<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                  ------------


                                    FORM 10-K

                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

(Mark One)
[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES 
         EXCHANGE ACT OF  1934 [FEE REQUIRED]

For the fiscal year ended                   December 31, 1996
                                            -----------------
                                       OR

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

For the transition period from               to
                               -------------    ------------------
Commission file number          0-8410
                               -------

             WYANT CORPORATION (FORMERLY HOSPOSABLE PRODUCTS, INC.)
  ---------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            New York                                   11-2236837
----------------------------------         -----------------------------------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)                                

 100 Readington Road     Somerville, New Jersey               08876
---------------------------------------------------------------------------
(Address of principal executive offices)                      (Zip Code)

Registrant's telephone number including area code  908-707-1800
                                                   ------------

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

                                                     Name of Each Exchange
Title of Each Class                                  on Which Registered
-------------------                                  ---------------------
Common Stock                                         Traded on the NASDAQ
par value $.01 per share                             National Market

Securities registered pursuant to Section 12 (g) of the Act: NONE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES   X      NO
   ------      ------
<PAGE>



Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [X]

The aggregate market value of the voting stock held by non-affiliates of the
registrant (i.e., by persons other than officers and directors of Hosposable
Products, Inc. as reflected in the table incorporated by reference in Item 12 of
this Annual Report on Form 10-K) as of March 21, 1997, was $4,134,273.

As of March 21, 1997, there were 1,692,476 Common Shares of the Registrant
outstanding.


                       DOCUMENTS INCORPORATED BY REFERENCE

                 1. The Exhibits identified in Item 14(a)3,(b).

                                       ii



<PAGE>




                                TABLE OF CONTENTS



                           Item                                            Page
                           ----                                            ----
PART I.
                  1.       Business                                          1

                  2.       Properties                                        3

                  3.       Legal Proceedings                                 4

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

PART II.
                  5.       Market for the Registrant's Common
                           Stock and Related Shareholder
                           Matters                                           5

                  6.       Selected Financial Data                           6

                  7.       Management's Discussion and
                           Analysis of Financial Condition
                           and Results of Operations                         7

                  8.       Financial Statements and
                           Supplementary Data                               10

                  9.       Changes in and Disagreements
                           with Accountants on Accounting
                           and Financial Disclosure                         10 

PART III.
                  10.      Directors and Executive Officers                 11

                  11.      Executive Compensation                           11

                  12.      Security Ownership of Certain
                           Beneficial Owners and Management                 11

                  13.      Certain Relationships and
                           Related Transactions                             11

PART IV.
                  14.      Exhibits, Consolidated Financial
                           Statements and Schedules and Reports
                           on Form 8-K                                      12

                                      iii



<PAGE>






                                     PART I

Item 1.  BUSINESS

A.       GENERAL

                  Hosposable Products, Inc., a New York corporation incorporated
in 1971(hereinafter "Hosposable"), and its wholly-owned subsidiaries,
Bridgewater Manufacturing Corp., a New Jersey corporation ("Bridgewater"), and
IFC Disposables, Inc., a Tennessee corporation ("IFC"), manufacture disposable
medical products, wiping products, and nonwoven roll goods. The disposable
medical products are produced by various converting equipment some of which
utilize in-house "airlaid" processing technology and equipment. The disposable
medical products include bedpads incorporating unique designs for incontinent
patients. Wiping products include disposable airlaid nonwoven patient washcloths
and general wiping products in addition to the use of other nonwoven materials
which are purchased and converted in-house. (The "Company" is used herein to
make general references, without distinction among Hosposable, Bridgewater and
IFC.)

                  The majority of the sales of the Company's branded products
are to distributors for eventual use by hospitals, nursing homes and other
health care institutions, and to government agencies. The bedpads are the
Company's principal products. Their end-use is for protection against
mattress-soiling, caused primarily by incontinence. A portion of the Company's
revenue is derived through the sale of finished products as private label brands
for major customers. The Company's airlaid fabrics (AirlayTM )are used as
components of end-products manufactured by the Company, and also are sold in
roll good form to converters and manufacturers who produce a wide range of
health care, consumer and industrial products.

                  In late 1996 the Company purchased a high speed adult brief
converting line. Both branded and private label adult briefs will be introduced
in 1997 to further expand the Company's line of incontinent care products in
this growth market.

                  The Company's products are manufactured on a number of
continuous production lines that automatically assemble the various layers of
product materials, bond them with various fixative means, cut the materials to
specific lengths, and fold, count, stack and bag/box the completed products.
During 1996, the Company produced the vast majority of its products with its own
equipment, at leased facilities in Fresno, California and Jackson, Tennessee,
and at the premises and plant facility in Branchburg, New Jersey purchased by
Hosposable in December 1993.


B.       INDUSTRY SEGMENTS

                  The Company operates in one industry segment. Its assets, net
sales and net income (loss) are shown in "Selected Financial Data" (Part II,
Item 6) and "Consolidated Financial Statements" (Part IV, Item 14).

                                       1


<PAGE>



C.       SUPPLY OF RAW MATERIALS

                  The Company purchases raw materials necessary for the
manufacture of its products from several unaffiliated suppliers. These raw
materials are readily available from numerous sources. The Company is not
dependent upon any one major source of supply, and is not limited by any supply
contracts.

D.       MARKETING AND SALES

                  The Company's products are sold by 12 sales and marketing
personnel who are paid salaries and several independent sales organizations that
work on a commission basis.

                  Most of the Company's sales (other than inter-company
transactions with IFC) are made to distributors that, in turn, sell the
Company's products to institutional users such as hospitals and nursing homes,
and to industrial users. Other sales are made to private labellers that sell to
retail individual/chain stores. The retail chains usually sell the products
under private label.

                  The following table shows, for the years-ended as indicated,
percentage information in respect of the Company's net sales.

                                    1992    1993     1994     1995     1996
                                    ----    ----     ----     ----     ----

Major Distributor . . . . . . . . . 12.5    12.5     11.1     11.8     10.5

Other Distributors. . . . . . . . . 51.0    52.9     55.9     36.5     34.7

Government Agencies . . . . . . . .  1.5     1.0      0.8      1.0      1.0

Private Label . . . . . . . . . . .  3.2     3.1      2.5     18.6     18.4

Converters (airlaid/non-
woven fabrics). . . . . . . . . . .  4.7*    6.1*     7.0*     8.2*     7.0*

Industrial Wiping Products
(IFC Disposables, Inc.) . . . . . . 27.1    24.4     22.7     23.9     28.4

* Does not include inter-company sales of $1,542,773, $1,709,494, $1,266,306,
$1,235,853 and $1,428,746, in 1996, 1995, 1994, 1993, and 1992, respectively, to
IFC Disposables, Inc.

                  At December 31, 1996 the Company had 'backlogs' of firm orders
of approximately $1,450,000 or approximately 34% less than the backlog at
December 31, 1995. This change is due to the Company's focus on reducing
customer order lead times as well as an emerging distributor practice to
implement 'just in time' planning for inventory management.

                                       2

<PAGE>




E.       COMPETITION

                  The industry in which the Company competes is highly
competitive. Among the competitors are such firms as Inbrand Corporation,
Paper-Pak Products, Inc. and others with substantially greater resources than
the Company's, as well as many firms comparable to the Company in 'size' and the
primary businesses of which are directly competitive. Although the Company is a
leading manufacturer of underpads, it is not a significant factor in the overall
adult incontinent market.

                  The Company's ability to compete successfully is dependent
upon its ability to make timely deliveries of value added products of a quality
similar or higher than its competitors and at competitive prices.

F.       EMPLOYEES/UNION CONTRACT

                  The Company has 330 employees. 198 are employed in New Jersey,
80 in Fresno, California and 52 in Jackson, Tennessee. Over 90% work in sales
and production.

                  The Company is party to collective bargaining agreements with
the International Production Service & Sales Employees Union that serves its New
Jersey factory-labor employees. The agreements expire in 1998. The Company
considers its relations with its employees to be satisfactory, and no labor
disputes are anticipated or have affected operations negatively to date.


G.       PATENTS AND TRADEMARKS

                  The Company is the owner of one unexpired United States
patent; No. 4,391,010. (It expires July 5, 2000.) The patent concerns features
of the construction or method of producing the Company's "TuckableTM" underpads.
While the sale of "TuckableTM" underpads has increased in recent years, the
Company cannot assess any economic advantage particularly attributable to the
patent.

                  The Company acquired a group of 13 trademarks with its
purchase of the assets of IFC Disposables, Inc. ("Presto Wipes," "Bench-Pac,"
"Busboy," "IFC," "Jumbies," "Lab Grade," "Like-Rags," "Redd Rags," "Suit-All,"
"Tuff-Job," "Ultras," "Drawing of Hand on Wiper" and "Vacuumed and Packaged in a
Class 100 Clean Room"). Trademarks are used to protect the individual
identifications of products, but the Company cannot assess any economic
advantage particularly attributable to any trademark. Moreover, there is no
assurance that trademark rights are enforceable as mere consequence of trademark
registration.


Item 2.  PROPERTIES

                  Since May 31, 1994 the Company has conducted all New Jersey
operations at its Branchburg New Jersey location. This facility accommodates
manufacturing operations, warehousing and office activities in an 111,640 square
foot building.

                                       3
<PAGE>





                  The Company leases approximately 80,000 square feet, used for
manufacturing and warehousing, in a building at 95 Santa Fe Avenue, Fresno,
California, from Len-Sid Realty Co. Leonard Schramm, the former President of the
Company is a partner in Len-Sid Realty Co. The terms of the lease agreement,
including $111,168 as annual rent, are comparable to terms that might be
obtainable from an unaffiliated lessor of like property in the immediate
vicinity of the Fresno warehouse. The lease term is for one year, but terminable
on 90 days' notice (essentially, because the landowner, The Atchison, Topeka and
Santa Fe Railroad, has the right to terminate Len-Sid Realty Co.'s 'possession'
on 90 days' notice).

                  IFC leases a warehouse-type facility in Madison County,
Tennessee. The base rent was $448,480 in 1996. The lease expires on December 31,
1997. During 1996 IFC sublet approximately 85,000 square feet in its leased
premises to an unrelated party and was paid rent of approximately $140,000. The
sub-lease expires on August 31, 1997.


Item 3.  LEGAL PROCEEDINGS

                  The Company is not a party to any material litigation.


Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  On May 23, 1996, the Company held its annual meeting of
shareholders. 1,495,869 shares, a quorum, were represented in person or by
proxy. Gerald W. Wyant, James A. Wyant, Donald C. MacMartin, Joseph H. Weinkam,
Jr., John B. Wight and Jane M. Curtis, were each elected to serve as a director
for a one-year period expiring in 1997. (1,465,143 'for'). The appointment of
Arthur Andersen LLP as auditors for the year ended December 31, 1996 was
ratified (1,489,069 'for').

                  The approval of an amendment to the Company's Certificate of
Incorporation to provide for the limited liability of directors in certain
circumstances was ratified (965,510 'for'). An amendment to the Company's
By-Laws to provide enhanced indemnification of officers and directors was
ratified (966,310 'for'). An amendment to the Company's Certificate of
Incorporation deleting certain provisions referencing a plan of merger or
consolidation was ratified (966,136 'for').

                  At a Board of Directors meeting held directly following the
annual meeting, Mr. Donald C. MacMartin was elected as Chairman of the Board of
Directors.

                                       4


<PAGE>


                                     PART II


Item 5.  MARKET FOR THE REGISTRANT'S COMMON
         STOCK AND RELATED SHAREHOLDER MATTERS

         a.       Principal Market and Sales Prices

                  The Company's Common Stock is traded on the NASDAQ National
Market. The sales highs and lows during each quarter of the last three fiscal
years, as reported by the National Quotation Bureau, Inc. are as follows:

                                  High                       Low
                                  ----                       ---
1994

1st Quarter                       7 1/2                      5 3/4
2nd Quarter                       9 1/2                      6 3/4
3rd Quarter                       9 1/4                      7
4th Quarter                       8 1/4                      7 1/4

1995

1st Quarter                       7 3/4                      5 1/2
2nd Quarter                       7 5/8                      5
3rd Quarter                       8 1/4                      4
4th Quarter                       8 3/4                      6 3/4

1996

1st Quarter                       7                          5
2nd Quarter                       8 1/4                      7
3rd Quarter                       8 1/4                      4 5/8
4th Quarter                       5 1/2                      4 1/2


         b.       Holders

                  The number of holders of the Company's Common Stock as at
March 21, 1997, was approximately 800 based on the number of holders of record
and an estimate of the number of individual participants represented by security
position listings.

         c.       Dividends

                  The Company has never paid a cash dividend, and does not
anticipate paying dividends in the foreseeable future.


                                       5

<PAGE>




Item 6   SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>

                                                             Year ended December 31
                                            -------------------------------------------------------------
                                            1996        1995          1994         1993              1992
                                            ----        ----          ----         ----              ----
                                                      (In thousands, except per share amounts)
<S>                                    <C>           <C>             <C>            <C>            <C>     
Operations Data:
----------------

Net Sales                              $ 42,294      $ 40,481        $ 34,515       $ 29,909       $ 29,748
Cost of Sales                            34,971        33,000          26,534         22,253         22,384

Selling, general and
 administrative expenses                  8,441         7,417           6,619          6,115          6,134

Operating income (loss)                  (1,118)           64           1,362          1,541          1,230

Other income (expense), Net                (545)         (436)            288            385            358

Income (loss) before
 income taxes                            (1,663)         (372)          1,650          1,926          1,588
Income tax expense (benefit)               (608)         (163)            613            726            637
Net income (loss)                        (1,055)         (209)          1,037          1,200            951


Per Share Data:
---------------

Net income (loss):
  Primary                              $   (.62)     $   (.12)       $    .61       $    .70       $    .56

Weighted average
  number of Common and
  Common equivalent
  shares outstanding                      1,692         1,692           1,692          1,704          1,703

                                                                  At December 31
                                          ----------------------------------------------------------------
                                          1996         1995            1994           1993            1992
                                          ----         ----            ----           ----            ----
Balance Sheet Data:
-------------------

Working capital                         $ 6,259       $ 8,194         $ 7,836        $ 8,859        $ 9,259
Total assets                             24,112        23,775          21,572         23,023         16,799
Long-term obligations                                                                           
 (excluding current                                                                             
  maturities)                             5,177         4,290           4,637          6,120          2,209
Stockholders' equity                     12,137        13,192          13,402         12,357         11,121
Cash Dividends declared                                                                         
 per common share                          --            --              --             --             --
</TABLE>
                                       6
<PAGE>




Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS
         FOR THE YEAR ENDED DECEMBER 31, 1996


Introduction

                  The following discussion and analysis of financial condition
and results of operations should be read in conjunction with the consolidated
financial statements and accompanying notes. (See Item 14.)


Results of Operations for Year Ended December 31, 1996
Compared to Year Ended December 31, 1995

SALES: Sales for 1996 were $42,293,633 as compared to $40,480,738 in 1995, a
4.5% increase. This increase was principally due to higher sales volume in the
health care and wiper segments of the business associated with general business
growth. This improved performance was partially offset by lower sales volume of
the airlaid roll goods product line. Selling price movement did not factor
significantly in the sales change.

COST OF SALES AND GROSS PROFIT: Gross profit for 1996 was $7,322,641 (17.3% of
sales) compared with $7,480,597 (18.5% of sales) in 1995. The decrease in 1996
was due to several operational matters in the absorbent products business
including downtime associated with the installation of machine enhancements,
increased production scrap and unfavorable labor and overhead spending.

OTHER INCOME (EXPENSES): Selling, general and administrative expenses for 1996
were $8,441,363 compared with $7,416,448 in 1995, an increase of $1,024,915, or
13.8%. The principal components of this change were higher freight, increased
professional and consulting fees, and a write-off against earnings of accounts
receivable balances.

During the fourth quarter of 1996, the Company recorded a charge to earnings of
$549,805 for legal, accounting and investment banking fees associated with the
acquisition of the Canadian operations of G.H. Wood + Wyant Inc. ("Wood +
Wyant"). During the fourth quarter of 1995, the Company recorded a charge to
earnings of $550,000 for asset write-downs including machinery and equipment,
leasehold improvements and leased property at the IFC facility.

Interest income for 1996 decreased to $131,252 compared with $148,571 in 1995
due to a lower cash position during the year. Interest expense for 1996
decreased to $306,853 from $321,655 in 1995. The components of this change
include higher amortization of loan discount fees in 1995 and lower interest
expense due to the scheduled retirement of debt.

Other income for 1996 decreased to $181,042 from $286,647 in 1995, primarily due
to the lower other income associated with the expiration of the sales and
marketing agreement between the Company and Wood + Wyant.

NET INCOME (LOSS): A net loss of $1,055,190 was incurred for 1996 as compered
with a net loss of $209,206 in 1995. The 1996 net loss per share was $.62
compared with a net loss per share of $.12 in 1995. The per share calculation
reflects a weighted average of 1,692,476 shares outstanding in both 1996 and
1995.

                                       7


<PAGE>



Results of Operations for Year Ended December 31, 1995
Compared to Year Ended December 31, 1994

SALES: Sales for 1995 were $40,480,738 as compared to $34,515,494 in 1994, a
17.3% increase, which was due to significantly higher sales volume in the health
care and airlaid nonwoven segments of the business.

COST OF SALES AND GROSS PROFIT: Gross profit for 1995 was $7,480,597 (18.5% of
sales) compared with $7,981,223 (23.1% of sales) in 1994. The decrease in 1995
was primarily due to significantly higher raw material costs, particularly for
paper pulp, corrugated and tissue and an unfavorable mix resulting from a
substantial increase in Private Label sales.

OTHER INCOME (EXPENSES): Selling, general and administrative expenses for 1995
were $7,416,448 compared with $6,619,308 in 1994, an increase of $797,140, due
primarily to higher fees for consulting and legal services.

Interest income for 1995 decreased to $148,571 from $216,638 in 1994, due to
lower rates on portfolio holdings. Other income for 1995 declined to $286,647
from $455,783 in 1994, due mainly to reduced rental income at the Branchburg
corporate facility. An assessment of the IFC segment of business resulted in
taking a pre-tax charge to earnings of $550,000 for machinery and equipment,
leasehold improvements and leased space not being utilized at the IFC facility.


NET INCOME (LOSS): A net loss of $209,206 was incurred in 1995 as compared to
net income of $1,036,350 in 1994. The 1995 net loss per share was $.12 compared
with 1994 net income per share of $.16. The per share calculation reflects a
weighted average of 1,692,476 shares outstanding in 1995 and 1,691,906 shares
outstanding in 1994.


Liquidity and Capital Resources

                  In December 1993, the Company entered into a loan agreement
with the New Jersey Economic Development Authority (the "Authority") and First
Union National Bank ("First Union"), whereby the Authority issued Economic
Development Bonds with an aggregate principal amount of $5,325,000 to be loaned
to the Company to finance the acquisition of a building and the land on which it
is situated, as well as the purchase of machinery and equipment to add a
production line (see Item 14). As of December 31, 1996, total proceeds of
approximately $5,229,000 had been distributed to the Company in order to
complete its purchase of the above mentioned land, building, machinery and
equipment. The remaining balance is held in escrow and will be distributed to
the Company as machinery and equipment is purchased.

                  The bonds are secured by a letter of credit provided by First
Union which has obtained; (a) a first mortgage and security interest on the
building and land that was acquired; (b) an assignment of the Company's right,
title and interest in and to all leases with respect to the building and land;
and (c) a security interest on the machinery and equipment purchased with a
portion of the bond proceeds and (d) IFC's and Bridgewater's guarantees of the
Company's obligations.


                  The agreement contains several restrictive financial covenants
which include; (a) minimum net worth requirement; (b) maximum leverage ratio;
(c) minimum debt service coverage ratio; (d) minimum current ratio; and (e)
maximum amount of annual capital expenditures.

                                       8


<PAGE>




                  The remaining bond maturity dates range from December 1, 1997
to December 1, 2013 and bear interest at fixed rates between 4.1% and 5.7%. The
bonds mature at various amounts throughout this period in amounts ranging from
$140,000 to $940,000. The bonds maturing December 1, 2007, 2009 and 2013 are to
be redeemed commencing December 1, 2005 and on each December 1 thereafter
through sinking fund payments ranging from $165,000 to $255,000.

                  In October 1996, the Company entered into a loan agreement
with First Union in the amount of $1,500,000 bearing interest at 8.12%. The
proceeds of the loan were used to acquire production machinery. The principal is
repayable in monthly installments of $17,857 through November 2003. The loan is
secured by the machinery purchased.

                  On March 18, 1997, 3290441 Canada Inc., a wholly owned and
newly formed subsidiary of the Company, acquired the Canadian business and
operating assets of Wood+Wyant and assumed all of its operating liabilities. The
total fair value of the consideration for this transaction was approximately
$14,000,000. In consideration for this sale, 3290441 Canada Inc. paid $3,731,343
in cash, issued a promissory note ("Note") in the amount of $3,181,150 (the
amount of the Note is subject to adjustment and will be exchanged for Class A
Preferred shares of 3290441 Canada Inc. on the basis of one share for each
dollar of unpaid principal amount of Note), 3,800,000 Class B Preferred shares
and 1,000,000 Class E Preferred shares. The Class A and Class B shares carry
cumulative dividends of 4% and 3.99999%, respectively, and are mandatorily
redeemable over 10 years. The Class E Preferred shares are exchangeable into
1,000,000 shares of the Company's common stock.

                  On March 14, 1997, the Company borrowed $4,000,000 from First
Union National Bank of which $2,000,000 is a term loan repayable in monthly
principal installments of $33,333 plus interest at 9.43%, maturing on March 13,
2002 and $2,000,000 is a revolving line of credit maturing on April 1, 1999 with
interest at the prime rate. A portion of these proceeds was used to finance the
acquisition of Wood + Wyant. This new financing replaced all previous existing
lines of credit

                  The Company's stockholders' equity was $12,137,236 at December
31, 1996 and $13,192,426 at December 31, 1995. The decrease resulted from a net
loss of $1,055,190 in 1996.

                  The Company's working capital position amounted to $6,259,024
at December 31, 1996, compared with $8,193,500 at December 31, 1995. The
reduction in working capital includes a decrease in cash and marketable
securities to $2,017,437 at December 31, 1996 from $4,281,702 at December 31,
1995. This reduction was due to the use of cash and marketable securities for
both corporate operations and capital expenditures.

                  Funds for the Company's current operations are derived from
the sale of its products and the ability, when necessary, to borrow additional
funds.


                  As a result, the Company believes that it has adequate funds
available to conduct and continue to expand its business and that of its
subsidiaries. In addition, the Company believes that, if necessary, it will be
able to make favorable financial arrangements for any future capital
requirements.

                                       9
<PAGE>


Backlog, Impact of Inflation, Seasonality

                  The Company attempts to maintain sufficient inventory levels
for all products to allow shipment against most orders within a three week
period. To some extent, however, certain components must be inventoried further
in advance of actual orders to ensure availability. For the most part, purchases
are based upon quarterly requirements as projected after calculating sales
indications from the sales and marketing departments.

                  The Company's products are not subject to seasonal influences.

                  Because its products are sold to distributors and wholesale
and retail outlets throughout the United States, the Company is affected by
general economic conditions. Accordingly, any adverse change in the economic
climate may have an adverse impact on the Company's sales and financial
condition.


Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                  See Item 14.

Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
         ON ACCOUNTING AND FINANCIAL DISCLOSURE

                  None.

                                       10
<PAGE>



                                    PART III


Item 10. DIRECTORS AND EXECUTIVE OFFICERS

                  Information as required for this Item 10 is incorporated by
reference to the Company's definitive proxy statement for its Annual Meeting of
Shareholders (the "1997 Proxy Statement"), to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A.


Item 11. EXECUTIVE COMPENSATION

                  Information as required in respect of this Item 11 is
incorporated by reference to the 1997 Proxy Statement.


Item 12. SECURITY OWNERSHIP OF CERTAIN
         BENEFICIAL OWNERS AND MANAGEMENT

                  Information as required in respect of this Item 12 is
incorporated by reference to the 1997 Proxy Statement.


Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                  Information as required in respect of this Item 13 is
incorporated by reference to the 1997 Proxy Statement.

                                       11


<PAGE>


                                     PART IV

Item 14. EXHIBITS, CONSOLIDATED FINANCIAL STATEMENTS
                  AND SCHEDULES AND REPORTS ON FORM 8-K

(a) 1. The following Financial Statements are included in Item 8.

       Report of Independent Public Accountants                        F-1

       Consolidated Balance Sheets as of December 31, 1996 and 1995.   F-2, F-3

       Consolidated Statements of Operations for the years ended
       December 31, 1996, 1995 and 1994.                               F-4

       Consolidated Statements of Stockholders' Equity for
       the years ended December 31, 1996, 1995 and 1994.               F-5

       Consolidated Statements of Cash Flows for the years ended
       December 31, 1996, 1995 and 1994.                               F-6, F-7

       Notes to Consolidated Financial Statements.                     F-8
                                                                        
                                                                        
    2. Financial Statement Schedules.                                 
                                                                        
       Schedule II - Valuation and Qualifying Accounts.                F-18
                                                                     
       All other schedules are omitted because they are not
    applicable or not required, or the applicable information is shown in the
    Consolidated Financial Statements or in notes thereto.


    3. Exhibit Tables

     (i)   Articles of Incorporation and Amendments thereof (with the
           exception of Item (i) below) and By-Laws are incorporated
           by reference. They were filed as exhibits with the Company's
           February 2, 1984 and January 7, 1987 Registration Statements and
           the Registrant's Proxy Statement filed May 30, 1990 (the "May 1990
           Proxy").

     (ii)  Certificate of Amendment of the Articles of Incorporation dated
           March 18, 1997 is filed herewith as Exhibit 1.


     (iii) Material Contracts and Amendments: The 1991 Stock Option Plan
           filed with the Company's 1994 Proxy Statement is incorporated by
           reference thereto. The 1997 Stock Incentive Plan filed with the
           Company's Form S-8 on March 19, 1997 is incorporated by
           reference thereto.


(b) Report on Form 8-K

    The Company's Form 8-K filed on November 14, 1996 disclosed an agreement
by Hosposable Products, Inc. to acquire all of the operating assets and assume
the operating liabilities of G.H. Wood + Wyant Inc.

    Shareholders may obtain a copy of any exhibit not filed herewith by
writing to Hosposable Products, Inc., P.O. Box 8609, Somerville, New Jersey
08876.

                                       12




<PAGE>

                            CERTIFICATE OF AMENDMENT
                                     OF THE
                          CERTIFICATE OF INCORPORATION
                                       OF
                            HOSPOSABLE PRODUCTS, INC.

                Under Section 805 of the Business Corporation Law


The undersigned, for the purpose of amending the Certificate of Incorporation of
Hosposable Products, Inc. (the "Corporation"), hereby certify that:

              1. The name of the corporation (hereinafter called
the"Corporation") is HOSPOSABLE PRODUCTS, INC.

              2. The certificate of incorporation of the Corporation was filed
by the New York Department of State on May 3, 1971.

              3. The certificate of incorporation of the Corporation is hereby
amended by deleting the language of Article 1 thereof, which sets forth the name
of the Corporation and by substituting in lieu thereof the following:

                      "The name of the corporation is WYANT CORPORATION."

              4. The certificate of incorporation of the Corporation is hereby
amended by increasing the aggregate number of shares which the Corporation shall
have the authority to issue by authorizing three million (3,000,000) additional
shares, $.01 par value per share and of the same class as the presently
authorized shares. Accordingly, Article 4 of the Certificate of Incorporation of
the Corporation is hereby amended to read in full as follows:

              "The total number of shares of stock which the corporation shall
have the authority to issue is six million (6,000,000), and the par value of
each such share shall be $.01."

              5. The amendments of the certificate of incorporation herein
certified have been duly authorized by vote of the board of directors of the
Corporation followed by a vote of a majority of the holders of all outstanding
shares entitled to vote thereon at a meeting of shareholders, pursuant to
Section 803 of the New York Business Corporation Law.


              IN WITNESS WHEREOF, WE HAVE SIGNED THIS Certificate on the 18th
day of March, 1997 and we affirm the statements therein as true under penalties
of perjury.


                                         HOSPOSABLE PRODUCTS, INC.


                                         By: /s/ Joseph H. Weinkam, Jr.
                                            -------------------------------
                                              Name: Joseph H. Weinkam, Jr.
                                               Title:  President


                                         By: /s/ John C. Zisko
                                            --------------------------------
                                              Name: John C. Zisko
                                                Title: Secretary




<PAGE>



                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the Company has duly caused this annual report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                             HOSPOSABLE PRODUCTS, INC.


                                    By:      D.C. MacMartin
                                        ---------------------------------------
                                             D.C. MacMartin
                                             Chairman of the Board of Directors

Pursuant to the requirements of the Securities Exchange Act of 1934, this annual
report has been signed below by the named persons in the indicated capacities
and on the indicated dates.

Signature                     Title                         Date
---------                     -----                         ----

/s/ D.C. MacMartin
----------------------        Chairman of the Board         March 21, 1997
D.C. MacMartin                of Directors

/s/ J.H. Weinkam, Jr.
----------------------        President and Chief           March 21, 1997
J.H. Weinkam, Jr.             Operating Officer

/s/ J.C. Zisko
----------------------        Vice President, Finance       March 21, 1997
J.C. Zisko                    Secretary/Treasurer

/s/ J.M. Curtis
----------------------        Director                      March 21, 1997
J.M. Curtis

/s/ T.R.M. Davis
----------------------        Director                      March 21, 1997
T.R.M. Davis

/s/ N.A. Gallopo
----------------------        Director                      March 21, 1997
N.A. Gallopo

/s/ J.B. Wight
----------------------        Director                      March 21, 1997
J.B. Wight

/s/ G.W. Wyant
----------------------        Director                      March 21, 1997
G.W. Wyant

/s/ J.A. Wyant
----------------------        Director                      March 21, 1997
J.A. Wyant


                                




<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS




To the Board of Directors and Stockholders of
Hosposable Products, Inc.:

We have audited the accompanying consolidated balance sheets of Hosposable
Products, Inc. (a New York corporation) and subsidiaries as of December 31, 1996
and 1995, and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1996. These financial statements and the schedule referred to
below are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements and schedule based on our
audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Hosposable Products,
Inc. and subsidiaries as of December 31, 1996 and 1995, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The schedule in Item 14(a)2 is not a required part
of the basic financial statements but is supplementary information required by
the Securities and Exchange Commission. This information has been subjected to
the auditing procedures applied in our audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.




                                      /s/ Arthur Andersen, LLP
                                      -------------------------------
                                      ARTHUR ANDERSEN, LLP

New York, New York
February 11, 1997 (except with respect to matters
discussed in Note 13 as to which the date is
March 18, 1997)

                                      F-1
<PAGE>
                   HOSPOSABLE PRODUCTS, INC. AND SUBSIDIARIES
                   ------------------------------------------

                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------

                           DECEMBER 31, 1996 AND 1995
                           --------------------------
<TABLE>
<CAPTION>
                                ASSETS                                     1996             1995
                                ------                                     ----             ----


CURRENT ASSETS:                                                                                      
<S>                                                               <C>               <C>              
    Cash and cash equivalents                                     $     1,570,625   $     2,919,469  
    Marketable securities (Note 2)                                        446,812         1,362,233  
    Receivables-                                                                                     
       Trade accounts (less allowance for doubtful accounts of                                       
          $255,907 in 1996 and $133,048 in 1995)                        4,726,198         5,263,137
    Inventories (Note 3)                                                4,448,236         3,407,080
    Refundable income taxes                                               456,039           286,424  
    Deferred income taxes                                                 331,186           243,282  
    Prepaid expenses and other current assets                             239,772           236,659  
                                                                  ---------------   ---------------
                 Total current assets                                  12,218,868        13,718,284
                                                                  ---------------   ---------------
                                                                                                     
                                                                                                     
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation
    and amortization of $7,834,375 in 1996 and $6,887,558 in
    1995 (Notes 4 and 5)                                               11,544,476         9,445,198

ACQUISITION ESCROW FUND (Note 5)                                           95,673           347,346


OTHER ASSETS                                                              250,570           263,888
                                                                  ---------------   ---------------
       Total assets                                               $    24,111,587   $    23,774,716 
                                                                  ===============   ===============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated balance sheets.

                                      F-2
<PAGE>

                   HOSPOSABLE PRODUCTS, INC. AND SUBSIDIARIES
                   ------------------------------------------

                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------

                           DECEMBER 31, 1996 AND 1995
                           --------------------------

<TABLE>
<CAPTION>                                                                                                 


              LIABILITIES AND STOCKHOLDERS' EQUITY                   1996             1995            
              ------------------------------------                   ----             ----            
                                                                                         
CURRENT LIABILITIES:                                                                     
<S>                                                              <C>         <C>                  
    Current maturities of long-term debt (Note 5)                   579,285   $       350,000      
    Accounts payable                                              4,369,911         4,051,197      
    Accrued expenses                                              1,010,648         1,123,587      
                                                             --------------   ---------------      
                 Total current liabilities                        5,959,844         5,524,784      
                                                             --------------   ---------------      
                                                                                         
                                                                                         
                                                                                         
LONG-TERM LIABILITIES:                                                                   
    Long-term debt, excluding current maturities                                         
       (Note 5)                                                   5,176,733         4,289,805      
    Deferred income taxes                                           837,774           667,701      
                                                                                         
                                                                                         
OTHER LIABILITIES                                                         -           100,000
      
COMMITMENTS (Note 11)   



STOCKHOLDERS' EQUITY (Note 7):
     Common stock, par value $.01 per share; authorized
       3,000,000 shares; issued 1,703,676 in 1996 and 1995           17,037            17,037
     Additional paid-in capital                                   6,894,249         6,894,249                              
     Retained earnings                                            5,257,480         6,312,670                                
     Less-Cost of 11,200 shares of common stock held in       
       treasury                                                     (31,530)          (31,530)
                                                             --------------   --------------- 
           Total stockholders' equity                            12,137,236        13,192,426 
                                                             --------------   ---------------    
           Total liabilities and stockholders' equity        $   24,111,587   $    23,774,716
                                                             ==============   ===============
</TABLE>            
              The accompanying notes are an integral part of these
                       consolidated balance sheets.


                                      F-3
<PAGE>




                   HOSPOSABLE PRODUCTS, INC. AND SUBSIDIARIES
                   ------------------------------------------

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      -------------------------------------

              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
              ----------------------------------------------------

<TABLE>
<CAPTION>

                                                                      1996                1995                1994
                                                                  ------------        ------------        ------------

<S>                                                               <C>                 <C>                 <C>         
NET SALES                                                         $ 42,293,633        $ 40,480,738        $ 34,515,494

COST OF SALES                                                       34,970,992          33,000,141          26,534,271
                                                                  ------------        ------------        ------------
                 Gross profit                                        7,322,641           7,480,597           7,981,223

OTHER EXPENSES (INCOME):
    Selling, general and administrative expenses                     8,441,363           7,416,448           6,619,308
    Acquisition costs (Note 9)                                         549,805                --                  --
    Interest income                                                   (131,252)           (148,571)           (216,638)
    Interest expense                                                   306,853             321,655             384,638
    Other income                                                      (181,042)           (286,647)           (455,783)
    Writedown of assets (Note 8)                                          --               550,000                --
                                                                  ------------        ------------        ------------
                 Total other expenses                                8,985,727           7,852,885           6,331,525
                                                                  ------------        ------------        ------------
                 Income (loss) before income tax (benefit)
                    expense                                         (1,663,086)           (372,288)          1,649,698

INCOME TAX (BENEFIT) EXPENSE (Note 6)                                 (607,896)           (163,082)            613,348
                                                                  ------------        ------------        ------------
                 Net income (loss)                                $ (1,055,190)       $   (209,206)       $  1,036,350
                                                                  ============        ============        ============

EARNINGS (LOSS) PER SHARE                                         $       (.62)       $       (.12)       $        .61
                                                                  ============        ============        ============
WEIGHTED AVERAGE NUMBER OF COMMON
 SHARES USED IN THE COMPUTATION                                      1,692,476           1,692,476           1,691,906
                                                                  ============        ============        ============

</TABLE>


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

                                      F-4



<PAGE>

                   HOSPOSABLE PRODUCTS, INC. AND SUBSIDIARIES
                   ------------------------------------------


           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
           ----------------------------------------------------------

           FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, 1994 AND 1993
           ----------------------------------------------------------

<TABLE>
<CAPTION>



                                               Common          Additional                                               Total      
                                            Stock, $.01          Paid-in             Retained         Treasury      Stockholders'
                                             Par Value           Capital             Earnings           Stock           Equity
                                            ----------       -------------        -------------      -----------    ---------------
<S>                                        <C>             <C>                  <C>                <C>            <C>            
BALANCE, December 31, 1993                 $   17,017      $   6,885,769        $   5,485,526      $   (31,530)   $    12,356,782
                                          
    Net income for the year                        -                  -             1,036,350               -           1,036,350
                                          
    Exercise of 2,000 Stock Options                20              8,480                   -                -               8,500  
                                           ----------      -------------        -------------      -----------    ---------------
                                          
                                          
BALANCE, December 31, 1994                 $   17,037      $   6,894,249        $   6,521,876      $   (31,530)   $    13,401,632
                                          
    Net loss for the year                          -                  -              (209,206)              -            (209,206)
                                           ----------      -------------        -------------      -----------    ---------------
                                          
BALANCE, December 31, 1995                     17,037          6,894,249            6,312,670          (31,530)        13,192,426
                                          
    Net loss for the year                          -                  -            (1,055,190)              -          (1,055,190)
                                           ----------      -------------        -------------      -----------    ---------------
                                          
BALANCE, December 31, 1996                 $   17,037      $   6,894,249        $   5,257,480      $   (31,530)   $    12,137,236
                                           ==========      =============        =============      ===========    ===============
</TABLE>                                  
                            
                   The accompanying notes are an integral part of these
                       consolidated financial statements.

                                      F-5


<PAGE>


                   HOSPOSABLE PRODUCTS, INC. AND SUBSIDIARIES
                   ------------------------------------------

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------

              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
              ----------------------------------------------------
<TABLE>
<CAPTION>

                                                                              1996                 1995                 1994
                                                                              ----                 ----                 ----
<S>                                                                           <C>                 <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss)                                                     $(1,055,190)       $   (209,206)         $   1,036,350
    Adjustments to reconcile net income (loss) to net cash (used in)
       provided by operating activities-
          Depreciation and amortization                                       989,048             982,352              1,064,718
          Provision for doubtful accounts                                     513,232              14,289                 37,000
          Loss on sale of fixed asset                                              -               33,426                     -
          Deferred income tax expense (benefit)                                82,169            (156,157)               (38,365)
          Writedown of assets                                                      -              550,000                     -
          Changes in assets and liabilities-
              (Increase) decrease in-
                 Accounts receivable, trade                                    23,707          (1,252,859)              (485,657)
                 Inventories                                               (1,041,156)            468,275               (485,848)
                 Refundable income taxes                                     (169,612)           (202,738)               (83,686)
                 Prepaid expenses and other current assets                    (34,045)            156,845                (61,036)
              Increase (decrease) in-
                 Accounts payable and accrued expenses                        205,791           2,462,532                240,905
                 Income taxes payable                                              -                   -                (178,931)
                 Other liabilities                                           (100,000)                 -                      -
                                                                       --------------      --------------          -------------
                        Net cash (used in) provided by operating
                           activities                                        (586,056)          2,846,759              1,045,450
                                                                       --------------      --------------          -------------
</TABLE>

                                      F-6 
<PAGE>


                   HOSPOSABLE PRODUCTS, INC. AND SUBSIDIARIES
                   ------------------------------------------

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------

              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
              ----------------------------------------------------

                                    continued
                                    ---------
<TABLE>
<CAPTION>



CASH FLOWS FROM INVESTING ACTIVITIES:
<S>                                                                        <C>                <C>                  <C>        
    Capital expenditures                                                   (3,046,095)        (1,505,141)          (2,433,372)
    Cash proceeds from sale of fixed asset                                         -             130,000                   -
    Sale of marketable securities                                           1,488,783          1,049,936            2,265,376
    Purchase of marketable securities                                        (573,362)                -                    -
                                                                       --------------     --------------       --------------
                        Net cash used in investing activities              (2,130,674)          (325,205)            (167,996)
                                                                       --------------     --------------       --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Utilization of acquisition escrow fund                                    251,673            712,737              843,150
    Principal payments under borrowing agreements                            (383,787)          (340,000)          (2,520,114)
    Bank borrowing                                                          1,500,000                 -                    -
    Proceeds from issuance of common stock                                         -                  -                 8,500
                                                                       --------------     --------------       --------------
                        Net cash provided by (used in) financing       
                           activities                                       1,367,886            372,737           (1,668,464)
                                                                       --------------     --------------       -------------- 
                        Net (decrease) increase in cash and cash      
                           equivalents                                     (1,348,844)         2,894,291             (791,010)

CASH AND CASH EQUIVALENTS, beginning of year                                2,919,469             25,178              816,188
                                                                       --------------     --------------       --------------

CASH AND CASH EQUIVALENTS, end of year                                 $    1,570,625     $    2,919,469       $       25,178
                                                                       ==============     ==============       ==============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Cash paid during the year for-
       Interest                                                        $      317,805     $      296,530       $      368,920
       Income taxes                                                            19,053            287,037              863,046
</TABLE>

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

                                      F-7



<PAGE>



                   HOSPOSABLE PRODUCTS, INC. AND SUBSIDIARIES
                   ------------------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

                        DECEMBER 31, 1996, 1995 AND 1994
                        --------------------------------
 

1.  SUMMARY OF SIGNIFICANT
    ACCOUNTING POLICIES
    -------------------

Nature of Business
------------------

Hosposable Products, Inc., a New York corporation incorporated in 1971, and its
wholly owned subsidiaries, Bridgewater Manufacturing Corp., a New Jersey
corporation ("Bridgewater"), IFC Disposables, Inc., a Tennessee corporation
("IFC"), and 3290441 Canada Inc., a newly formed Canadian corporation,
manufacture disposable medical products, wiping products, and nonwoven roll
goods. The disposable medical products are produced by various converting
equipment, some of which utilize in-house "airlaid" processing technology and
equipment. The disposable medical products include bedpads and adult briefs
incorporating unique designs for incontinent patients. Wiping products include
disposable airlaid nonwoven patient washcloths and general wiping products in
addition to other nonwoven materials which are purchased and converted in-house.

Principles of Consolidation
---------------------------

The consolidated financial statements include the accounts of Hosposable
Products, Inc. and its wholly owned subsidiaries, Bridgewater, IFC, and 3290441
Canada Inc. (collectively, the "Company"). All significant intercompany balances
and transactions have been eliminated in consolidation.

Reclassifications
-----------------

Certain prior year amounts have been reclassified to conform with the current
year's presentation.

Utilization of Estimates
------------------------

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

                                      F-8
<PAGE>

Cash Equivalents
----------------

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

Inventories
-----------

Inventories are stated at the lower of cost (first-in, first-out) or market.

Property, Plant and Equipment
-----------------------------

Property, plant and equipment are recorded at cost. Depreciation of property,
plant and equipment is provided utilizing the straight-line method over the
estimated useful life of the respective assets ranging from 5 to 30 years.
Leasehold improvements are amortized on a straight-line basis over the term of
the related leases or the estimated useful life, whichever is shorter.

Stock-Based Compensation
------------------------

Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock Based Compensation," encourages, but does not require companies to record
compensation cost for stock-based employee compensation plans at fair value. The
Company has chosen to continue to account for stock-based compensation awards to
employees and directors using the intrinsic value method prescribed in
Accounting Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued
to Employees," and related Interpretations. Accordingly, compensation cost for
stock options awarded to employees and directors is measured as the excess, if
any, of the quoted market price of the Company's stock at the date of grant over
the amount an employee or director must pay to acquire the stock.

As required, the Company has adopted SFAS No. 123 to account for stock-based
compensation awards to outside consultants and affiliates. Accordingly,
compensation costs for stock option awards to outside consultants and affiliates
is measured at the date of grant based on the fair value of the award using the
Black-Scholes option pricing model. (Note 7).

Income Taxes
------------

The Company files a consolidated federal income tax return. Deferred tax assets
and liabilities are recognized for the future tax consequences attributable to
differences between financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the
year in which those temporary differences are expected to be recovered or
settled. Deferred income taxes result primarily from differences between
financial and tax reporting of depreciation and the treatment of acquisition
costs (Note 9).

Per Share Data
--------------

Per share data is based on the weighted average number of common shares
outstanding.

                                      F-9
<PAGE>

2.  MARKETABLE SECURITIES
    ---------------------

Marketable securities at December 31 consisted of:

                                         1996          1995
                                         ----          ----

       U.S. Government obligations    $        -   $   623,048
       Municipal bonds                   200,156       654,035
       Corporate bonds                   246,656             -
       Other                                   -        85,150
                                      ----------   -----------
                                      $  446,812   $ 1,362,233
                                      ==========   ===========

As of December 31, 1996 and 1995, all marketable securities have been classified
as available for sale. These securities are stated at market value. As cost
approximates market, any gross unrealized holding gains or losses were
immaterial to the financial statements.

3.  INVENTORIES
    -----------

Inventories at December 31 consisted of:

                                     1996            1995
                                     ----            ----
      Raw materials               $ 3,106,833    $  2,308,121
      Finished goods                1,341,403       1,098,959
                                  -----------    ------------
                                  $ 4,448,236    $  3,407,080
                                  ===========    ============

4.  PROPERTY, PLANT AND EQUIPMENT
    -----------------------------

Property, plant and equipment at December 31 consisted of the following:

                                                    1996          1995      
                                                    ----          ----
                                              
   Land                                        $    374,133   $    374,133
   Building and improvements                      3,645,793      3,639,338
   Capitalized equipment leases                      72,311         72,311
   Machinery and equipment                       14,075,163     11,405,104
   Trucks and automobiles                            68,198         68,198
   Furniture, fixtures and equipment              1,014,493        659,913
   Leasehold improvements                           128,760        113,759
                                               ------------   ------------
                                                 19,378,851     16,332,756
   Less- Accumulated depreciation             
      and amortization                            7,834,375      6,887,558
                                               ------------   ------------
                                               $ 11,544,476   $  9,445,198
                                               ============   ============
                                   
Depreciation expense amounted to $946,798, $951,343 and $1,016,061 in 1996, 
1995 and 1994 respectively.

                                      F-10
<PAGE>



5.  LONG-TERM DEBT
    --------------

Long-term debt at December 31 consisted of the following:

                                                     1996          1995
                                                     ----          ----
     Authority Bonds - II (a)                     $4,305,000    $4,655,000
     Notes payable (b)                             1,463,681         -
                                                  ----------    ----------
                   Total long-term debt            5,768,681     4,655,000
    
     Less:
         Unamortized discount on bonds                12,663        15,195
         Current maturities                          579,285       350,000
                                                  ----------    ----------
                                                  $5,176,733    $4,289,805
                                                  ==========    ==========

Maturities of long-term debt over the next five years are as follows:

          1997                              $579,285
          1998                               594,285
          1999                               609,285
          2000                               629,285
          2001                               654,285
                         
(a)  In December 1993, the Company entered into a loan agreement with the New
     Jersey Economic Development Authority (the "Authority") and First Union
     National Bank ("First Union"), whereby the Authority issued Economic
     Development Bonds with an aggregate principal amount of $5,325,000 to be
     loaned to the Company to finance the acquisition of a building and the land
     upon which it is situated, as well as to purchase machinery and equipment
     to add a production line. As of December 31, 1996, total proceeds of
     approximately $5,229,000 had been distributed to the Company in order to
     complete its purchase of the above-mentioned land and building and
     machinery and equipment. The remaining balance is held in escrow, as
     identified in the accompanying consolidated balance sheets, and will be
     distributed to the Company as machinery and equipment is purchased. The
     bonds are secured by a letter of credit provided by First Union which has
     obtained: (i) a first mortgage and security interest on the building and
     land that was acquired; (ii) an assignment of all of the Company's right,
     title and interest in and to all leases with respect to the building and
     land; and (iii) a security interest in the machinery and equipment
     purchased with a portion of the bond proceeds.

     The agreement contains several restrictive financial covenants which
     include: (i) minimum net worth requirement; (ii) maximum leverage ratio;
     (iii) minimum debt service coverage ratio; (iv) minimum current ratio; and
     (v) maximum amount of annual capital expenditures.

     The remaining bond maturity dates range from December 1, 1997 to December
     1, 2013, and bear interest at fixed rates from 4.1% to 5.7%. The bonds
     mature at various amounts throughout this period ranging from $140,000 to
     $940,000. The bonds maturing December 1, 2007, 2009 and 2013 are to be
     redeemed commencing December 1, 2005 and on each December 1 thereafter
     through sinking fund payments ranging from $165,000 to $255,000.

(b)  In October 1996, the Company entered into a loan agreement with First Union
     in the amount of $1,500,000 bearing interest at 8.12%. The proceeds of the
     loan were used to acquire production machinery. The principal is repayable
     in monthly installments of $17,857 through November 2003. The loan is
     secured by the machinery purchased.

                                      F-11
<PAGE>


Line of Credit
--------------

The Company has available a secured line of credit in the amount of $2,000,000
from First Union which expires on July 31, 1997, and bears interest at the prime
rate (8.25% at December 31, 1996). The Company had no borrowings outstanding
under the line at December 31, 1996 and 1995. Under the agreement, the Company
is required to provide First Union a first priority lien on accounts receivable
and inventory (Note 13).

6.  INCOME TAXES
    ------------

Components of income tax (benefit) expense are as follows:

                            Current          Deferred           Total
                            -------          --------           -----

      1996:
          Federal         $  (705,540)      $   177,267      $  (528,273)
          State                15,475           (95,098)         (79,623)
                         ------------      ------------     ------------
                          $  (690,065)      $    82,169      $  (607,896)
                         ============      ============     ============

      1995:
          Federal         $   (19,407)      $  (119,339)     $  (138,746)
          State                12,482           (36,818)         (24,336)
                         ------------      ------------     ------------
                          $    (6,925)      $  (156,157)     $  (163,082)
                         ============      ============     ============

      1994:
          Federal         $   581,251       $   (73,302)     $   507,949
          State               120,249           (14,850)         105,399
                         ------------      ------------     ------------
                          $   701,500       $   (88,152)     $   613,348
                         ============      ============     ============


The actual tax expense differed from the "expected" amounts by applying the U.S.
federal income tax rate of 34% as follows:
<TABLE>
<CAPTION>

                                                                          Years Ended December 31
                                                                  ----------------------------------
                                                                   1996            1995         1994
                                                                   ----            ----         ----
<S>                                                           <C>                <C>              <C>
        Federal income tax (benefit) expense at statutory 
          rate                                                   $(565,449)      $(126,578)   $560,897
        State income taxes, net of federal income tax
          (benefit) expense                                        (52,551)        (16,062)     69,563
        Other                                                       10,104         (20,442)    (17,112)
                                                                 ---------       ---------    --------
        Actual tax (benefit) expense                             $(607,896)      $(163,082)   $613,348
                                                                 =========       =========    ========
</TABLE>
                                      F-12
<PAGE>


7.   STOCK-BASED COMPENSATION PLANS
     ------------------------------

The Company has two stock option plans, the 1991 Stock Option Plan (the "1991
Plan") and the 1987 Stock Option Plan (the "1987 Plan"). The Company accounts
for options granted to employees and directors under these plans under APB No.
25, under which no compensation cost has been recognized for stock options
granted. Had compensation cost for these stock options been determined
consistent with SFAS No. 123, the Company's pro forma net loss and loss per
share would have been as follows:

                                     1996          1995
                                     ----          ----
    Net loss:
          As reported            $(1,055,190)   $(209,206)
          Pro forma               (1,473,271)    (362,766)
 
    Primary loss per share:
          As reported                   (.62)        (.12)
          Pro forma                     (.87)        (.21)

The effects of applying SFAS 123 in this pro forma disclosure are not indicative
of future amounts. SFAS 123 does not apply to awards prior to 1995, and
additional awards in future years are anticipated.

During 1991 and 1987, the stockholders of the Company approved the adoption of
the 1991 Plan and the 1987 Plan, respectively. Each plan authorizes the granting
of stock options, the exercise of which would allow up to an aggregate of
250,000 shares of the Company's common stock to be acquired by the holders of
the stock options. Options under these plans may be either Incentive Stock
Options or Nonqualified Stock Options. Stock Options may be granted to
directors, employees, and consultants and/or affiliates of the Company.
Incentive Stock Options may be granted to employees only, while Nonqualified
Stock Options may be granted to directors, employees, and consultants and/or
affiliates of the Company. The exercise price of the Nonqualified and Incentive
Stock Options must be equal to at least 85% and 100%, respectively, of the fair
market value of the common stock on the date of grant. Any plan participant who
is granted Incentive Stock Options and possesses more than 10% of the voting
rights of the Company's outstanding common stock must be granted an option price
with at least 110% of the fair market value on the date of grant and the option
must be exercised within five years from the date of grant. Under the Company's
1991 Plan and 1987 Plan, options have been granted to directors, employees and
consultants for terms of up to ten years at not less than the fair value of the
shares at the dates of grant and are exercisable in whole or in part at stated
times from the date of grant up to two years from the date of grant. No further
grants will be issued under the 1987 Plan. At December 31, 1996, options to
purchase 137,000 and 25,000 shares of Common Stock were exercisable with respect
to the 1991 Plan and the 1987 Plan, respectively. 



                                      F-13
<PAGE>

<TABLE>
<CAPTION>

Option activity during 1996, 1995 and 1994 is summarized as follows:
                                                1996                        1995                         1994
                                       ---------------------       ----------------------       ---------------------
                                                    Weighted                     Weighted                  Range
                                                     Average                      Average                   of
                                                    Exercise                     Exercise                 Exercise
                                       Shares        Price         Shares         Price         Shares     Price
                                       ------        -----         ------         -----         ------     -----

<S>                                    <C>         <C>              <C>         <C>             <C>      <C>     <C> 
Outstanding, beginning of year         106,000     $   7.04         88,700      $  4.73         93,700   $2.50 - 6.00
       Granted                         188,000         7.46         65,000         6.90             -            -
       Exercised                            -           -               -           -           (2,000)       4.25
       Expired                         (16,000)        5.78        (47,700)        3.64         (3,000)   2.50 - 6.00
       Canceled/surrendered            (29,000)        7.25             -           -               -            -
                                       --------                    --------                     -------
Outstanding, end of year               249,000         7.22        106,000         7.04         88,700    4.25 - 6.00

Exercisable at end of year             162,000         7.10        106,000         7.04         88,700    4.25 - 6.00


Weighted average fair value of
    options granted                       3.35                        2.36

</TABLE>

The fair value of options at date of grant was estimated using the Black-Scholes
pricing model with the following weighted average assumptions.

                                                 1996           1995
                                                 ----           ----
     Expected life (years)                       5.00           3.15
     Risk-free interest rates                    6.32%          5.32%
     Volatility                                 39.59%         40.56%
     Dividend yield                              0.00%          0.00%

The following table summarizes information with respect to stock options
outstanding at December 31, 1996:
<TABLE>
<CAPTION>


                                         Options Outstanding                            Options Exercisable
                       -----------------------------------------------------    ----------------------------------
<S>                      <C>                <C>                 <C>                 <C>               <C>
                           Number             Weighted                                 Number
                        Outstanding           Average                               Exercisable
       Range                 at              Remaining            Weighted               at               Weighted
    of Exercise         December 31,        Contractual           Average           December 31,          Average
      Prices                1996                Life           Exercise Price           1996           Exercise Price
   ------------       -------------         -----------        --------------       -------------      ---------------
  $5.00 - $7.50          249,000               7.83             $   7.22               162,000             $7.10

</TABLE>
                                      F-14
<PAGE>


8.   WRITE-DOWN OF ASSETS
     --------------------

During the fourth quarter of 1995, the Company recorded a charge of $550,000
($340,000 or $.20 per share after tax) for selected asset write-downs including
machinery and equipment, leasehold improvements and leased property. The charge
resulted from management's decision to dispose of certain machinery and accrue
for underutilized space at its IFC facility.

9.   1996 FOURTH QUARTER ADJUSTMENTS
     -------------------------------

Acquisition Costs
-----------------

During the fourth quarter of 1996, the Company incurred approximately $550,000
($350,000 or $.21 per share after tax) for professional services in connection
with its acquisition described in Note 13.

Accounts Receivable
-------------------

During the fourth quarter of 1996, the Company wrote off against earnings
approximately $400,000 ($250,000 or $.15 per share after tax) of accounts
receivable balances.

10.  RELATED-PARTY TRANSACTIONS
     --------------------------

On July 10, 1990, the Company entered into a six-year marketing and sales
support agreement with a significant shareholder, G.H. Wood+Wyant Inc.
("Wood+Wyant"), pursuant to which the Company would be paid by Wood+Wyant, over
a five-year period, for providing services based upon and in respect of its
airlaid fabric production and marketing expertise. At the closing, $100,000 was
paid and thereafter $200,000 was payable on June 30 and December 31 of each year
through December 1994. Income recognized in connection with this agreement
amounted to $166,662 in 1996 and $316,667 in each of the two years ended 1995
and 1994. There was no deferred income at December 31, 1996 as the agreement has
expired. Deferred income of $166,662 is included in accrued expenses as of
December 31, 1995.

Sales made to Wood+Wyant amounted to approximately $283,898, $222,000 and
$373,000 in 1996, 1995 and 1994, respectively. Purchases made from Wood+Wyant
amounted to approximately $2,167,440, $1,040,000 and $261,799 in 1996, 1995 and
1994, respectively.

11.  COMMITMENTS
     -----------

The Company occupies manufacturing and office facilities under an operating
lease which expires on December 31, 1997. The minimum rental commitment under
this lease is $448,480.

Aggregate rental expense amounted to $193,744 (net of sublease income of
$140,000 and $100,000 previously provided for (Note 8)), $410,148 (net of
sublease income of $152,000) and $525,301 for the years ended December 31, 1996,
1995 and 1994, respectively.

The Company maintains a consulting agreement with its former president which
expires on July 9, 1998. The aggregate commitment for future fees on this
agreement is approximately $250,000.

12.  SIGNIFICANT CUSTOMERS/
     CONCENTRATIONS OF CREDIT
     ------------------------

The Company operates primarily in the disposable health care products industry.

For the years ended December 31, 1996, 1995 and 1994, the largest customer
accounted for approximately 10.5%, 11.8% and 11.1% of net sales, respectively.

                                      F-15
<PAGE>



13.  SUBSEQUENT EVENTS
     -----------------

Acquisition of the Canadian Operations of Wood+Wyant
----------------------------------------------------

On March 18, 1997, 3290441 Canada Inc., a wholly owned and newly formed
subsidiary of the Company, acquired the Canadian business and operating assets
of Wood+Wyant and assumed all of its operating liabilities. The total fair value
of the consideration for this transaction was approximately $14,000,000. In
consideration for this sale, 3290441 Canada Inc. paid $3,731,343 in cash, issued
a promissory note ("Note") in the amount of $3,181,150 (the amount of the Note
is subject to adjustment and will be exchanged for Class A Preferred shares of
3290441 Canada Inc. on the basis of one share for each dollar of unpaid
principal amount of Note), 3,800,000 Class B Preferred shares and 1,000,000
Class E Preferred shares. The Class A and Class B shares carry cumulative
dividends of 4% and 3.999999, respectively, and are mandatorily redeemable over
10 years. The Class E Preferred shares are exchangeable into 1,000,000 shares of
the Company's common stock.

The acquisition will be accounted for in a manner similar to a
pooling-of-interests since the Companies were deemed to be under common control.

Summary financial information of Wood+Wyant's Canadian operations follows (in
U.S. $):

                                             December 31,
                                                1996
                                             ----------
                                             (Unaudited)
    
    Balance sheet:
        Current assets                    $   13,736,000
        Current liabilities                   10,416,000
        Long-term debt                         2,211,000
        Net assets                             8,881,000
        Total assets                          22,134,000

                                          For the Year Ended
                                          December 31, 1996
                                          ------------------
                                             (Unaudited)
    Operations:
        Revenues                          $   53,226,000
        Income before taxes                    2,336,000
        Net income                             1,351,000


                                      F-16
<PAGE>


Financing Arrangements
-----------------------

On March 14, 1997, the Company borrowed $4,000,000 from First Union National
Bank of which $2,000,000 is a term loan repayable in monthly principal
installments of $33,333 plus interest at 9.43%, maturing on March 13, 2002 and
$2,000,000 is a revolving line of credit maturing on April 1, 1999 with interest
at the prime rate. A portion of these proceeds was used to finance the
acquisition of Wood+Wyant.

This new financing replaced all previous existing lines of credit (Note 5).


                                      F-17
<PAGE>

                   HOSPOSABLE PRODUCTS, INC. AND SUBSIDIARIES
                   ------------------------------------------

                        VALUATION AND QUALIFYING ACCOUNTS
                        ---------------------------------

                FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, 1994
                -------------------------------------------------

<TABLE>
<CAPTION>

                                                   Balance at        Charged to                             Balance
                                                   Beginning         Costs and                               at End
                  Description                       of Year           Expenses        Deductions (1)        of Year
                  -----------                       -------           --------        --------------        -------
<S>                  <C>                           <C>                <C>                 <C>              <C>     
       ALLOWANCE FOR DOUBTFUL ACCOUNTS:
           Year ended December 31 -
                     1996                          $133,048           $513,232            $390,373         $255,907
                     1995                          $118,759           $125,399            $111,110         $133,048
                     1994                          $ 95,643            $37,000             $13,884         $118,759



                                                         (1) Represents amounts written off, net of recoveries

                                      
</TABLE>

                                      F-18