TSET, INC.
                          464 COMMON STREET, SUITE 301
                          BELMONT, MASSACHUSETTS 02478




Dear Shareholder:

         You are cordially  invited to attend the Annual Meeting of Shareholders
of TSET,  Inc. The annual meeting will be held on Wednesday,  November 20, 2002,
at 11:00 a.m., local time, at Caesar's  Palace,  3570 Las Vegas Boulevard South,
Las Vegas, Nevada.

         Your vote is  important  and I urge you to vote  your  shares by proxy,
whether  or not you plan to  attend  the  meeting.  After  you read  this  proxy
statement,  please  indicate  on the proxy  card the manner in which you want to
have  your  shares  voted.  Then  date,  sign  and mail  the  proxy  card in the
postage-paid  envelope that is provided.  If you sign and return your proxy card
without  indicating  your choices,  it will be understood  that you wish to have
your shares voted in accordance with the  recommendations of the Company's Board
of Directors.

         We hope to see you at the meeting.

                                Sincerely,



                                Daniel R. Dwight
                                President and Chief Executive Officer


October ___, 2002








                                   TSET, INC.
                          464 COMMON STREET, SUITE 301
                          BELMONT, MASSACHUSETTS 02478


                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                          TO BE HELD NOVEMBER 20, 2002

         NOTICE IS HEREBY  GIVEN that the Annual  Meeting of  Shareholders  (the
"ANNUAL  MEETING") of TSET,  Inc.  (the  "Company"),  will be held on Wednesday,
November 20, 2002, at 11:00 a.m., local time, at Caesar's Palace, 3570 Las Vegas
Boulevard South, Las Vegas,  Nevada, for the following  purposes,  as more fully
described in the attached Proxy Statement:

         1. To elect five  directors,  each until the next annual meeting of the
Company's shareholders or until their successors are duly elected and qualified;

         2. To approve an amendment to the Company's  Articles of  Incorporation
to change the name of the Company to "Kronos Advanced Technologies, Inc."; and

         3. To consider  any other  matters  that may  properly  come before the
Annual Meeting or any adjournment thereof.

         The Board of  Directors  has fixed the close of business on October 22,
2002, as the record date for determining the shareholders  entitled to notice of
and to vote at the Annual Meeting or at any adjournment thereof. A complete list
of the  shareholders  entitled  to vote at the Annual  Meeting  will be open for
examination by any shareholder  during  ordinary  business hours for a period of
ten days prior to the Annual  Meeting at the offices of the  Company's  transfer
agent and registrar, Merit Transfer Company, at 68 South Main Street, Suite 708,
Salt Lake City, Utah 84101.


                                    IMPORTANT

         You are cordially  invited to attend the Annual  Meeting in person.  In
order to ensure your  representation  at the meeting,  however,  please promptly
complete, date, sign and return the enclosed proxy in the accompanying envelope.
If you  should  decide to attend  the  Annual  Meeting  and vote your  shares in
person, you may revoke your proxy at that time.

                                By Order of the Board of Directors,


                                Daniel R. Dwight
                                President and Chief Executive Officer


October ___, 2002








                                TABLE OF CONTENTS

                                                                        PAGE NO.

ABOUT THE MEETING.............................................................1
     WHAT IS THE PURPOSE OF THE ANNUAL MEETING?...............................1
     WHO IS ENTITLED TO VOTE?.................................................1
     WHO CAN ATTEND THE MEETING?..............................................1
     WHAT CONSTITUTES A QUORUM?...............................................1
     HOW DO I VOTE?...........................................................1
     WHAT IF I DO NOT SPECIFY HOW MY SHARES ARE TO BE VOTED?..................2
     CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?.......................2
     WHAT ARE THE BOARD'S RECOMMENDATIONS?....................................2
     WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?..............................2
STOCK OWNERSHIP...............................................................3
     BENEFICIAL OWNERS........................................................3
PROPOSAL 1 - ELECTION OF DIRECTORS............................................4
     DIRECTORS STANDING FOR ELECTION..........................................4
     RECOMMENDATION OF THE BOARD OF DIRECTORS.................................4
     DIRECTORS - PRESENT TERM EXPIRES AT THE ANNUAL MEETING...................4
     MEETINGS ................................................................7
     COMMITTEES OF THE BOARD OF DIRECTORS.....................................7
     COMPENSATION OF DIRECTORS................................................8
     EXECUTIVE COMPENSATION...................................................8
     STOCK OPTION PLAN.......................................................11
     EMPLOYMENT AGREEMENTS...................................................11
     EXECUTIVE SEVERANCE AGREEMENTS..........................................13
     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..........................13
PROPOSAL 2 - AMENDMENT TO THE ARTICLES OF INCORPORATION......................15
     RECOMMENDATION OF THE BOARD OF DIRECTORS................................15
DESCRIPTION OF CAPITAL STOCK.................................................16
     COMMON STOCK............................................................16
     PREFERRED STOCK.........................................................16
     OPTIONS  ...............................................................16
     WARRANTS 18
     ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE ARTICLES OF
       INCORPORATION, BYLAWS AND FLORIDA LAW.................................18
     TRANSFER AGENT AND REGISTRAR............................................18
     OTHER MATTERS...........................................................19
     INDEPENDENT ACCOUNTANTS.................................................19
     ADDITIONAL INFORMATION..................................................19







                                       i



                                   TSET, INC.
                          464 COMMON STREET, SUITE 301
                          BELMONT, MASSACHUSETTS 02478

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


                                 PROXY STATEMENT
                                OCTOBER ___, 2002


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


         This proxy statement contains information related to the annual meeting
of  shareholders of TSET,  Inc., to be held on Wednesday,  November 20, 2002, at
11:00 a.m., local time, at Caesar's Palace,  3570 Las Vegas Boulevard South, Las
Vegas,  Nevada,  and any postponements or adjournments  thereof.  The Company is
making this proxy solicitation.

                                ABOUT THE MEETING

WHAT IS THE PURPOSE OF THE ANNUAL MEETING?

         At the Company's annual meeting, shareholders will act upon the matters
outlined  in the notice of  meeting  on the cover page of this proxy  statement,
including  the  election of  directors  and the  approval of an amendment to the
Company's  Articles of Incorporation to change the name of the Company to Kronos
Advanced Technologies, Inc. In addition, the Company's management will report on
the  performance of the Company during fiscal 2002 and respond to questions from
shareholders.

WHO IS ENTITLED TO VOTE?

         Only  shareholders  of record on the close of  business  on the  record
date, October 22, 2002, are entitled to receive notice of the annual meeting and
to vote the shares of common  stock that they held on that date at the  meeting,
or any  postponements or adjournments of the meeting.  Each outstanding share of
common stock will be entitled to one vote on each matter to be voted upon at the
meeting.

WHO CAN ATTEND THE MEETING?

         All  shareholders  as of the  record  date,  or  their  duly  appointed
proxies,  may  attend the  meeting,  and each may be  accompanied  by one guest.
Seating, however, is limited.  Admission to the meeting will be on a first-come,
first-serve basis. Registration will begin at 10:00 a.m., and seating will begin
at  10:30  a.m.  Each   shareholder  may  be  asked  to  present  valid  picture
identification,  such as a driver's  license  or  passport.  Cameras,  recording
devices and other electronic devices will not be permitted at the meeting.

         Please  note that if you hold your  shares in "street  name"  (that is,
through a broker or other nominee), you will need to bring a copy of a brokerage
statement  reflecting your stock ownership as of the record date and check in at
the registration desk at the meeting.

WHAT CONSTITUTES A QUORUM?

         The presence at the meeting, in person or by proxy, of the holders of a
majority  of the shares of common  stock  outstanding  on the  record  date will
constitute a quorum,  permitting the meeting to conduct its business.  As of the
record date,  46,891,293 shares of common stock of the Company were outstanding.
Proxies received but marked as abstentions and broker non-votes will be included
in the  calculation  of the  number of shares  considered  to be  present at the
meeting.

HOW DO I VOTE?

         If you  complete  and  properly  sign the  accompanying  proxy card and
return  it to the  Company,  it  will  be  voted  as you  direct.  If you  are a
registered  shareholder  and attend the meeting,  you may deliver your completed
proxy  card  in  person  or  vote  by  ballot  at  the  meeting.  "Street  name"


                                       1


shareholders  who wish to vote at the  meeting  will need to obtain a proxy form
from the institution that holds their shares.

WHAT IF I DO NOT SPECIFY HOW MY SHARES ARE TO BE VOTED?

         If you submit a proxy but do not indicate any voting instructions, then
your shares will be voted in accordance with the Board's recommendations.

CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?

         Yes. Even after you have submitted your proxy card, you may change your
vote at any time before the proxy is exercised  by filing with the  Secretary of
the Company  either a notice of revocation  or a duly  executed  proxy bearing a
later date.  The powers of the proxy holders will be suspended if you attend the
meeting in person and so request, although attendance at the meeting will not by
itself revoke a previously granted proxy.

WHAT ARE THE BOARD'S RECOMMENDATIONS?

         Unless you give other  instructions  on your proxy  card,  the  persons
named as proxy  holders  on the  proxy  card will  vote in  accordance  with the
recommendation  of the Board of  Directors.  The Board's  recommendation  is set
forth  together with the  description of each item in this proxy  statement.  In
summary, the Board recommends a vote:

         o   FOR the election of the nominated slate of directors (see page 4);

         o   FOR the  approval  of an  amendment  to the  Company's  Articles of
             Incorporation  to change the name of the Company to Kronos Advanced
             Technologies, Inc. (see page 16).

         With  respect  to any other  matter  that  properly  comes  before  the
meeting,  the proxy holders will vote as  recommended  by the Board of Directors
or, if no recommendation is given, in their own discretion.

WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?

         ELECTION OF DIRECTORS. The affirmative vote of a plurality of the votes
cast at the meeting is required for the election of  directors.  This means that
the five  nominees will be elected if they receive more  affirmative  votes than
any other person.  A properly  executed proxy marked  "Withheld" with respect to
the  election of any director  will not be voted with  respect to such  director
indicated, although it will be counted for purposes of determining whether there
is a quorum.

         COMPANY NAME CHANGE.  For the approval of an amendment to the Company's
Articles of  Incorporation  to change the name of the Company to Kronos Advanced
Technologies,  Inc. and any other item that  properly  comes before the meeting,
the affirmative vote of the holders of a majority of the outstanding  shares, as
of the record date,  will be required for approval.  A properly  executed  proxy
marked "Abstain" with respect to any such matter will not be voted,  although it
will  be  counted  for  purposes  of  determining  whether  there  is a  quorum.
Accordingly, an abstention will have the effect of a negative vote.

         If you hold your  shares  in  "street  name"  through a broker or other
nominee,  your  broker  or  nominee  may not be  permitted  to  exercise  voting
discretion with respect to some of the matters to be acted upon. Thus, if you do
not give your broker or nominee  specific  instructions,  your shares may not be
voted on those  matters  and will not be  counted in  determining  the number of
shares necessary for approval.  Shares  represented by such "broker  non-votes,"
however, will be counted in determining whether there is a quorum.






                                       2


                                 STOCK OWNERSHIP

BENEFICIAL OWNERS

         The  following  table  presents  certain   information   regarding  the
beneficial  ownership of all shares of common stock at October 14, 2002 for each
executive  officer and  director of our company and for each person  known to us
who owns  beneficially  more than 5% of the  outstanding  shares  of our  common
stock. The percentage ownership shown in such table is based upon the 46,891,293
common shares issued and  outstanding at October 14, 2002 and ownership by these
persons of options or  warrants  exercisable  within 60 days of such date.  Also
included  is  beneficial   ownership  on  a  fully  diluted  basis  showing  all
authorized,  but  unissued,  shares of our common  stock at October  14, 2002 as
issued and outstanding.  Unless otherwise indicated, each person has sole voting
and investment power over such shares.

                                                          COMMON STOCK
                                                       BENEFICIALLY OWNED
                                                       ------------------
NAME AND ADDRESS                                   NUMBER               PERCENT
----------------                                   ------               -------
Daniel R. Dwight                                3,215,818(1)               6.9%
464 Common Street
Suite 301
Belmont, MA  02478

Richard F. Tusing                               1,717,118(2)               3.8%
464 Common Street
Suite 301
Belmont, MA  02478

Richard A. Papworth                               822,114(3)               1.8%
464 Common Street
Suite 301
Belmont, MA  02478

Jeffrey D. Wilson                                 310,000(4)                  *
464 Common Street
Suite 301
Belmont, MA  02478

Erik Black                                        272,983(5)                  *
464 Common Street
Suite 301
Belmont, MA  02478

Charles D. Strang                                 100,000(6)                  *
464 Common Street
Suite 301
Belmont, MA  02478

James P. McDermott                                   294,118                  *
464 Common Street
Suite 301
Belmont, MA  02478

All Officers and Directors of TSET              6,732,151(7)              14.1%
---------------
*        Less than 1%.

(1)      Includes options to purchase  1,321,700 shares of common stock that can
         be acquired within sixty days of October 14, 2002

(2)      Includes options to purchase 473,000 shares of common stock that can be
         acquired within sixty days of October 14, 2002.

(3)      Includes options to purchase 448,475 shares of common stock that can be
         acquired within sixty days of October 14, 2002.

(4)      Includes options to purchase 310,000 shares of common stock that can be
         acquired within sixty days of October 14, 2002.

(5)      Includes  options to purchase 50,000 shares of common stock that can be
         acquired within sixty days of October 14, 2002.

(6)      Includes options to purchase 100,000 shares of common stock that can be
         acquired within sixty days of October 14, 2002.

(7)      Includes options to purchase  2,703,175 shares of common stock that can
         be acquired within sixty days of October 14, 2002.



                                       3


                       PROPOSAL 1 - ELECTION OF DIRECTORS


DIRECTORS STANDING FOR ELECTION

         The Board of  Directors of the Company  consists of eight  seats.  Each
director holds office until the first annual meeting of  shareholders  following
their election or appointment and until their  successors have been duly elected
and qualified.

         The Board of  Directors  has  nominated  Daniel R.  Dwight,  Richard A.
Papworth,  Richard F. Tusing,  James P. McDermott and Erik W. Black for election
as  directors.  The  accompanying  proxy will be voted for the election of these
nominees,  unless authority to vote for one or more nominees is withheld. In the
event that any of the nominees is unable or unwilling to serve as a director for
any reason (which is not anticipated),  the proxy will be voted for the election
of any substitute nominee designated by the Board of Directors. The nominees for
directors  have  previously  served as members of the Board of  Directors of the
Company and have consented to serve such term.


RECOMMENDATION OF THE BOARD OF DIRECTORS

         THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION
         OF EACH OF THE NOMINEES


DIRECTORS - PRESENT TERM EXPIRES AT THE ANNUAL MEETING


DANIEL R. DWIGHT                      Daniel R.  Dwight has served as a Director
PRESIDENT AND CHIEF EXECUTIVE         of  TSET  since  November  2000,  and as a
OFFICER                               Director  and Chief  Executive  Officer of
AGE 42                                Kronos  Air  Technologies   since  January
                                      2001.  Effective  October  16,  2001,  Mr.
                                      Dwight was  appointed  President and Chief
                                      Executive  Officer of the Company.  He has
                                      extensive experience in private equity and
                                      operations  in  a  wide  variety  of  high
                                      growth  and  core  industrial  businesses.
                                      From February  2000 to October  2001,  Mr.
                                      Dwight  was  an   independent   management
                                      consultant    who    provided     business
                                      development,     strategic     consulting,
                                      financial planning,  merchant banking, and
                                      operational  execution  services to a wide
                                      range of clients.  Prior to  starting  his
                                      consulting  practice,  Mr. Dwight spent 17
                                      years with General  Electric  including 10
                                      years of  operations,  manufacturing,  and
                                      business development  experience with GE's
                                      industrial businesses,  and seven years of
                                      international   investment   and   private
                                      equity experience with GE Capital.  He has
                                      had  responsibility for over $1 billion in
                                      merger and  acquisition and private equity
                                      transactions  at GE.  Most  recently,  Mr.
                                      Dwight initiated GE Capital's entry in the
                                      Asia private equity  market.  Between 1995
                                      and 1999, the Asian equity  portfolio grew
                                      to   include   consolidations,   leveraged
                                      buyouts,   growth   capital  and  minority
                                      investments    in   diverse    industries,
                                      including     information      technology,
                                      telecommunications    services,   consumer
                                      products,  services and distribution,  and
                                      contract  manufacturing.  Mr.  Dwight  led
                                      deal  teams  with  responsibility  for the
                                      execution of  transactions,  monitoring of
                                      portfolio  companies  and  realization  of
                                      investments.  Since 1982,  Mr.  Dwight has
                                      held    other     leadership     positions
                                      domestically and  internationally  with GE
                                      Capital,  as well as senior positions with
                                      GE    Corporate    Business    Development
                                      (1989-1992)  and GE Corporate  Audit Staff
                                      (1984-1987). His responsibilities included
                                      identifying,  analyzing  and  implementing
                                      reorganizations,           restructurings,
                                      consolidating      acquisitions,       and
                                      divestitures of GE businesses. He also had
                                      responsibility  for the development of new
                                      business ventures and commercialization of
                                      new   technologies   strategic   to   GE's
                                      industrial businesses. Mr. Dwight holds an
                                      MBA in Finance and  Marketing  with Honors
                                      from the University of Chicago in 1989 and
                                      a B.S. in Accounting  with Honors from the
                                      University of Vermont in 1982.



                                       4


RICHARD A. PAPWORTH                   Richard A.  Papworth  became a Director of
CHIEF FINANCIAL OFFICER               the  Company in June 2001,  was  appointed
AGE 44                                Chief Financial  Officer of the Company in
                                      May 2000,  and has  served as a  Director,
                                      Chief Financial Officer,  and Treasurer of
                                      Kronos  Air  Technologies   since  January
                                      2001, and as Assistant Secretary of Kronos
                                      Air Technologies  since December 2000. Mr.
                                      Papworth has had diverse finance, tax, and
                                      accounting   experience   in  a  range  of
                                      industries,    including    real    estate
                                      development/construction,         software
                                      development,   publishing,   distribution,
                                      financial  institutions,   and  investment
                                      companies.    From   1997-2000,   he   was
                                      Vice-President  and Controller of the U.S.
                                      and   European   operations   of  Wilshire
                                      Financial   Services  Group,  a  Portland,
                                      Oregon-based  publicly held specialty loan
                                      servicing and investment company with more
                                      than $2 billion under management.  In this
                                      capacity, Mr. Papworth was responsible for
                                      accounting and control  system,  financial
                                      reporting  and   analysis,   and  business
                                      decision   support   for   the   worldwide
                                      organization.  From 1996-97,  he was Chief
                                      Financial Officer of First Bank of Beverly
                                      Hills, a $550 million  banking  subsidiary
                                      of WFSG.  From 1995-96,  Mr.  Papworth was
                                      Treasurer   for   Maintenance    Warehouse
                                      America  Corporation  in which capacity he
                                      successfully   negotiated  more  than  $50
                                      million of real estate and working capital
                                      financing,   and   was   responsible   for
                                      management   of   Maintenance    Warehouse
                                      America  Corporation's  insurance  program
                                      and  tax  compliance.   From  1994-95,  he
                                      maintained   a  private   management   and
                                      finance  consulting  practice  for  select
                                      clients. From 1989-94, Mr. Papworth worked
                                      for Morrison Homes, the U.S. home building
                                      division of U.K.-based George Wimpey Plc.,
                                      during   which   period  he  held  various
                                      positions    including   Chief   Financial
                                      Officer,    Treasurer,    and    Assistant
                                      Treasurer. From 1985-89, he engaged in tax
                                      consulting with Deloitte and Touche, a Big
                                      Five  accounting  firm. He received a B.S.
                                      in  accounting  (with  minors in business,
                                      economics,   and   Spanish)   and  a  Macc
                                      (Masters of Accountancy)  with emphasis in
                                      tax law, from Brigham Young  University in
                                      1984. Mr.  Papworth  became  licensed as a
                                      certified  public  accountant in the State
                                      of California in 1987. Mr. Papworth speaks
                                      Spanish fluently.



                                       5


RICHARD  F. TUSING                    Richard F. Tusing has served as a Director
CHIEF OPERATING OFFICER               of  TSET  since  October  2000  and  as  a
AGE 45                                Director of Kronos Air Technologies  since
                                      January  2001  and  was  appointed   Chief
                                      Operating  Officer on January 1, 2002. Mr.
                                      Tusing  has had  extensive  experience  in
                                      developing  new  enterprises,  negotiating
                                      the  licensing  of  intellectual  property
                                      rights,   and   managing   technical   and
                                      financial organizations, and has more than
                                      20   years   of   business    development,
                                      operations,  and consulting  experience in
                                      the  technology   and   telecommunications
                                      industries.  He has  spent  four  years in
                                      executive management with several emerging
                                      technology companies,  14 years in various
                                      managerial  and executive  positions  with
                                      MCI Communications Corporation,  and three
                                      additional years in managerial consulting.
                                      While acting as an independent  management
                                      consultant  from 1996 to the present,  Mr.
                                      Tusing's    experience    with    emerging
                                      technology  companies  includes serving as
                                      Chief   Executive    Officer   and   Chief
                                      Technology  Officer for Avalon Media Group
                                      (a turnkey advertising  services company);
                                      primary   responsibility   for  technology
                                      planning,    licensing,    and   strategic
                                      technology architecture  relationships for
                                      ICU,  Inc.  (a mobile  video  conferencing
                                      company);  and  Executive  Vice-President,
                                      Chief Technology Officer,  and Director of
                                      Entertainment   Made   Convenient   (Emc3)
                                      International,  Inc.  (a  video  and  data
                                      downloading services company). Through his
                                      private consultancy,  Mr. Tusing provides,
                                      among other things, managerial,  financial
                                      planning,    technical,    and   strategic
                                      planning  services.  From  1982-1996,  Mr.
                                      Tusing  held   multiple   managerial   and
                                      executive      positions      with     MCI
                                      Communications      Corporation.      From
                                      1994-1996,  he served as MCI's Director of
                                      Strategy and  Technology,  managing  MCI's
                                      emerging   technologies  division  (having
                                      primary   responsibility  for  evaluating,
                                      licensing,  investing  in,  and  acquiring
                                      third-party    technologies    deemed   of
                                      strategic  importance  to  MCI),  and also
                                      oversaw   the   development   of   several
                                      early-stage  and  venture-backed  software
                                      and hardware companies;  in this capacity,
                                      Mr.   Tusing   managed   more   than   100
                                      scientists   and   engineers    developing
                                      state-of-the-art    technologies.     From
                                      1992-1994,  Mr. Tusing  founded MCI Metro,
                                      MCI's  entree  into  the  local  telephone
                                      services  business  and,  as  MCI  Metro's
                                      Managing         Director,         managed
                                      telecommunications  operations,  developed
                                      financial  and ordering  systems,  and led
                                      efforts   in   designing   its   marketing
                                      campaigns.  From  1990-1992,  he served as
                                      Director   of   Finance    and    Business
                                      Development   for  MCI's  western  region,
                                      overseeing    $1,000,000,000   in   annual
                                      revenue   and  a   $90,000,000   operating
                                      budget.  From  1982-1990,  Mr. Tusing held
                                      other management and leadership  positions
                                      within  MCI,  including  service  as MCI's
                                      Pacific   Division's   Regional  Financial
                                      Controller,   Manager  of  MCI's   Western
                                      Region's Information  Technology Division,
                                      and led MCI's National Corporate Financial
                                      Systems  Development   Organization.   Mr.
                                      Tusing  received B.S.  degrees in business
                                      management   and   psychology   from   the
                                      University of Maryland in 1979.



                                       6


ERIK W. BLACK                         Erik W.  Black  became a  Director  of the
AGE 32                                Company  in  June  2001,   was   appointed
                                      Executive    Vice-President   -   Business
                                      Development  of the  Company  in May 2000,
                                      and also  served as  Chairman of the Board
                                      of   Directors   of  Atomic   Soccer  from
                                      November  2000  until  the sale of  Atomic
                                      Soccer in April 2001.  Mr. Black  resigned
                                      as  Executive  Vice-President  -  Business
                                      Development   of  the  Company   effective
                                      December 31, 2001.  Before  joining  TSET,
                                      Mr.  Black  served  from  1997-2000  as  a
                                      business and corporate strategy consultant
                                      to the office of the  Chairman  on Funding
                                      Selection, Inc., an investment banking and
                                      mergers and acquisitions  company. He also
                                      developed,  launched,  and managed GI Bill
                                      Express.com  LLP from  February 1999 until
                                      its  acquisition by  Military.com in April
                                      2000.  Mr.  Black  has also  worked  as an
                                      e-business  associate  consultant  for IBM
                                      Global Services in Phoenix,  Arizona, from
                                      March 1999 until April 2000.  In addition,
                                      Mr. Black was the sole  proprietor of E.B.
                                      Web  Designs,   an  Internet   development
                                      services and consulting company founded in
                                      1998.    Mr.    Black    worked   as   the
                                      communications    coordinator    for   the
                                      Synthetic  Organic Chemical  Manufacturers
                                      Association  in   Washington,   D.C.  from
                                      1996-97 and as an associate consultant for
                                      Robert Charles Lesser & Co., a real estate
                                      consulting firm, from 1995-96. He received
                                      an  M.B.A.  and a Masters  of  Information
                                      Management   degrees  from  Arizona  State
                                      University  in 2000 (where he received the
                                      ASU MBA  Kiplinger  Foundation  Prize  for
                                      outstanding   scholarship,   service,  and
                                      contribution, and served as Vice-President
                                      -  communications  of the ASU MBA  Student
                                      Body  Association in 1999-2000),  a Global
                                      Leadership  Certificate from Thunderbird -
                                      The    American    Graduate    School   of
                                      International  Management  in 2000,  and a
                                      B.A. from Pomona College in 1995, where he
                                      graduated  magna cum laude and was elected
                                      to  Phi  Beta  Kappa.   Mr.  Black  speaks
                                      Russian fluently.

JAMES P. MCDERMOTT                    James P.  McDermott  became a Director  of
AGE 40                                the  Company in July 2001.  Mr.  McDermott
                                      has  over  18  years  of   financial   and
                                      operational   problem-solving  experience.
                                      Mr.  McDermott  is  a  co-founder  and  is
                                      currently  a  Managing  Director  of Eagle
                                      Rock  Advisors,  LLC,  the Manager for The
                                      Eagle Rock Group,  LLC.  From 1992 through
                                      2000,    Mr.    McDermott   held   various
                                      managerial  and executive  positions  with
                                      PennCorp  Financial  Group,  Inc.  and its
                                      affiliates.  From 1998 through  2000,  Mr.
                                      McDermott was Executive Vice-President and
                                      Chief   Financial   Officer  of   PennCorp
                                      Financial  Group.  While  serving  in this
                                      position,  Mr.  McDermott was one-third of
                                      the  executive  management  team  that was
                                      responsible     for     developing     and
                                      implementing  operational   stabilization,
                                      debt reduction and recapitalization  plans
                                      for the company.  From 1995 through  1998,
                                      Mr.    McDermott    served    as    Senior
                                      Vice-President   of   PennCorp   Financial
                                      Group.  Mr.  McDermott worked closely with
                                      the  Audit   Committee  of  the  Board  of
                                      Directors  on  evaluating  the  PennCorp's
                                      accounting  and  actuarial  practices.  In
                                      addition,  Mr.  McDermott was  responsible
                                      for developing a corporate-wide technology
                                      management program resulting in technology
                                      convergence   and  cost   savings  to  the
                                      company's  technology  budget.  From  1994
                                      through   1998,   Mr.   McDermott   was  a
                                      principal in Knightsbridge Capital Fund I,
                                      LP,   a  $92   million   investment   fund
                                      specializing      in       leverage-equity
                                      acquisitions      of     insurance     and
                                      insurance-related      businesses.     Mr.
                                      McDermott  was also the founding  Chairman
                                      of   the   e-business   Internet   service
                                      provider,  Kivex.com, and a senior manager
                                      of  one  of  the  world's  leading  public
                                      accounting  firms,   KPMG.  Mr.  McDermott
                                      received   a  B.S.   Degree  in   Business
                                      Administration   from  the  University  of
                                      Wisconsin, Madison.

MEETINGS

         During the Company's  fiscal year ending June 30, 2002 ("FISCAL  2002")
the Board of Directors met on 10 occasions. Each director attended more than 75%
of the total number of meetings of the Board and Committees on which he served.


COMMITTEES OF THE BOARD OF DIRECTORS

         AUDIT COMMITTEE.  We currently do not have an Audit Committee.



                                       7


         COMPENSATION. On September 11, 2001, the Board of Directors established
a Compensation  Committee  consisting of two independent members of the Board of
Directors.  The Compensation  Committee currently consists of James P. McDermott
and  Charles  D.  Strang.  The  Compensation  Committee  and  Chairman  will  be
designated  annually by the Board of Directors.  The  Compensation  Committee is
charged with  reviewing  and making  recommendations  concerning  the  Company's
general  compensation  strategy,  reviewing  salaries  for  officers,  reviewing
employee benefit plans, and administering TSET's stock incentive plan.


COMPENSATION OF DIRECTORS

         CASH COMPENSATION.  Our Bylaws provide that, by resolution of the Board
of  Directors,  each  director may be  reimbursed  his expenses of attendance at
meetings of the Board of Directors;  likewise, each director may be paid a fixed
sum or receive a stated salary as a director. As of the date of this prospectus,
no  director  receives  any salary or other form of cash  compensation  for such
service. No director is precluded from serving our Company in any other capacity
and receiving compensation from us in connection therewith.

         SHARE-BASED COMPENSATION. Each director is entitled to receive annually
50,000 restricted shares of our common stock, either granted as shares or in the
form of fully-vested  options,  as compensation for their services as members of
our Board of  Directors.  The  Chairman of our Board of Directors is entitled to
receive annually an additional 50,000 shares of our common stock, either granted
as  shares  or in the form of  fully-vested  options,  as  compensation  for his
services  as  Chairman  of our  Board  of  Directors.  As of the  date  of  this
prospectus,  Messrs.  Wilson and Strang  have been  granted  200,000  and 50,000
options,  respectively as compensation for Mr. Wilson's  services as Chairman of
our Board of  Directors  and Mr.  Strang's  services as a member of our Board of
Directors. Messrs. Tusing and Dwight have each been granted 50,000 shares of our
common  stock as  compensation  for their  services  as  members of our Board of
Directors.


EXECUTIVE COMPENSATION

         The following table sets forth  compensation  for the fiscal year ended
June 30, 2002 for our executive officers:


                           SUMMARY COMPENSATION TABLE


                                     ANNUAL COMPENSATION                              LONG-TERM COMPENSATION
                        ---------------------------------------------- ---------------------------------------------------
                                                                                  AWARDS                    PAYOUTS
                                                                                  ------                    -------
                                                                        RESTRICTED    SECURITIES                   ALL
                                                            OTHER         STOCK       UNDERLYING      LTIP        OTHER
NAME AND PRINCIPAL                 SALARY      BONUS     COMPENSATION     AWARDS    OPTIONS/SAR'S   PAYOUTS   COMPENSATION
FISCAL POSITION          YEAR         $          $            $             $             #            $            $
-------------------     -------   ---------  ---------  -------------- -----------  -------------  --------- --------------
(a)                       (b)        (c)        (d)          (e)           (f)           (g)          (h)          (i)
-------------------     -------   ---------  ---------  -------------- -----------  -------------  --------- --------------
                                                                                               
Daniel R. Dwight,      2002       112,500           --         7,620          --       2,600,000        --             --
  President and        2001            --           --            --          --              --        --             --
  Chief Executive      2000            --           --            --          --              --        --             --
  Officer(1)

Richard F. Tusing,     2002            --           --            --          --              --        --             --
  Chief Operating      2001            --           --            --          --              --        --             --
  Officer(2)           2000            --           --            --          --              --        --             --

Richard A. Papworth,   2002       120,000(3)        --            --          --         300,000        --             --
  Chief Financial      2001       120,000           --         2,000          --        448,475(4)      --             --
  Officer              2000       10,000(5)         --            --     50,000(6)            --        --             --

Jeffrey D. Wilson,     2002        70,000           --         3,500          --          50,000        --             --
  Former Chairman of   2001       180,000           --        12,000            --      600,000(8)      --             --
  the Board of         2000       155,000(9) 30,000(10)      2,670(11)  700,000(12)           --        --             --
  Directors and
  Chief Executive
  Officer(7)

Erik W. Black,         2002       60,000(14)        --         6,000          --              --        --             --
    Former Executive   2001       100,000           --         6,000          --        50,000(15)      --             --
    Vice-President -   2000       4,167(16)         --       4,500(17)        --              --        --             --
    Business
    Development(13)



                                       8


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

(1)      Mr.  Dwight  became  President  and  Chief  Executive  Officer  of TSET
         effective October 16, 2001.

(2)      Mr. Tusing became Chief Operating  Officer of TSET effective January 1,
         2002. Mr. Tusing continues to be compensated pursuant to his consulting
         agreement  with TSET until an  employment  agreement is entered into by
         the parties.

(3)      TSET accrued $45,000 of Mr. Papworth's 2002 salary.

(4)      Mr.  Papworth  was  granted an option to  purchase  398,475  restricted
         shares of our common stock pursuant to a letter  agreement  dated April
         10, 2001 amending Mr. Papworth's  employment  agreement,  dated May 19,
         2000.  The  options  were  fully  vested as of April  10,  2001 and the
         exercise  price is equal to $0.885  per  share,  which was the  closing
         price of our common  stock as quoted on the  Over-the-Counter  Bulletin
         Board on April 9, 2001. In addition,  Mr.  Papworth was granted  50,000
         options  on April 9,  2001.  These  options  are fully  vested  and the
         exercise price is equal to $0.885 per share.

(5)      Mr. Papworth joined our Company in May 2000. He is compensated $120,000
         annually.

(6)      As a signing bonus to his employment  agreement,  Mr. Papworth received
         14,815  restricted  shares of our common  stock.  The $50,000  value is
         determined  by  multiplying  the number of such shares with the closing
         market price of our  Company's  unrestricted  common stock  ($3.374 per
         share) on the date such shares were granted (May 19, 2000).

(7)      Effective  October 10,  2001,  Mr.  Wilson  resigned as Chairman of the
         Board of Directors  and Chief  Executive  Officer of TSET pursuant to a
         mutual agreement between TSET and Mr. Wilson.

(8)      Mr. Wilson was granted 350,000 options  pursuant to a letter  agreement
         dated April 10, 2001 amending Mr. Wilson's employment agreement,  dated
         April 16, 1999.  125,000 options were fully vested as of April 10, 2001
         and the remaining  225,000 options were to vest upon the achievement of
         certain performance objectives.  The exercise price was equal to $0.885
         per share, which was the closing price of our Company's common stock as
         quoted on the  Over-the-Counter  Bulletin Board on April 9, 2001.  TSET
         has  determined  that the options to purchase  350,000 shares of common
         stock granted to Mr. Wilson  pursuant to the letter  agreement are void
         as of April 10, 2001, the effective date of the letter  agreement.  Mr.
         Wilson was granted 50,000  options on April 9, 2001.  These options are
         fully  vested and the exercise  price is equal to $0.885 per share.  In
         addition,  Mr. Wilson,  was granted  200,000 options on May 3, 2001, in
         connection  with his service as Chairman of the Board of  Directors  in
         1999 and 2000. These options are fully vested and the exercise price is
         equal to $0.71 per share.

(9)      Mr. Wilson's 2000 salary of $155,000 consisted of ten months at $12,500
         and two months at $15,000. Mr. Wilson deferred all salary during fiscal
         years 1999 and 2000 and was entitled to receive 12% annual  interest on
         all deferred  amounts.  Pursuant to an  agreement  between TSET and Mr.
         Wilson effective October 10, 2001, TSET issued a promissory note in the
         amount of $350,000  and will pay  $30,000 in cash within  sixty days of
         October 15, 2001,  which represents all of Mr. Wilson's accrued salary,
         bonus and  interest.  In  addition,  TSET will also pay Mr.  Wilson his
         unpaid reimbursable expenses.

(10)     Under the terms of his employment agreement,  Mr. Wilson was to receive
         a cash bonus of $30,000 on or before May 1, 2000;  however,  Mr. Wilson
         deferred  his cash bonus  during  fiscal year 2000 and was  entitled to
         receive 12% annual interest on all deferred  compensation.  Pursuant to
         an agreement  between TSET and Mr. Wilson dated October 10, 2001,  TSET
         issued a promissory note in the amount of $350,000 and will pay $30,000
         in cash within sixty days of October 15, 2001,  which represents all of
         Mr. Wilson's accrued salary, bonus and interest. In addition, TSET will
         pay Mr. Wilson his unpaid reimbursable expenses.

(11)     Mr. Wilson was entitled to an automobile allowance of $1,000 per month,
         of which $2,670 was received in fiscal year 2000.

(12)     As a signing bonus to his employment  agreement,  Mr. Wilson's nominee,
         The Pangaea  Group LLC,  received  1,000,000  restricted  shares of our
         common stock.  Such stock vested at a rate of 100,000  shares per month
         over a 10-month period;  700,000 shares vested during fiscal year 2000.
         The $700,000 value was obtained by  multiplying  the vested shares with
         the closing  market price of our  unrestricted  common stock ($1.00 per
         share)  on  the  date  such  shares  were  granted  (April  20,  1999).
         Notwithstanding   the  above   calculation,   we  expensed  such  stock
         transaction  at a value of  $300,000,  or  $0.30  per  share.  TSET has
         determined that the issuance of the 1,000,000 shares of common stock is
         void  as of  April  16,  1999,  the  effective  date  of  Mr.  Wilson's
         employment agreement.

(13)     Mr. Black resigned as Executive  Vice-President - Business  Development
         of TSET effective December 31, 2001.

(14)     TSET accrued $60,000 of Mr. Black's 2002 salary.

(15)     Mr. Black was granted  50,000  options on April 9, 2001.  These options
         are fully vested and the exercise price is equal to $0.885 per share.

(16)     Mr. Black joined our Company in May 2000. He was  compensated  $100,000
         annually, of which $4,167 was received in fiscal year 2000.

(17)     Mr.  Black was entitled to an  automobile  allowance of $500 per month,
         and a one-time  relocation  allowance  of $5,000,  of which  $4,500 was
         received in fiscal year 2000.



                                       9



                                    AGGREGATED OPTIONS/SAR EXERCISES
                                         IN LAST FISCAL YEAR AND
                                  FISCAL YEAR END OPTIONS/SAR VALUES(1)


                                                                            NUMBER OF SECURITIES     VALUE OF UNEXERCISED
                                        SHARES                             UNDERLYING UNEXERCISED        IN-THE-MONEY
                                     ACQUIRED ON             VALUE            OPTIONS/SAR'S AT         OPTIONS/SAR'S AT
             NAME                      EXERCISE           REALIZED ($)       FISCAL YEAR END(1)       FISCAL YEAR END(2)
             ----                      --------           ------------       ------------------       ------------------
                                                                                                     
Daniel R. Dwight                          -0-                 -0-          Exercisable:   1,321,700              $0
President and                                                              Unexercisable: 1,600,000              $0
Chief Executive Officer(3)

Richard F. Tusing                         -0-                 -0-          Exercisable:    473,000               $0
Chief Operating Officer(4)                                                 Unexercisable:  950,000               $0

Richard A. Papworth                       -0-                 -0-          Exercisable:    448,475               $0
Chief Financial Officer                                                    Unexercisable:  300,000               $0

Jeffrey D. Wilson                         -0-                 -0-          Exercisable:   310,000(6)             $0
Former Chairman of the Board                                               Unexercisable: 350,000(6)             $0
of Directors and
Chief Executive Officer(5)

Erik W. Black                             -0-                 -0-          Exercisable:     50,000               $0
Former Executive Vice-President                                            Unexercisable:        0               $0
Business Development(7)

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

(1)      These grants represent  options to purchase common stock. No SAR's have
         been granted.


(2)      The value of the  unexercised  in-the-money  options were calculated by
         determining the difference  between the fair market value of the common
         stock  underlying  the options and the exercise price of the options as
         of June 30, 2002.


(3)      Mr.  Dwight  became  President  and  Chief  Executive  Officer  of TSET
         effective November 15, 2001.


(4)      Mr. Tusing became Chief Operating  Officer of TSET effective January 1,
         2002.


(5)      Effective  October 10,  2001,  Mr.  Wilson  resigned as Chairman of the
         Board of Directors  and Chief  Executive  Officer of TSET pursuant to a
         mutual agreement between TSET and Mr. Wilson.


(6)      TSET has  determined  that the  options to purchase  350,000  shares of
         common stock granted to Mr. Wilson pursuant to a letter agreement dated
         April 10, 2001 are void as of April 10, 2001, the effective date of the
         letter agreement. Of these options to purchase 350,000 shares of common
         stock,  options  to  purchase  125,000  shares  of  common  stock  were
         exercisable   at  fiscal  year  end  2001  and  225,000   options  were
         unexercisable at fiscal year end 2001.


(7)      Mr. Black resigned as Executive  Vice President - Business  Development
         of TSET effective as of December 31, 2001.



                                       10




                                                    OPTION/SAR GRANTS TABLE

                                     % TOTAL
                                  NO. OF SECURITIES      OPTIONS/SAR'S
                                      UNDERLYING           GRANTED TO
                                    OPTIONS/SAR'S         EMPLOYEES IN      EXERCISE OR BASE PRICE
             NAME                    GRANTED (#)        FISCAL YEAR (%)         ($ PER SHARE)           EXPIRATION DATE
             ----                    -----------        ---------------         -------------           ---------------
                                                                                         
Daniel R. Dwight                    93,600(2)                1.5%                   $0.960           November 15, 2004
President and                       1,000,000               16.4%                   $0.680           February 12, 2012
Chief Executive Officer(1)            600,000                9.9%                   $0.250           February 12, 2012
                                   500,000(3)                8.2%                   $0.420           November 15, 2011
                                   250,000(3)                4.1%                   $0.660           November 15, 2011
                                   250,000(3)                4.1%                   $0.560           November 15, 2011

Richard F. Tusing                  246,500(5)                4.1%                   $0.960               June 30, 2005
Chief Operating Officer(4)            600,000                9.9%                   $0.680           February 12, 2012
                                      350,000                5.8%                   $0.250           February 12, 2012

Jeffrey D. Wilson                      50,000                0.8%                   $0.885               April 9, 2006
Former Chairman of the Board           10,000                0.1%                   $0.210              March 31, 2005
of Directors and
Chief Executive Officer(6)

Richard A. Papworth                   100,000                1.6%                   $0.680           February 12, 2012
Chief Financial Officer               200,000                3.3%                   $0.250           February 12, 2012


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

(1)      Mr.  Dwight  became  President  and  Chief  Executive  Officer  of TSET
         effective October 16, 2001.

(2)      Represents   options  granted  pursuant  to  Mr.  Dwight's   Consulting
         Agreements dated August 11, 2000 (individual  agreement) and January 1,
         2001 (Dwight  Tusing &  Associates'  agreement),  as amended  April 12,
         2001.

(3)      Represents   options  granted  pursuant  to  Mr.  Dwight's   Employment
         Agreement  effective November 15, 2001 and Stock Option Agreement dated
         April 1, 2002.

(4)      Mr. Tusing became Chief Operating  Officer of TSET effective January 1,
         2002.

(5)      Represents   options  granted  pursuant  to  Mr.  Tusing's   Consulting
         Agreements dated August 11, 2000 (individual  agreement) and January 1,
         2001 (Dwight  Tusing &  Associates'  agreement),  as amended  April 12,
         2001.

(6)      Effective  October 10,  2001,  Mr.  Wilson  resigned as Chairman of the
         Board of Directors  and Chief  Executive  Officer of TSET pursuant to a
         mutual agreement between TSET and Mr. Wilson.


STOCK OPTION PLAN

         On February 12, 2002,  the Board of Directors  approved the TSET,  Inc.
Stock  Option  Plan  under  which  the  Company's  key  employees,  consultants,
independent  contractors,  officers and directors are eligible to receive grants
of stock options. The Company has reserved a total of 6,250,000 shares of common
stock under the Stock Option Plan. It is presently administered by the Company's
Board of  Directors.  Subject to the  provisions  of the Stock Option Plan,  the
Board of Directors  has full and final  authority to select the  individuals  to
whom  options will be granted,  to grant the options and to determine  the terms
and conditions and the number of shares issued pursuant thereto.

EMPLOYMENT AGREEMENTS

         The Employment  Agreement of Jeffrey D. Wilson, our former Chairman and
Chief  Executive  Officer,  was dated as of April 20, 1999 and  continued for an
"evergreen"  term of five years  unless Mr.  Wilson  provided  at least 60 days'
prior written notice of his resignation.  Such agreement  provided for base cash
compensation  during the first  12-month  period in the  amount of  $12,500  per
month,  plus a cash bonus in the amount of $30,000 to be paid in one lump sum on
or before May 1, 2000. During the second 12-month period, Mr. Wilson's base cash
compensation was to increase to $15,000 per month, and during the third 12-month
period such base cash  compensation  was to  increase to $20,000 per month.  Mr.
Wilson deferred all cash and bonus  compensation  from April 1999 through August
2000;  however,  commencing in September  2000, Mr. Wilson began  receiving cash
compensation  in the  amount of  $17,500  per  month,  approved  by the Board of
Directors,  in consideration of his previous deferral of such  compensation.  We
were  obligated to pay interest at the rate of 12% annually on all  compensation
deferred  by Mr.  Wilson  until all such  amounts  have  been paid in full.  Mr.
Wilson's  nominee,  The Pangaea Group,  LLC, received a signing bonus of 100,000
fully vested and  non-forfeitable  restricted  shares of our common  stock;  The


                                       11


Pangaea  Group,  LLC received an  additional  900,000  restricted  shares of our
common  stock,  which  vested at the rate of  100,000  shares per month over the
9-month period following Mr. Wilson's  acceptance of the terms of his employment
agreement.  Mr. Wilson was entitled to fully  participate in any and all 401(k),
stock option, stock bonus, savings, profit-sharing, insurance, and other similar
plans and benefits of employment; however, as of the date of this prospectus, we
have not adopted or  implemented  any such  plans.  Mr.  Wilson had  "piggyback"
registration  rights with respect to all restricted shares owned by him, as well
as "demand"  registration  rights with  respect  thereto  exercisable  two times
during each 5-year term of his employment. The cost of exercising such piggyback
and  demand  registration  rights  was to be borne by us. As of the date of this
prospectus, Mr. Wilson had not exercised such registration rights. Mr. Wilson is
entitled to be indemnified,  defended,  and held harmless by us from and against
any and all costs, losses,  damages,  penalties,  fines, or expenses (including,
without  limitation,  reasonable  attorneys'  fees,  court costs, and associated
expenses) suffered, imposed upon, or incurred by him in any manner in connection
with his service as our Chairman and Chief Executive Officer.

         On April 10, 2001, we entered into a Letter  Agreement  with Mr. Wilson
amending Mr. Wilson's  Employment  Agreement.  Pursuant to the Letter Agreement,
Mr. Wilson waived the  anti-dilution  provision of his  Employment  Agreement in
consideration  for options to purchase  350,000 shares of our restricted  common
stock. The option to purchase 125,000 shares of common stock was fully vested as
of April 10, 2001 and the  remaining  225,000  share option was to vest upon the
achievement  of certain  performance  objectives.  The  exercise  price of these
options was equal to $0.885 per share, which was the closing price of our common
stock as quoted on the Over-the-Counter Bulletin Board on April 9, 2001.

         In September 2001, we determined that, among other things, our Board of
Directors never validly approved Mr. Wilson's Employment Agreement. Accordingly,
we determined that Mr. Wilson's  Employment  Agreement and the Letter  Agreement
are null and void from their  inception.  As a consequence,  we have  determined
that the issuance of 1,000,000  shares of common stock pursuant to Mr.  Wilson's
Employment  Agreement  and the grant of options to  purchase  350,000  shares of
common  stock  pursuant to the Letter  Agreement  were void as of the  effective
dates of the Employment Agreement and Letter Agreement,  respectively,  and that
these  shares of common  stock and  options  are  treated  as if they were never
issued or granted,  as the case may be.  Effective  October 10, 2001, Mr. Wilson
resigned as Chairman of the Board of Directors  and Chief  Executive  Officer of
the Company. Mr. Wilson remains as a director of the Company.

         Daniel R. Dwight,  our President and Chief Executive  Officer,  and our
company entered into an Employment  agreement effective as of November 15, 2001.
The initial term of Mr.  Dwight's  Employment  Agreement is for 2 years and will
automatically renew for successive 1 year terms unless the Company or Mr. Dwight
provide the other party with  written  notice  within 3 months of the end of the
initial term or any subsequent renewal term. Mr. Dwight's  Employment  Agreement
provides for base cash compensation of $180,000 per year. Mr. Dwight is eligible
for annual  incentive  bonus  compensation  in an amount  equal to Mr.  Dwight's
annual salary based on the achievement of certain bonus objectives. In addition,
the Company granted Mr. Dwight  1,000,000  immediately  vested and  exercisable,
ten-year stock options at various exercise  prices.  Mr. Dwight will be entitled
to fully participate in any and all 401(k), stock option, stock bonus,  savings,
profit-sharing,  insurance,  and other similar plans and benefits of employment.
Mr. Dwight is entitled to be indemnified, defended, and held harmless by us from
and against any and all costs, losses,  damages,  penalties,  fines, or expenses
(including,  without  limitation,  reasonable  attorneys' fees, court costs, and
associated expenses) suffered, imposed upon, or incurred by him in any manner in
connection with his service as our Chief Executive Officer.

         Richard A. Papworth,  our Chief  Financial  Officer,  has an Employment
Agreement dated as of May 19, 2000,  which continues for an "evergreen"  term of
two years,  unless Mr. Papworth  provides at least 90 days' prior written notice
of his resignation.  Mr. Papworth's  Employment Agreement provides for base cash
compensation  in the amount of $10,000  per  month,  a signing  bonus of $50,000
worth of fully vested and non-forfeitable restricted shares of our common stock,
plus a year-end  bonus  payable in cash and  additional  shares,  in a "blended"
amount to be determined.  Mr. Papworth will be entitled to fully  participate in
any  and  all  401(k),  stock  option,  stock  bonus,  savings,  profit-sharing,
insurance,  and other similar plans and benefits of employment;  however,  as of
the date of this prospectus,  we have not adopted or implemented any such plans.
Mr.  Papworth is entitled to be indemnified,  defended,  and held harmless by us
from and  against  any and all costs,  losses,  damages,  penalties,  fines,  or
expenses  (including,  without  limitation,  reasonable  attorneys'  fees, court
costs, and associated  expenses)  suffered,  imposed upon, or incurred by him in
any manner in connection with his service as our Chief Financial Officer.

         On April 10, 2001, we entered into a Letter Agreement with Mr. Papworth
amending Mr. Papworth's Employment Agreement.  Pursuant to the Letter Agreement,
Mr. Papworth waived the anti-dilution  provision of his Employment  Agreement in
consideration  for an option to purchase 398,475 shares of our restricted common
stock.  The option was fully vested as of April 10, 2001 and the exercise  price
is equal to $0.885 per share, which was the closing price of our common stock as
quoted on the Over-the-Counter Bulletin Board on April 9, 2001.




                                       12


EXECUTIVE SEVERANCE AGREEMENTS

         The Employment  Agreement of Richard A. Papworth,  our Chief  Financial
Officer, provides that upon the occurrence of any transaction involving a change
of control of TSET pursuant to which his employment is terminated, any shares of
our common stock to which Mr.  Papworth is entitled  through any stock option or
other stock  ownership  plan shall  immediately  vest and Mr.  Papworth  will be
entitled to receive all the  compensation  and  benefits of  employment  that he
would have received for the full term of his employment but for such termination
(i.e., given the 2-year  "evergreen" term of his employment,  Mr. Papworth would
therefore receive two years' worth of such compensation),  the immediate vesting
of shares in any stock option or other stock  ownership  plan, and the immediate
vesting  of  all  matching  contributions  made  by us in any  401(k),  savings,
profit-sharing, or other similar plan or benefit program.

         The  Employment  Agreement  of Daniel R.  Dwight,  our Chief  Executive
Officer,  provides that,  upon the occurrence of any transaction as defined as a
"change of control" of TSET,  Mr.  Dwight shall  receive his salary and benefits
for a period of time that is the  greater of (i) one year or (ii) the  remainder
of Mr. Dwight's employment term.

         As of the record  date,  we have not  adopted  any  separate  executive
severance agreements.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         We believe that all prior related party  transactions have been entered
into upon terms no less  favorable to us than those that could be obtained  from
unaffiliated  third parties.  Our reasonable  belief of fair value is based upon
proximate  similar  transactions  with third  parties or  attempts to obtain the
consideration from third parties.  All ongoing and future transactions with such
persons,  including any loans or compensation to such persons,  will be approved
by a majority of disinterested members of the Board of Directors.

         In  connection  with his  Employment  Agreement,  Jeffrey  D.  Wilson's
nominee,  The Pangaea Group LLC, received a signing bonus of 100,000  restricted
shares of our common  stock;  such shares were fully vested and  non-forfeitable
upon issuance. In addition, The Pangaea Group LLC received an additional 900,000
restricted shares of our common stock, vesting at the rate of 100,000 shares per
month over the 9-month period ended January 2000. In September 2001, the Company
determined  that,  among other  things,  our Board of  Directors  never  validly
approved  Mr.  Wilson's  Employment  Agreement.  Accordingly,  the  Company  has
determined  that Mr.  Wilson's  Employment  agreement was null and void from its
inception.  As a consequence,  the Company has  determined  that the issuance of
1,000,000 shares of common stock pursuant to Mr. Wilson's  Employment  Agreement
is void as of the effective  date of the  Employment  Agreement,  and that these
shares of common stock are treated as if they were never issued.

         On August 11, 2000, we entered into a Consulting Agreement with Richard
F. Tusing and Daniel R. Dwight, pursuant to which Messrs. Tusing and Dwight will
provide management, financial, strategic, and other consulting services to us in
exchange for  consulting  fees payable in cash and options of our common  stock.
Out-of-pocket  expenses incurred by Messrs. Tusing and Dwight in connection with
provision  of  their  services  under  the  Consulting  Agreement  will  also be
reimbursed  by us. The  Consulting  Agreement  was entered into prior to Messrs.
Tusing's  and  Dwight's  appointment  as  members of our Board of  Directors  in
October  2000  and  was  negotiated  at  arm's  length.   We  believe  that  the
compensation  and  other  provisions  of  the  Consulting  Agreement  are  fair,
reasonable, customary, and favorable to us. The Consulting Agreement was renewed
with Dwight,  Tusing & Associates  on similar terms and  conditions  with a rate
adjustment as of January 1, 2001,  and was amended on April 12, 2001 to decrease
the strike  price of the  options  granted as partial  compensation  thereunder.
Pursuant to the Company and Mr. Dwight  entering into his Employment  Agreement,
effective November 15, 2001, Mr. Dwight's  Consulting  Agreement is no longer in
effect.  Pursuant to his Consulting  Agreement,  Mr. Dwight earned  $208,400 and
$179,600, respectively, in the years ended June 30, 2001 and 2002, respectively.
Of the aggregate amount of $388,000, we have paid $202,400 to Mr. Dwight and the
balance of $185,600  remains  payable.  Mr.  Tusing's  Consulting  Agreement  is
currently in effect. The initial term of Mr. Tusing's  Consulting  Agreement was
six months and is  automatically  renewed  for  successive  terms of six months,
unless our company or Mr. Tusing  terminate  the  agreement  upon 30 days' prior
written notice. Mr. Tusing performs  management and business consulting services
under  the  Consulting  Agreement.  Pursuant  to the  agreement,  Mr.  Tusing is
compensated  $150 per hour for his  services  and the number of hours  worked is
mutually  determined by our company and Mr. Tusing. At Mr. Tusing's  discretion,
he may elect to convert  his unpaid  hourly cash  compensation  for an option to
purchase  restricted  shares of the Company's common stock at one hundred option
shares for each hour of  consulting  services.  Such option,  once  elected,  is
exercisable for three years at an exercise price of $2.00 per share. Pursuant to
his Consulting Agreement, Mr. Tusing earned $207,400 and $377,750, respectively,
in the years ended June 30, 2001 and 2002 and $30,750  through July 31, 2002. Of
the  aggregate  amount of $615,900,  we have paid $294,000 to Mr. Tusing and the
balance of $331,900 remains payable.



                                       13


         Effective October 15, 2001, we entered into a Consulting Agreement with
Jeffrey D. Wilson,  pursuant to which Mr. Wilson will provide  thirty-five hours
per month of  management  and other  consulting  services to us in exchange  for
consulting fees payable in cash and options of our common stock. The term of Mr.
Wilson's  Consulting  Agreement is one year. Mr. Wilson is compensated  $150 per
hour for his services.  Pursuant to his Consulting Agreement,  Mr. Wilson earned
$51,200 in the year ended June 30, 2002 and $8,700 through  October 15, 2002. Of
the  aggregate  amount of  $56,500,  we have paid  $5,200 to Mr.  Wilson and the
balance of $51,300 remains payable. In addition,  our company granted Mr. Wilson
an option to purchase  100,000  shares of the  Company's  common  stock upon the
successful  conclusion  of the  Company's  legal  proceedings  against  W.  Alan
Thompson,  Ingrid T. Fuhriman, Robert L. Fuhriman II and Weihao Long. The option
is for three years and fully vests and becomes exercisable  immediately upon the
grant thereof. The exercise price of the option will be the closing price of the
Company's  common stock on the option's  date of grant.  Out-of-pocket  expenses
incurred by Mr. Wilson in connection  with  provision of his services  under the
Consulting Agreement will also be reimbursed by us. The Consulting Agreement was
negotiated  at  arm's  length.  We  believe  that  the  compensation  and  other
provisions of the  Consulting  Agreement are fair,  reasonable,  customary,  and
favorable to us. Mr. Wilson's  Consulting  Agreement was in effect until October
15, 2002.

         Pursuant to Daniel R. Dwight's Employment Agreement, effective November
15, 2001, our company and Mr. Dwight agreed that the Consulting Agreement, dated
January 1, 2001,  between our company and Mr. Dwight and the Finders  Agreement,
dated  August 11,  2000,  between  our company  and Mr.  Dwight were  terminated
effective  November 15, 2001.  We  acknowledged  and agreed that pursuant to the
terms of the Consulting  Agreement,  we owe Mr. Dwight past-due amounts equal to
$250,582.  We agreed that this  past-due  amount will accrue  interest at 1% per
month  until paid in full.  Payments  from our  company to Mr.  Dwight  shall be
allocated  first to  out-of-pocket  expenses,  second  to  salary,  and third to
repayment of the past-due amount. In addition,  we acknowledged and agreed that,
pursuant to the Consulting  Agreement and the Finders Agreement,  Mr. Dwight has
earned 271,700 options that are fully vested and exercisable under the terms and
conditions  of the  Consulting  Agreement,  the Finders  Agreement  and a Letter
Agreement, dated April 12, 2001 between our company and Mr. Dwight.








                                       14


             PROPOSAL 2 - AMENDMENT TO THE ARTICLES OF INCORPORATION

         Our Company's Board of Directors proposes an amendment to our Company's
Articles of  Incorporation  to change the name of our Company to Kronos Advanced
Technologies, Inc.

         If the amendment to our Company's Articles of Incorporation is adopted,
Articles of Amendment shall be filed with the Nevada  Secretary of State so that
the first  paragraph of Article I of the Articles of  Incorporation  shall be as
follows:

                  "That the name of said  corporation  shall be Kronos  Advanced
Technologies, Inc."

         Our Company is focused on the development and  commercialization of the
air-movement and purification  technology known as KronosTM. Our Company's Board
of Directors  believes that it is desirable to change the name of our Company to
Kronos Advanced  Technologies,  Inc., as it more directly associates our Company
with our KronosTM technology.


RECOMMENDATION OF THE BOARD OF DIRECTORS

         Our Board of Directors unanimously recommends a vote "FOR" the approval
of an amendment to our Company's Articles of Incorporation to change the name of
our Company to Kronos Advanced Technologies, Inc.







                                       15


                          DESCRIPTION OF CAPITAL STOCK

         Our authorized  capital stock consists of 500,000,000  shares of common
stock, par value $0.001 per share, and 50,000,000  shares of preferred stock, no
par value. As of October 14, 2002, 46,891,293 shares of common stock were issued
and  outstanding;  no shares of our preferred stock are issued and  outstanding.
The rights and  preferences  of the  preferred  stock  will be  determined  upon
issuance by our Board of Directors.  The following  description  is a summary of
our  capital  stock  and  contains  the  material  terms   thereof.   Additional
information can be found in our Articles of Incorporation and Bylaws, which were
filed as exhibits to our  Registration  Statement on Form S-1 filed on August 7,
2001 with the Securities and Exchange Commission.


COMMON STOCK

         Holders of our  common  stock are  entitled  to one vote for each share
held on all matters submitted to a vote of stockholders,  including the election
of directors. Accordingly, holders of a majority of our common stock entitled to
vote in any election of directors  may elect all of the  directors  standing for
election should they choose to do so. Neither our Articles of Incorporation  nor
our Bylaws provide for cumulative voting for the election of directors.  Holders
of our  common  stock  are  entitled  to  receive  their  pro rata  share of any
dividends  declared  from  time to time by the Board of  Directors  out of funds
legally  available  therefor.  Holders of our common  stock have no  preemptive,
subscription,  conversion,  sinking fund, or redemption  rights. All outstanding
shares of our common  stock are fully paid and  non-assessable.  In the event of
liquidation,  dissolution,  or winding up of the Company,  the holders of common
stock are entitled to share  ratably in all assets  remaining  after  payment of
liabilities,  subject to prior  distribution  rights of preferred stock (if any)
then outstanding.


PREFERRED STOCK

         Our Articles of Incorporation authorizes 50,000,000 shares of preferred
stock,  no par value. No shares of preferred stock are issued and outstanding as
of the date of this prospectus. The Board of Directors is authorized, subject to
any limitations  prescribed by the Nevada Revised Statutes,  or the rules of any
quotation  system  or  national  securities  exchange  on which our stock may be
quoted or listed,  to provide for the issuance of shares of  preferred  stock in
one or more series;  to  establish  from time to time the number of shares to be
included  in each such  series;  to fix the  rights,  powers,  preferences,  and
privileges of the shares of such series,  without  further vote or action by the
stockholders. Depending upon the terms of the preferred stock established by the
Board of Directors,  any or all series of preferred  stock could have preference
over the common stock with respect to dividends and other distributions and upon
liquidation of the Company or could have voting or conversion  rights that could
adversely affect the holders of the outstanding  common stock. As of the date of
this prospectus, the voting and other rights associated with the preferred stock
have yet to be determined by the Board of Directors.  There are no present plans
by the Board of Directors to issue preferred  shares or address the rights to be
assigned thereto.


OPTIONS

         In April 2001, we entered into agreements  with employees,  consultants
and directors  for the grant of stock  options to purchase  shares of our common
stock.  All stock option grants are  exercisable at the fair market value of the
shares  on  the  date  of  grant,  except  for  those  options  granted  to  the
consultants.  The exercise  price in the  consulting  agreements is fixed and in
excess  of the fair  market  value on the date of  grants.  On April  10,  2001,
Messrs.  Jeffrey D.  Wilson and  Richard A.  Papworth  were  granted  options to
acquire, collectively, 748,475 shares of common stock in consideration for their
relinquishment of the anti-dilution clauses in their employment  agreements.  We
have  determined  that the options to purchase  350,000  shares of common  stock
granted  to Mr.  Wilson on April 10,  2001 are void as of that  date,  and these
options are treated as if they were never granted. On April 10, 2001, members of
our management  team and Board of Directors were granted stock options  totaling
450,000  shares.  On May 4, 2001,  two  members of the Board of  Directors  were
granted stock options for 250,000 shares of common stock.  On February 12, 2002,
eight  employees of the Company were granted stock options for 4,580,000  shares
of common  stock.  On November  15,  2001,  Daniel R.  Dwight was granted  stock
options for  1,000,000  shares of common stock as a signing  bonus in connection
with Mr. Dwight's Employment Agreement.

         As of October 9, 2002,  the  following  options had been granted in the
amounts and to the individuals shown below; as of the date hereof,  none of such
options has been exercised:



                                       16




--------------------------------- -------------------- ------------------ ------------------- ------------------
                                        NUMBER
NAME                                  OF OPTIONS         STRIKE PRICE       DATE OF GRANT        EXPIRATION
--------------------------------- -------------------- ------------------ ------------------- ------------------
                                                                                      
Daniel R. Dwight                          50,000             $0.885            04/09/01           04/09/06
                                      178,100(1)             $0.960            05/07/01           05/07/04
                                       93,600(1)             $0.960            11/15/01           11/15/04
                                       1,000,000             $0.680            02/12/02           02/12/12
                                         600,000             $0.250            12/12/02           02/12/12
                                      500,000(2)             $0.420            11/15/01           11/15/11
                                      250,000(2)             $0.560            11/15/01           11/15/11
                                      250,000(2)             $0.660            11/15/01           11/15/11


Richard F. Tusing                         50,000             $0.885            04/09/01           04/09/06
                                      176,500(3)             $0.960            05/07/01           05/07/04
                                      246,500(3)             $0.960            06/30/02           06/30/05
                                         600,000             $0.680            02/12/02           02/12/12
                                         350,000             $0.250            02/12/02           02/12/12


Richard A. Papworth                       50,000             $0.885            04/09/01           04/09/06
                                         398,475             $0.885            04/09/01           04/09/11
                                         100,000             $0.680            02/12/02           02/12/12
                                         200,000             $0.250            02/12/02           02/12/12


Igor Krichtafovitch                       50,000             $0.885            04/09/01           04/09/06
                                         600,000             $0.680            02/12/02           02/12/12
                                         400,000             $0.250            02/12/02           02/12/12


J. Alexander Chriss                       50,000             $0.885            04/09/01           04/09/06
                                      104,000(4)             $1.120            04/30/01           04/30/04
                                      104,800(4)             $1.120            12/31/01           12/31/04
                                         350,000             $0.680            02/12/02           02/12/12
                                         300,000             $0.250            02/12/02           02/12/12


Jeffrey D. Wilson                         50,000             $0.885            04/09/01           04/09/06
                                      200,000(5)             $0.710            05/03/01           05/03/11
                                       50,000(6)             $0.360            10/10/01           10/10/04
                                          10,000             $0.210            03/31/02           03/31/05


Charles D. Strang                         50,000             $0.885            04/09/01           04/09/06
                                       50,000(7)             $0.710            05/03/01           05/03/11


Erik W. Black                             50,000             $0.885            04/09/01           04/09/06


Charles H. Wellington, Jr.                50,000             $0.885            04/09/01           04/09/06


Vladimir Gorobets                         30,000             $0.250            02/12/02           02/12/12



                                       17


--------------------------------- -------------------- ------------------ ------------------- ------------------
                                        NUMBER
NAME                                  OF OPTIONS         STRIKE PRICE       DATE OF GRANT        EXPIRATION
--------------------------------- -------------------- ------------------ ------------------- ------------------

Bruce Long                                20,000             $0.250            02/12/02           02/12/12

Jacob Oharah                              30,000             $0.250            02/12/02           02/12/12


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

(1)      Pursuant  to  consulting   agreements  dated  as  of  August  11,  2000
         (individually) and January 1, 2001 (as Dwight Tusing & Associates),  as
         amended April 12, 2001.

(2)      Pursuant  to an  employment  agreement  dated  November  15, 2001 and a
         corresponding stock option agreement dated November 15, 2001.

(3)      Pursuant  to  consulting   agreements  dated  as  of  August  11,  2000
         (individually) and January 1, 2001 (as Dwight Tusing & Associates),  as
         amended April 12, 2001.

(4)      Pursuant to a consulting  agreement dated as of March 18, 2001;  option
         grant effective as of April 30, 2001.

(5)      Mr.  Wilson was granted  options to purchase  100,000  shares of common
         stock  annually  for  his  service  as  Chairman  of  TSET's  Board  of
         Directors.  Options  shown  reflect  such  options for such service for
         years 1999 and 2000, respectively.

(6)      Pursuant to an  agreement  dated  October 10, 2001 between TSET and Mr.
         Wilson,  Mr. Wilson was granted an option to purchase  50,000 shares of
         common stock in  consideration  of Mr.  Wilson's  service in year 2001,
         prior to his resignation, as Chairman of TSET's Board of Directors.

(7)      Mr. Strang is entitled to receive  50,000  restricted  shares of common
         stock  annually  for  his  service  as a  member  of  TSET's  Board  of
         Directors.

WARRANTS

         On August 7, 2001, we entered into a Warrant  Agreement  with The Eagle
Rock Group,  LLC,  pursuant to which The Eagle Rock Group was granted a ten-year
warrant to acquire  1,400,000 shares of our common stock at an exercise price of
$0.68 per  share  (the  fair  market  value on the date of  grant).  The  shares
underlying the warrant have piggyback and demand registration rights, as well as
subscription  rights  in the  event  that  we  issue  any  rights  to all of our
stockholders  to subscribe  for shares of our common  stock.  In  addition,  the
warrant contains redemption rights in the event that we enter into a transaction
that results in a change of control of our  company.  We  registered  all of the
shares  underlying  The Eagle Rock  Group's  warrant in a Form S-1  Registration
Statement  filed with the U.S.  Securities & Exchange  Commission  on August 16,
2002.

         Effective  March 11, 2002, we entered into an agreement  with The Eagle
Rock Group extending our  relationship  with The Eagle Rock Group until March 1,
2003.  Pursuant to the  agreement,  we agreed to grant to The Eagle Rock Group a
ten-year warrant for the right to purchase 2,000,000 shares of our common stock.
Five hundred thousand (500,000) warrant shares are earned over a 12-month period
and will fully vest on March 1, 2003. The remainder of the shares may be earned,
contingent upon the occurrence of various events, including a successful capital
raise,  securing  contracts  with the U.S.  military,  securing  contracts  with
consumer-oriented   distribution   organizations,   and   the   adoption   of  a
branding/marketing  campaign principally  developed by The Eagle Rock Group. The
exercise  price of these  warrant  shares  will be equal to our  common  stock's
closing price as of the day an initial letter of intent or term sheet related to
such transaction is executed.

ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE ARTICLES OF INCORPORATION, BYLAWS AND
FLORIDA LAW

         The following provisions of the Articles of Incorporation and Bylaws of
our Company could discourage potential  acquisition proposals and could delay or
prevent a change in control of our Company.  Such  provisions  may also have the
effect of preventing  changes in the  management of our Company,  and preventing
shareholders from receiving a premium on their common stock.

         AUTHORIZED BUT UNISSUED  STOCK.  The authorized but unissued  shares of
common stock and  preferred  stock are  available  for future  issuance  without
shareholder  approval.  These additional shares may be utilized for a variety of
corporate  purposes,  including  future  public  offerings  to raise  additional
capital, corporate acquisitions and employee benefit plans.

TRANSFER AGENT AND REGISTRAR

         The transfer agent and registrar for our common stock is Merit Transfer
Company,  68 South Main Street,  Suite 708, Salt Lake City, UT 84101,  Telephone
(801) 531-7558.




                                       18


OTHER MATTERS

         As of the  date  of this  proxy  statement,  our  Company  knows  of no
business that will be presented for  consideration at the meeting other than the
items  referred to above.  If any other  matter is properly  brought  before the
meeting for action by shareholders, proxies in the enclosed form returned to our
Company  will be voted in  accordance  with the  recommendation  of our Board of
Directors or, in the absence of such a  recommendation,  in accordance  with the
judgment of the proxy holder.


INDEPENDENT ACCOUNTANTS

         The firm of Grant  Thornton,  LLP served as our  Company's  independent
accountants  for Fiscal 2002.  Representatives  of the firm will be available by
telephone  to respond to questions  at the Annual  Meeting of the  Shareholders.
These  representatives  will have an  opportunity  to make a  statement  if they
desire to do so. The Company  has not  selected  its  independent  accounts  for
Fiscal 2003.

         AUDIT  FEES.  The  aggregate  fees  billed  for  professional  services
rendered was $62,400 for the audit of the Company's annual financial  statements
for the year ended June 30,  2002 and the  reviews of the  financial  statements
included in the Company's Forms 10-Q for that fiscal year.

         FINANCIAL  INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION  FEES. None of
the  professional  services  described in Paragraphs  (c)(4)(ii) of Rule 2-01 of
Regulation S-X were rendered by the principal accountant for the year ended June
30, 2002.

         ALL OTHER  FEES.  Other than the  services  described  above  under the
captions   "Audit  Fees"  and   "Financial   Information   Systems   Design  and
Implementation  Fees," the  aggregate  fees billed for services  rendered by the
principal  accountant was $105,000 for the year ended June 30, 2002.  These fees
related  to  the  review  of  the  Company's  Registration  Statements  and  the
preparation of federal and state income-tax returns.


ADDITIONAL INFORMATION

         ADVANCE NOTICE PROCEDURES.  Under our Company's Bylaws, no business may
be brought  before an annual meeting unless it is specified in the notice of the
meeting (which  includes  shareholder  proposals that our Company is required to
include  in its proxy  statement  pursuant  to Rule 14a-8  under the  Securities
Exchange  Act of 1934) or is otherwise  brought  before the meeting by or at the
discretion of the Board or by a  shareholder  entitled to vote who has delivered
notice to the Company (containing  certain information  specified in the bylaws)
not less than 120 days nor more than 180 days prior to the first  anniversary of
the preceding year's annual meeting. These requirements are separate from and in
addition to the SEC's requirements that a shareholder must meet in order to have
a shareholder proposal included in our Company's proxy statement.

         SHAREHOLDER  PROPOSALS  FOR  THE  2003  ANNUAL  MEETING.   Shareholders
interested in submitting a proposal for inclusion in the proxy materials for our
2003 Annual  Meeting of the  Shareholders  may do so by following the procedures
prescribed  in  SEC  Rule  14a-8.  To be  eligible  for  inclusion,  shareholder
proposals  must be received  by our  Company's  Secretary  no later than July 1,
2003. Any shareholder  proposals should be addressed to our Company's Secretary,
464 Common Street, Suite 301, Belmont, Massachusetts 02478.

         PROXY  SOLICITATION  COSTS.  Our  Company is  soliciting  the  enclosed
proxies.  The cost of  soliciting  proxies in the enclosed form will be borne by
our  Company.  Officers  and regular  employees  of our Company may, but without
compensation other than their regular  compensation,  solicit proxies by further
mailing  or  personal  conversations,  or  by  telephone,  telex,  facsimile  or
electronic means. Our Company will, upon request,  reimburse brokerage firms for
their reasonable expenses in forwarding solicitation materials to the beneficial
owners of stock.



                                       19


         INCORPORATION  BY REFERENCE.  Certain  financial and other  information
required  pursuant to Item 13 of the Proxy Rules is incorporated by reference to
the Company's Annual Report,  which is being delivered to the shareholders  with
this proxy  statement.  In order to facilitate  compliance  with Rule 2-02(a) of
Regulation  S-X,  one copy of the  definitive  proxy  statement  will  include a
manually signed copy of the accountant's report.


                                     BY ORDER OF THE BOARD OF DIRECTORS



                                     Daniel R. Dwight
                                     President and
                                     Chief Executive Officer

Belmont, Massachusetts
October ___, 2002























                                       20