business, operations, condition (financial or otherwise), earnings
or prospects of the Company, whether or not arising in the ordinary course
of business, (ii) except as otherwise stated therein, there have been no
transactions entered into by the Company and no commitments made by the
Company that, individually or in the aggregate, are material with respect
to the Company, (iii) there has not been any change in the capital stock or
indebtedness of the Company, and (iv) there has been no dividend or
distribution of any kind declared, paid or made by the Company in respect
of any class of its capital stock.

4
<PAGE>
(l) The Company has full corporate power and authority to enter
into and perform its obligations under this Agreement and the
Representative's Warrant Agreement (as hereinafter defined). The execution
and delivery of this Agreement and the Representative's Warrant Agreement
have been duly authorized by all necessary corporate action on the part of
the Company and this Agreement and the Representative's Warrant Agreement
have each been duly executed and delivered by the Company and each is a
valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium and other similar laws affecting creditors' rights generally and
by general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and except as rights to
indemnity and contribution under this Agreement may be limited by
applicable law. The issuance, offering and sale by the Company to the
Underwriters of the Securities pursuant to this Agreement or the
Representative's Securities pursuant to the Representative's Warrant
Agreement, the compliance by the Company with the provisions of this
Agreement and the Representative's Warrant Agreement, and the consummation
of the other transactions contemplated by this Agreement and the
Representative's Warrant Agreement do not (i) require the consent,
approval, authorization, registration or qualification of or with any court
or governmental or regulatory authority, except such as have been obtained
or may be required under state securities or blue sky laws and, if the
Registration Statement filed with respect to the Securities (as amended) is
not effective under the Act as of the time of execution hereof, such as may
be required (and shall be obtained as provided in this Agreement) under the
Act, or (ii) conflict with or result in a breach or violation of, or
constitute a default under, any material contract, indenture, mortgage,
deed of trust, loan agreement, note, lease or other material agreement or
instrument to which the Company is a party or by which the Company or any
of its property is bound or subject, or the certificate of incorporation or
by-laws of the Company, or any statute or any rule, regulation, judgment,
decree or order of any court or other governmental or regulatory authority
or any arbitrator applicable to the Company.

(m) No legal or governmental proceedings are pending to which
the Company is a party or to which the property of the Company is subject,
and no such proceedings have been threatened against the Company or with
respect to any of its property, except such as are described in the
Prospectus (and, if the Prospectus is not in existence, the most recent
Preliminary Prospectus). No contract or other document is required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement that is not described therein
(and, if the Prospectus is not in existence, in the most recent Preliminary
Prospectus) or filed as required.

(n) The Company is not in (i) violation of its certificate of
incorporation, by-laws or other governing documents, (ii) violation in any
material respect of any law, statute, regulation, ordinance, rule, order,
judgment or decree of any court or any governmental or regulatory authority
applicable to it, or (iii) default in any material respect in the
performance or observance of any obligation, agreement, covenant or
condition contained in any material contract, indenture, mortgage, deed of
trust, loan agreement, note, lease or other material agreement or
instrument to which it is a party or by which it or any of its property may
be bound or subject, and no event has occurred which with notice or lapse
of time or both would constitute such a default.

5
<PAGE>
(o) The Company currently owns or possesses adequate rights to
use all intellectual property, including all trademarks, service marks,
trade names, copyrights, inventions, know-how, trade secrets, proprietary
technologies, processes and substances, or applications or licenses
therefor, that are described in the Prospectus (and if the Prospectus is
not in existence, the most recent Preliminary Prospectus), and any other
rights or interests in items of intellectual property as are necessary for
the conduct of the business now conducted or proposed to be conducted by
them as described in the Prospectus (or, such Preliminary Prospectus), and,
except as disclosed in the Prospectus (and such Preliminary Prospectus),
the Company is not aware of the granting of any patent rights to, or the
filing of applications therefor by, others, nor is the Company aware of,
nor has the Company received notice of, infringement of or conflict with
asserted rights of others with respect to any of the foregoing. All such
intellectual property rights and interests are (i) valid and enforceable
and (ii) to the best knowledge of the Company, not being infringed by any
third parties.

(p) The Company possesses adequate licenses, orders,
authorizations, approvals, certificates or permits issued by the
appropriate federal, state or foreign regulatory agencies or bodies
necessary to conduct its business as described in the Registration
Statement and the Prospectus (and, if the Prospectus is not in existence,
the most recent Preliminary Prospectus), and, except as disclosed in the
Prospectus (and, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), there are no pending or, to the best knowledge of
the Company, threatened, proceedings relating to the revocation or
modification of any such license, order, authorization, approval,
certificate or permit.

(q) The Company has good and marketable title to all of the
properties and assets reflected in the Company's financial statements or as
described in the Registration Statement and the Prospectus (and, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
subject to no lien, mortgage, pledge, charge or encumbrance of any kind,
except those reflected in such financial statements or as described in the
Registration Statement and the Prospectus (and such Preliminary
Prospectus). Except as disclosed in the Prospectus, the Company occupies
its leased properties under valid and enforceable leases conforming to the
description thereof set forth in the Registration Statement and the
Prospectus (and such Preliminary Prospectus).

(r) The Company is not and does not intend to conduct its
business in a manner in which it would be an "investment company" as
defined in Section 3(a) of the Investment Company Act of 1940 (the
"Investment Company Act").

(s) The Company has obtained and delivered to the Representative
the agreements (the "Lock-up Agreements") with the officers, directors and
certain other security holders owning shares of Common Stock substantially
to the effect that, among other things, each such person will not,
commencing on the date that the Registration Statement is declared
effective by the Commission (the "Effective Date") and continuing for a
period of one year thereafter, without the prior written consent of the
Representative, directly or indirectly, publicly sell, offer or contract to
sell or grant any option to purchase, transfer, assign or pledge, or
otherwise encumber, or dispose

6
<PAGE>
of any shares of Common Stock now or hereafter owned by such person and
that the purchaser or transferee in any private sale agrees to be bound by
the Lock-up Agreement.

(t) No labor dispute with the employees of the Company exists,
is threatened or, to the best of the Company's knowledge, is imminent that
could result in a material adverse change in the condition (financial or
otherwise), business, prospects, net worth or results of operations of the
Company, except as described in or contemplated by the Prospectus (and, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus).

(u) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which it is engaged; the Company
has not been refused any insurance coverage sought or applied for; and the
Company has no reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the
condition (financial or otherwise), business, prospects, net worth or
results of operations of the Company, except as described in or
contemplated by the Prospectus (and, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).

(v) The Representative's Warrant (as hereinafter defined) will
conform to the description thereof in the Registration Statement and in the
Prospectus (and, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and, when sold to and paid for by the
Representative in accordance with the Representative's Warrant Agreement,
will have been duly authorized and validly issued and will constitute valid
and binding obligations of the Company entitled to the benefits of the
Representative's Warrant Agreement. The shares of Common Stock and Warrants
issuable upon exercise of the Representative's Warrant have been duly
authorized and reserved for issuance upon exercise of the Representative's
Warrant by all necessary corporate action on the part of the Company and,
when issued and delivered and paid for upon such exercise in accordance
with the terms of the Representative's Warrant Agreement and the
Representative's Warrant, respectively, will be validly issued, fully paid,
nonassessable and free of preemptive rights and will conform to the
description thereof in the Prospectus (and, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).

(w) No person has acted as a finder in connection with, or is
entitled to any commission, fee or other compensation or payment for
services as a finder for or for originating, or introducing the parties to,
the transactions contemplated herein and the Company will indemnify the
Underwriter with respect to any claim for finder's fees in connection
herewith. Except as set forth in the Registration Statement and the
Prospectus (and, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), the Company has no management or financial
consulting agreement with anyone. No promoter, officer, director or
stockholder of the Company is, directly or indirectly, affiliated or
associated with an NASD member and no securities of the Company have been
acquired by an NASD member, except as previously disclosed in writing to
the Representative.

7
<PAGE>
(x) The Company has filed all federal, state, local and foreign
tax returns which are required to be filed through the date hereof, or has
received extensions thereof, and has paid all taxes shown on such returns
and all assessments received by it to the extent that the same are material
and have become due.

(y) Neither the Company nor any director, officer, agent,
employee or other person associated with or acting on behalf of the Company
has, directly or indirectly; used any corporate funds for unlawful
contributions, gifts, entertainment, or other unlawful expenses relating to
political activity; made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds; violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or made any bribe,
rebate, payoff, influence payment, kickback, or other unlawful payment. No
transaction has occurred between or among the Company and any of its
officers or directors or any affiliates of any such officer or director,
that is required to be described in and is not described in the
Registration Statement and the Prospectus.

(z) Neither the Company nor any of its officers, directors or
affiliates (as defined in the Regulations), has taken or will take,
directly or indirectly, prior to the completion of the Offering, any action
designed to stabilize or manipulate the price of any security of the
Company, or which has caused or resulted in, or which might in the future
reasonably be expected to cause or result in, stabilization or manipulation
of the price of any security of the Company, to facilitate the sale or
resale of any of the Securities or the Option Securities.

2. PURCHASE, SALE AND DELIVERY OF THE SECURITIES AND THE
REPRESENTATIVE'S WARRANTS.

(a) On the basis of the representations, warranties, agreements
and covenants herein contained and subject to the terms and conditions
herein set forth, the Company agrees to issue and sell to each Underwriter,
and each Underwriter agrees, severally and not jointly, to purchase from
the Company, the number of Firm Securities as set forth opposite its name
on Schedule 1 annexed hereto, at the purchase price indicated in the
Prospectus.

(b) Certificates in definitive form for the Firm Securities that
the Underwriters have agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Underwriters request upon notice to the Company at least 48 hours prior to
the Firm Closing Date, shall be delivered by or on behalf of the Company to
the Underwriters, against payment by or on behalf of the Underwriters of
the purchase prices therefor by wire transfer of immediately available
funds to a bank account specified by the Company. Such delivery of the
Firm Securities shall be made at the offices of Counsel for the
Underwriters, 5445 DTC Parkway, Suite 520, Englewood, Colorado 80111 at
7:30 A.M., Denver time within five days from the Effective Date of the
Offering, or at such other place, time or date as the Underwriters and the
Company may agree upon, such time and date of delivery against payment
being herein referred to as the "Firm Closing Date." The Company will make
such certificates for the Firm Securities available for checking and
packaging by the Underwriters, at such offices as may be designated by

8
<PAGE>

the Representative, at least 24 hours prior to the Firm Closing Date. In
lieu of physical delivery, the closing may occur by "DTC" delivery.

(c) For the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Securities as
contemplated by the Prospectus, the Company hereby grants to the
Underwriter an option to purchase any or all of the Option Securities,
which options are exercisable by the Representative on behalf of and for
the account of the Underwriters. The purchase price to be paid for any of
the Option Securities shall be the same price per share for the Firm
Securities set forth above in paragraph (a) of this Section 2. The option
granted hereby may be exercised as to all or any part of the Option
Securities from time to time within 45 calendar days after the Firm Closing
Date. The Underwriters shall not be under any obligation to purchase any of
the Option Securities prior to the exercise of such option. The
Representative may from time to time exercise the option granted hereby on
behalf of the Underwriters by giving notice in writing or by telephone
(confirmed in writing) to the Company setting forth the aggregate number of
Option Securities as to which the Underwriters are then exercising the
option and the date and time for delivery of and payment for such Option
Securities. Any such date of delivery shall be determined by the
Underwriters but shall not be earlier than two business days or later than
three business days after such exercise of the option and, in any event,
shall not be earlier than the Firm Closing Date. The time and date set
forth in such notice, or such other time on such other date as the
Representative and the Company may agree upon, is herein called the "Option
Closing Date" with respect to such Option Securities. Upon exercise of the
option as provided herein, the Company shall become obligated to sell to
the Underwriters, and, subject to the terms and conditions herein set
forth, each Underwriter shall become obligated to purchase from the
Company, the Option Securities as to which the Underwriter is then
exercising its option. If the option is exercised as to all or any portion
of the Option Securities, certificates in definitive form for such Option
Securities, and payment therefor, shall be delivered on the related Option
Closing Date in the manner, and upon the terms and conditions, set forth in
paragraph (b) of this Section 2, except that reference therein to the Firm
Securities and the Firm Closing Date shall be deemed, for purposes of this
paragraph (c), to refer to such Option Securities and Option Closing Date,
respectively.

(d) On the Firm Closing Date, the Company will further issue and
sell to the Representative or, at the direction of the Representative, to
bona fide officers of the Underwriters, for an aggregate purchase price of
$100, warrants (the "Representative's Warrant") entitling the holders
thereof to purchase 200,000 shares of Common Stock and 200,000 Warrants
for a period of four years, such period to commence on the first
anniversary of the Effective Date. The Representative's Warrant shall be
exercisable at the price indicated in the Prospectus, and shall contain
terms and provisions more fully described herein below and as set forth
more particularly in the warrant agreement relating to the Representative's
Warrant to be executed by the Company on the Effective Date (the
"Representative's Warrant Agreement"), including, but not limited to, (i)
customary anti-dilution provisions in the event of stock dividends, split
mergers, sales of all or substantially all of the Company's assets, sales
of stock below then prevailing market or exercise prices and other events,
and (ii) prohibitions of mergers, consolidations or other reorganizations
of or by the Company or the taking by the Company of other action during
the five-year period

9
<PAGE>
following the Effective Date unless adequate provision is made to preserve,
in substance, the rights and powers incidental to the Representative's
Warrant. As provided in the Representative's Warrant Agreement, the
Representative may designate that the Representative's Warrant be issued in
varying amounts directly to bona fide officers of the Underwriters. As
further provided, no sale, transfer, assignment, pledge or hypothecation of
the Representative's Warrant shall be made for a period of five years from
the Effective Date, except (i) by operation of law or reorganization of the
Company, or (ii) to the Underwriters and bona fide partners, officers (but
not directors) of the Underwriters and selling group members.

3. OFFERING BY THE UNDERWRITERS. The Underwriters propose to offer
the Firm Securities for sale to the public upon the terms set forth in the
Prospectus (the "Offering").

4. COVENANTS OF THE COMPANY. The Company covenants and agrees with
the Underwriters that:

(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, to become effective as promptly as possible. If required, the
Company will file the Prospectus and any amendment or supplement thereto
with the Commission in the manner and within the time period required by
Rule 424(b) under the Act. During any time when a prospectus relating to
the Securities is required to be delivered under the Act, the Company (i)
will comply with all requirements imposed upon it by the Act and the rules
and regulations of the Commission thereunder to the extent necessary to
permit the continuance of sales of or dealings in the Securities in
accordance with the provisions hereof and of the Prospectus, as then
amended or supplemented, and (ii) will not file with the Commission any
prospectus or amendment referred to in the first sentence of section (a)
(i) hereof, any amendment or supplement to such prospectus or any amendment
to the Registration Statement as to which the Underwriters shall not
previously have been advised and furnished with a copy for a reasonable
period of time prior to the proposed filing and as to which filing the
Underwriters shall not have given their consent. The Company will prepare
and file with the Commission, in accordance with the rules and regulations
of the Commission, promptly upon request by the Underwriters or counsel to
the Underwriters, any amendments to the Registration Statement or
amendments or supplements to the Prospectus that may be necessary or
advisable in connection with the distribution of the Securities by the
Underwriters, and will use its best efforts to cause any such amendment to
the Registration Statement to be declared effective by the Commission as
promptly as possible. The Company will advise the Underwriters, promptly
after receiving notice thereof, of the time when the Registration Statement
or any amendment thereto has been filed or declared effective or the
Prospectus or any amendment or supplement thereto has been filed and will
provide evidence satisfactory to the Underwriters of each such filing or
effectiveness.

(b) The Company will advise the Underwriters, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, (ii) the

10
<PAGE>
suspension of the qualification of any Securities for offering or sale in
any jurisdiction, (iii) the institution, threat or contemplation of any
proceeding for any such purpose, or (iv) any request made by the Commission
for amending the Registration Statement, for amending or supplementing the
Prospectus or for additional information. The Company will use its best
efforts to prevent the issuance of any such stop order and, if any such
stop order is issued, to obtain the withdrawal thereof as promptly as
possible.

(c) The Company will, in cooperation with counsel to the
Underwriters, arrange for the qualification of the Securities for offering
and sale under the blue sky or securities laws of such jurisdictions as the
Underwriters may designate and will continue such qualifications in effect
for as long as may be necessary to complete the distribution of the
Securities.

(d) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a result of
which the Prospectus, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if for any
other reason it is necessary at any time to amend or supplement the
Prospectus to comply with the Act or the rules or regulations of the
Commission thereunder, the Company will promptly notify the Underwriters
thereof and, subject to Section 4(a) hereof, will prepare and file with the
Commission, at the Company's expense, an amendment to the Registration
Statement or an amendment or supplement to the Prospectus that corrects
such statement or omission or effects such compliance.

(e) Intentionally left blank.

(f) The Company will, without charge, provide to the
Underwriters and to counsel for the Underwriters (i) as many signed copies
of the Registration Statement originally filed with respect to the
Securities and each amendment thereto (in each case including exhibits
thereto) as the Underwriters may reasonably request, (ii) as many conformed
copies of such Registration Statement and each amendment thereto (in each
case without exhibits thereto) as the Underwriters may reasonably request,
and (iii) so long as a prospectus relating to the Securities is required to
be delivered under the Act, as many copies of each Preliminary Prospectus
or the Prospectus or any amendment or supplement thereto as the
Underwriters may reasonably request.

(g) The Company, as soon as practicable, will make generally
available to its security holders and to the Underwriters an earnings
statement of the Company that satisfies the provisions of Section 11 (a) of
the Act and Rule 158 thereunder.

(h) The Company will reserve and keep available for issuance
that maximum number of authorized but unissued shares of Common Stock which
are issuable upon exercise of any outstanding warrants and the
Representative's Warrant (including the underlying securities) outstanding
from time to time.

11
<PAGE>
(i) The Company will apply the net proceeds from the sale of the
Securities being sold by it as set forth under "Use of Proceeds" in the
Prospectus.

(j) Intentionally left blank.

(k) Prior to the Closing Date or the Option Closing Date (if
any), the Company will not, directly or indirectly, without prior written
consent of the Representative, issue any press release or other public
announcement or hold any press conference with respect to the Company or
its activities with respect to the Offering (other than trade releases
issued in the ordinary course of the Company's business consistent with
past practices with respect to the Company's operations).

(l) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in reliance
upon Rule 430A under the Act, then immediately following the execution of
this Agreement, the Company will prepare, and file or transmit for filing
with the Commission in accordance with Rule 430A and Rule 424(b) under the
Act, copies of the Prospectus including the information omitted in reliance
on Rule 430A, or, if required by such Rule 430A, a post-effective amendment
to the Registration Statement (including an amended Prospectus), containing
all information so omitted.

(m) The Company will cause the Securities to be included in The
Nasdaq SmallCap Market on the Effective Date and to maintain such listing
thereafter. The Company will file with The Nasdaq SmallCap Market all
documents and notices that are required by companies with securities that
are traded on The Nasdaq SmallCap Market.

(n) During the period of five years from the Firm Closing Date,
the Company will, as promptly as possible, not to exceed 135 days, after
each annual fiscal period render and distribute reports to its stockholders
which will include audited statements of its operations and changes of
financial position during such period and its audited balance sheet as of
the end of such period, as to which statements the Company's independent
certified public accountants shall have rendered an opinion and shall
timely file all reports required to be filed under the securities laws.

(o) During a period of three years commencing with the Firm
Closing Date, the Company will furnish to the Representative, at the
Company's expense, copies of all periodic and special reports furnished to
stockholders of the Company and of all information, documents and reports
filed with the Commission.

(p) The Company has appointed Corporate Stock Transfer, Inc. as
transfer agent for the Common Stock, subject to the Closing. The Company
will not change or terminate such appointment (except for the appointment
of American Securities Transfer & Trust, Inc.) for a period of three years
from the Firm Closing Date without first obtaining the written consent of
the Representative. For a period of three years after the Effective Date,
the Company shall cause the transfer agent to deliver promptly to the
Underwriters a duplicate copy of the daily transfer sheets

12
<PAGE>
relating to trading of the Securities. The Company shall also provide to
the Representative, on a weekly basis, copies of the DTC special securities
positions listing report.

(q) During the period of 180 days after the date of this
Agreement, the Company will not at any time, directly or indirectly, take
any action designed to or that will constitute, or that might reasonably be
expected to cause or result in, the stabilization of the price of the
Securities to facilitate the sale or resale of any of the Securities.

(r) The Company will not take any action to facilitate the sale
of any shares of Common Stock pursuant to Rule 144 under the Act if any
such sale would violate any of the terms of the Lock-up Agreements.

(s) Prior to the 120th day after the Firm Closing Date, the
Company will provide the Underwriters and their designees with three bound
volumes of the transaction documents relating to the Registration Statement
and the closing(s) hereunder, in form and substance reasonably satisfactory
to the Representative.

(t) The Company shall consult with the Representative prior to
the distribution to third parties of any financial information news
releases or other publicity regarding the Company, its business, or any
terms of this offering and the Underwriters will consult with the Company
prior to the issuance of any research report or recommendation concerning
the Company's securities. Copies of all documents that the Company or its
public relations firm intend to distribute will be provided to the
Representative for review prior to such distribution.

(u) The Company and the Underwriters will advise each other
immediately in writing as to any investigation, proceeding, order, event or
other circumstance, or any threat thereof, by or relating to the Commission
or any other governmental authority, that could impair or prevent the
Offering. Except as required by law or as otherwise mutually agreed in
writing, neither the Company nor the Underwriters will acquiesce in such
circumstances and each will actively defend any proceedings or orders in
that connection.

(v) The Company shall first submit to the Representative
certificates representing the Securities for approval prior to printing,
and shall, as promptly as possible, after filing the Registration Statement
with the Commission, obtain CUSIP numbers for the Securities.

(w) The Company will prepare and file a registration statement
with the Commission pursuant to section 12 of the 1934 Act, and will use
its best efforts to have such registration statement declared effective by
the Commission on the Effective Date. For this purpose the Company shall
prepare and file with the Commission a General Form of Registration of
Securities (Form 8-A).

(x) For so long as the Securities are registered under the 1934
Act, the Company will hold an annual meeting of stockholders for the
election of directors within 180 days after the

13
<PAGE>
end of each of the Company's fiscal years and within 135 days after the end
of each of the Company's fiscal years will provide the Company's
stockholders with the audited financial statements of the Company as of the
end of the fiscal year just completed prior thereto. Such financial
statements shall be those required by Rule 14a-3 under the 1934 Act and
shall be included in an annual report pursuant to the requirements of such
Rule.

(y) The Company will engage a financial public relations firm
reasonably satisfactory to the Representative on or before the Firm Closing
Date, and continuously engage such firm, or a substitute firm reasonably
acceptable to the Representative, for a period of twelve (12) months
following the Firm Closing Date.

(z) The Company will take all necessary and appropriate actions
to be included in Standard and Poor's Corporation Descriptions or other
equivalent manual and to maintain its listing therein for a period of five
(5) years from the Effective Date. Such application shall be made on an
accelerated basis no more than two days following the Effective Date.

(aa) On or prior to the Effective Date, the Company will give
written instructions to the transfer agent for the Common Stock directing
said transfer agent to place stop-order restrictions against, and
appropriate legends advising of the Lock-up Agreements on, the certificates
representing the securities of the Company owned by the persons who have
entered into the Lock-up Agreements.

(bb) During the twelve-month period commencing on the later of
the Effective Date and the Closing Date, and provided that the
Representative agrees to a complete or partial release of the restrictions
contained in a Lock-up Agreement, the Company shall grant the
Representative the right to sell, within seven business days of the
effective date of such release, for the account of any person who was a
shareholder of the Company prior to the Offering and who owns at least five
percent (5%) of the Company's Common Stock after the Offering, any
securities sold pursuant to Rule 144 under the Act, provided that such sale
is made in accordance with the applicable shareholder's instructions.

(cc) Prior to the Effective Date, the Company will have taken all
necessary and appropriate action to have at least two persons be elected to
the Company's Board of Directors who are deemed to be independent of the
Company's management.

4. EXPENSES

(a) The Company shall pay all costs and expenses incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated hereby are consummated or this Agreement is
terminated pursuant to Section 10 hereof, including all costs and expenses
incident to (i) the preparation, printing and filing or other production of
documents with respect to the transactions, including any costs of printing
the Registration Statement originally filed

14
<PAGE>
with respect to the Securities and any amendment thereto, any Preliminary
Prospectus and the Prospectus and any amendment or supplement thereto, this
Agreement, the selected dealer agreement and the other agreements and
documents governing the underwriting arrangements and any blue sky
memoranda, (ii) all reasonable and necessary arrangements relating to the
delivery to the Underwriters of copies of the foregoing documents, and the
costs and expenses of the Underwriters in mailing or otherwise distributing
the same including telephone charges, duplications and other accountable
expenses, (iii) the fees and disbursements of the counsel, the accountants
and any other experts or advisors retained by the Company, (iv) the
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including transfer agent's, warrant agent's and
registrar's fees or any transfer or other taxes payable thereon, (v) the
qualification of the Securities under state blue sky or securities laws,
including filing fees and fees and disbursements, (vi) the filing fees of
the Commission and the NASD relating to the Securities, (vii) the inclusion
of the Securities on The Nasdaq SmallCap Market and in the Standard and
Poor's Corporation Descriptions Manual, (viii) any "road shows" or other
meetings with prospective investors in the Securities, including
transportation, accommodation, meal, conference room, audio-visual
presentation and similar expenses, but not including such expenses for the
Underwriters or their representatives or designees in excess of $15,000 and
(ix) the publication of "tombstone advertisements" in THE WALL STREET
JOURNAL and/or INVESTOR'S BUSINESS DAILY to be selected by the
Representative, and the manufacture of prospectus memorabilia. In addition
to the foregoing, the Company, shall reimburse the Representative for its
expenses on the basis of a non-accountable expense allowance in the amount
of 3.00% of the gross offering proceeds to be received by the Company. The
non-accountable expense allowance, based on the gross proceeds from the
sale of the Firm Securities, shall be deducted from the funds to be paid by
the Representative in payment for the Firm Securities, pursuant to Section
2 of this Agreement, on the Firm Closing Date. To the extent any Option
Securities are sold, any remaining non-accountable expense allowance based
on the gross proceeds from the sale of the Option Securities shall be
deducted from the funds to be paid by the Representative in payment for the
Option Securities, pursuant to Section 2 of this Agreement, on the Option
Closing Date. The Company warrants, represents and agrees that all such
payments and reimbursements will be promptly and fully made.

(b) Notwithstanding any other provision of this Agreement, if
the Offering is terminated in accordance with the provisions of Section 6
or Section 10(a)(i), the Company agrees that, in addition to the Company
paying its own expenses as described in subparagraph (a) above, the Company
shall reimburse the Representative for its actual accountable out-of-pocket
expenses which have previously been advanced to the Representative, up to
a maximum of $100,000. Such expenses shall include, but are not to be
limited to, fees for the services and time of counsel for the Underwriters
to the extent not covered by clause (a) above, plus any additional expenses
and fees, including, but not limited to, travel expenses, postage expenses,
duplication expenses, long-distance telephone expenses, and other expenses
incurred by the Representative in connection with the proposed offering.

5. Intentionally left blank.

15
<PAGE>
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of
the Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Underwriters' sole discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the
date hereof and as of the Firm Closing Date as if made on and as of the
Firm Closing Date, to the accuracy of the statements of the Company's
officers made pursuant to the provisions hereof, to the performance by the
Company of its covenants and agreements hereunder and to the following
additional conditions:

(a) If the Registration Statement, as heretofore amended, has
not been declared effective as of the time of execution hereof, the
Registration Statement, as heretofore amended or as amended by an amendment
thereto to be filed prior to the Firm Closing Date, shall have been
declared effective not later than 5:30 P.M., New York City time, on the
date on which the amendment to such Registration Statement containing
information regarding the initial public offering price of the Securities
has been filed with the Commission, or such later time and date as shall
have been consented to by the Underwriters; if required, the Prospectus and
any amendment or supplement thereto shall have been filed with the
Commission in the manner and within the time period required by Rule 424(b)
under the Act, no stop order suspending the effectiveness of the
Registration Statement shall have been issued, and no proceedings for that
purpose shall have been instituted or threatened or, to the knowledge of
the Company or the Underwriters, shall be contemplated by the Commission;
and the Company shall have complied with any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise).

(b) The Underwriters shall have received an opinion, dated the
Firm Closing Date, of Brenman Bromberg & Tennenbaum, P.C., counsel to the
Company, as to law, substantially to the effect that:

(1) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its organization and is duly qualified to transact business
as a foreign corporation and is in good standing under the laws of each
other jurisdiction in which its ownership or leasing of any properties or
the conduct of its business requires such qualification, except where the
failure to be in good standing or so qualify would not have a materially
adverse effect upon the Company;

(2) the Company has full corporate power and authority to
own or lease its property and conduct its business as it is now being
conducted and as it is proposed to be conducted, as described in the
Registration Statement and the Prospectus, and the Company has full
corporate power and authority to enter into this Agreement and the
Representative's Warrant Agreement and to carry out all the terms and
provisions hereof and thereof to be carried out by it;

(3) to the knowledge of such counsel, there are no
outstanding options, warrants or other rights granted by the Company to
purchase shares of its Common Stock, preferred stock or other securities
other than as described in the Prospectus; the Securities have been duly

16
<PAGE>
authorized and the securities underlying the Representative's Warrant has
been duly reserved for issuance by all necessary corporate action on the
part of the Company and the Securities when issued and delivered to and
paid for by the Representative, pursuant to this Agreement, the
Representative's Warrant when issued and delivered and paid for in
accordance with this Agreement and the Representative's Warrant Agreement
by the Underwriters, and the Representative's Warrant when issued upon
payment of the exercise price specified in the Representative's Warrant,
will be validly issued, fully paid, nonassessable and free of preemptive
rights and will conform to the description thereof in the Prospectus; to
the knowledge of such counsel, no holder of outstanding securities of the
Company is entitled as such to any preemptive or other right to subscribe
for any of the Securities or the Representative's Warrant; and to the
knowledge of such counsel, no person is entitled to have securities
registered by the Company under the Registration Statement or otherwise
under the Act other than as described in the Prospectus;

(4) the execution and delivery of this Agreement and the
Representative's Warrant Agreement have been duly authorized by all
necessary corporate action on the part of the Company and this Agreement
and the Representative's Warrant Agreement have been duly executed and
delivered by the Company, and each is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other similar laws
affecting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law) and except as rights to indemnity and contribution under this
Agreement and the Representative's Warrant Agreement may be limited by
applicable securities laws and the public policy underlying such laws;

(5) the Representative's Warrant is duly authorized and
upon payment of the purchase price therefore specified in Section 2(d) of
this Agreement will be validly issued and constitute valid and binding
obligations of the Company; and the certificates representing the
Securities are in due and proper form under law;

(6) the statements set forth in the Prospectus under the
caption "Description of Securities" insofar as those statements purport to
summarize the terms of the capital stock and warrants of the Company,
provide a fair summary of such terms; to the knowledge of such counsel, the
statements set forth in the Prospectus describing statutes and regulations
and the descriptions of the consequences to the Company under such statutes
and regulations are fair summaries of the information set forth therein and
are accurate in all material respects; to the knowledge of such counsel,
the statements in the Prospectus, insofar as those statements constitute
summaries of the contracts, instruments, leases or licenses referred to
therein, constitute a fair summary in all material respects of those
contracts, instruments, leases or licenses and include all material terms
thereof, as applicable;

(7) none of (A) the execution and delivery of this
Agreement and the Representative's Warrant Agreement, (B) the issuance,
offering and sale by the Company to the Underwriters of the Securities
pursuant to this Agreement and the Representative's Warrant

17
<PAGE>
Securities pursuant to the Representative's Warrant Agreement, or (C) the
compliance by the Company with the other provisions of this Agreement and
the Representative's Warrant Agreement and the consummation of the
transactions contemplated hereby and thereby, to the knowledge of such
counsel (1) requires the consent, approval, authorization, registration or
qualification of or with any court or governmental authority known to us,
except such as have been obtained and such as may be required under state
blue sky or securities laws as to which we express no opinion or (2)
conflicts with or results in a breach or violation of, or constitutes a
default under, any material contract, indenture, mortgage, deed of trust,
loan agreement, note, lease or other material agreement or instrument known
to such counsel to which the Company is a party or by which the Company or
any of its property is bound or subject, or the certificate of
incorporation or by-laws of the Company, or any material statute or any
judgment, decree, order, rule or regulation of any court or other
governmental or regulatory authority known to us applicable to the Company;

(8) to the knowledge of such counsel, (A) no legal or
governmental proceedings are pending to which the Company is a party or to
which the property of the Company is subject except those arising in the
ordinary course of business and fully covered by insurance and (B) no
contract or other document is required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein or filed as required;

(9) to the knowledge of such counsel, the Company possesses
adequate licenses, orders, authorizations, approvals, certificates or
permits issued by the appropriate federal, state or local regulatory
agencies or bodies necessary to conduct its business as described in the
Registration Statement and the Prospectus, and, there are no pending or
threatened proceedings relating to the revocation or modification of any
such license, order, authorization, approval, certificate or permit, except
as disclosed in the Registration Statement and the Prospectus, which would
have a material adverse effect on the Company;

(10) The Company is not in violation or breach of, or in
default with respect to, any term of its certificate of incorporation or
by-laws, and to the knowledge of such counsel, the Company is not in (i)
violation in any material respect of any law, statute, regulation,
ordinance, rule, order, judgment or decree of any court or any governmental
or regulatory authority applicable to it, or (ii) default in any material
respect in the performance or observance of any obligation, agreement,
covenant or condition contained in any material contract, indenture,
mortgage, deed of trust, loan agreement, note, lease or other material
agreement or instrument to which it is a party or by which it or any of its
property may be bound or subject, and no event has occurred which with
notice, lapse of time or both would constitute such a default.

(11) The Securities have been approved for inclusion on The
Nasdaq SmallCap Market;

(12) The Registration Statement is effective under the Act;
any required filing of the Prospectus pursuant to Rule 424(b) has been made
in the manner and within the time

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<PAGE>
period required by Rule 424(b); and to our knowledge, no stop order
suspending the effectiveness of the Registration Statement or any amendment
thereto has been issued, and no proceedings for that purpose have been
instituted or threatened or, to the best knowledge of such counsel, are
contemplated by the Commission;

(13) The Registration Statement originally filed with
respect to the Securities and each amendment thereto and the Prospectus (in
each case, other than the financial statements, the notes, schedules and
other financial and statistical information contained therein, as to which
such counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act and the rules and
regulations of the Commission thereunder; and

(14) the Company is not an "investment company" as defined
in Section 3(a) of the Investment Company Act of 1940 and, if the Company
conducts its business as set forth in the Prospectus, it will not become an
"investment company" and will not be required to register under the
Investment Company.

Such counsel also shall state in its opinion that it has
participated in the preparation of the Registration Statement and the
Prospectus and that nothing has come to its attention that has caused it to
believe that the Registration Statement, at the time it became effective
(including the information deemed to be a part of the Registration
Statement at the time of effectiveness pursuant to Rule 430A(b), if
applicable), contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus, as of its
date or as of the Firm Closing Date, contained an untrue statement of
material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.

In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials, copies of which
certificates will be provided to the Underwriters, and, as to matters of
the laws of certain jurisdictions, on the opinions of other counsel to the
Company, which opinions shall also be delivered to the Underwriters, in
form and substance acceptable to the Underwriters, if such other counsel
expressly authorize such reliance and counsel to the Company expressly
states in their opinion that such counsel's and the Underwriters' reliance
upon such opinion is justified.

(d) A. At the time this Agreement is executed, the
Representative shall have received a letter, dated such date, addressed to
the Underwriters in form and substance satisfactory (including the non-
material nature of the changes or decreases, if any, referred to in clause
(iii) below) in all respects to the Representative and Representative's
counsel, from Causey Demgen & Moore Inc., Certified Public Accountants:

(i) confirming that it is a independent certified public
accountant with respect to the Company within the meaning of the Act and
the applicable Rules and Regulations;

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<PAGE>
(ii) stating that it is their opinion that the financial
statements of the Company included in the Registration Statement comply as
to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations thereunder and that
the Representative may rely upon the opinion of the Certified Public
Accountants with respect to the financial statements included in the
Registration Statement;

(iii) stating that, on the basis of a limited review
which included a reading of the latest available unaudited interim
financial statements of the Company, a reading of the latest available
minutes of the stockholders and board of directors and the various
committees of the boards of directors of the Company, consultations with
officers and other employees of the Company responsible for financial and
accounting matters and other specified procedures and inquiries (which, as
to the interim financial statements included in the Registration Statement,
shall constitute a review as described in SAS No. 71, Interim Financial
Statements), nothing has come to the Certified Public Accountants'
attention which would lead them to believe that (A) the unaudited financial
statements of the Company included in the Registration Statement do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations or are not fairly
presented in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
financial statements of the Company included in the Registration Statement,
or (B) at a specified date not more than five (5) days prior to the
Effective Date, there has been any change in the capital stock or long-term
debt of the Company, or any decrease in the stockholders' equity or net
current assets or net assets of the Company as compared with amounts shown
in the December 31, 1998 balance sheet included in the Registration
Statement, other than as set forth in or contemplated by the Registration
Statement, or, if there was any change or decrease, setting forth the
amount of such change or decrease, and (C) during the period from December
31, 1998 to a specified date not more than five (5) days prior to the
Effective Date, there was any decrease (increase) in net revenues, net
income (loss) or in net earnings (loss) per common share of the Company, in
each case as compared with the corresponding period in December 31, 1998,
other than as set forth in or contemplated by the Registration Statement,
or, if there was any such decrease, setting forth the amount of such
decrease (increase);

(iv) setting forth, at a date not later than five (5) days
prior to the Effective Date, the amount of liabilities of the Company;

(v) stating that they have compared specific dollar
amounts, numbers of shares, percentages of revenues and earnings,
statements and other financial information pertaining to the Company set
forth in the Prospectus in each case to the extent that such amounts,
numbers, percentages, statements and information may be derived from the
general accounting records, including work sheets, of the Company and
excluding any questions requiring an interpretation by legal counsel, with
the results obtained from the application of specified readings, inquiries
and other appropriate procedures (which procedures do not constitute an
examination in accordance with generally accepted auditing standards) set
forth in the letter and found them to be in agreement; and

(vi) statements as to such other matters incident to the
transaction

20
<PAGE>
contemplated hereby as the Representative may request.

B. At the Firm Closing Date and the Option Closing Date, if
any, the Representative shall have received from the Certified Public
Accountants, a letter, dated as of the Firm Closing Date or the Option
Closing Date, as the case may be, to the effect that it reaffirms that
statements made in the letter furnished pursuant to subsection A of this
Section 6(e), except that the specified date referred to shall be a date
not more than five (5) days prior to the Firm Closing Date or the Option
Closing Date, as the case may be, and, if the Company has elected to rely
on Rule 430A of the Rules and Regulations, to the further effect that they
have carried out procedures as specified in clause (v) of subsection A of
this Section 6(e) with respect to certain amounts, percentages and
financial information as specified by the Representative and deemed to be
a part of the Registration Statement pursuant to Rule 430A(b) and have
found such amounts, percentages and financial information to be in
agreement with the records specified in such clause (v).

(e) The representations and warranties of the Company contained
in this Agreement shall be true and correct as if made on and as of the
Firm Closing Date; the Registration Statement shall not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein in order to make the statements therein not misleading,
and the Prospectus, as amended or supplemented as of the Firm Closing Date,
shall not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
the Company shall have performed all covenants and agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to the
Firm Closing Date.

(f) No stop order suspending the effectiveness of the
Registration Statement or any amendment thereto shall have been issued, and
no proceedings for that purpose shall have been instituted or threatened or
contemplated by the Commission.

(g) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there shall not
have been any material adverse change, or any development involving a
prospective material adverse change, in the business, operations, condition
(financial or otherwise), earnings or prospects of the Company, except in
each case as described in or contemplated by the Prospectus (exclusive of
any amendment or supplement thereto).

(h) The Underwriters shall have received a certificate, dated
the Firm Closing Date, of the Chief Executive Officer and the Secretary of
the Company to the effect set forth in subparagraphs (e) and (f) above.

(i) The Securities shall be qualified in such jurisdictions as
the Underwriters may reasonably request pursuant to Section 4(c), and each
such qualification shall be in effect and not subject to any stop order or
other proceeding on the Firm Closing Date.

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<PAGE>
(j) The Company shall have executed and delivered to the
Underwriters the Representative's Warrant Agreement and a certificate or
certificates evidencing the Representative's Warrant, in each case in a
form acceptable to the Underwriters.

(k) The Underwriters shall have received Lock-up Agreements
executed by the persons listed on Schedule 2 annexed hereto.

(l) On or before the Firm Closing Date, the Underwriters and
counsel for the Underwriters shall have received such further certificates,
documents, letters or other information as they may have reasonably
requested from the Company and other security holders of the Company.

All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Underwriters and
counsel for the Underwriters. The Company shall furnish to the Underwriters
such conformed copies of such opinions, certificates, letters and documents
in such quantities as the Underwriters and counsel for the Underwriters
shall reasonably request.

The obligation of the Underwriters to purchase and pay for any Option
Securities shall be subject, in its discretion, to each of the foregoing
conditions, except that all references to the Firm Securities and the Firm
Closing Date shall be deemed to refer to such Option Securities and the
related Option Closing Date, respectively.

7. INDEMNIFICATION AND CONTRIBUTION.

(a) The Company agrees to indemnify and hold harmless the
Underwriters and each person, if any, who controls the Underwriters within
the meaning of Section 15 of the Act or Section 20 of the 1934 Act against
any losses, claims, damages, or liabilities, joint or several, to which the
Underwriters, or such controlling person may become subject under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:

(1) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or (B) any application or other document, or any
amendment or supplement thereto, executed by the Company or based upon
written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Securities under the Blue Sky or
securities laws thereof or filed with the Commission or any securities
association or securities exchange (each an "Application"), or

(2) the omission or alleged omission to state in such
Registration Statement or any amendment thereto, any Preliminary Prospectus
or the Prospectus or any amendment or supplement thereto, or any
Application a material fact required to be stated therein

22
<PAGE>
or necessary to make the statements therein not misleading, and will
reimburse, as incurred, the Underwriters and such controlling person for
any legal or other expenses reasonably incurred by the Underwriters or such
controlling person in connection with investigating or defending against
any loss, claim, damage, liability, action, investigation, litigation or
proceeding; PROVIDED, HOWEVER, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such Registration
Statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or any Application in
reliance upon and in conformity with written information furnished to the
Company by the Underwriters, specifically for use therein. This indemnity
agreement will be in addition to any liability which the Company may
otherwise have. The Company will not, without the prior written consent of
the Underwriters, or controlling person, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may be sought
hereunder (whether or not the Underwriters or any person who controls the
Underwriters or within the meaning of Section 15 of the Act or Section 20
of the 1934 Act is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes an unconditional
release of the Underwriters and each such controlling person from all
liability arising out of such claim, action, suit or proceeding.

(b) The Underwriters will indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the 1934 Act
against, any losses, claims, damages or liabilities to which the Company or
any such director, officer, or controlling person may become subject under
the Act or otherwise, but only insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or any Application, or (ii) the omission or the alleged omission
to state therein a material fact required to be stated in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Application, or
necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon
and in conformity with written information furnished to the Company by the
Underwriters specifically for use therein; and, subject to the limitation
set forth immediately preceding this clause, will reimburse, as incurred,
any legal or other expenses reasonably incurred by the Company or any such
director, officer, or controlling person in connection with investigating
or defending against any such loss, claim, damage, liability, action
investigation, litigation or proceedings, in respect thereof. This
indemnity agreement will be in addition to any liability which the
Underwriters may otherwise have.

(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party of
the

23
<PAGE>
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 7. In case any such action is
brought against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled
to participate therein and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; PROVIDED,
HOWEVER, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be one or more legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party,
the indemnifying party shall not have the right to direct the defense of
such action on behalf of such indemnified party or parties and such
indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall
have employed separate counsel in accordance with the proviso to the next
preceding sentence or (ii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs
and expenses of any settlement of such action effected by such indemnified
party without the consent of the indemnifying party.

(d) In circumstances in which the indemnity obligation provided
for in the preceding paragraphs of this Section 7 is unavailable or
insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Securities, or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law,
not only such relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total proceeds from the Offering
(net of underwriting discounts and commissions but before deducting
expenses) received by the Company bear to the total underwriting discounts
and commissions received by the Underwriters. The relative fault of the
parties shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters, the parties' relative intent,
knowledge, access to information and

24
<PAGE>
opportunity to correct or prevent such statement or omission, and the other
equitable considerations appropriate in the circumstances. The Company and
the Underwriters agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d).
Notwithstanding any other provision of this paragraph (d), the Underwriters
shall not be obligated to make contributions hereunder that in the
aggregate exceeding the total public offering price of the Securities
purchased by the Underwriters under this Agreement, less the aggregate
amount of any damages that the Underwriters have otherwise been required to
pay in respect of the same or any substantially similar claim, and no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11 (f) of the Act) shall be entitled to contribution from any
person who is not guilty of such fraudulent misrepresentation. For purposes
of this paragraph (d), each person, if any, who controls an Underwriter
within the meaning of Section 15 of the Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Underwriters, and each
director of the Company, each officer of the Company who signed the
Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the 1934 Act,
shall have the same rights to contribution as the Company.

8. SUBSTITUTION OF UNDERWRITERS.

If any Underwriter shall for any reason not permitted hereunder cancel
its obligations to purchase the Firm Securities hereunder, or shall fail to
take up and pay for the number of Firm Securities set forth opposite names
in Schedule 1 hereto upon tender of such Firm Securities in accordance with
the terms hereof, then:

(a) If the aggregate number of Firm Securities which such
Underwriter or Underwriters agreed but failed to purchase does not exceed
10% of the total number of Firm Securities, the other Underwriters shall be
obligated to purchase the Firm Securities which such defaulting Underwriter
agreed but failed to purchase.

(b) If any Underwriter so defaults and the agreed number of Firm
Securities with respect to which such default or defaults occurs is more
than 10% of the total number of Firm Securities, the remaining Underwriters
shall have the right to take up and pay for the Firm Securities which the
defaulting Underwriter agreed but failed to purchase. If such remaining
Underwriters do not, at the Firm Closing Date, take up and pay for the Firm
Securities which the defaulting Underwriter agreed but failed to purchase,
the time for delivery of the Firm Securities shall be extended to the next
business day to allow the remaining Underwriters the privilege of
substituting within twenty-four hours (including nonbusiness hours) another
underwriter or underwriters satisfactory to the Company. If no such
underwriter or underwriters shall have been substituted as aforesaid,
within such twenty-four hour period, the time of delivery of the Firm
Securities may, at the option of the Company, be again extended to the next
following business day, if necessary, to allow the Company the privilege of
finding within twenty-four hours (including nonbusiness hours) another
underwriter or underwriters to purchase the Firm Securities which the
defaulting Underwriter

25
<PAGE>
or Underwriters agreed but failed to purchase. If it shall be arranged for
the remaining Underwriter or substituted Underwriters to take up the Firm
Securities of the defaulting Underwriter as provided in this section, (i)
the Company or the Underwriters shall have the right to postpone the time
of delivery for a period of not more than seven business days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other document or arrangements, and
the Company agrees promptly to file any amendments to the Registration
Statement or supplements to the Prospectus which may thereby be made
necessary, and (ii) the respective numbers of Firm Securities to be
purchased by the remaining Underwriters or substituted Underwriters shall
be taken as the basis of the underwriting obligation for all purposes of
this agreement.

If in the event of a default by any Underwriter and the remaining
Underwriters shall not take up and pay for all the Firm Securities agreed
to be purchased by the defaulting Underwriter or substitute another
underwriter or underwriters as aforesaid, the Company shall not find or
shall not elect to seek another underwriter or underwriters for such Firm
Securities as aforesaid, then this Agreement shall terminate.

If, following exercise of the option provided in Section 2(c) hereof,
any Underwriter or Underwriters shall for any reason not permitted
hereunder cancel their obligations to purchase Option Securities at the
Option Closing Date, or shall fail to take up and pay for the number of
Option Securities, which it became obligated to purchase at the Option
Closing Date upon tender of such Option Securities in accordance with the
terms hereof, then the remaining Underwriters or substituted Underwriters
may take up and pay for the Option Securities of the defaulting
Underwriters in the manner provided in Section 8(b) hereof. If the
remaining Underwriters or substituted Underwriters shall not take up and
pay for all such Option Securities, the Underwriters shall be entitled to
purchase the number of Option Securities for which there is no default or,
at their election, the option shall terminate, the exercise thereof shall
be of no effect.

As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. In the event of
termination, there shall be no liability on the part of any non-defaulting
Underwriter to the Company, provided that the provisions of this Section 8
shall not in any event affect the liability of any defaulting Underwriter
to the Company arising out of such default.

9. SURVIVAL. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, any of its
officers or directors and the Underwriter set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement
shall remain in full force and effect, regardless of (i) any investigation
made by or on behalf of the Company, any of its officers or directors, the
Underwriter or any controlling person referred to in Section 7 hereof, and
(ii) delivery of and payment for the Securities. The respective agreements,
covenants, indemnities and other statements set forth in Sections 4 and 7
hereof shall remain in full force and effect, regardless of any termination
or cancellation of this Agreement.

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<PAGE>
10. TERMINATION.

(a) This Agreement may be terminated with respect to the Firm
Securities or any Option Securities in the sole discretion of the
Representative by notice to the Company given prior to the Firm Closing
Date or the related Option Closing Date, respectively, in the event that
the Company shall have failed, refused or been unable to perform all
obligations and satisfy all conditions on its part to be performed or
satisfied under Section 6 hereunder at or prior thereto or if at or prior
to the Firm Closing Date or such Option Closing Date, respectively:

(1) the Company sustains a loss by reason of explosion,
fire, flood, accident or other calamity, which, in the opinion of the
Underwriter, substantially affects the value of the properties of the
Company or which materially interferes with the operation of the business
of the Company regardless of whether such loss shall have been insured;
there shall have been any material adverse change, or any development
involving a prospective material adverse change (including, without
limitation, a change in management or control of the Company), in the
business, operations, condition (financial or otherwise), earnings or
prospects of the Company, except in each case as described in or
contemplated by the Prospectus (exclusive of any amendment or supplement
thereto);

(2) any action, suit or proceeding shall be threatened,
instituted or pending, at law or in equity, against the Company, by any
person or by any federal, state, foreign or other governmental or
regulatory commission, board or agency wherein any unfavorable result or
decision could materially adversely affect the business, operations,
condition (financial or otherwise), earnings or prospects of the Company;

(3) trading in the Common Stock shall have been suspended
by the Commission, the NASD or on Nasdaq, or trading in securities
generally on the New York Stock Exchange shall have been suspended or
minimum or maximum prices shall have been established on either such
exchange or quotation system;

(4) a banking moratorium shall have been declared by New
York or United States authorities;

(5) there shall have been (A) an outbreak of hostilities
between the United States and any foreign power (or, in the case of any
ongoing hostilities, a material escalation thereof), (B) an outbreak of any
other insurrection or armed conflict involving the United States or (C) any
other calamity or crisis or material change in financial, political or
economic conditions, having an effect on the financial markets that, in any
case referred to in this clause (5), in the sole judgment of the
Underwriter makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities as contemplated by the
Registration Statement; and

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<PAGE>
(6) termination of this Agreement pursuant to this Section
10 shall be without liability of any party to any other party, except as
provided in Section 5(b) and Section 7 hereof.

11. INFORMATION SUPPLIED BY THE UNDERWRITER. The statements set
forth in the "Underwriting Section" in any Preliminary Prospectus or the
Prospectus constitute the only information furnished by the Underwriter to
the Company for the purposes of Section 7(b) hereof. The Underwriter
confirms that such statements (to such extent) are correct.

12. NOTICES. All notice hereunder to or upon either party hereto
shall be deemed to have been duly given for all purposes if in writing and
(i) delivered in person or by messenger or an overnight courier service
against receipt, or (ii) send by certified or registered mail, postage
paid, return receipt requested, or (iii) sent by telegram, facsimile, telex
or similar means, provided that a written copy thereof is sent on the same
day by postage paid first-class mail, to such party at the following
address:

To the Company: At the address listed in the Prospectus
To the Company's counsel: At the address listed in the Prospectus

To the Representative: Neidiger Tucker Brunner, Inc.
1675 Larimer Street, Suite 300
Denver, CO 80202

To the Representative's counsel: Gary A. Agron, Esq.
Law Office of Gary A. Agron
5445 DTC Pkwy., Suite 520
Englewood, Colorado 80111

or such other address as either party hereto may at any time, or from time
to time, direct by notice given to the other party in accordance with this
section. The date of giving of any such notice shall be, in the case of
clause (i), the date of the receipt; in the case of clause (ii), five
business days after such notice or demand is sent; and, in the case of
clause (iii), the business day next following the date such notice is sent.

13. AMENDMENT. Except as otherwise provided herein, no amendment of
this Agreement shall be valid or effective, unless in writing and signed by
or on behalf of the parties hereto.

14. WAIVER. No course of dealing or omission or delay on the part of
either party hereto in asserting or exercising any right hereunder shall
constitute or operate as a waiver of any such right. No waiver of any
provision hereof shall be effective, unless in writing and signed by or on
behalf of the party to be charged therewith. No waiver shall be deemed a
continuing waiver or waiver in respect of any other or subsequent breach or
default, unless expressly so stated in writing.

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<PAGE>
15. APPLICABLE LAW. This agreement shall be governed by, and
interpreted and enforced in accordance with, the laws of the State of
Colorado without regard to principles of choice of law or conflict of laws.

16. JURISDICTION. Each of the parties hereto hereby irrevocably
consents and submits to the exclusive jurisdiction of the Colorado courts
and the United States District Court for the District of Colorado in
connection with any suit, action or other proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby, waives
any objection to venue in the City and County of Denver, State of Colorado,
or such District and agrees that service of any summons, complaint, notice
or other process relating to such suit, action or other proceeding may be
effected in the manner provided by clause (ii) of Section 12.

17. REMEDIES. In the event of any actual or prospective breach or
default by either party hereto, the other party shall be entitled to
equitable relief, including remedies in the nature of rescission,
injunction and specific performance. All remedies hereunder are cumulative
and not exclusive, and nothing herein shall be deemed to prohibit or limit
either party from pursuing any other remedy or relief available at law or
in equity for such actual or prospective breach or default, including the
recovery of damages.

18. ATTORNEYS' FEES. The prevailing party in any suit, action or
other proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby, shall be entitled to recover its costs
and reasonable attorneys' fees.

19. SEVERABILITY. The provisions hereof are severable and in the
event that any provision of this Agreement shall be determined to be
invalid or unenforceable in any respect by a court of competent
jurisdiction, the remaining provisions hereof shall not be affected, but
shall, subject to the discretion of such court, remain in full force and
effect, and any invalid or unenforceable provision shall be deemed, without
further action on the part of the parties hereto, amended and limited to
the extent necessary to render the same valid and enforceable.

20. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original and which together shall
constitute one and the same agreement.

21. SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the Underwriter, the Company and their respective successors
and assigns. Nothing expressed or mentioned in this Agreement is intended
or shall be construed to give any other person any legal or equitable
right, remedy or claim under or in respect of this Agreement or any
provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that
(i) the indemnities of the Company contained in Section 7 of this Agreement
shall also be for the benefit of any person or persons who control any
Underwriter within the meaning of Section 15 of the Act or Section 20 of
the 1934 Act, and (ii) the indemnities of the Underwriter contained in
Section 7 of this Agreement shall also be for the benefit of the directors
of the Company, the officers

29
<PAGE>
of the Company who have signed the Registration Statement and any person or
persons who control the Company within the meaning of Section 15 of the Act
or Section 20 of the 1934 Act. No purchaser of Securities from the
Underwriter shall be deemed a successor because of such purchase.

22. TITLES AND CAPTIONS. The titles and captions of the articles and
sections of this Agreement are for convenience of reference only and do not
in any way define or interpret the intent of the parties or modify or
otherwise affect any of the provisions hereof.

23. GRAMMATICAL CONVENTIONS. Whenever the context so requires, each
pronoun or verb used herein shall be construed in the singular or the
plural sense and each capitalized term defined herein and each pronoun used
herein shall be construed in the masculine, feminine or neuter sense.

24. REFERENCES. The terms "herein," "hereto," "hereof," "hereby,"
and "hereafter," and other terms of similar import, refer to this Agreement
as a whole, and not to any Article, Section or other part hereof.

25. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
of the parties hereto with respect to the subject matter hereof and
supersedes any prior agreement, commitment or arrangement relating thereto.

If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute an agreement binding the
Company, and the Underwriter.

Very truly yours,

Entropin , Inc.

By: /s/ THOMAS G. TACHOVSKY
--------------------------------------------
Chief Executive Officer

The foregoing agreement is hereby confirmed and accepted as of the date
first above written.

Neidiger Tucker Brunner, Inc.
as representative of the several underwriters listed
on Schedule l annexed hereto

By: /s/ ANTHONY B. PETRELLI
------------------------------------
Title: Senior Vice President
---------------------------------

30
<PAGE>
Schedule 1

Underwriters Number of Shares Number of Warrants
- ------------ ---------------- ------------------

Neidiger, Tucker, Bruner, Inc. 625,000 625,000
Westport Resources Investment
Services, Inc. 625,000 625,000
American Fronteer Financial 250,000 250,000
EBI Securities 100,000 100,000
First Colonial Securities 100,000 100,000
Schneider Securities 100,000 100,000
Capital West Securities 20,000 20,000
Culverwell & Co. 20,000 20,000
Fox & Co. Investments 20,000 20,000
Fredrick & Co. 20,000 20,000
Institutional Equities 20,000 20,000
Joseph Gunnar & Co. 20,000 20,000
Kashner Davidson Sec. 20,000 20,000
Mercer Partners 20,000 20,000
National Securities 20,000 20,000
Smith Moore & Co. 20,000 20,000
---------- ----------
Total 2,000,000 2,000,000
========== ==========

31
<PAGE>
SCHEDULE 2

Security Holders Subject to Lock Up

Directors and Officers:
----------------------

Daniel Azarnoff

Higgins (& Shirley) Bailey

Donald Hunter

Wellington Ewen

James (& Joyce) Wynn*

Other Share, Option and/or Warrant Holders:
------------------------------------------

Thomas Anderson

Roy Azarnoff

Bateman Dynasty

Cambridge Holdings

Dewey Crim**

GJM Trading Partners

Great Expectations Family LP

Arthur Hayes

J. Paul Consulting

Gerald Levy

Claudia McAdam

William McMaster

Kenneth Melmon

Lester Mitscher

<PAGE>
SCHEDULE 2
(Continued)

Other Share, Warrant and/or Option Holders
------------------------------------------
(Continued):
-----------

Steve Quoy

Wendy Rieder

Alice Rivera

Carolyn T. Somers

James Toot

Underwood Family Partners

______________

*Pursuant to their Lock-up Agreement, Mr. and Ms. Wynn have not agreed to
refrain from selling 25,000 shares of common stock that Ms. Wynn holds in
her name only and 12,000 shares of common stock Mr. and Mrs. Wynn have
gifted to their two sons.

**Pursuant to his Lock-up Agreement, Mr. Crim has agreed to refrain from
selling the shares of common stock underlying his option to purchase
100,000 shares at $4.00 per share, but has not agreed to refrain from
selling the shares of common stock underlying his option to purchase 25,000
at $3.00 per share.

<PAGE>
ENTROPIN, INC.

AND

NEIDIGER TUCKER BRUNER, INC.

REPRESENTATIVE'S

WARRANT AGREEMENT

REPRESENTATIVE'S WARRANT AGREEMENT dated as of March 20, 2000 by
and between ENTROPIN, INC., (the "Company") and NEIDIGER TUCKER BRUNER,
INC. ("Representative").

W I T N E S S E T H:
--------------------

WHEREAS, the Company proposes to issue to the Representative 200,000
warrants (each a "Representative's Warrant") each to purchase one share of
the Company's $.001 par value common stock, (the "Common Stock").

WHEREAS, the Representative has agreed, pursuant to the underwriting
agreement (the "Underwriting Agreement") dated March 14, 2000 by and
between the Representative and the Company, to act as the Representative in
connection with the Company's proposed public offering (the "Public
Offering") of 2,000,000 shares of Common Stock and 2,000,000 common stock
purchase warrants (the "Offering Securities"); and

WHEREAS, the Representative's Warrants to be issued pursuant to this
Agreement will be issued on the Firm Closing Date (as such term is defined
in the Underwriting Agreement) by the Company to the Representative in
consideration for, and as part of, the Representative's compensation in
connection with the Representative's acting as the Representative pursuant
to the Underwriting Agreement;

NOW, THEREFORE, in consideration of the premises, the payment by the
Representative to the Company of One Hundred Dollars ($100.00), the
agreements herein set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

1. GRANT. The Holder (as defined in Section 3 below) is hereby
granted the right to purchase, at any time from March 20, 2001 until 5:00
p.m., New York time, March 19, 2005, up to 200,000 shares of Common Stock,
at an initial purchase price (subject to adjustment as provided in Section
8 hereof) of $8.75 per share of Common Stock subject to the terms and
conditions of this Agreement. The securities issuable upon exercise of the
Representative's Warrant are sometimes referred to herein as the
"Representative's Securities."

<PAGE>
2. WARRANT CERTIFICATES. The warrant certificate (the
"Representative's Warrant Certificate") to be delivered pursuant to this
Agreement shall be in the form set forth in the attached Warrant
Certificate and is made a part hereof, with such appropriate insertions,
omissions, substitutions, and other variations as required or permitted by
this Agreement.

3. EXERCISE OF REPRESENTATIVE'S WARRANT.

(a) The Representative's Warrant is exercisable during the term
set forth in Section 1 hereof payable by certified or cashier's check or
money order in lawful money of the United States. Upon surrender of the
Representative's Warrant Certificate with the annexed Form of Election to
Purchase duly executed, together with payment of the Purchase Price (as
hereinafter defined) for the Representative's Securities (and such other
amounts, if any, arising pursuant to Section 4 hereof) at the Company's
principal office, the registered holder of a Representative's Warrant
Certificate ("Holder" or "Holders") shall be entitled to receive a
certificate or certificates for the Representative's Securities so
purchased. The purchase rights represented by each Representative's
Warrant Certificate are exercisable at the option of the Holder or Holders
thereof, in whole or in part as to Representative's Securities. The
Representative's Warrant may be exercised to purchase all or any part of
the Representative's Securities represented thereby. In the case of the
purchase of less than all the Representative's Securities purchasable on
the exercise of the Representative's Warrant represented by a
Representative's Warrant Certificate, the Company shall cancel the
Representative's Warrant Certificate represented thereby upon the surrender
thereof and shall execute and deliver a new Representative's Warrant
Certificate of like tenor for the balance of the Representative's
Securities purchasable thereunder.

(b) In lieu of the payment of cash upon exercise of the
Representative's Warrant as provided in Section 3(a), the Holder may
exercise the Representative's Warrant by surrendering the Representative's
Warrant Certificate at the principal office of the Company, accompanied by
a notice stating (i) the Holder's intent to effect such exercise by an
exchange, (ii) the Common Stock to be issued upon the exchange, (iii)
whether Representative's Warrants are to be surrendered in connection with
the exchange, and (iv) the date on which the Holder requests that such
exchange is to occur. The Purchase Price for the Representative's
Securities to be acquired in the exchange shall be paid by the surrender as
indicated in the notice, of Representative's Warrants, having a "Value", as
defined below, equal to the Purchase Price. "Value" as to each
Representative's Warrant shall mean the difference between the "Market
Price", as hereinafter defined, of a share of Common Stock and the then
Purchase Price for a share of Common Stock.

By way of example of the application of the formula, assume that
the Market Price of the Common Stock is $8.00, the Purchase Price of the
Representative's Warrant is $6.00. On such assumptions, the Value of a
Representative's Warrant is $2.00 ($8.00-$6.00) and therefore for each
three (3) Representative's Warrants surrendered, the Holder could acquire
one (1) share of Common Stock in the exchange. Notwithstanding the
example, the Holder shall not be limited to exchanging Representative's
Warrants for Common Stock.

2
<PAGE>
The Warrant Exchange shall take place on the date specified in the
notice or if the date the notice is received by the Company is later than
the date specified in the notice, on the date the notice is received by the
Company.

4. ISSUANCE OF CERTIFICATES. Upon the exercise of the
Representative's Warrant and payment of the Purchase Price therefor, the
issuance of certificates representing the Representative's Securities or
other securities, properties or rights underlying such Representative's
Warrant, shall be made forthwith (and in any event within five (5) business
days thereafter) without further charge to the Holder thereof, and such
certificates shall (subject to the provisions of Sections 5 and 7 hereof)
be issued in the name of, or in such names as may be directed by, the
Holder thereof; provided, however, that the Company shall not be required
to pay any tax which may be payable in respect of any transfer involved in
the issuance and delivery of any such certificates in a name other than
that of the Holder, and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting
the issuance thereof shall have paid to the Company the amount of such tax
or shall have established to the satisfaction of the Company that such tax
has been paid. The Representative's Warrant Certificates and the
certificates representing the Representative's Securities or other
securities, property or rights (if such property or rights are represented
by certificates) shall be executed on behalf of the Company by the manual
or facsimile signature of the then present Chairman or Vice Chairman of the
Board of Directors or President or Vice President of the Company, attested
to by the manual or facsimile signature of the then present Secretary or
Assistant Secretary or Treasurer or Assistant Treasurer of the Company.
The Representative's Warrant Certificates shall be dated the date of
issuance thereof by the Company upon initial issuance, transfer or
exchange.

5. RESTRICTION ON TRANSFER OF REPRESENTATIVE'S WARRANT. The Holder
of a Representative's Warrant Certificate (and its Permitted Transferee, as
defined below), by its acceptance thereof, covenants and agrees that until
March 19, 2005, the Representative's Warrant may not be sold, transferred,
assigned, hypothecated or otherwise disposed of, in whole or in part,
except to officers and partners of the Representatives, or any Public
Offering selling group member and their respective officers and partners,
("Permitted Transferees"). Thereafter the Representative's Warrant may be
transferred, assigned, hypothecated or otherwise disposed of in compliance
with applicable law.

6. PURCHASE PRICE.

(a) INITIAL AND ADJUSTED PURCHASE PRICE. Except as otherwise
provided in Section 8 hereof, the initial purchase price of the
Representative's Securities is set forth in Section 1. The adjusted
purchase price shall be the price which shall result from time to time from
any and all adjustments of the initial purchase price in accordance with
the provisions of Section 8 hereof.

(b) PURCHASE PRICE. The term "Purchase Price" herein shall mean
the initial purchase price or the adjusted purchase price, depending upon
the context.

3
<PAGE>
7. REGISTRATION RIGHTS.

(a) REGISTRATION UNDER THE SECURITIES ACT OF 1933 AS AMENDED
("ACT"). The Representative's Warrant may have not been registered under
the Act. The Representative's Warrant Certificates may bear the following
legend:

"The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act"), and may not be
offered for sale or sold except pursuant to (i) an effective registration
statement under the Act, or (ii) an opinion of counsel, if such opinion and
counsel shall be reasonably satisfactory to counsel to the issuer, that an
exemption from registration under the Act is available."

(b) DEMAND REGISTRATION. (1) At any time commencing on the
first anniversary of and expiring on the fifth anniversary of the effective
date of the Company's Registration Statement relating to the Public
Offering (the "Effective Date"), the Holders of a Majority (as hereinafter
defined) in interest of the Representative's Warrant, or the Majority in
interest of the Representative's Securities (assuming the exercise of all
of the Representative's Warrant) shall have the right, exercisable by
written notice to the Company, to have the Company prepare and file with
the U.S. Securities and Exchange Commission (the "Commission"), on one (1)
occasion, a registration statement on Form S-1 or SB-2 or other
appropriate form, and such other documents, including a prospectus, as may
be necessary in the opinion of both counsel for the Company and counsel for
the Holders, in order to comply with the provisions of the Act, so as to
permit a public offering and sale, of the Representative's Securities by
such Holders and any other Holders of the Representative's Warrant and/or
the Representative's Securities who notify the Company within fifteen (15)
business days after receipt of the notice described in Section 7(b)(2).

(2) The Company covenants and agrees to give written
notice of any registration request under this Section 7(b) by any Holders
to all other registered Holders of the Representative's Warrant and the
Representative's Securities within ten (10) calendar days from the date of
the receipt of any such registration request.

(3) For purposes of this Agreement, the term
"Majority" in reference to the Holders of the Representative's Warrant or
Representative's Securities, shall mean in excess of fifty percent (50%) of
the then outstanding Representative's Warrant or Representative's
Securities that (i) are not held by the Company, an affiliate, officer,
creditor, employee or agent thereof or any of their respective affiliates,
members of their family, persons acting as nominees or in conjunction
therewith, or (ii) have not been resold to the public pursuant to a
registration statement filed with the Commission under the Act.

(4) The Company shall have no obligation to prepare
and file a registration statement pursuant to this Section 7(b) if, within
twenty (20) days after the Company receives such a demand for
registration, the Company agrees, or insiders who own individually

4
<PAGE>
more than 5% of the Company's outstanding Common Stock agree, to purchase
the Holder's Warrants and/or Warrant Shares from the requesting Holders at
a price equal to the difference between the Exercise Price then in effect
and the then current market price of the Company's Common Stock. The
market price of the Company's Common Stock shall be the average of the
closing asked prices for the Company's Common Stock during the ten (10)
business days period preceding such request.

(c) PIGGYBACK REGISTRATION. (1) If, at any time within the
period commencing on the first anniversary and expiring on the sixth
anniversary of the Effective Date, the Company should file a registration
statement with the Commission under the Act (other than in connection with
a merger or other business combination transaction or pursuant to Form S-8),
it will give written notice at least twenty (20) calendar days prior to
the filing of each such registration statement to the Representative and to
all other Holders of the Representative's Warrant and/or the
Representative's Securities of its intention to do so. If a Representative
or other Holders of the Representative's Warrant and/or the
Representative's Securities notify the Company within fifteen (15) calendar
days after receipt of any such notice of its or their desire to include any
Representative's Securities in such proposed registration statement, the
Company shall afford the Representative and such Holders of the
Representative's Warrant and/or Representative's Securities the opportunity
to have any such Representative's Securities registered under such
registration statement. Notwithstanding the provisions of this Section
7(c)(1) and the provisions of Section 7(d), the Company shall have the
right at any time after it shall have given written notice pursuant to this
Section 7(c)(1) (irrespective of whether a written request for inclusion of
any such securities shall have been made) to elect not to file any such
proposed registration statement, or to withdraw the same after the filing
but prior to the effective date thereof.

(2) If the managing underwriter of an offering to which the
above piggyback rights apply, in good faith and for valid business reasons,
objects to such rights, such objection shall preclude such inclusion.

(d) COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION. In
connection with any registrations under Sections 7(b) and 7(c) hereof, the
Company covenants and agrees as follows:

(1) The Company shall use its best efforts to file a
registration statement within thirty (30) calendar days of receipt of any
demand therefor pursuant to Section 7(b); provided, however, that the
Company shall not be required to produce audited or unaudited financial
statements for any period prior to the date such financial statements are
required to be filed in a report on Form 10-K or Form 10-Q (or Form 10-KSB
or Form 10-QSB), as the case may be. The Company shall use its best
efforts to have any registration statement declared effective at the
earliest possible time, and shall furnish each Holder desiring to sell
Representative's Securities such number of prospectuses as shall reasonably
be requested.

(2) The Company shall maintain the effectiveness of the
registration

5
<PAGE>
statement for a period of time equal to the lesser of 9 months or until
such time as all of the Warrant Shares have been sold pursuant to the
registration statement.

(3) The Company shall pay all costs (excluding fees and
expenses of Holders' counsel and any underwriting discounts or selling
fees, expenses or commissions), fees and expenses in connection with any
registration statement filed pursuant to Sections 7(b) and 7(c) hereof
including, without limitation, the Company's legal and accounting fees,
printing expenses, blue sky fees and expenses.

(4) The Company will use its best efforts to qualify or
register the Representative's Securities included in a registration
statement for offering and sale under the securities or blue sky laws of
such states as reasonably are requested by the Holders, provided that the
Company shall not be obligated to execute or file any general consent to
service of process or to qualify as a foreign corporation to do business
under the laws of any such jurisdiction.

(5) The Company shall indemnify the Holders of the
Representative's Securities to be sold pursuant to any registration
statement and each person, if any, who controls such Holders within the
meaning of Section 15 of the Act or Section 20(a) of the Securities
Exchange Act of 1934 (the "Exchange Act"), against all loss, claim, damage,
expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to
which any of them may become subject under the Act, the Exchange Act or
otherwise, arising from such registration statement, but only to the same
extent and with the same effect as the provisions pursuant to which the
Company has agreed to indemnify the Representative contained in Section 8
of the Underwriting Agreement.

(6) The Holders of the Representative's Securities to be
sold pursuant to a registration statement, and their successors and
assigns, shall indemnify the Company, its officers and directors and each
person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, against all loss, claim,
damage or expense or liability to which they may become subject under the
Act, the Exchange Act or otherwise, arising from information furnished by
or on behalf of such Holders, or their successors or assigns, for specific
inclusion in such registration statement to the same extent and with the
same effect as the provisions contained in Section 8 of the Underwriting
Agreement pursuant to which the Representative has agreed to indemnify the
Company.

(7) Nothing contained in this Agreement shall be construed
as requiring the Holders to exercise their Representative's Warrant prior
to the initial filing of any registration statement or the effectiveness
thereof, provided that such Holders have made arrangements reasonably
satisfactory to the Company to pay the exercise price from the proceeds of
such offering.

(8) The Company shall furnish to each Representative for
the offering, if any, such documents as such Representative may reasonably
require.

6
<PAGE>
(9) The Company shall as soon as practicable after the
effective date of the registration statement, and in any event within 15
months thereafter, make "generally available to its security holders"
(within the meaning of Rule 158 under the Act) an earnings statement (which
need not be audited) complying with Section 11(a) of the Act and covering
a period of at least 12 consecutive months beginning after the effective
date of the registration statement.

(10) The Company shall deliver promptly to each Holder
participating in the offering requesting the correspondence described below
and any managing Representative copies of all correspondence between the
Commission and the Company, its counsel or auditors with respect to the
registration statement and permit each Holder and Representative to do such
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems
reasonably necessary to comply with applicable securities laws or rules of
the National Association of Securities Dealers, Inc. ("NASD"). Such
investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such reasonable
times and as often as any such Holder shall reasonably request.

(11) The Company shall enter into an underwriting agreement
with the managing underwriter selected for such underwriting by Holders
holding a Majority of the Representative's Securities requested to be
included in such underwriting, provided, however that such managing
underwriter shall be reasonably acceptable to the Company, except that in
connection with an offering for which the Holders have piggyback rights,
the Company shall have the sole right to select the managing underwriter or
underwriters. Such underwriting agreement shall be satisfactory in form
and substance to the Company, a Majority of such Holders (in respect of a
registration under Section 7(b) only) and such managing underwriter, and
shall contain such representations, warranties and covenants by the Company
and such other terms as are customarily contained in agreements of that
type. The Holders shall be parties to any underwriting agreement relating
to an underwritten sale of their Representative's Securities. Such Holders
shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters except as they may relate
to such Holders and their intended methods of distribution.

8. ADJUSTMENTS TO PURCHASE PRICE AND NUMBER OF SECURITIES.

(a) COMPUTATION OF ADJUSTED PURCHASE PRICE. Except as
hereinafter provided, in case the Company shall at any time after the date
hereof issue or sell any shares of Common Stock (other than the issuances
referred to in Section 8(g) hereof), including shares held in the Company's
treasury, for a consideration per share less than the "Market Price" (as
defined in Section 8(a)(6) hereof) per share of Common Stock on the date
immediately prior to the issuance or sale of such shares, or without
consideration, then forthwith upon any such issuance or sale, the Purchase
Price of the Common Stock shall (until another such issuance or sale) be
reduced to the price (calculated to the nearest full cent) determined by
dividing (i) the sum of (x) the total number of shares of Common Stock
outstanding immediately prior to such issue or sale multiplied by the
Purchase Price in effect immediately prior to such issue or sale, and (y)
the consideration, if any, received by the Company upon such issue or sale,
by (ii) the total number

7
<PAGE>
of shares of Stock outstanding immediately after such issue or sale
provided, however, that in no event shall the Purchase Price be adjusted
pursuant to this computation to an amount in excess of the Purchase Price
in effect immediately prior to such computation, except in the case of a
combination of outstanding shares of Common Stock, as provided by Section
8(c) hereof.

For the purposes of this Section 8, the term "Purchase Price"
shall mean the Purchase Price of the Common Stock forming a part of the
Representative's Securities set forth in Section 6 hereof, as adjusted from
time to time pursuant to the provisions of this Section 8.

For the purposes of any computation to be made in accordance with
this Section 8(a), the following provisions shall be applicable:

(1) In case of the issuance or sale of shares of Common
Stock (or of other securities deemed hereunder to involve the issuance or
sale of shares of Common Stock) for a consideration part or all of which
shall be cash, the amount of the cash consideration therefor shall be
deemed to be the amount of cash received by the Company for such shares
(or, if shares of Common Stock are offered by the Company for subscription,
the subscription price, or, if such securities shall be sold to
Representatives or dealers for public offering without a subscription
offering, the initial public offering price) before deducting therefrom any
compensation paid or discount allowed in the sale, underwriting or purchase
thereof by Representatives or dealers or others performing similar
services, or any expenses incurred in connection therewith.

(2) In case of the issuance or sale (otherwise than as a
dividend or other distribution on any stock of the Company, and otherwise
than on the exercise of options, rights or warrants or the conversion or
exchange of convertible or exchangeable securities) of shares of Common
Stock (or of other securities deemed hereunder to involve the issuance or
sale of shares of Common Stock) for a consideration part or all of which
shall be other than cash, the amount of the consideration therefor other
than cash shall be deemed to be the value of such consideration as
determined in good faith by the Board of Directors of the Company.

(3) Shares of Common Stock issuable by way of dividend or
other distribution on any stock of the Company shall be deemed to have been
issued immediately after the opening of business on the day following the
record date for the determination of stockholders entitled to receive such
dividend or other distribution and shall be deemed to have been issued
without consideration.

(4) The reclassification of securities of the Company other
than shares of Common Stock into securities including shares of Common
Stock shall be deemed to involve the issuance of such shares of Common
Stock for a consideration other than cash immediately prior to the close of
business on the date fixed for the determination of security holders
entitled

8
<PAGE>
to receive such shares, and the value of the consideration allocable to
such shares of Common Stock shall be determined as provided in Section
8(a)(2).

(5) The number of shares of Common Stock at any one time
outstanding shall include the aggregate number of shares of Common Stock
issued or issuable (subject to readjustment upon the actual issuance
thereof) upon the exercise of options, rights or warrants and upon the
conversion or exchange of convertible or exchangeable securities.

(6) As used herein in the phrase "Market Price" at any date
shall be deemed to be the last reported sale price, or, in the case no such
reported sale takes place on such day, the average of the last reported
sales prices for the last three (3) trading days, in either case as
officially reported by the principal securities exchange on which the
Common Stock is listed or admitted to trading, or, if the Common Stock is
not listed or admitted to trading on any national securities exchange, the
average closing bid price as furnished by the NASD through the NASD
Automated Quotation System ("NASDAQ") or similar organization if NASDAQ is
no longer reporting such information, or if the Common Stock is not quoted
on NASDAQ, as determined in good faith by resolution of the Board of
Directors of the Company, based on the best information available to it.

(b) OPTIONS, RIGHTS, WARRANT AND CONVERTIBLE AND EXCHANGEABLE
SECURITIES. Except in the case of the Company issuing rights to subscribe
for shares of Common Stock distributed to all the stockholders of the
Company and Holders of Representative's Warrant pursuant to Section 8(i)
hereof, if the Company shall at any time after the date hereof issue
options, rights or warrants to purchase shares of Common Stock, or issue
any securities convertible into or exchangeable for shares of Common Stock
(other than the issuances referred to in Section 8(g) hereof), (i) for a
consideration per share less than the Market Price (including the issuance
thereof without consideration such as by way of dividend or other
distribution), or (ii) without consideration, the Purchase Price in effect
immediately prior to the issuance of such options, rights or warrants, or
such convertible or exchangeable securities, as the case may be, shall be
reduced to a price determined by making a computation in accordance with
the provisions of Section 8(a) hereof, provided that:

(1) The aggregate maximum number of shares of Common Stock
issuable or that may become issuable under such options, rights or warrants
(assuming exercise in full even if not then currently exercisable or
currently exercisable in full) shall be deemed to be issued and outstanding
at the time such options, rights or warrants were issued, and for a
consideration equal to the minimum purchase price per share provided for in
such options, rights or warrants at the time of issuance, plus the
consideration (determined in the same manner as consideration received on
the issue or sale of shares in accordance with the terms of the
Representative's Warrant), if any, received by the Company for such
options, rights or warrants; provided, however, that upon the expiration or
other termination of such options, rights or warrants, if any thereof shall
not have been exercised, the number of shares of Common Stock deemed to be
issued and outstanding pursuant to this Section 8(b)(1) (and for the
purposes of

9
<PAGE>
Section 8(a)(5) hereof) shall be reduced by such number of shares as to
which options, warrants and/or rights shall have expired or terminated
unexercised, and such number of shares shall no longer be deemed to be
issued and outstanding, and the Purchase Price then in effect shall
forthwith be readjusted and thereafter be the price which it would have
been had adjustment been made on the basis of the issuance only of shares
actually issued or issuable upon the exercise of those options, rights or
warrants as to which the exercise rights shall not be expired or terminated
unexercised.

(2) The aggregate maximum number of shares of Common Stock
issuable upon conversion or exchange of any convertible or exchangeable
securities (assuming conversion or exchange in full even if not then
currently convertible or exchangeable in full) shall be deemed to be issued
and outstanding at the time of issuance of such securities, and for a
consideration equal to the consideration (determined in the same manner as
consideration received on the issue or sale of shares of Common Stock in
accordance with the terms of the Representative's Warrant) received by the
Company for such securities, plus the minimum consideration, if any,
receivable by the Company upon the conversion or exchange thereof;
provided, however, that upon the expiration or other termination of the
right to convert or exchange such convertible or exchangeable securities
(whether by reason or redemption or otherwise), the number of shares deemed
to be issued and outstanding pursuant to this Section 8(b)(2) (and for the
purpose of Section 8(a)(5) hereof) shall be reduced by such number of
shares as to which the conversion or exchange rights shall have expired or
terminated unexercised, and such number of shares shall no longer be deemed
to be issued and outstanding and the Purchase Price then in effect shall
forthwith be readjusted and thereafter be the price which it would have
been had adjustment been made on the basis of the issuance only of the
shares actually issued or issuable upon the conversion or exchange of those
convertible or exchangeable securities as to which the conversion or
exchange rights shall not have expired or terminated unexercised.

(3) If any change shall occur in the price per share
provided for in any of the options, rights or warrants referred to in
Section 8(b)(1), or in the price per share at which the securities referred
to in Section 8(b)(2) are convertible or exchangeable, and if a change in
the Purchase Price has not occurred by reason of the event giving rise to
the change in the price per share of such other options, rights, warrants,
or convertible or exchangeable securities, such options, rights or warrants
or conversion or exchange rights, as the case may be, to the extent not
theretofore exercised, the shall be deemed to have expired or terminated
on the date when such price change became effective in respect of shares
not theretofore issued pursuant to the exercise or conversion or exchange
thereof, and the Company shall be deemed to have issued upon such date new
options, rights or warrants or convertible or exchangeable securities at
the new price in respect of the number of shares issuable upon the exercise
of such options, rights or warrants or the conversion or exchange of such
convertible or exchangeable securities.

(c) SUBDIVISION AND COMBINATION. In case the Company shall at
any time subdivide or combine the outstanding shares of Common Stock, the
Purchase Price shall forthwith be proportionately decreased in the case of
a subdivision or increased in the case of combination.

10
<PAGE>
(d) ADJUSTMENT IN NUMBER OF SECURITIES. Upon each adjustment of
the Purchase Price pursuant to the provisions of this Section 8, the number
of Representative's Securities issuable upon the exercise of the
Representative's Warrant shall be adjusted to the nearest whole share by
multiplying a number equal to the Purchase Price in effect immediately
prior to such adjustment by the number of Representative's Securities
issuable upon exercise of the Representative's Warrant immediately prior to
such adjustment and dividing the product so obtained by the adjusted
Purchase Price.

(e) DEFINITION OF COMMON STOCK. For the purpose of this
Agreement, the term "Common Stock" shall mean the class of stock designated
as Common Stock in the Certificate of Incorporation, of the Company as it
may be amended as of the date hereof.

(f) RECLASSIFICATION, MERGER OR CONSOLIDATION. The Company will
not merge, reorganize or take any other action which would terminate the
Representative's Warrant without first making adequate provision for the
Representative's Warrant. In case of any reclassification or change of the
outstanding shares of Common Stock issuable upon exercise of the
outstanding warrants (other than a change in par value to no par value, or
from nor par value to par value, or as a result of a subdivision or
combination), or in case of any consolidation of the Company with, or
merger of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger in which the Company is
the continuing corporation and which does not result in any
reclassification or change of the outstanding Common Stock except a change
as a result of a subdivision or combination of such shares or a change in
par value, as aforesaid), or in the case of a sale or conveyance to another
corporation or other entity of the property of the Company as an entirety
or substantially as an entirety, the Holders of each Representative's
Warrant then outstanding or to be outstanding shall have the right
thereafter (until the expiration of such Representative's Warrant) to
purchase, upon exercise of such Representative's Warrant, the kind and
number of shares of stock and other securities and property receivable upon
such reclassification, change, consolidation, merger, sale or conveyance as
if the Holders were the owner of the shares of Common Stock underlying the
Representative's Warrant immediately prior to any such events at a price
equal to the product of (x) the number of shares issuable upon exercise of
the Representative's Warrant and (y) the Purchase Price in effect
immediately prior to the record date for such reclassification, change,
consolidation, merger, sale or conveyance, as if such Holders had exercised
the Representative's Warrant. In the event of a consolidation, merger,
sale or conveyance of property, the corporation formed by such
consolidation or merger, or acquiring such property, shall execute and
deliver to the Holders a supplemental Representative's warrant agreement to
such effect. Such supplemental Representative's warrant agreement shall
provide for adjustments which shall be identical to the adjustment provided
for in this Section 8. The provisions of this Section 8(f) shall similarly
apply to successive consolidations or mergers.

(g) NO ADJUSTMENT OF PURCHASE PRICE IN CERTAIN CASES. No
adjustment of the Purchase Price shall be made:

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<PAGE>
(1) Upon the issuance or sale of (i) the Representative's
Warrant or the securities underlying the Representative's Warrant, (ii) the
securities sold pursuant to the Public Offering (including those sold upon
exercise of the Representative's over-allotment option), or (iii) the
shares issuable pursuant to the options, warrants, rights, stock purchase
agreements or convertible or exchangeable securities outstanding or in
effect on the date hereof or pursuant to any compensatory stock plan as
described in the prospectus relating to the Public Offering, or (iv)
"restricted securities" as that term is defined in Rule 144 promulgated
under the Securities Act of 1933, as amended, for not less than 50% of
Market Price.

(2) If the amount of said adjustments shall aggregate less
than two ($.02) cents for one (1) share of Common Stock; provided, however,
that in such case any adjustment that would otherwise be required then to
be made shall be carried forward and shall be made at the time of and
together with the next subsequent adjustment which, together with any
adjustment so carried forward, shall aggregate at least two ($.02) cents
for one (1) share of Common Stock. In addition, Registered Holders shall
not be entitled to cash dividends paid by the Company prior to the exercise
of any warrant or warrants held by them.

9. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES. Each
Representative's Warrant Certificate is exchangeable without expense, upon
the surrender thereof by the registered Holders at the principal executive
office of the Company, for a new Representative's Warrant Certificate of
like tenor and date representing in the aggregate the right to purchase the
same number of Representative's Securities in such denominations as shall
be designated by the Holders thereof at the time of such surrender.

10. LOSS, THEFT, ETC. OF CERTIFICATES Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of any Representative's Warrant Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable
expenses incidental thereto, and upon surrender and cancellation of the
Representative's Warrant Certificates, if mutilated, the Company will make
and deliver a new Representative's Warrant Certificate of like tenor, in
lieu thereof.

11. ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be
required to issue certificates representing fractions of shares of Common
Stock upon the exercise of the Representative's Warrant, nor shall it be
required to issue scrip or pay cash in lieu of fractional interests;
provided, however, that if a Holder exercises all Representative's Warrant
held of record by such Holder the fractional interests shall be eliminated
by rounding any fraction to the nearest whole number of shares of Common
Stock or other securities, properties or rights.

12
<PAGE>
Company covenants and agrees that, upon exercise of Representative's
Warrant and payment of the Purchase Price therefor, all the shares of
Common Stock issuable upon such exercise shall be duly and validly issued,
fully paid, non-assessable and not subject to the preemptive rights of any
stockholder. As long as the Representative's Warrant shall be outstanding,
the Company shall use its best efforts to cause the Common Stock to be
listed (subject to official notice of issuance) on all securities exchanges
on which the Common Stock issued to the public in connection herewith may
then be listed or quoted.

13. NOTICES TO REPRESENTATIVE'S WARRANT HOLDERS. Nothing contained in
this Agreement shall be construed as conferring upon the Holders the right
to vote or to consent or to receive notice as a stockholder in respect of
any meetings of stockholders for the election of directors or any other
matter, or as having any rights whatsoever as a stockholder of the Company.
If, however, at any time prior to the expiration of the Representative's
Warrant and their exercise, any of the following events shall occur:

(a) the Company shall take a record of the holders of its shares
of Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings, as
indicated by the accounting treatment of such dividend or distribution on
the books of the Company; or

(b) the Company shall offer to all the holders of its Common
Stock any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the
Company, or any option, right or warrant to subscribe therefor; or

(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of all
or substantially all of its property, assets and business as an entirety
shall be proposed; then, in any one or more of said events, the Company
shall give written notice of such event at least fifteen (15) calendar days
prior to the date fixed as a record date or the date of closing the
transfer books for the determination of the stockholders entitled to such
dividend, distribution, convertible or exchangeable securities or
subscription rights, or entitled to vote on such proposed dissolution,
liquidation, winding up or sale. Such notice shall specify such record date
or the date of closing the transfer books, as the case may be. Failure to
give such notice or any defect therein shall not affect the validity of any
action taken in connection with the declaration or payment of any such
dividend, or the issuance of any convertible or exchangeable securities, or
subscription rights, options or warrants, or any proposed dissolution,
liquidation, winding up or sale.

14. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have
been duly made when delivered, or five days after being mailed by
registered or certified mail, return receipt requested:

(a) If to the registered Holders of the Representative's
Warrant, to the address

13
<PAGE>
of such Holders as shown on the books of the Company; or

(b) If to the Company to the address shown in the Underwriting
Agreement or to such other address as the Company may designate by notice
to the Holders.

15. SUPPLEMENTS AND AMENDMENTS. The Company and the Representative
may from time to time supplement or amend this Agreement without the
approval of any Holders of Representative's Warrant Certificates (other
than the Representative) in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or
inconsistent with any provisions herein, or to make any other provision in
regard to matters or questions arising hereunder which the Company and
the Representative may deem necessary or desirable and which the
Company and the Representative deem shall not adversely affect the
interests of the Holders of Representative's Warrant Certificates.

16. SUCCESSORS. All the covenants and provisions of this Agreement
shall be binding upon and inure to the benefit of the Company, the
Representative, the Holders and their respective successors and assigns
hereunder.

17. TERMINATION. This Agreement shall terminate at the close of
business five years from the date hereof. Notwithstanding the foregoing,
the indemnification provisions of Section 7 shall survive such termination
until the close of business on the expiration of any applicable statue of
limitations.

18. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement and
each Representative's Warrant Certificate issued hereunder shall be deemed
to be a contract made under the laws of the State of Colorado and for all
purposes shall be construed in accordance with the laws of said state
without giving effect to the rules of said state governing the conflicts of
laws.

19. ENTIRE AGREEMENT; MODIFICATION. This Agreement (including the
Underwriting Agreement, to the extent portions thereof are referred to
herein) contains the entire understanding between the parties hereto with
respect to the subject matter hereof and thereof. This Agreement may not
be modified or amended except by a writing duly signed by the Company and
the Holders of a Majority in Interest of the Representative's Securities
(for this purpose, treating all then outstanding Representative's Warrants
as if they had been exercised).

20. SEVERABILITY. If any provision of this Agreement shall be held
to be invalid or unenforceable, such invalidity or unenforceability shall
not affect any other provision of this Agreement.

14
<PAGE>
21. CAPTIONS. The caption headings of the Sections of this Agreement
are for convenience of reference only and are not intended, nor should they
be construed as, a part of this Agreement and shall be given no substantive
effect.

22. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and
the Representative and any other registered Holders of the Representative's
Warrant Certificates or Representative's Securities any legal or equitable
right, remedy or claim under this Agreement; and this Agreement shall be
for the sole and exclusive benefit of the Company and the Representative
and any other Holders of the Representative's Warrant Certificates or
Representative's Securities.

23. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and such counterparts shall together constitute but one
and the same instrument.

24. BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the Company, the Representative and their respective
successors and assigns and the Holders from time to time of the
Representative's Warrant Certificates or any of them.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, as of the day and year first above written.

ENTROPIN, INC.

By: /s/ THOMAS G. TACHOVSKY
----------------------------------
Chief Executive Officer

NEIDIGER TUCKER BRUNER, INC., for itself and
as Representative of the Several
Underwriters listed On Schedule A

By: /s/ ANTHONY B. PETRELLI
-----------------------------------
Senior Vice President

15
<PAGE>
Schedule A

Representative's Warrant Agreement

Between

Entropin, Inc.

and

Neidiger Tucker Bruner, Inc.

Representative

Neidiger Tucker Bruner, Inc.

Underwriters:

Westport Resources Investment Services, Inc.
American Fronteer Financial
EBI Securities
First Colonial Securities
Schneider Securities
Capital West Securities
Culverwell & Co.
Fox & Co. Investments
Fredrick & Co.
Institutional Equities
Joseph Gunnar & Co.
Kashner Davidson Sec.
Mercer Partners
National Securities
Smith Moore & Co.

<PAGE>
ENTROPIN, INC.
--------------

WARRANT CERTIFICATE

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND MAY NOT BE OFFERED FOR
SALE OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT, OR (ii) AN OPINION OF COUNSEL, IF SUCH OPINION AND COUNSEL
SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER THE ACT IS AVAILABLE.

THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.

EXERCISABLE COMMENCING MARCH 20, 2001 THROUGH
5:00 P.M., NEW YORK TIME ON MARCH 19, 2005

No. UW-1 Warrant covering 200,000 shares of
Common Stock

This Warrant Certificate certifies that Neidiger Tucker Bruner,
Inc. or registered assigns, is the registered holder of this Warrant to
purchase initially, at any time from March 20, 2001, until 5:00 p.m., New
York time on March 19, 2005 (the "Expiration Date"), up to 200,000 shares
of Common Stock, $.001 par value (the "Common Stock") of Entropin, Inc.
("Company") at a purchase price of $8.75 per share (the "Purchase Price"),
upon the surrender of this Warrant Certificate and payment of the
applicable Purchase Price at an office or agency of the Company, but
subject to the conditions set forth herein and in the Representative's
Warrant Agreement, dated as of March 14, 2000, by and between the Company
and Neidiger Tucker Bruner, Inc. (the "Warrant Agreement"). Payment of the
Purchase Price shall be made by certified or cashier's check or money order
payable to the order of the Company.

No Warrant may be exercised after 5:00 p.m., New York time, on
the Expiration Date, at which time all Warrant evidenced hereby, unless
exercised prior thereto, shall thereafter be void.

The Warrant evidenced by this Warrant Certificate is part of a
duly authorized issue of Warrants issued pursuant to the Warrant Agreement
between the Company and the Representative, which Warrant Agreement is
hereby incorporated by reference in and made a part of this instrument and
is hereby referred to for a description of the rights, limitation of
rights, obligations, duties and immunities thereunder of the Company and
the holders (the words "holders" or "holder" meaning the registered holders
or registered holder) of the Warrant.

<PAGE>
The Warrant Agreement provides that upon the occurrence of
certain events the Purchase Price and the type and/or number of the
Company's securities issuable upon the exercise of this Warrant, may,
subject to certain conditions, be adjusted. In such event, the Company
will, at the request of the holder, issue a new Warrant Certificate
evidencing the adjustment in the Purchase Price and the number and/or type
of securities issuable upon the exercise of the Warrant; provided, however,
that the failure of the Company to issue such new Warrant Certificates
shall not in any way change, alter, or otherwise impair, the rights of the
holder as set forth in the Warrant Agreement.

Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrant shall be issued to the transferee(s) in
exchange as provided herein, without any charge except for any tax or other
governmental charge imposed in connection with such transfer.

Upon the exercise of less than all of the Warrants evidenced by
this Certificate, the Company shall forthwith issue to the holder hereof a
new Warrant Certificate representing such number of unexercised Warrants.

The Company may deem and treat the registered holder(s) hereof as
the absolute owner(s) of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, and of any distribution to the holder(s)
hereof, and for all other purposes, and the Company shall not be affected
by any notice to the contrary.

All terms used in this Warrant Certificate which are defined in
the Warrant Agreement shall have the meanings assigned to them in the
Warrant Agreement.

IN WITNESS WHEREOF, the undersigned has executed this certificate
this 20thday of March 2000.

ENTROPIN, INC.

By: /s/ THOMAS G. TACHOVSKY
------------------------------------
Chief Executive Officer
ATTEST:

By:__________________________________
Secretary

<PAGE>
FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)

FOR VALUE RECEIVED___________________________
hereby sells, assigns and transfers unto _____________________

(Please print name and address of transferee)

this Warrant Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
_____________________ Attorney, to transfer the within Warrant Certificate
on the books of Entropin, Inc., with full power of substitution.
Dated:____________________

Signature_____________________

(Signature must conform in all respects to
the name of holder as specified on the face of the Warrant Certificate.)

[Signature guarantee] ________________________________
(Insert Social Security or Other
Identifying Number of Holders)

<PAGE>
FORM OF ELECTION TO PURCHASE

The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ______ shares of
Common Stock and herewith tenders in payment for such securities a
certified or cashier's check or money order payable to the order of
Entropin, Inc in the amount of $______, all in accordance with the terms
hereof. The undersigned requests that certificates for such securities be
registered in the name of ___________________________ whose address is
_____________________ and that such certificates be delivered to
___________ whose address is ______________________________________________
______________.

Dated:_____________________

Signature_______________________

(Signature must conform in all respects to
the name of holder as specified on the face of the Warrant Certificate.)

________________________________________
(Insert Social Security or Other
Identifying Number of Holders)

[Signature guarantee]

<PAGE>
ENTROPIN, INC.

AND

NEIDIGER TUCKER BRUNER, INC.

REPRESENTATIVE'S

WARRANT AGREEMENT

REPRESENTATIVE'S WARRANT AGREEMENT dated as of March 20, 2000 by
and between ENTROPIN, INC., (the "Company") and NEIDIGER TUCKER BRUNER,
INC. ("Representative").

W I T N E S S E T H:
-------------------

WHEREAS, the Company proposes to issue to the Representative 200,000
warrants (each a "Representative's Warrant") each to purchase one common
stock purchase warrant; and

1. GRANT. The Holder (as defined in Section 3 below) is hereby
granted the right to purchase, at any time from March 20, 2001 until 5:00
p.m., New York time, March 19, 2005, up to 200,000 common stock purchase
warrants identical to the common stock purchase warrants sold in the Public
Offering, except that the 200,000 warrants will not be subject to any call
or redemption provision by the Company, at an initial purchase price
(subject to adjustment as provided in Section 8 hereof) of $.30 per common
stock purchase warrant subject to the terms and conditions of this
Agreement. The 200,000 common stock purchase warrants issuable upon
exercise of the Representative's Warrant are referred to herein as the
"Representative's Securities."

3. EXERCISE OF REPRESENTATIVE'S WARRANT.

2
<PAGE>
to exchanging Representative's Warrants for Common Stock.

The Warrant Exchange shall take place on the date specified in the
notice or if the date the notice is received by the Company is later than
the date specified in the notice, on the date the notice is received by the
Company.

6. PURCHASE PRICE.

3
<PAGE>
(b) PURCHASE PRICE. The term "Purchase Price" herein shall mean
the initial purchase price or the adjusted purchase price, depending upon
the context.

7. REGISTRATION RIGHTS.

4
<PAGE>
(4) The Company shall have no obligation to prepare
and file a registration statement pursuant to this Section 7(b) if, within
twenty (20) days after the Company receives such a demand for
registration, the Company agrees, or insiders who own individually more
than 5% of the Company's outstanding Common Stock agree, to purchase the
Holder's Warrants and/or Warrant Shares from the requesting Holders at a
price equal to the difference between the Exercise Price then in effect and
the then current market price of the Company's Common Stock. The market
price of the Company's Common Stock shall be the average of the closing
asked prices for the Company's Common Stock during the ten (10) business
days period preceding such request.

(d) COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION. In
connection with any registrations under Sections 7(b) and 7(c) hereof, the
Company covenants and agrees as follows:

5
<PAGE>
Representative's Securities such number of prospectuses as shall reasonably
be requested.

(2) The Company shall maintain the effectiveness of the
registration statement for a period of time equal to the lesser of 9 months
or until such time as all of the Warrant Shares have been sold pursuant to
the registration statement.

6
<PAGE>
(8) The Company shall furnish to each Representative for
the offering, if any, such documents as such Representative may reasonably
require.

(9) The Company shall as soon as practicable after the
effective date of the registration statement, and in any event within 15
months thereafter, make "generally available to its security holders"
(within the meaning of Rule 158 under the Act) an earnings statement (which
need not be audited) complying with Section 11(a) of the Act and covering
a period of at least 12 consecutive months beginning after the effective
date of the registration statement.

8. ADJUSTMENTS TO PURCHASE PRICE AND NUMBER OF SECURITIES.

(a) COMPUTATION OF ADJUSTED PURCHASE PRICE. Except as
hereinafter provided, in case the Company shall at any time after the date
hereof issue or sell any shares of Common Stock (other than the issuances
referred to in Section 8(g) hereof), including shares held in the Company's
treasury, for a consideration per share less than the "Market Price" (as
defined in Section 8(a)(6) hereof) per share of Common Stock on the date
immediately prior to the issuance or sale of such shares, or without
consideration, then forthwith upon any such issuance or sale, the Purchase
Price of the Common Stock underlying the Representative's Securities shall
(until another such issuance or sale) be reduced to the price (calculated
to the nearest full cent)

7
<PAGE>
determined by dividing (i) the sum of (x) the total number of shares of
Common Stock outstanding immediately prior to such issue or sale multiplied
by the Purchase Price in effect immediately prior to such issue or sale,
and (y) the consideration, if any, received by the Company upon such issue
or sale, by (ii) the total number of shares of Stock outstanding
immediately after such issue or sale provided, however, that in no event
shall the Purchase Price be adjusted pursuant to this computation to an
amount in excess of the Purchase Price in effect immediately prior to such
computation, except in the case of a combination of outstanding shares of
Common Stock, as provided by Section 8(c) hereof.

For the purposes of this Section 8, the term "Purchase Price"
shall mean the Purchase Price of the Common Stock underlying the
Representative's Securities set forth in Section 6 hereof, as adjusted from
time to time pursuant to the provisions of this Section 8.

For the purposes of any computation to be made in accordance with
this Section 8(a), the following provisions shall be applicable:

8
<PAGE>
(4) The reclassification of securities of the Company other
than shares of Common Stock into securities including shares of Common
Stock shall be deemed to involve the issuance of such shares of Common
Stock for a consideration other than cash immediately prior to the close of
business on the date fixed for the determination of security holders
entitled to receive such shares, and the value of the consideration
allocable to such shares of Common Stock shall be determined as provided in
Section 8(a)(2).

9
<PAGE>
Representative's Warrant), if any, received by the Company for such
options, rights or warrants; provided, however, that upon the expiration or
other termination of such options, rights or warrants, if any thereof shall
not have been exercised, the number of shares of Common Stock deemed to be
issued and outstanding pursuant to this Section 8(b)(1) (and for the
purposes of Section 8(a)(5) hereof) shall be reduced by such number of
shares as to which options, warrants and/or rights shall have expired or
terminated unexercised, and such number of shares shall no longer be deemed
to be issued and outstanding, and the Purchase Price then in effect shall
forthwith be readjusted and thereafter be the price which it would have
been had adjustment been made on the basis of the issuance only of shares
actually issued or issuable upon the exercise of those options, rights or
warrants as to which the exercise rights shall not be expired or terminated
unexercised.

10
<PAGE>
(c) SUBDIVISION AND COMBINATION. In case the Company shall at
any time subdivide or combine the outstanding shares of Common Stock, the
Purchase Price shall forthwith be proportionately decreased in the case of
a subdivision or increased in the case of combination.

(d) ADJUSTMENT IN NUMBER OF SECURITIES. Upon each adjustment of
the Purchase Price pursuant to the provisions of this Section 8, the number
of Representative's Securities issuable upon the exercise of the
Representative's Warrant shall be adjusted to the nearest whole share by
multiplying a number equal to the Purchase Price in effect immediately
prior to such adjustment by the number of Representative's Securities
issuable upon exercise of the Representative's Warrant immediately prior to
such adjustment and dividing the product so obtained by the adjusted
Purchase Price.

(f) RECLASSIFICATION, MERGER OR CONSOLIDATION. The Company will
not merge, reorganize or take any other action which would terminate the
Representative's Warrant without first making adequate provision for the
Representative's Warrant. In case of any reclassification or change of the
outstanding shares of Common Stock issuable upon exercise of the
outstanding warrants (other than a change in par value to no par value, or
from nor par value to par value, or as a result of a subdivision or
combination), or in case of any consolidation of the Company with, or
merger of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger in which the Company is
the continuing corporation and which does not result in any
reclassification or change of the outstanding Common Stock except a change
as a result of a subdivision or combination of such shares or a change in
par value, as aforesaid), or in the case of a sale or conveyance to another
corporation or other entity of the property of the Company as an entirety
or substantially as an entirety, the Holders of each Representative's
Warrant then outstanding or to be outstanding shall have the right
thereafter (until the expiration of such Representative's Warrant) to
purchase, upon exercise of such Representative's Warrant, the kind and
number of warrants to purchase shares of stock and other securities and
property receivable upon such reclassification, change, consolidation,
merger, sale or conveyance as if the Holders were the owner of the warrants
to purchase shares of Common Stock underlying the Representative's Warrant
immediately prior to any such events at a price equal to the product of (x)
the number of shares issuable upon exercise of the Representative's Warrant
and (y) the Purchase Price in effect immediately prior to the record date
for such reclassification, change, consolidation, merger, sale or
conveyance, as if such Holders had exercised the Representative's Warrant.
In the event of a consolidation, merger, sale or conveyance of property,
the corporation formed by such consolidation or merger, or acquiring such
property, shall execute and deliver to the Holders a supplemental
Representative's warrant agreement to such effect. Such supplemental
Representative's warrant agreement shall provide for adjustments which
shall be identical to the adjustment provided for in this Section 8. The

11
<PAGE>
provisions of this Section 8(f) shall similarly apply to successive
consolidations or mergers.

(g) NO ADJUSTMENT OF PURCHASE PRICE IN CERTAIN CASES. No
adjustment of the Purchase Price shall be made:

(1) Upon the issuance or sale of (i) the Representative's
Warrant or the securities underlying the Representative's Warrant, (ii) the
securities sold pursuant to the Public Offering (including those sold upon
exercise of the Representative's over-allotment option), or (iii) the
shares issuable pursuant to the options, warrants, rights, stock purchase
agreements or convertible or exchangeable securities outstanding or in
effect on the date hereof or pursuant to any compensatory stock plan as
described in the prospectus relating to the Public Offering, or (iv)
"restricted securities" as that term is defined in Rule 144 promulgated
under the Securities Act of 1933, as amended, for not less than 50% of
Market Price.

12
<PAGE>
whole number of shares of Common Stock or other securities, properties or
rights.

12. RESERVATION AND LISTING OF SECURITIES. The Company shall at all
times reserve and keep available out of its authorized shares of Common
Stock, solely for the purpose of issuance upon the exercise of the
Representative's Warrant, such number of shares of Common Stock or other
securities and properties or rights as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of
Representative's Warrant and payment of the Purchase Price therefor, all
the shares of Common Stock issuable upon such exercise shall be duly and
validly issued, fully paid, non-assessable and not subject to the
preemptive rights of any stockholder. As long as the Representative's
Warrant shall be outstanding, the Company shall use its best efforts to
cause the Common Stock to be listed (subject to official notice of
issuance) on all securities exchanges on which the Common Stock issued to
the public in connection herewith may then be listed or quoted.

13
<PAGE>
14. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have
been duly made when delivered, or five days after being mailed by
registered or certified mail, return receipt requested:

(a) If to the registered Holders of the Representative's
Warrant, to the address of such Holders as shown on the books of the
Company; or

(b) If to the Company to the address shown in the Underwriting
Agreement or to such other address as the Company may designate by notice
to the Holders.

15. SUPPLEMENTS AND AMENDMENTS. The Company and the Representative
may from time to time supplement or amend this Agreement without the
approval of any Holders of Representative's Warrant Certificates (other
than the Representative) in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or
inconsistent with any provisions herein, or to make any other provision in
regard to matters or questions arising hereunder which the Company and the
Representative may deem necessary or desirable and which the Company and
the Representative deem shall not adversely affect the interests of the
Holders of Representative's Warrant Certificates.

20. SEVERABILITY. If any provision of this Agreement shall be held
to be invalid or unenforceable, such invalidity or unenforceability shall
not affect any other provision of this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, as of the day and year first above written.

ENTROPIN, INC.

By: /s/ THOMAS G. TACHOVSKY
----------------------------------------
Chief Executive Officer

NEIDIGER TUCKER BRUNER, INC., for itself and
as Representative of the Several
Underwriters listed On Schedule A

By: /s/ ANTHONY B. PETRELLI
----------------------------------------
Senior Vice President

15
<PAGE>
Schedule A

Representative's Warrant Agreement

Between

Entropin, Inc.

and

Neidiger Tucker Bruner, Inc.

Representative

Neidiger Tucker Bruner, Inc.

Underwriters:

<PAGE>
ENTROPIN, INC.
--------------
WARRANT CERTIFICATE

THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.

EXERCISABLE COMMENCING MARCH 20, 2001 THROUGH
5:00 P.M., NEW YORK TIME ON MARCH 19, 2005

No. UW-1 Warrant to purchase 200,000
common stock purchase warrants

This Warrant Certificate certifies that Neidiger Tucker Bruner,
Inc. or registered assigns, is the registered holder of this Warrant to
purchase initially, at any time from March 20, 2001, until 5:00 p.m., New
York time on March 19, 2005 (the "Expiration Date"), up to 200,000 common
stock purchase warrants, each such warrant exercisable to purchase one
common stock purchase warrant (as described in the Warrant Agreement
attached hereto) at a purchase price of $.30 per warrant (the "Purchase
Price"), upon the surrender of this Warrant Certificate and payment of the
applicable Purchase Price at an office or agency of the Company, but
subject to the conditions set forth herein and in the Representative's
Warrant Agreement, dated as of March 14, 2000 by and between the Company
and Neidiger Tucker Bruner, Inc. (the "Warrant Agreement"). Payment of the
Purchase Price shall be made by certified or cashier's check or money order
payable to the order of the Company.

No Warrant may be exercised after 5:00 p.m., New York time, on
the Expiration Date, at which time all Warrant evidenced hereby, unless
exercised prior thereto, shall thereafter be void.

<PAGE>
The Warrant Agreement provides that upon the occurrence of
certain events the Purchase Price and the type and/or number of the
Company's common stock purchase warrants issuable upon the exercise of this
Warrant, may, subject to certain conditions, be adjusted. In such event,
the Company will, at the request of the holder, issue a new Warrant
Certificate evidencing the adjustment in the Purchase Price and the number
and/or type of common stock purchase warrants issuable upon the exercise of
the Warrant; provided, however, that the failure of the Company to issue
such new Warrant Certificates shall not in any way change, alter, or
otherwise impair, the rights of the holder as set forth in the Warrant
Agreement.

All terms used in this Warrant Certificate which are defined in
the Warrant Agreement shall have the meanings assigned to them in the
Warrant Agreement.

IN WITNESS WHEREOF, the undersigned has executed this certificate
this 20th day of March, 2000.

ENTROPIN, INC.

By: /s/ THOMAS G. TACHOVSKY
--------------------------------------
Chief Executive Officer
ATTEST:

By:__________________________________
Secretary

<PAGE>
FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)

FOR VALUE RECEIVED___________________________
hereby sells, assigns and transfers unto _____________________

(Please print name and address of transferee)

Signature_____________________

(Signature must conform in all respects to
the name of holder as specified on the face of the Warrant Certificate.)

[Signature guarantee] ________________________________
(Insert Social Security or Other
Identifying Number of Holders)

<PAGE>
FORM OF ELECTION TO PURCHASE

The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ______ common stock
purchase warrants and herewith tenders in payment for such securities a
certified or cashier's check or money order payable to the order of
Entropin, Inc in the amount of $______, all in accordance with the terms
hereof. The undersigned requests that certificates for such securities be
registered in the name of ___________________________ whose address is
_____________________ and that such certificates be delivered to __________
whose address is ______________________________________________________.

Dated:____________________

Signature________________________________

(Signature must conform in all respects to
the name of holder as specified on the face of the Warrant Certificate.)

_______________________________
(Insert Social Security or Other
Identifying Number of Holders)

[Signature guarantee]

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
AUDITED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 2,260,526
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,260,526
<PP&E> 85,292
<DEPRECIATION> (23,429)
<TOTAL-ASSETS> 2,825,225
<CURRENT-LIABILITIES> 322,805
<BONDS> 0
4,303,662
0
<COMMON> 7,382
<OTHER-SE> (1,992,695)
<TOTAL-LIABILITY-AND-EQUITY> 2,825,225
<SALES> 0
<TOTAL-REVENUES> 64,888
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,002,488
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,662
<INCOME-PRETAX> (4,939,262)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,939,262)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,939,262)
<EPS-BASIC> (0.75)
<EPS-DILUTED> (0.75)

</TABLE>