SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                   _______

                                  FORM 10-Q


X     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the quarterly period ended       March 31, 2005
                                        --------------------

      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   0-5485
                                             --------

                            VISKASE COMPANIES, INC.
                            -----------------------
             (Exact name of registrant as specified in its charter)

  Delaware                                               95-2677354
------------                                           --------------
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                      Identification No.)

625 Willowbrook Centre Parkway, Willowbrook, Illinois        60527
-----------------------------------------------------      ---------
(Address of principal executive offices)                  (Zip Code)

     Registrant's telephone number, including area code:  (630) 789-4900

   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
                                                     ---            ---

   Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes          No    X
                                                  ---         ---

   Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court. Yes    X        No
                                 ---             ---
   As of May 13, 2005, there were 9,715,954 shares outstanding of the
registrant's Common Stock, $0.01 par value.

                                                     1
<PAGE>





                          Viskase Companies, Inc.
                                  Index



                                                                         Page

PART I - FINANCIAL INFORMATION
------------------------------

Item 1.  Consolidated Financial Statements ................................ 3

 Consolidated Balance Sheets as of March 31, 2005 and December 31, 2004 ... 3

 Consolidated Statements of Operations for the Three Months Ended
   March 31, 2005 and March 31, 2004 ...................................... 4

 Consolidated Statements of Cash Flows for the Three Months Ended
   March 31, 2005 and March 31, 2004 ...................................... 5

 Notes To Consolidated Financial Statements ............................... 6

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations ........................................... 24

Item 3.  Quantitative and Qualitative Disclosures About Market Risk ...... 35

Item 4.  Controls and Procedures ......................................... 35

PART II - OTHER INFORMATION
----------------------------

Item 1.  Legal Proceedings ............................................... 36

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds ..... 36

Item 6.  Exhibits ........................................................ 36














                                                     2
<PAGE>

                VISKASE COMPANIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS
      (In Thousands, Except for Number of Shares and Per Share Amounts)

<TABLE>
<CAPTION>
                                                         March 31, 2005            December 31, 2004
                                                         --------------            -----------------
<S>                                                 <C>                        <C>
ASSETS
Current assets:
 Cash and cash equivalents                                   $28,594                    $30,255
 Restricted cash                                               2,584                      3,461
 Receivables, net                                             29,676                     30,509
 Inventories                                                  33,658                     32,268
 Other current assets                                         10,123                     10,469
                                                             -------                     ------
  Total current assets                                       104,635                    106,962

Property, plant and equipment,
 including those under capital leases                        112,973                    112,158

Less accumulated depreciation and amortization                21,569                     19,312
                                                             -------                    -------
 Property, plant and equipment, net                           91,404                     92,846

Deferred financing costs, net                                  4,155                      4,060
Other assets                                                   9,059                      9,564
                                                            --------                   --------
    Total Assets                                            $209,253                   $213,432
                                                            ========                   ========

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
 Short-term debt including current portion of long-term
  debt and obligations under capital leases                     $325                       $384
 Accounts payable                                             14,180                     17,878
 Accrued liabilities                                          28,034                     25,820
 Current deferred income taxes                                 1,481                      1,481
                                                            --------                   --------
  Total current liabilities                                   44,020                     45,563

Long-term debt including obligations under capital leases    101,533                    100,962

Accrued employee benefits                                     66,183                     66,715
Noncurrent deferred income taxes                              11,993                     12,205

Commitments and contingencies

Stockholders' deficit:
 Preferred stock, $.01 par value; none outstanding
 Common stock, $.01 par value; 10,670,053 shares
  issued and 9,665,493 shares outstanding at
  March 31, 2005; and 10,670,053 shares issued
  and 9,632,022 shares outstanding at December 31, 2004          106                        106
 Paid in capital                                               1,895                      1,895
 Accumulated (deficit)                                       (22,437)                   (21,310)
 Less 805,270 treasury shares, at cost                          (298)                      (298)
 Accumulated other comprehensive income                        6,270                      7,608
 Unearned restricted stock issued for future service             (12)                       (14)
                                                            --------                   --------
  Total stockholders' (deficit)                              (14,476)                   (12,013)
                                                            --------                   --------
    Total Liabilities and Stockholders' Deficit             $209,253                   $213,432
                                                            ========                   ========
</TABLE>

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

                                                     3

<PAGE>



                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
     (In Thousands, Except for Number of Shares and Per Share Amounts)

<TABLE>
<CAPTION>
                                              Quarter                Quarter
                                               Ended                  Ended
                                               March                  March
                                             31, 2005               31, 2004
                                             --------               --------
<S>                                      <C>                  <C>
NET SALES                                     $49,524                $50,615

COSTS AND EXPENSES
 Cost of sales                                 39,992                 40,258
 Selling, general and administrative            7,396                  7,817
 Amortization of intangibles                      269                    270
 Restructuring expense                            387                    668
                                              -------                -------

OPERATING INCOME                                1,480                  1,602

 Interest income                                 (199)                  (144)
 Interest expense                               3,066                  3,091
 Other (income) expense, net                   (1,253)                 2,597
                                              -------                -------

(LOSS) BEFORE INCOME TAXES                       (134)                (3,942)

 Income tax provision (benefit)                   994                   (180)
                                              -------                -------

NET (LOSS)                                     (1,128)                (3,762)

 Other comprehensive income (loss):
 Foreign currency translation adjustments      (1,338)                   617
                                              -------                -------

COMPREHENSIVE (LOSS)                          ($2,466)               ($3,145)
                                              =======                =======

WEIGHTED AVERAGE COMMON SHARES
 - BASIC                                    9,645,039             10,670,053
                                            =========             ==========

PER SHARE AMOUNTS:
(LOSS) EARNINGS PER SHARE
 - BASIC AND DILUTED
Net (loss)                                      ($.12)                 ($.35)
                                            =========             ==========
</TABLE>

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

                                                     4

<PAGE>



                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                   Quarter              Quarter
                                                                    Ended                Ended
                                                                    March                March
                                                                   31, 2005             31, 2004
                                                                   --------             --------
<S>                                                            <C>                <C>
Cash flows from operating activities:
 Net income (loss)                                                 ($1,128)             ($3,762)

 Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities:
   Depreciation and amortization under capital lease                 2,767                2,727
   Amortization of intangibles                                         269                  270
   Amortization of deferred financing fees                             173                   27
   Increase (decrease) in deferred income taxes                        193                 (351)
   Foreign currency translation loss                                   244                  567
   Loss in disposition of assets                                         6                  276
   Bad debt provision                                                   61                   32
   Non-cash interest on 8% notes                                       577                  495

   Changes in operating assets and liabilities:
   (net of effects of dispositions)
     Receivables                                                       111                  681
     Inventories                                                    (2,040)              (2,847)
     Other current assets                                              119                 (437)
     Accounts payable and accrued liabilities                         (620)              (1,920)
     Other                                                             127                5,089
                                                                  ---------            ---------

   Total adjustments                                                 1,987                4,609
                                                                  ---------            ---------


     Net cash provided by operating
      activities before reorganization expense                         859                  847

Net cash used for reorganization

Cash flows from investing activities:
 Capital expenditures                                               (2,788)                (805)
 Proceeds from disposition of assets                                    18                1,217
 Restricted cash                                                       877               11,748
                                                                  ---------            ---------

     Net cash provided by (used in) investing activities            (1,893)              12,160

Cash flows from financing activities:
 Deferred financing costs                                             (268)
 Repayment of long-term borrowings
  and capital lease obligation                                         (43)
 (10,670)
                                                                  ---------            ---------
     Net cash (used in) financing activities                          (311)             (10,670)

Effect of currency exchange rate changes on cash                      (316)                (203)
                                                                  ---------            ---------
Net increase (decrease) in cash and equivalents                     (1,661)               2,134
Cash and equivalents at beginning of period                         30,255               23,160
                                                                  ---------            ---------
Cash and equivalents at end of period                              $28,594              $25,294
                                                                  =========            =========

Supplemental cash flow information:
 Interest paid less capitalized interest                             ($278)              $1,132
 Income taxes paid                                                    $561                  $23
</TABLE>

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

                                                     5

<PAGE>


                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

1.  Summary of Significant Accounting Policies

    General

    Viskase Companies, Inc. is a Delaware corporation organized in 1970. As
    used herein, the "Company" means Viskase Companies, Inc. and its
    subsidiaries.

    Nature of Operations

    The Company is a producer of non-edible cellulosic and plastic casings
    used to prepare and package processed meat products, and to provide
    value-added support services relating to these products, for some of the
    largest global consumer products companies. The Company operates seven
    manufacturing facilities and eight distribution centers in North America,
    Europe and Latin America and, as a result, is able to sell its products
    in most countries throughout the world.

    Principles of Consolidation

    The consolidated financial statements include the accounts of the
    Company. Intercompany accounts and transactions have been eliminated in
    consolidation.

    Reclassification

    Reclassifications have been made to the prior years' financial statements
    to conform to the 2005 presentation.

    Use of Estimates in the Preparation of Financial Statements

    The preparation of financial statements includes the use of estimates and
    assumptions that affect a number of amounts included in the Company's
    financial statements, including, among other things, pensions and other
    post-retirement benefits and related disclosures, inventories valued
    under the last-in, first-out method, reserves for excess and obsolete
    inventory, allowance for doubtful accounts, restructuring charges and
    income taxes. Management bases its estimates on historical experience
    and other assumptions that it believes are reasonable. If actual amounts
    are ultimately different from previous estimates, the revisions are
    included in the Company's results for the period in which the
    actual amounts become known. Historically, the aggregate differences, if
    any, between the Company's estimates and actual amounts in any year have
    not had a significant effect on the Company's consolidated financial
    statements.

    Cash Equivalents

    For purposes of the statement of cash flows, the Company considers cash
    equivalents to consist of all highly liquid debt investments purchased
    with an initial maturity of approximately three months or less. Due to
    the short-term nature of these instruments, the carrying values
    approximate the fair market value. Cash equivalents and restricted cash
    include $26,707 and $28,272 of short-term investments at March 31, 2005
    and December 31, 2004, respectively. Restricted cash is principally
    cash held as collateral for outstanding letters of credit with a
    commercial bank.

    Inventories

    Domestic inventories are valued primarily at the lower of last-in, first-
    out ("LIFO") cost or market. Remaining inventories, primarily foreign,
    are valued at the lower of first-in, first-out ("FIFO") cost or market.

                                                     6

<PAGE>

                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

    Property, Plant and Equipment

    The Company carries property, plant and equipment at cost less
    accumulated depreciation. Property and equipment additions include
    acquisition of property and equipment and costs incurred for computer
    software purchased for internal use including related external direct
    costs of materials and services and payroll costs for employees directly
    associated with the project. Depreciation is computed on the straight-
    line method over the estimated useful lives of the assets ranging from
    (i) building and improvements - 10 to 32 years, (ii) machinery and
    equipment - 4 to 12 years, (iii) furniture and fixtures - 3 to 12 years
    and (iv) auto and trucks - 2 to 5 years. Upon retirement or other
    disposition, cost and related accumulated depreciation are removed from
    the accounts, and any gain or loss is included in results of operations.

    Deferred Financing Costs

    Deferred financing costs are amortized on a straight-line basis over the
    expected term of the related debt agreement. Amortization of deferred
    financing costs is classified as interest expense.

    Patents

    Patents are amortized on the straight-line method over an estimated
    average useful life of 10 years.

    Goodwill and Intangible Assets

    Intangible assets that have an indefinite useful life are not amortized
    and are tested at least annually for impairment. As part of fresh-start
    accounting, the Company recognized intangible assets that are being
    amortized. Non-compete agreements in the amount of $1,236 are being
    amortized over two years.

    Long-Lived Assets

    The Company continues to evaluate the recoverability of long-lived assets
    including property, plant and equipment, patents and other intangible
    assets. Impairments are recognized when the expected undiscounted future
    operating cash flows derived from long-lived assets are less than their
    carrying value. If impairment is identified, valuation techniques deemed
    appropriate under the particular circumstances will be used to determine
    the asset's fair value. The loss will be measured based on the excess of
    carrying value over the determined fair value. The review for impairment
    is performed at

least once a year or when circumstances warrant.

    Accounts Payable

    The Company's cash management system provides for the daily replenishment
    of its bank accounts for check-clearing requirements. The outstanding
    check balances of $404 and $1,092 at March 31, 2005 and December 31,
    2004, respectively, are not deducted from cash but are reflected in
    Accounts Payable on the consolidated balance sheets.

                                                     7

<PAGE>

                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

    Pensions and Other Post-Retirement Benefits

    The North American operations of the Company and the Company's operations
    in Germany have defined benefit retirement plans covering substantially
    all salaried and full time hourly employees ired prior to March 31, 2003.
    Pension cost is computed using the projected unit credit method. The
    discount rate used approximates the average yield for high-quality
    corporate bonds as of the valuation date. The Company's funding policy is
    consistent with funding requirements of the applicable Federal and
    foreign laws and regulations.

    United States employees hired after March 31, 2003, who are not covered
    by a collective bargaining agreement, are eligible for a defined
    contribution benefit equal to three percent of base earnings, as defined
    by the plan.

    The United States and Canadian operations of the Company have
    historically provided post-retirement health care and life insurance
    benefits. The Company accrues for the accumulated post-retirement benefit
    obligation that represents the actuarial present value of the anticipated
    benefits. Measurement is based on assumptions regarding such items as the
    expected cost of providing future benefits and any cost sharing
    provisions. The Company terminated post-retirement medical benefits as of
    December 31, 2004 for all active employees and retirees in the United
    States who are not covered by a collective bargaining agreement.

    Income Taxes

    Deferred tax assets and liabilities are measured using enacted tax laws
    and tax rates expected to apply to taxable income in the years in which
    those temporary differences are expected to be recovered or settled. The
    effect on deferred tax assets and liabilities due to a change in tax
    rates is recognized in income in the period that includes the enactment
    date. In addition, the amounts of any future tax benefits are reduced by
    a valuation allowance to the extent such benefits are not expected to be
    realized on a more likely than not basis.

    Net (Loss) Per Share

    Net (loss) per share of common stock is based upon the weighted-average
    number of shares of common stock outstanding during the year. No effect
    has been given to common stock equivalents, as their effect is anti-
    dilutive on loss per share.

    Other Comprehensive Income

    Comprehensive income includes all other non-shareholder changes in
    equity. Changes in other comprehensive income in 2005 and 2004 resulted
    from changes in foreign currency translation adjustments.

    Revenue Recognition

    The Company's revenues are recognized at the time products are shipped to
    the customer, under F.O.B. Shipping Point terms or under F.O.B. Port
    terms. Revenues are net of any discounts, rebates and allowances. The
    Company records all labor, raw materials, in-bound freight, plant
    receiving and purchasing, warehousing, handling and distribution costs as
    a component of cost of goods sold.

    Accounting for Stock-Based Compensation

    The Company uses a fair value method to account for options granted to
    employees for the purchase of common stock. No compensation expense is
    recognized on the grant date, since at that date, the

                                                     8

<PAGE>

                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

    option price equals the market price of the underlying common stock. The
    pro forma effect of accounting for stock options under a fair value
    method is as follows:
<TABLE>
<CAPTION>

        (Dollars in Thousands, Except Per Share Amounts)               2005                2004
                                                                      ------              ------
<S>                                                         <C>                 <C>



    Net income, as reported                                         $(1,128)             $25,317
    Deduct: Total stock-based compensation expense under a
    fair value based method, net of related tax effects                 (67)                 (22)
                                                                    --------             --------

    Net income, pro forma                                           $(1,195)             $25,295
                                                                    ========             ========




Basic and diluted earnings per share, as reported                $(0.12)               $2.53
    Basic and diluted earnings per share, pro forma                  $(0.12)               $2.53
</TABLE>
    Accounting Standards

    In November 2004, the FASB issued SFAS No. 151 ("SFAS 151"), "Inventory
    Costs - an Amendment of ARB No. 43 Chapter 4." SFAS 151 requires that
    items such as idle facility expense, excessive spoilage, double freight,
    and rehandling be recognized as current-period charges rather than being
    included in inventory regardless of whether the costs meet the criterion
    of abnormal as defined in ARB 43. SFAS 151 is applicable for inventory
    costs incurred during fiscal years beginning after June 15, 2005. The
    Company plans to adopt this standard beginning the first quarter of
    fiscal year 2006 and does not believe the adoption will have a material
    impact on its financial statements as such costs have historically been
    expensed as incurred.

    In December 2004, the FASB issued SFAS No. 153 ("SFAS 153"), "Exchanges
    of Nonmonetary Assets - an Amendment of APB Opinion No. 29" which
    addresses the measurement of exchanges of nonmonetary assets and
    eliminates the exception from fair value accounting for nonmonetary
    exchanges of similar productive assets and replaces it with an exception
    for exchanges that do not have commercial substance. SFAS 153 specifies
    that a nonmonetary exchange has commercial substance if the future cash
    flows of an entity are expected to change significantly as a result of
    the exchange. This statement is effective for nonmonetary asset exchanges
    occurring in fiscal periods beginning after June 15, 2005 and is not
    expected to have a significant impact on the Company's financial
    statements.

    In December 2004, the FASB issued SFAS No. 123 (revised 2004) ("SFAS
    123R"), "Share-Based Payment."  SFAS 123R sets accounting requirements
    for "share-based" compensation to employees, requires companies to
    recognize in the income statement the grant-date fair value of stock
    options and other equity-based compensation issued to employees and
    disallows the use of a fair value method of accounting for stock
    compensation. SFAS 123R is applicable for all fiscal periods beginning
    after June 15, 2005. The Company is currently evaluating the impact this
    statement will have on the financial statements.

    In March 2005, the FASB issued Interpretation No. 47 ("FIN 47"),
    "Accounting for Conditional Asset Retirement Obligations." FIN 47
    clarifies that the term "conditional asset retirement obligation" as
    used in SFAS No. 143, "Accounting for Asset Retirement Obligations,"
    refers to a legal obligation to perform an asset retirement activity in
    which the timing and (or) method of settlement are conditional
    on a future event that may or may not be within the control of the
    entity. FIN 47 is effective no later than the end of fiscal years ending
    after December 15, 2005. The Company is currently assessing the
    impact of FIN 47 on its consolidated financial statements.

                                                     9

<PAGE>

                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

2.  Cash and Cash Equivalents

<TABLE>
<CAPTION>

                                            March 31, 2005              December 31, 2004
                                            --------------              -----------------

<S>                                   <C>                        <C>
    Cash and cash equivalents                   $28,594                        $30,255
    Restricted cash                               2,584                          3,461
                                                -------                        -------

                                                $31,178                        $33,716
                                                =======                        =======
</TABLE>

    As of March 31, 2005, cash equivalents and restricted cash of $24,122 are
    invested in short-term investments.

3.  Inventories

    Inventories consisted of:

<TABLE>
<CAPTION>

                                            March 31, 2005              December 31, 2004
                                            --------------              -----------------

<S>                                   <C>                        <C>
    Raw materials                               $4,743                       $4,816
    Work in process                             13,755                       13,558
    Finished products                           15,160                       13,894
                                               -------                      -------

                                               $33,658                      $32,268
                                               =======                      =======

</TABLE>
    Approximately 46% of the Company's inventories at March 31, 2005 were
    valued at LIFO. Remaining inventories, primarily foreign, are valued at
    the lower of FIFO cost or market. At March 31, 2005, the LIFO values
    exceeded current manufacturing cost by approximately $91.

4.  Debt Obligations (Dollars in Thousands, Except For Number of Shares and
    Warrants, and Per Share, Per Warrant and Per Bond Amounts)

    On June 29, 2004, the Company issued $90,000 of new 11.5% Senior Secured
    Notes due 2011 ("11.5% Senior Secured Notes") and 90,000 warrants ("New
    Warrants") to purchase an aggregate of 805,230 shares of common stock of
    the Company. The proceeds of the 11.5% Senior Secured Notes and the
    90,000 New Warrants totaled $90,000. The 11.5% Senior Secured Notes have
    a maturity date of, and the New Warrants expire on, June 15, 2011. The
    $90,000 proceeds were used for the (i) repurchase of $55,527 principal
    amount of the Company's 8% Senior Subordinated Notes due December 1, 2008
    (the "8% Notes") at a price of 90% of the aggregate principal amount
    thereof, plus accrued and unpaid interest thereon; (ii) early termination
    of the General Electric Capital Corporation ("GECC") capital lease and
    repurchase of the operating assets subject thereto for a purchase price
    of $33,000; and (iii) payment of fees and expenses associated with the
    refinancing and repurchase of existing debt. In addition, the Company
    entered into a new $20,000 revolving credit facility with a financial
    institution. The revolving credit facility is a five-year facility with a
    June 29, 2009 maturity date.


    Each of the 90,000 New Warrants entitles the holder to purchase 8.947
    shares of the Company's common stock at an exercise price of $.01 per
    share. The New Warrants were valued for accounting purposes using a fair
    value method. Using a fair value method, each of the 90,000 New Warrants
    was valued at $11.117 for an aggregate fair value of the warrant issuance
    of $1,001. The remaining $88,899 of aggregate proceeds were allocated to
    the carrying value of the 11.5% Senior Secured Notes as of June 29, 2004.

                                                     10

<PAGE>

                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

    Outstanding short-term and long-term debt consisted of:

<TABLE>
<CAPTION>

                                                                  March 31,      December 31,
                                                                    2005              2004
                                                                  ---------      ------------
<S>                                                          <C>              <C>
    Short-term debt, current maturity of long-term debt
     and capital lease obligations:
      Other                                                         $325             $384
                                                                    ----             ----

       Total short-term debt                                        $325             $384
                                                                    ====             ====

    Long-term debt:
     11.5% Senior Secured Notes                                  $89,107          $89,071
     8% Notes                                                     12,298           11,757
     Other                                                           128              134
                                                                --------         --------

       Total long-term debt                                     $101,533         $100,962
                                                                ========         ========
</TABLE>

    New Revolving Credit Facility
    -----------------------------
    On June 29, 2004, the Company entered into a new $20,000 secured
    revolving credit facility ("New Revolving Credit Facility"). The New
    Revolving Credit Facility includes a letter of credit subfacility of
    up to $10,000 of the total $20,000 maximum facility amount. The New

    Revolving Credit Facility expires on June 29, 2009. Borrowings under the
    loan and security agreement governing this New Revolving Credit Facility
    are subject to a borrowing base formula based on percentages of eligible
    domestic receivables and eligible domestic inventory. Under the New
    Revolving Credit Facility, we will be able to choose between two per
    annum interest rate options: (i) the lender's prime rate and (ii)
    LIBOR plus a margin currently of 2.25% (which margin will be subject to
    performance based increases up to 2.50% and decreases down to 2.00%);
    provided that the minimum interest rate shall be at least equal to 3.00%.
    Letter of credit fees will be charged a per annum rate equal to the then
    applicable LIBOR rate margin less 50 basis points. The New Revolving
    Credit Facility also provides for an unused line fee of 0.375% per annum.

    Indebtedness under the New Revolving Credit Facility is secured by liens
    on substantially all of the Company and the Company's domestic
    subsidiaries' assets, with liens (i) on inventory, account receivables,
    lockboxes, deposit accounts into which payments are deposited and
    proceeds thereof, which will be contractually senior to the liens
    securing the 11.5% Senior Secured Notes and the related guarantees
    pursuant to an intercreditor agreement, (ii) on real property, fixtures
    and improvements thereon, equipment and proceeds thereof, which will be
    contractually subordinate to the liens securing the 11.5% Senior Secured
    Notes and such guarantees pursuant to such intercreditor agreement, (iii)
    on all other assets, which will be contractually pari passu with the
    liens securing the 11.5% Senior Secured Notes and such guarantees
    pursuant to such intercreditor agreement.

    The New Revolving Credit Facility contains various covenants which will
    restrict the Company's ability to, among other things, incur
    indebtedness, enter into mergers or consolidation transactions, dispose
    of assets (other than in the ordinary course of business), acquire
    assets, make certain restricted payments, prepay any of the 8% Notes at a
    purchase price in excess of 90% of the aggregate principal amount thereof
    (together with accrued and unpaid interest to the date of such
    prepayment), create liens on our assets, make investments, create
    guarantee obligations and enter into sale and leaseback transactions and
    transactions with affiliates, in each case subject to permitted
    exceptions. The New Revolving Credit Facility also requires that we
    comply with various financial covenants, including meeting a minimum
    EBITDA requirement and limitations on capital expenditures in the
    event our usage of the New Revolving Credit Facility exceeds 30% of the
    facility amount. The New Revolving Credit Facility also requires payment
    of a prepayment premium in the event that it is

                                                     11

<PAGE>

                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

    terminated prior to maturity. The prepayment premium, as a percentage of
    the $20,000 facility amount, is 3% through June 29, 2005, 2% through June
    29, 2006, and 1% through June 29, 2007.

    Old Revolving Credit Facility
    -----------------------------
    The Company had a secured revolving credit facility ("Old Revolving
    Credit Facility") with an initial availability of $10,000 with Arnos
    Corp., an affiliate of Carl C. Icahn. During February 2004, the
    amount of the Old Revolving Credit Facility availability increased by
    $10,000 to an aggregate amount of $20,000. The Old Revolving Credit
    Facility was terminated on June 29, 2004 in connection with the
    issuance of the 11.5% Senior Secured Notes discussed below. Borrowings
    under the Old Revolving Credit Facility bore interest at a rate per annum
    at the prime rate plus 200 basis points.

    There were no short-term borrowings under either of the revolving credit
    facilities during 2004 and 2005.

    11.5% Senior Secured Notes
    --------------------------
    On June 29, 2004, the Company issued $90,000 of 11.5% Senior Secured
    Notes that bear interest at a rate of 11.5% per annum, payable semi-
    annually in cash on June 15 and December 15, commencing on December 15,
    2004. The 11.5% Senior Secured Notes mature on June 15, 2011.

    The 11.5% Senior Secured Notes will be guaranteed on a senior secured
    basis by all of our future domestic restricted subsidiaries that are not
    immaterial subsidiaries (as defined). The 11.5% Senior Secured Notes and
    the related guarantees (if any) are secured by substantially all of the
    tangible and intangible assets of the Company and guarantor subsidiaries
    (if any); and includes the pledge of the capital stock directly owned by
    the Company or the guarantors; provided that no such pledge will
    include more than 65% of any foreign subsidiary directly owned by the
    Company or the guarantor. The Indenture and the security documents
    related thereto provide that, to the extent that any rule is adopted,
    amended or interpreted that would require the filing with the SEC (or any
    other governmental agency) of separate financial statements for any of
    our subsidiaries due to the fact that such subsidiary's capital stock
    secures the Notes, then such capital stock will automatically be
    deemed not to be part of the collateral securing the Notes to the extent
    necessary to not be subject to such requirement. In such event, the
    security documents may be amended, without the consent of any holder of
    Notes, to the extent necessary to release the liens on such capital
    stock.

    With limited exceptions, the 11.5% Senior Secured Notes require that the
    Company maintain a minimum annual level of EBITDA calculated at the end
    of each fiscal quarter as follows:


<TABLE>
<CAPTION>
    Fiscal quarter ending                                      Amount
    ------------------------------------------------           ------
<S>                                                   <C>
    September 30, 2004 through September 30, 2006              $16,000
    December 31, 2006 through September 30, 2008               $18,000
    December 31, 2008 and thereafter                           $20,000
</TABLE>

    unless the sum of (i) unrestricted cash of the Company and its restricted
    subsidiaries as of such day and (ii) the aggregate amount of advances
    that the Company is actually able to borrow under the New Revolving
    Credit Facility on such day (after giving effect to any borrowings
    thereunder on such day) is at least $15,000. The minimum annual level of
    EBITDA covenant is not currently in effect as the Company's unrestricted
    cash and the amount of available credit under the New Revolving Credit
    Facility exceeds $15,000. The Company's EBITDA as of March 31, 2005 would
    have exceeded the required covenant level if the covenant had been in
    effect at that time.

                                                     12

<PAGE>

                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

    The 11.5% Senior Secured Notes limit the ability of the Company to (i)
    incur additional indebtedness; (ii) pay dividends, redeem subordinated
    debt, or make other restricted payments, (iii) make certain investments
    or acquisitions; (iv) issue stock of subsidiaries; (v) grant or permit to
    exist certain liens; (vi) enter into certain transactions with
    affiliates; (vii) merge, consolidate, or transfer substantially all of
    our assets; (viii) incur dividend or other payment restrictions affecting
    certain subsidiaries; (ix) transfer, sell or acquire assets, including
    capital stock of subsidiaries; and (x) change the nature of our business.
    At any time prior to June 15, 2008, the Company may redeem, at its
    option, some or all of the 11.5% Senior Secured Notes at a make-whole
    redemption price equal to the greater of (i) 100% of the aggregate
    principal amount of the 11.5% Senior Secured Notes being redeemed and
    (ii) the sum of the present values of 105 3/4% of the aggregate principal
    amount of such 11.5% Senior Secured Notes and scheduled payments of
    interest on such 11.5% Senior Secured Notes to and including June 15,
    2008, discounted to the date of redemption on a semi-annual basis
    (assuming a 360-day year consisting of twelve 30-day months) at the
    Treasury Rate plus 50 basis points, together with, in each case, accrued
    and unpaid interest and additional interest, if any, to the date of
    redemption. The make-whole redemption price as of March 31, 2005 is
    approximately 126%.

    On or after June 15, 2008, the Company may redeem, at its option, some or
    all of the 11.5% Senior Secured Notes at the following redemption prices,
    plus accrued and unpaid interest to the date of redemption:

    For the periods below            Percentage

    On or after June 15, 2008              105 3/4%
    On or after June 15, 2009              102 7/8%
    On or after June 15, 2010                  100%

    Prior to June 15, 2007, the Company may redeem, at its option, up to 35%
    of the aggregate principal amount of the 11.5% Senior Secured Notes with
    the net proceeds of any equity offering at 111 1/2% of their principal
    amount, plus accrued and unpaid interest to the date of redemption,
    provided that at least 65% of the aggregate principal amount of the 11.5%
    Senior Secured Notes remains outstanding immediately following the
    redemption.

    Within 90 days after the end of each fiscal year ending in 2006 and
    thereafter, for which the Company's Excess Cash Flow (as defined) was
    greater than or equal to $2.0 million, the Company must offer to purchase
    a portion of the 11.5% Senior Secured Notes at 101% of principal amount,
    together with accrued and unpaid interest to the date of purchase, with
    50% of our Excess Cash Flow from such fiscal year ("Excess Cash Flow
    Offer Amount"); except that no such offer shall be required
    if the New Revolving Credit Facility prohibits such offer from being made
    because, among other things, a default or an event of default is then
    outstanding thereunder. The Excess Cash Flow Offer Amount shall be
    reduced by the aggregate principal amount of 11.5% Senior Secured Notes
    purchased in eligible open market purchases as provided in the indenture.

    If the Company undergoes a change of control (as defined), the holders of
    the 11.5% Senior Secured Notes will have the right to require the Company
    to repurchase their 11.5% Senior Secured Notes at 101% of their principal
    amount, plus accrued and unpaid interest to the date of purchase.

    If the Company engages in asset sales, it must either invest the net cash
    proceeds from such sales in its business within a certain period of time
    (subject to certain exceptions), prepay indebtedness under the New
    Revolving Credit Facility (unless the assets that are the subject of such
    sales are comprised of real property, fixtures or improvements thereon or
    equipment) or make an offer to purchase a principal amount of the 11.5%
    Senior Secured Notes equal to the excess net cash proceeds. The purchase
    price of each 11.5% Senior Secured Note so purchased will be 100% of its
    principal amount, plus accrued and unpaid interest to the date of
    purchase.

                                                     13

<PAGE>

                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

    8% Notes
    --------

    The 8% Notes bear interest at a rate of 8% per year, and accrue interest
    from December 1, 2001, payable semi-annually (except annually with
    respect to year four and quarterly with respect to year five), with
    interest payable in the form of 8% Notes (paid-in-kind) for the first
    three years. Interest for years four and five will be payable in cash to
    the extent of available cash flow, as defined, and the balance in the
    form of 8% Notes (paid-in-kind). Thereafter, interest will be payable in
    cash. The 8% Notes mature on December 1, 2008.

    On June 29, 2004, the Company repurchased $55,527 aggregate principal
    amount of its 8% Notes, and the holders (i) released the liens on the
    collateral that secured the 8% Notes, (ii) contractually subordinated the
    Company's obligations under the 8% Notes to obligations under certain
    indebtedness, including the new 11.5% Senior Secured Notes and the New
    Revolving Credit Facility; and (iii) eliminated substantially all of the
    restrictive covenants contained in the indenture governing the 8% Notes.
    The carrying amount of the remaining 8% Notes outstanding at March 31,
    2005 is $12,298.

    Prior to June 29, 2004, the 8% Notes were secured by a collateral pool
    comprised of (i) all domestic accounts receivable and inventory; (ii) all
    patents, trademarks and other intellectual property (subject to non-
    exclusive licensing agreements); (iii) all instruments, investment
    property and other intangible assets, (iv) substantially all domestic
    fixed assets and (v) a pledge of 100% of the capital stock of two
    of the Company's domestic subsidiaries, but excluding assets subject to
    the GECC lease, certain real estate and certain assets subject to prior
    liens. Pursuant to an intercreditor agreement, the prior security
    interest of the holders of the 8% Notes in such collateral was
    subordinated to the lender under the Old Revolving Credit Facility and
    was senior to the security interest of GECC under the GECC lease. As of
    June 29, 2004, the 8% Notes were no longer secured by the collateral pool
    and accordingly, are effectively subordinated to the 11.5% Senior Secured
    Notes.

    The 8% Notes were valued at market in fresh-start accounting. The
    discount to face value is being amortized using the effective-interest
    rate methodology through maturity with an effective interest rate of
    10.46%.

    The following table summarizes the carrying value of the 8% Notes at
    December 31 assuming interest through 2006 is paid in the form of 8%
    Notes (paid-in-kind):

<TABLE>
<CAPTION>
                               2005              2006              2007
                             --------          --------          --------
<S>                  <C>                  <C>               <C>
8% Notes
  Principal                  $17,261           $18,684           $18,684
  Discount                     3,305             2,283             1,148
                             -------           -------           -------

  Carrying value             $13,956           $16,401           $17,536
                             =======           =======           =======
</TABLE>

    Letter of Credit Facility
    -------------------------

    Letters of credit in the amount of $1,769 were outstanding under letter
    of credit facilities with commercial banks, and were cash collateralized
    at March 31, 2005.

    The Company finances its working capital needs through a combination of
    internally generated cash from operations and cash on hand. The New
    Revolving Credit Facility provides additional financial flexibility.

                                                     14

<PAGE>

                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

    GECC
    ----

    In April 2004, the Company renegotiated and amended its lease arrangement
    with GECC. Under terms of the amended lease, six payments of
    approximately $6,092 were due semi-annually on February 28 and August 28
    beginning in February 2005. As part of the renegotiation of the lease,
    the Company agreed to purchase the assets at their fair market value of
    $9,500. The Company obtained the option to terminate the lease early upon
    payment of $33,000 through February 28, 2005; thereafter the amount of
    the early termination payment would decrease upon payment of each semi-
    annual capital lease payment. The equipment would transfer to the Company
    free and clear of all liens on the earlier of (i) the payment of the
    early termination amount, plus any accrued interest due and payable at 6%
    per annum or (ii) the payment of the final installment due August 28,
    2007.

    On June 29, 2004, the Company exercised its $33,000 early termination
    payment option, terminated the lease and acquired title to the leased
    equipment. The leased equipment was transferred to the Company free and
    clear of all liens.

    Aggregate maturities of debt for each of the next five years are:
<TABLE>
<CAPTION>
                                2005      2006      2007      2008      2009      Thereafter
                               ------    ------    ------    ------    ------     ----------
<S>                         <C>       <C>       <C>       <C>       <C>       <C>
11.5% Senior Secured Notes                                                          $90,000
8% Notes                                                     $18,684
Other                           $325                                                    128
                               ------    ------    ------    -------   ------     ----------
                                $325                         $18,684                $90,128
                               ======    ======    ======    =======   ======     ==========
</TABLE>
5.  Post-Retirement Plans

    Pension contributions
    ---------------------


    The Company paid $222 during the first quarter of 2005, and expects to
    contribute an additional $3,722 during the remainder of the year.

<TABLE>
<CAPTION>
                                                                        Pension Benefits
                                                                    ---------------------------
                                                                    3 Months          3 Months
                                                                      Ended             Ended
                                                                    March 31,         March 31,
                                                                       2005              2004
                                                                    ---------         ---------

<S>                                                            <C>               <C>
Component of net period benefit cost
  Service cost                                                         $634              $528
  Interest cost                                                       1,827             1,816
  Expected return on plan assets                                     (1,700)           (1,655)
  Amortization of prior service cost                                    (92)
                                                                    ---------         ---------
      Total net periodic benefit cost                                  $669              $689
                                                                    =========         =========
</TABLE>

    The Company has expensed $669 in the first quarter of 2005 and expects
    its pension expense to be $2,763 for the year.

                                                     15

<PAGE>

                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

    Post-retirement benefits
    ------------------------

    The Company paid $578 during the first quarter of 2005, and expects to
    contribute an additional $600 during the remainder of the year.

<TABLE>
<CAPTION>
                                                                          Other Benefits
                                                                     3 Months          3 Months
                                                                       Ended             Ended
                                                                     March 31,          March 31,
                                                                       2005               2004
                                                                     ---------          ---------
<S>                                                           <C>                  <C>
Component of net period benefit cost
  Service cost                                                           $60               $286
  Interest cost                                                          246                926
  Amortization of actuarial (gain) loss                                                     115
                                                                        -----              -----

    Total net periodic benefit cost                                     $306             $1,327
                                                                        ====             =======

</TABLE>


    The Company has expensed $306 in the first quarter of 2005 and expects
    its post-retirement benefits expense to be $1,226 for the year.

6.  Restructuring Charges (Dollars in Millions)

    During the first quarter of 2005, the Company committed to a
    restructuring plan to continue to address the Company's competitive
    environment. The plan resulted in a before tax charge of $0.4
    million.

    During the first quarter of 2004, the Company committed to a
    restructuring plan to continue to address the Company's competitive
    environment. The plan resulted in a before tax charge of $0.8
    million. Approximately 13% of the home office personnel were laid off due
    to the restructuring plan. The 2004 restructuring charge is offset by a
    reversal of an excess reserve of $0.1 million relating to the 2003
    restructuring reserve.

    During the third and fourth quarters of 2003, the Company committed to a
    restructuring plan to address the industry's competitive environment. The
    plan resulted in a before-tax charge of $2.6 million. Approximately 2% of
    the Company's worldwide workforce was laid off due to the 2003
    restructuring plan. The Company reversed an excess reserve of $1.6
    million, of which $1.3 million was Nucel(r) technology third-party license
    fees that had been renegotiated. The Nucel(r) technology third-party
    license fees were originally reflected in the 2000 restructuring reserve.
    The remaining $0.3 million represents an excess reserve for employee
    costs that were originally reflected in the 2002 restructuring reserve.

    The renegotiated Nucel(r) technology third-party license fee payments
    remaining as of March 31, 2005 are $0.2 million and are included in the
    2000 restructuring reserve.

                                                     16

<PAGE>

                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

    Restructuring Reserves
    ----------------------


    The following table provides details of the 2005, 2003 and 2000
    restructuring reserves for the period ended March 31, 2005:

<TABLE>
<CAPTION>

                                 Restructuring                                                Restructuring
                                 reserve as of                                                reserve as of
                                  December 31,     2005                      Other               March 31,
                                      2004        Charge     Payments     adjustments               2005
<S>                           <C>              <C>        <C>          <C>              <C>
2005 employee costs                                $0.4       $(0.3)                                $0.1
2003 employee costs                   $0.1                                                          $0.1
2000 Nucel(r) license fees               0.2                                                           0.2
                                      ----         ----       ------           -----                ----

  Total restructuring charge
payments                              $0.3         $0.4       $(0.3)                                $0.4
                                      ====         ====       ======           =====                ====
</TABLE>

7.  Capital Stock and Paid in Capital

    Authorized shares of preferred stock $(0.01 par value per share) and
    common stock $(0.01 par value per share) for the Company are 50,000,000
    shares and 50,000,000 shares, respectively. A total of 10,670,053 shares
    of common stock were issued and 9,665,493 were outstanding as of March
    31, 2005. A total of 10,670,053 shares of common stock were issued and
    9,632,022 were outstanding as of December 31, 2004.

    In connection with the Company's emergence from bankruptcy in 2003,
    660,000 shares of common stock were reserved for grant to management and
    employees under the Viskase Companies, Inc. Restricted Stock Plan. On
    April 3, 2003, the Company granted 330,070 shares of restricted common
    stock ("Restricted Stock") under the Restricted Stock Plan. Shares
    granted under the Restricted Stock Plan vest 12.5% on grant date; 17.5%
    on the first anniversary of grant date; 20% on the second anniversary of
    grant date; 20% on the third anniversary; and, 30% on the fourth
    anniversary of the grant date, subject to acceleration upon the
    occurrence of certain events. The Restricted Stock expense for the three-
    month period ended March 31, 2005 and 2004 is $2 and $6, respectively.
    The value of the Restricted Stock was calculated based on the fair market
    value of approximately $0.10 per share for the new common stock upon
    emergence from bankruptcy using a multiple of cash flow calculation to
    determine enterprise value and the related equity value.

8.  Treasury Stock

    In connection with the June 29, 2004 refinancing transaction, the Company
    purchased 805,270 shares of its common stock from the underwriter for a
    purchase price of $298. The common stock has been accounted for as
    treasury stock. The treasury shares are being held for use in connection
    with any exercise of the New Warrants.

9.  Warrants (Dollars in Thousands, Except Per Share and Per Warrant Amounts)

    On June 29, 2004, the Company issued $90,000 of 11.5% Senior Secured
    Notes together with the 90,000 New Warrants to purchase an aggregate of
    805,230 shares of common stock of the Company. The aggregate purchase
    price of the 11.5% Senior Secured Notes and the 90,000 of New Warrants
    was $90,000. Each of the New Warrants entitles the holder to purchase
    8.947 shares of the Company's common stock at an exercise price of $.01
    per share through the June 15, 2011 expiration date.

                                                     17

<PAGE>

                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

    The New Warrants were valued for accounting purposes using a fair value
    method. Using a fair value method, each of the New Warrants was valued at
    $11.117 for an aggregate fair value of the warrant issuance of $1,001.

    Pursuant to the Company's 2003 plan of reorganization, holders of the Old
    Common Stock received warrants to purchase shares of common stock ("Old
    Warrants"). At March 31, 2005, Old Warrants exercisable for 304,127
    shares of common stock are outstanding. The Old Warrants have a seven-
    year term expiring on April 2, 2010, and have an exercise price of $10.00
    per share.

10.  Contingencies

    In 1988, Viskase Canada Inc. ("Viskase Canada"), a subsidiary of the
    Company, commenced a lawsuit against Union Carbide Canada Limited and
    Union Carbide Corporation ("Union Carbide") in the Ontario Superior Court
    of Justice, Court File No.: 292270188 seeking damages resulting from
    Union Carbide's breach of environmental representations and warranties
    under the Amended and Restated Purchase and Sale Agreement, dated January
    31, 1986 ("Agreement"). Pursuant to the Agreement, Viskase Corporation
    and various affiliates (including Viskase Canada) purchased from Union
    Carbide and Union Carbide Films Packaging, Inc., its cellulosic casings
    business and plastic barrier films business ("Business"), which purchase
    included a facility in Lindsay, Ontario, Canada ("Site"). Viskase Canada
    is claiming that Union Carbide breached several representations and
    warranties and deliberately and/or negligently failed to disclose to
    Viskase Canada the existence of contamination on the Site.

    In November 2000, the Ontario Ministry of the Environment ("MOE")
    notified Viskase Canada that it had evidence to suggest that the Site was
    a source of polychlorinated biphenyl ("PCB") contamination. Viskase
    Canada and The Dow Chemical Company, corporate successor to Union
    Carbide ("Dow"), have been working with the MOE in investigating the PCB
    contamination and developing and implementing, if appropriate, a remedial
    plan for the Site and the affected area.

    The Company and Dow have reached an agreement in principle for resolution
    of all outstanding matters between them whereby Dow would repurchase the
    Site for $1,375 (Canadian), would be responsible for, and assume the cost
    of remediation of the Site, and would indemnify Viskase Canada and its
    affiliates, including the Company, in relation to all related
    environmental liabilities at the Site and dismissal of the action
    referred to above. As of March 31, 2005, the Company had a reserve of
    $521 (U.S.) for property remediation and cost.

    In 1993, the Illinois Department of Revenue ("IDR") submitted a proof of
    claim against Envirodyne Industries, Inc. (now known as Viskase
    Companies, Inc.) and its subsidiaries in Bankruptcy Court,
    Bankruptcy Case Number 93 B 319 for alleged liability with respect to the
    IDR's denial of the Company's allegedly incorrect utilization of certain
    loss carry-forwards of certain of its subsidiaries. In September 2001,
    the Bankruptcy Court denied the IDR's claim and determined the debtors
    were not responsible for 1998 and 1999 tax liabilities, interest and
    penalties. IDR appealed the Bankruptcy Court's decision to the United
    States District Court, Northern District of Illinois, Case Number 01 C
    7861; and in February 2002 the district court affirmed the Bankruptcy
    Court's order. IDR appealed the district court's order to United States
    Court of Appeals for the Seventh Circuit, Case Number 02-1632. On January
    6, 2004, the appeals court reversed the judgment of the district court
    and remanded the case for further proceedings. The matter is now before
    the Bankruptcy Court for further determination. As of March 31, 2005, the
    tax liabilities, interest and penalties claimed totaled approximately
    $2,900.

    During 1999 and 2000, the Company and certain of its subsidiaries and one
    other sausage casings manufacturer were named in ten virtually identical
    civil complaints filed in the United States District Court for the
    District of New Jersey. The District Circuit ordered all of these cases
    consolidated in Civil Action No. 99-5195-MLC (D.N.J.). Each complaint
    brought on behalf of a purported class of sausage casings customers
    alleges that the defendants unlawfully conspired to fix prices and
    allocate

                                                     18

<PAGE>

                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

    business in the sausage casings industry. In 2001, all of the
    consolidated cases were transferred to the United States District Court
    for the Northern District of Illinois, Eastern Division. The Company
    strongly denies the allegations set forth in these complaints.

    In May 2004, the Company entered into settlement agreement, without the
    admission of any liability ("Settlement Agreement") with the plaintiffs.
    Under terms of the Settlement Agreement, the plaintiffs fully released
    the Company and its subsidiaries from all liabilities and claims arising
    from the civil action in exchange for the payment of a $300 settlement
    amount, which amount was reserved in the December 31, 2003 financial
    statements.

    In August 2001, the Department of Revenue of the Province of Quebec,
    Canada issued an assessment against Viskase Canada in the amount of
    $2,700 (Canadian) plus interest and possible penalties. This assessment
    is based upon Viskase Canada's failure to collect and remit sales tax
    during the period July 1, 1997 to May 31, 2001. During this period,
    Viskase Canada did not collect and remit sales tax in Quebec on reliance
    of the written advice of its outside accounting firm. Viskase Canada
    filed a Notice of Objection in November 2001 with supplementary
    submission in October 2002. The Notice of Objection found in favor of the
    Department of Revenue. The Company has appealed the decision. The
    ultimate liability for the Quebec sales tax lies with the customers of
    Viskase Canada during the relevant period. Viskase Canada could be
    required to pay the amount of the underlying sales tax prior to receiving
    reimbursement for such tax from our customers. The Company has, however,
    provided for a reserve of $300 (U.S.) for interest and penalties, if any,
    but has not provided for a reserve for the underlying sales tax. Viskase
    Canada is negotiating with the Quebec Department of Ministry to avoid
    having to collect the sales tax from customers who will then be entitled
    to credit for such sales tax collected. Those negotiations have resulted
    in Viskase Canada making a settlement offer, whereby Viskase Canada would
    pay $300 (Canadian) and there would be no collection of the underlying
    sales tax from the customers of Viskase Canada. The settlement offer
    has been recommended internally for approval by the ultimate decision
    making authority within the Quebec Department of Revenue.

    Under the Clean Air Act Amendments of 1990, various industries, including
    casings manufacturers, will be required to meet maximum achievable
    control technology ("MACT") air emissions standards for certain
    chemicals. MACT standards applicable to all U.S. cellulosic casing
    manufacturers were promulgated June 11, 2002. The Company submitted
    extensive comments to the EPA during the public comment period.
    Compliance with these new rules is required by June 13, 2005, although
    the Company has obtained a one-year extension for both of its facilities.
    To date, the Company has spent approximately $7,955 in capital
    expenditures for MACT, and expects to spend an additional $2,355
    over the next 12 months to become compliant with MACT rules at our two
    U.S. extrusion facilities. Although the Company is in the process of
    installing the technology necessary to meet these emissions standards at
    our two extrusion facilities, our inability to do so, or our inability to
    receive any further compliance extensions from the regulatory agencies,
    if required, could result in substantial penalties, including civil fines
    of up to $65 per facility per day or a shutdown of our U.S. extrusion
    operations.

    The Company is involved in these and various other legal proceedings
    arising out of our business and other environmental matters, none of
    which are expected to have a material adverse effect upon results of
    operations, cash flows or financial condition.

                                                     19

<PAGE>

                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

11.  Earnings Per Share

    Following are the reconciliations of the numerators and denominators of
    the basic and diluted EPS (in thousands, except for number of shares and
    per share amounts):
<TABLE>
<CAPTION>
                                                       Quarter          Quarter
                                                        Ended            Ended
                                                        March            March
                                                       31, 2005        31, 2004
                                                       --------        --------
<S>                                                <C>            <C>

NUMERATOR:

Income (loss) available to common stockholders:

Net income (loss)                                       ($1,128)        ($3,762)
                                                        --------        --------

Net income (loss) available to common stockholders
  for basic and diluted EPS                             ($1,128)        ($3,762)
                                                        ========        ========

DENOMINATOR:

Weighted average shares outstanding
  for basic EPS                                        9,645,039      10,670,053
                                                       =========      ==========
</TABLE>

    Common stock equivalents, consisting of the New Warrants for 805,270
    shares, Old Warrants for 304,127 shares, 985,000 stock options issued to
    management, and 188,167 shares of unvested restricted stock are excluded
    from the loss per share because they are anti-dilutive. The vested
    portion of the Restricted Stock is included in the weighted-average
    shares outstanding for basic earnings per share.

12. Stock-Based Compensation (Dollars in Thousands, Except Per Share
    Amounts)

    The Company's net income and net income per common share would have been
    reduced to the pro forma amounts indicated below if compensation cost for
    the Company's stock option plan had been determined based on the fair
    value at the grant date for awards in accordance with the provisions of
    SFAS No. 123.

<TABLE>
<CAPTION>
                                                        2005                         2004
                                                       ------                       ------
<S>                                             <C>                      <C>
Net income:
  As reported                                         ($1,128)                     $25,317
  Pro forma                                           ($1,195)                     $25,295
Basic and diluted earnings per share:
  As reported                                          ($0.12)                       $2.53
  Pro forma                                            ($0.12)                       $2.53
</TABLE>

                                                     20

<PAGE>

                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

    The fair values of the options granted during 2005 and 2004 were
    estimated on the date of grant using the binomial option pricing model.
    The assumptions used and the estimated fair values are as follows:

<TABLE>
<CAPTION>
                                         2005                        2004
                                        ------                      ------
<S>                               <C>                      <C>
Expected term                           10 years                    5 years
Expected stock volatility                 14.78%                     16.05%
Risk-free interest rate                    4.17%                      3.44%
Fair value per option                     $1.10                       $0.54
</TABLE>

    The Company has granted non-qualified stock options to its chief
    executive officer for the purchase of 500,000 shares of its common stock
    under an employment agreement. The Company has granted non-qualified
    stock options to its management for the purchase of 485,000 shares of its
    common stock. Options were granted at fair market value at date of grant
    and one-third vests on each of the first, second and third anniversaries
    of the date of grant, subject to acceleration in certain events. The
    options for its chief executive officer and those granted to management
    expire five years and ten years, respectively, from the date of grant.
    The Company's outstanding options were:

<TABLE>
<CAPTION>
                                                               Weighted
                                       Shares                  Average
                                        Under                  Exercise
                                       Option                    Price
                                       ------                  ---------
<S>                              <C>                   <C>
  Outstanding, January 1, 2005            500,000                 $2.40
  Granted                                 485,000                 $2.90
  Exercised                                     0
  Forfeited                                 5,000
                                          -------
  Outstanding, March 31, 2005             980,000                 $2.64
                                          =======                 =====
</TABLE>

None of the options were exercisable as of March 31, 2005.

13.  Business Segment Information and Geographic Area Information

    The Company primarily manufactures and sells cellulosic food casings. The
    Company's operations are primarily in North America, South America and
    Europe. Intercompany sales and charges (including royalties) have been
    reflected as appropriate in the following information. Certain items are
    maintained at the Company's corporate headquarters and are not allocated
    geographically. They include most of the Company's debt and related
    interest expense and income tax benefits. Other expense for the quarter
    ended March 31, 2005 and March 31, 2004 includes net foreign exchange
    transaction gains (losses) of approximately $1,014 and ($2,305),
    respectively.

                                                     21

<PAGE>

                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

Geographic Area Information
---------------------------

<TABLE>
<CAPTION>
                                                   Three months     Three months
                                                       ended            ended
                                                     March 31,        March 31,
                                                        2005             2004
                                                   ------------     ------------
<S>                                            <C>               <C>
Net sales
United States                                        $31,434         $30,391
Canada                                                                 1,840
South America                                          2,038           1,891
Europe                                                20,695          21,761
Other and eliminations                                (4,643)         (5,268)
                                                     --------        --------
                                                     $49,524         $50,615
                                                     ========        ========
Operating income (loss)
United States                                         $1,978            $977
Canada                                                  (164)           (283)
South America                                           (108)           (198)
Europe                                                  (226)            113
Other and eliminations
                                                     --------        --------
                                                      $1,480            $609
                                                     ========        ========
Identifiable assets
United States                                       $118,623        $114,341
Canada                                                 2,416             648
South America                                          7,471           8,086
Europe                                                80,743          70,439
Other and eliminations
                                                     --------        --------

                                                    $209,253        $193,514
                                                     ========        ========
United States export sales
(reported in North America net sales above)
Asia                                                  $4,599          $4,435
South and Central America                              1,294           1,360
Other international                                    3,241           2,678
                                                     --------        --------

                                                      $9,134          $8,473
                                                     ========        ========
</TABLE>

14.  Subsequent Event

    On May 4, 2005, the Company announced that it will relocate finishing
    operations performed at its facility in Kentland, Indiana to Mexico. This
    restructuring seeks to lower costs and optimize operations. The Company
    also continues to evaluate other opportunities to reduce its costs and
    achieve greater production efficiencies.

    The relocation of the finishing operations is intended to lower costs and
    optimize operations. The total cost of the restructuring, exclusive of
    capital expenditures, is expected to be approximately $15,000,000,
    substantially all of which will result in future cash expenditures. The
    major types of costs associated with the restructuring and the estimated
    total amount of such costs is as follows:

                                                     22

<PAGE>

                   VISKASE COMPANIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in Thousands)

    Implementation and transition                               $7,000,000
    Training, severance and other employment-related costs      $5,000,000
    Moving and shutdown costs                                   $3,000,000

    The Company also expects to make capital expenditures of approximately $5
    million to $6 million in connection with the restructuring. The Company
    expects to incur a substantial portion of these costs and capital
    expenditures beginning in the second quarter of 2005 and expects to
    continue to incur them through the end of 2006. The Company believes that
    the restructuring will yield annual operating cost reductions of between
    $7 million and $8 million when the project is complete.

                                                     23

<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS
         ----------------------------------------------------------------

In this filing, unless indicated otherwise, "Viskase" or the "Company" refers
to Viskase Companies, Inc., and "we," "us" and "our" refer to Viskase and its
subsidiaries.

Results of Operations
---------------------

We are a worldwide leader in the manufacture and sale of cellulosic, fibrous
and plastic casings for the processed meat industry. We currently operate
seven manufacturing facilities and eight distribution centers throughout
North America, Europe and South America and we derive approximately 60% of
total net sales from customers located outside the United States. We believe
we are one of the two largest manufacturers of non-edible cellulose casings
for small-diameter processed meats and one of the three largest manufacturers
of non-edible fibrous casings. Our management believes that the factors most
critical to the success of our business are:

  - maintaining and building upon our reputation for providing a high level
    of customer and technical services;
  - maintaining and building upon our long-standing customer relationships,
    many of which have continued for decades;
  - developing additional sources of revenue through new products and
    services;
  - penetrating new regional markets; and
  - continuing to streamline our cost structure.

Our net sales are driven by consumer demand for meat products and the level
of demand for casings by processed meat manufacturers, as well as the average
selling prices of our casings. Specifically, demand for our casings is
dependent on population growth, overall consumption of processed meats and
the types of meat products purchased by consumers. Average selling prices are
dependent on overall supply and demand for casings and our product mix.

Our cellulose and fibrous casing extrusion operations are capital-intensive
and are characterized by high fixed costs. Our plastic casing extrusion and
finishing operations are characterized by dominant labor costs. The
industry's operating results have historically been sensitive to the global
alance of capacity and demand. The industry's extrusion facilities produce
casings under a timed chemical process and operate continuously. We believe
that the industry's current output is in balance with global demand and the
recent downward trend in casing prices has stabilized. Recently, some
competitors have announced plans to expand extrusion capacity at their
existing facilities. The projected increase in global capacity from these
expansion projects (and idled capacity) is approximately 5%.

Our contribution margin varies with changes in selling price, input material
costs, labor costs and manufacturing efficiencies. Subject to the limits of
our capacity discussed below, the total contribution margin increases as
demand for our casings increases. Our financial results benefit from
increased volume because we do not have to increase our fixed cost structure
in proportion to increases in demand. For certain products, we operate at
near capacity in our existing facilities. We continue to seek ways to
increase our throughput at these facilities; however, should demand for those
products increase substantially, we would not be able to meet that increased
demand in the short term. We regularly evaluate our capacity limitations and
compare those limitations to projected market demand.

We operate in a competitive environment. During the mid-1990's, we
experienced significant pricing pressure and volume loss with the entrance of
a foreign competitor into the United States market. The market for cellulosic
casings experienced declines in selling price over the last ten years, which
we believe only recently has stabilized. While the overall market volume has
expanded during this period, the industry continued to experience pressure on
pricing. Our financial performance moves in direct relation to our average
selling price.

                                                     24

<PAGE>
We have continued to reduce our fixed cost structure in response to market
and economic conditions. Since 1998, we have reduced annual fixed costs by
approximately $40.0 million by:

  - closing our Chicago, Illinois plant and selling the facility;
  - reconfiguring our Loudon, Tennessee and Beauvais, France plants;
  - closing our Thaon-les-Vosges, France extrusion operations;
  - discontinuing our Nucel(r) operations;
  - closing our Lindsay, Ontario, Canada facility; and
  - reducing the number of employees by approximately 30%.

Comparison of Results of Operations for Fiscal Quarters Ended March 31, 2005
and 2004. The following discussion compares the results of operations for the
fiscal quarter ended March 31, 2005 to the results of operations for the
fiscal quarter ended March 31, 2004. We have provided the table below in
order to facilitate an understanding of this discussion. The table shows our
results of operations for the first quarter of 2005 and 2004. The table
(dollars in millions) is as follows:

<TABLE>
<CAPTION>
                                          Quarter      Quarter            %
                                           ended        ended          Change
                                         March 31      March 31         Over
                                            2005         2004           2004
                                         --------      --------        ------
<S>                                  <C>            <C>            <C>
NET SALES                                  $49.5        $50.6          -2.2%

COST AND EXPENSES
Cost of sales                               40.0         40.3          -0.7%
Selling, general and administrative          7.4          7.8          -5.4%
Amortization of intangibles                  0.3          0.3          -0.4%
Restructuring expense (income)               0.4          0.7         -42.1%
                                           -----        -----
OPERATING INCOME (LOSS)                      1.5          1.6          -7.6%
Interest income                             (0.2)        (0.1)          NM
Interest expense                             3.1          3.1          -0.8%
Other (income) expense, net                 (1.3)         2.6           NM

Income tax provision (benefit)               1.0         (0.2)          NM
                                           -----        -----

NET (LOSS)                                 ($1.1)       ($3.8)          NM
                                           ======       ======
</TABLE>

NM = Not meaningful when comparing positive to negative numbers or to zero.

2005 Versus 2004
----------------

Net Sales. Our net sales for first quarter 2005 were $49.5 million, which
represents a decrease of $1.1 million or 2.2% from the comparable prior year
quarter. Net sales benefited $1.4 million due to foreign currency translation
gains, offset by a $0.9 million decrease due to price and mix and a $1.6
million decrease from volume.

Cost of Sales. Cost of sales for first quarter 2005 decreased 0.7% from the
prior year due to the decreased sales level for the same period, and
increased as a percent of net sales (from 79.5% in 2004 to 80.6% in 2005).
The slight increase as a percent of sales can be attributed to an increase in
plant costs offset by operating efficiencies.

Selling, General and Administrative Expenses. We were able to reduce selling,
general and administrative expenses from 15.4% of sales in the first quarter
of 2004 to 14.9% in the first quarter of

                                                     25

<PAGE>
2005. This can be attributed to reductions in overall spending and internal
reorganizations that occurred in March 2004, which reduced employee costs in
later periods. Additionally, in the first quarter of 2004 there was an
unusual income charge of $0.4 million consisting of a reversal of a legal
liability recorded in fresh-start accounting that has been settled.

Operating Income. The operating income for first quarter 2005 was $1.5
million, representing a slight decrease of $0.1 million from the prior year
quarter. The decrease in the operating income resulted primarily from the
effect of lower net sales. Operating income for first quarter 2005 includes a
restructuring charge of $0.4 million and for first quarter 2004 includes a
restructuring charge of $0.8 million, offset by a reversal of $0.1 million
for the 2003 restructuring, in keeping with our strategy to streamline our
cost structure. Also included in the 2004 operating income is an unusual
income charge of $0.4 million consisting of a reversal of a legal liability
recorded in fresh-start accounting that has been settled.

Interest Expense. Interest expense, net of interest income, for first quarter
2005 was comparable to the prior year period.

Other Income (Expense). Other income of approximately $1.3 million for first
quarter 2005 consists principally of a $1.0 million net gain related to
foreign currency translation. Other expense for the comparable quarter 2004
of $2.6 million consists principally of a $2.3 million net loss related to
foreign currency translation.

Income Tax Provision (Benefit). During 2005, an income tax provision of $1.0
million was recognized on the loss before income taxes of $0.1 million
resulting principally from an income tax provision for results of operations
of foreign subsidiaries.

Primarily as a result of the factors discussed above, loss for first quarter
2005 was $1.1 million compared to net loss of $3.8 million for first quarter
2004.

Effect of Changes in Exchange Rates
-----------------------------------

In general, our results of operations are affected by changes in foreign
exchange rates. Subject to market conditions, we price our products in our
foreign operations in local currencies, with the exception of the Brazilian
export market and the U.S. export markets, which are priced in U.S. dollars.
As a result, a decline in the value of the U.S. dollar relative to the local
currencies of profitable foreign subsidiaries can have a favorable effect on
our profitability, and an increase in the value of the U.S. dollar relative
to the local currencies of profitable foreign subsidiaries can have a
negative effect on our profitability. Exchange rate fluctuations decreased
comprehensive income by $1.3 million for first quarter 2005 and $0.6 million
for the comparable period of 2004.

Liquidity and Capital Resources
-------------------------------

Cash and cash equivalents decreased by $1.7 million during first quarter
2005. Cash flows provided by operating activities were $0.9 million, used in
investing activities were $1.9 million, and used in financing activities were
$0.3 million. Cash flows provided by operating activities were principally
attributable to net loss, depreciation, amortization, and non-cash interest
offset by a seasonal increase in working capital usage. Cash flows used in
investing activities were principally attributable to capital expenditures
and the release of restricted cash. Cash flows used in financing activities
principally consisted of the incurrence of financing fees.

As of March 31, 2005, the Company had positive working capital of
approximately $60.6 million including unrestricted cash of $28.6 million,
with additional amounts available under its revolving credit facility.
While the Company could decide to raise additional amounts through the
issuance of new debt or equity, management believes that the existing
resources available to it will be adequate to satisfy current and planned
operations for at least the next twelve months.

                                                     26

<PAGE>

On June 29, 2004, we issued $90.0 million of new 11.5% Senior Secured Notes
and 90,000 warrants ("New Warrants") to purchase an aggregate of 805,230
shares of common stock of the Company. The proceeds of the 11.5% Senior
Secured Notes and the 90,000 New Warrants totaled $90.0 million. The 11.5%
Senior Secured Notes have a maturity date of, and the New Warrants expire on,
June 15, 2011. The $90.0 million proceeds were used for the (i) repurchase
$55.527 million principal amount of the 8% Notes at a price of 90% of the
aggregate principal amount thereof, plus accrued and unpaid interest thereon;
(ii) early termination of the GECC capital lease and repurchase of the
operating assets subject thereto for a purchase price of $33.0 million; and
(iii) payment of fees and expenses associated with the refinancing and
repurchase of existing debt. In addition, we entered into a $20.0 million
secured revolving credit facility ("New Revolving Credit Facility") with a
financial institution. The New Revolving Credit Facility is a five-year
facility with a June 29, 2009 maturity date.

The 11.5% Senior Secured Notes require that we maintain a minimum annual
level of EBITDA calculated at the end of each fiscal quarter as follows:

Fiscal quarter ending                                               Amount
--------------------------------------------------------------------------
September 30, 2004 through September 30, 2006                $16.0 million
December 31, 2006 through September 30, 2008                 $18.0 million
December 31, 2008 and thereafter                             $20.0 million

unless the sum of (i) unrestricted cash as of such day and (ii) the aggregate
amount of advances that we are actually able to borrow under the New
Revolving Credit Facility on such day (after giving effect to any borrowings
thereunder on such day) is at least $15.0 million.

	The 11.5% Senior Secured Notes limit our ability and the ability of our
subsidiaries to (i) incur additional indebtedness; (ii) pay dividends, redeem
subordinated debt, or make other restricted payments, (iii) make certain
investments or acquisitions; (iv) issue stock of subsidiaries; (v) grant or
permit to exist certain liens; (vi) enter into certain transactions with
affiliates; (vii) merge, consolidate, or transfer substantially all of our
assets; (viii) incur dividend or other payment restrictions affecting certain
subsidiaries; (ix) transfer, sell or acquire assets, including capital stock
of subsidiaries; and (x) change the nature of our business.

The New Revolving Credit Facility contains various covenants which will
restrict our ability to, among other things, incur indebtedness, enter into
mergers or consolidation transactions, dispose of assets (other than in the
ordinary course of business), acquire assets, make certain restricted
payments, prepay any of the 8% Notes at a purchase price in excess of 90% of
the aggregate principal amount thereof (together with accrued and unpaid
interest to the date of such prepayment), create liens on our assets, make
investments, create guarantee obligations and enter into sale and leaseback
transactions and transactions with affiliates, in each case subject to
permitted exceptions. If our usage of the revolving credit facility exceeds
30%, the revolving credit facility requires that we comply with various
financial covenants, including meeting a minimum four-quarter EBITDA
(calculated each calendar quarter) of $19.4 million through September 30,
2006 and $21.0 million thereafter and an annual limitation on capital
expenditures of $9.7 million in 2004, $5.5 million in 2005 and $6.0 million
in 2006 and thereafter (with any unused amount being carried over to the
immediately following fiscal year). The minimum level of EBITDA and annual
limitations on capital expenditures are not currently in effect because we
have no borrowings outstanding, and as such, our usage is below the 30%
threshold applicable to the covenant. The New Revolving Credit Facility also
requires payment of a prepayment premium in the event that it is terminated
prior to maturity. The prepayment premium, as a percentage of the $20.0
million facility amount, is 3% through June 29, 2005, 2% through June 29,
2006, and 1% through June 29, 2007.

Borrowings under the loan and security agreement governing the new Revolving
Credit Facility (the "Credit Agreement") are subject to a borrowing base
formula based on percentages of eligible domestic receivables and eligible
domestic inventory. Under the Credit Agreement, we are able to choose between
two per annum interest rate options: (x) the lender's prime rate and (y) (1)
LIBOR plus (2) a margin currently of 2.25% (which margin will be subject to
performance based increases up to 2.50% and decreases down to 2.00%);
provided that LIBOR shall be at least equal to 1.00%. Letter of credit fees
will

                                                     27

<PAGE>
be charged a per annum rate equal to the then applicable margin described in
clause (y)(2) of the immediately preceding sentence less 50 basis points. The
Credit Agreement also provides for an unused line fee of 0.375% per annum and
a monthly servicing fee. The Credit Agreement has a term of five years from
the date of the closing thereof.

Indebtedness under the Credit Agreement is secured by liens on substantially
all of our and our domestic subsidiaries' assets, which liens (i) on
inventory, account receivables, lockboxes, deposit accounts into which
payments therefore are deposited and proceeds thereof, are contractually
senior to the liens securing the 11.5% Senior Secured Notes and the related
guarantees pursuant to an intercreditor agreement, (ii) on real property,
fixtures and improvements thereon, equipment and proceeds thereof, are
contractually subordinate to the liens securing the 11.5% Senior Secured
Notes and such guarantees pursuant to such intercreditor agreement, (iii) on
all other assets, are contractually pari passu with the liens securing the
11.5% Senior Secured Notes and such guarantees pursuant to such intercreditor
agreement.

The 8% Notes are unsecured, bear interest at a rate of 8% per year, and will
accrue interest from December 1, 2001, payable semi-annually (except annually
with respect to year four and quarterly with respect to year five), with
interest payable in the form of 8% Notes (paid-in-kind) for the first three
years. Interest for years four and five will be payable in cash to the extent
of available cash flow, as defined, and the balance in the form of 8% Notes
(paid-in-kind). Thereafter, interest will be payable in cash. The 8% Notes
will mature on December 1, 2008 with a principal value of approximately $18.7
million, assuming interest in the first five years is paid-in-kind.

The 8% Notes were valued at market under fresh-start accounting. The 8% Notes
were recorded on the books at April 3, 2003 at their discounted value of
$33.2 million. The discount to face value is being amortized using the
effective-interest rate methodology through maturity with an effective
interest rate of 10.46%.

On June 29, 2004, we purchased $55.527 million aggregate principal amount of
the outstanding 8% Notes. In connection therewith and in accordance with the
indenture for the 8% Notes, the holders thereof agreed to, among other
things, release the liens on the collateral that had been securing the 8%
Notes and eliminate substantially all of the restrictive covenants contained
in such indentures governing the 8% Notes. The carrying amount of the
remaining 8% Notes outstanding at March 31, 2005 is $12,298.

From time to time, we may offer to purchase at a substantial discount any or
all of the remaining 8% Notes through privately negotiated transactions,
purchases in the public marketplace or otherwise.

The following table summarizes the carrying value of the 8% Notes at December
31 (in millions):
<TABLE>
<CAPTION>

                                                 2005               2006               2007
                                                 ----               ----               ----
<S>                                         <C>             <C>                 <C>
8% Notes Principal amount outstanding           $17.3              $18.7              $18.7
   Discount                                      (3.3)              (2.3)              (1.2)
                                                ------             ------             ------
   Carrying value                               $14.0              $16.4              $17.5
                                                ======             ======             ======
</TABLE>
In April 2004, we renegotiated and amended our lease arrangement with GECC.
Under terms of the amended lease, six payments of approximately $6.1 million
were due semi-annually on February 28 and August 28 beginning in February
2005. We and GECC mutually agreed to a $9.5 million fair market sales value
for the leased equipment, which amount was used to value the equipment in
fresh-start accounting. We had the option to terminate the lease early upon
payment of $33.0 million through February 28, 2005; thereafter the amount of
the early termination payment would decrease upon payment of each semi-annual
capital lease payment. The equipment would transfer to us free and clear of
all liens on the earlier of (i) the payment of the early termination amount,
plus any accrued interest due and payable at 6% per annum or (ii) the payment
of the final installment due August 28, 2007.

                                                     28

<PAGE>

On June 29, 2004, we exercised our $33.0 million early termination payment
option, terminated the lease and acquired title to the leased equipment. The
leased equipment was transferred to us free and clear of all liens.

Letters of credit in the amount of $1.8 million were outstanding under letter
of credit facilities with commercial banks, and were cash collateralized at
March 31, 2005.

We finance our working capital needs through a combination of internally
generated cash from operations, cash on hand and our revolving credit
facility.

Our board of directors has approved a plan under which we will restructure
our finishing operations by relocating finishing operations from our facility
in Kentland, Indiana to a facility in Mexico. We expect to complete the
restructuring by the end of 2006. The relocation of the finishing operations
is intended to lower costs and optimize operations. The total cost of the
restructuring, exclusive of capital expenditures, is expected to be
approximately $15 million, substantially all of which will result in future
cash expenditures. We also expect to make capital expenditures of
approximately $5 million to $6 million in connection with the restructuring.
We expect to incur a substantial portion of these costs and capital
expenditures beginning in the second quarter of 2005 and expect to continue
to incur them through the end of 2006. We believe that the restructuring will
yield annual operating cost reductions of between $7 million and $8 million
when the project is complete.

Capital expenditures for first quarter 2005 and first quarter 2004 totaled
$2.8 million and $0.8 million, respectively. The 2005 capital expenditures
are expected to be $14 million including amounts for the relocation of
finishing operations to Mexico. The 2005 capital expenditures are principally
related to (i) the installation of environmental equipment to conform to MACT
standards for casing manufacturers and (ii) capital expenditures for the
relocation of finishing operations to Mexico.

In 2004, we spent approximately $2.7 million on research and development
programs, including product and process development, and on new technology
development. The 2005 research and development and product introduction
expenses are expected to be in the $3.0 million range. Among the projects
included in the current research and development efforts are SmokeMaster(r)
small diameter and fibrous casings, Visflex(r) casings and the application of
certain patents and technology for license by Viskase.

Pension and Post-Retirement Benefits
------------------------------------

Our long-term pension and post-retirement benefit liabilities totaled $66.2
million at March 31, 2005.

Expected annual cash contributions for pension and post-retirement benefit
liabilities are expected to be (in millions):

<TABLE>
<CAPTION>
                                 2005          2006          2007          2008          2009
                                 ----          ----          ----          ----          ----
<S>                         <C>           <C>           <C>          <C>             <C>
Pension                          $3.8         $13.1          $8.7          $7.6          $3.0
Post-retirement benefit           1.0           1.0           1.1           1.2           1.2
                                 ----         -----          ----          ----          ----
Total                            $4.8         $14.1          $9.8          $8.8          $4.2
                                 ====         =====          ====          ====          ====
</TABLE>

Other
-----

As of March 31, 2005, aggregate maturities of debt for each of the next five
years are (in thousands):

<TABLE>
<CAPTION>
                                    2005       2006       2007       2008       2009       Thereafter
                                    ----       ----       ----       ----       ----       ----------
<S>                          <C>           <C>        <C>       <C>        <C>        <C>
11.5% Senior Secured Notes                                                                  $90,000
8% Notes                                                            $18,684
Other                               $325                                                        128
                                    ----       ----       ----       ------     ----       ----------

                                    $325                            $18,684                 $90,128
</TABLE>

                                                     29

<PAGE>
Critical Accounting Policies
----------------------------

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions in certain circumstances that affect amounts
reported in the accompanying financial statements. In preparing these
financial statements, management bases its estimates on historical experience
and other assumptions that it believes are reasonable. We do not believe
there is a great likelihood that materially different amounts would be
reported under different conditions or using different assumptions related to
the accounting policies described below. However, application of these
accounting policies involves the exercise of judgment and the use of
assumptions as to uncertainties and, as a result, actual results could differ
from these estimates. If actual amounts are ultimately different from
previous estimates, the revisions are included in our results for the period
in which the actual amounts become known. Historically, the aggregate
differences, if any, between our estimates and actual amounts in any year
have not had a significant impact on our consolidated financial statements.
We are not aware of any trend, event or uncertainty that would materially
affect the methodology or assumptions used within our critical accounting
policies. We have not made any material changes to accounting estimates in
the past three years, and at this time we do not intend to make any changes
in the underlying assumptions to our accounting estimates.

Revenue Recognition
-------------------

Our revenues are recognized at the time the products are shipped to the
customer, under F.O.B. Shipping Point terms or under F.O.B. Port terms.
Revenues are net of any discounts, rebates and allowances. We record all
labor, raw materials, in-bound freight, plant receiving and purchasing,
warehousing, handling and distribution costs as a component of cost of goods
sold.

Allowance for Doubtful Accounts Receivable
------------------------------------------

Accounts receivable have been reduced by an allowance for amounts that may
become uncollectible in the future. This estimated allowance is primarily
based upon our evaluation of the financial condition of each customer, each
customer's ability to pay and historical write-offs.

Allowance for Obsolete and Slow Moving Inventories
--------------------------------------------------

Inventories are valued at the lower of cost or market. The inventories have
been reduced by an allowance for slow moving and obsolete inventories. The
estimated allowance is based upon management's estimate of specifically
identified items, the age of the inventory and historical write-offs of
obsolete and excess inventories.

Deferred Income Taxes
---------------------

Deferred tax assets and liabilities are measured using enacted tax laws and
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities due to a change in tax rates is
recognized in income in the period that includes the enactment date. In
addition, the amounts of any future tax benefits are reduced by a valuation
allowance to the extent such benefits are not expected to be realized on a
more likely than not basis.

Pension Plans and Other Post-Retirement Benefit Plans
-----------------------------------------------------

Our North American operations have a defined benefit retirement plan that
covers substantially all salaried and full-time hourly employees who were
hired prior to April 1, 2003 and a fixed defined contribution plan and a
discretionary profit sharing plan that covers substantially all salaried and
full-time hourly employees who were hired on or after April 1, 2003. Our
operations in Germany have a defined benefit retirement plan that covers
substantially all salaried and full-time hourly employees. Pension cost is
computed using the projected unit credit method. The discount rate used
approximates the average

                                                     30

<PAGE>
yield for high quality corporate bonds as of the valuation date. Our funding
policy is consistent with funding requirements of the applicable federal and
foreign laws and regulations.

Our North American operations have historically provided post-retirement
health care and life insurance benefits. We accrue for the accumulated post-
retirement benefit obligation that represents the actuarial present value of
the anticipated benefits. Measurement is based on assumptions regarding such
items as the expected cost of providing future benefits and any cost sharing
provisions. We terminated post-retirement medical benefits as of December 31,
2004 for all active employees and retirees in the U.S. who were not covered
by a collective bargaining agreement.

The weighted average plan asset allocation at December 31, 2004 and 2003, and
target allocation (not weighted) for 2005, are as follows:

<TABLE>
<CAPTION>
                                             Percentage of Plan                     2005
                                                   Assets                          Target
           Asset Category                    2004          2003                  Allocation
-------------------------------------       ------        ------                 ----------
<S>                                    <C>            <C>                 <C>
Equity Securities                           62.5%         58.5%                      60%
Debt Securities                             35.2%         37.1%                      40%
Other                                        2.3%          4.4%                       0%
                                           ------        ------                     ----
Total                                      100.0%        100.0%                     100%
</TABLE>
Goodwill and Intangible Assets
------------------------------

Intangible assets that have an indefinite useful life are not amortized and
are tested at least annually for impairment. As part of fresh-start
accounting, the Company recognized intangible assets that are being
amortized. Non-compete agreements in the amount of $1,236 are being amortized
over two years.

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

We carry property, plant and equipment at cost less accumulated depreciation.
Property and equipment additions include acquisition of property and
equipment and costs incurred for computer software purchased for internal use
including related external direct costs of materials and services and payroll
costs for employees directly associated with the project. Depreciation is
computed on the straight-line method over the estimated useful lives of the
assets ranging from (i) building and improvements - 10 to 32 years, (ii)
machinery and equipment - 4 to 12 years, (iii) furniture and fixtures - 3 to
12 years and (iv) auto and trucks - 2 to 5 years. Upon retirement or other
disposition, cost and related accumulated depreciation are removed from the
accounts, and any gain or loss is included in results of operations.

Long-Lived Assets
-----------------

We continue to evaluate the recoverability of long-lived assets including
property, plant and equipment, patents and other intangible assets.
Impairments are recognized when the expected undiscounted future operating
cash flows derived from long-lived assets are less than their carrying value.
If impairment is identified, valuation techniques deemed appropriate under
the particular circumstances will be used to determine the asset's fair
value. The loss will be measured based on the excess of carrying value over
the determined fair value. The review for impairment is performed at least
once a year or when circumstances warrant.

Other Matters
-------------

We do not have off-balance sheet arrangements (sometimes referred to as
"special purpose entities"), financing or other relations with unconsolidated
entities or other persons. In the ordinary course of business, we lease
certain casing manufacturing and finishing equipment, and certain real
property, consisting of manufacturing and distribution facilities and office
facilities. Substantially all such leases as of March 31, 2005 were operating
leases, with the majority of those leases requiring us to pay maintenance,
insurance and real estate taxes.

                                                     31

<PAGE>

Recent Accounting Pronouncements
--------------------------------

In November 2004, the FASB issued SFAS No. 151 ("SFAS 151"), "Inventory Costs
- an Amendment of ARB No. 43 Chapter 4." SFAS 151 requires that items such as
idle facility expense, excessive spoilage, double freight, and rehandling be
recognized as current-period charges rather than being included in inventory
regardless of whether the costs meet the criterion of abnormal as defined in
ARB 43. SFAS 151 is applicable for inventory costs incurred during fiscal
years beginning after June 15, 2005. The Company plans to adopt this standard
beginning the first quarter of fiscal year 2006 and does not believe the
adoption will have a material impact on its financial statements as such
costs have historically been expensed as incurred.

In December 2004, the FASB issued SFAS No. 153 ("SFAS 153"), "Exchanges of
Nonmonetary Assets - an Amendment of APB Opinion No. 29" which addresses the
measurement of exchanges of nonmonetary assets and eliminates the exception
from fair value accounting for nonmonetary exchanges of similar productive
assets and replaces it with an exception for exchanges that do not have
commercial substance. SFAS 153 specifies that a nonmonetary exchange has
commercial substance if the future cash flows of an entity are expected to
change significantly as a result of the exchange. This statement is effective
for nonmonetary asset exchanges occurring in fiscal periods beginning after
June 15, 2005 and is not expected to have a significant impact on the
Company's financial statements.

In December 2004, the FASB issued SFAS No. 123 (revised 2004) ("SFAS 123R"),
"Share-Based Payment."  SFAS 123R sets accounting requirements for "share-
based" compensation to employees, requires companies to recognize in the
income statement the grant-date fair value of stock options and other equity-
based compensation issued to employees and disallows the use of a fair value
method of accounting for stock compensation. SFAS 123R is applicable for all
fiscal periods beginning after June 15, 2005. The Company is currently
evaluating the impact this statement will have on the financial statements.

In March 2005, the FASB issued Interpretation No. 47 ("FIN 47"), "Accounting
for Conditional Asset Retirement Obligations." FIN 47 clarifies that the term
"conditional asset retirement obligation" as used in SFAS No. 143,
"Accounting for Asset Retirement Obligations," refers to a legal obligation
to perform an asset retirement activity in which the timing and (or) method
of settlement are conditional on a future event that may or may not be within
the control of the entity. FIN 47 is effective no later than the end of
fiscal years ending after December 15, 2005. The Company is currently
assessing the impact of FIN 47 on its consolidated financial statements.

Forward-looking Statements
--------------------------

Forward-looking statements in this report are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are not guarantees of future performance and
are subject to risks and uncertainties that could cause actual results and
our plans and objectives to differ materially from those projected. Such
risks and uncertainties include, but are not limited to, general business and
economic conditions; competitive pricing pressures for our products; changes
in other costs; opportunities that may be presented to and pursued by us;
determinations by regulatory and governmental authorities; the timing and
cost of our finishing operations restructuring; and the ability to achieve
other cost reductions and efficiencies.

Related Party Transactions (Dollars in Thousands)
-------------------------------------------------

During the quarter ended March 31, 2005, we purchased $31 in
telecommunication services from XO Communications, Inc., an affiliate of Carl
C. Icahn, who may be deemed to be the beneficial owner of approximately 29.1%
of the common stock. We believe that the purchase of the telecommunication
services was on terms at least as favorable as we would expect to negotiate
with an unaffiliated party.

                                                     32

<PAGE>

Arnos Corp., an affiliate of Carl C. Icahn, was the lender under a secured
revolving credit facility that we terminated in 2004. We paid Arnos Corp.
origination fees, interest and unused commitment fees of $144 during 2004. We
believe the terms of this facility were at least as favorable as those that
we would have expected to negotiate with an unaffiliated party.

On June 29, 2004 we repurchased 805,270 shares of common stock (representing
approximately 7.34% of the issued and outstanding common stock on a fully
diluted basis as of June 17, 2004) held by Jefferies & Company, Inc., the
initial purchaser of the 11.5% Senior Secured Notes, or our affiliates for
total consideration of $298.

Contingencies
-------------

In 1988, Viskase Canada Inc. ("Viskase Canada"), a subsidiary of the Company,
commenced a lawsuit against Union Carbide Canada Limited and Union Carbide
Corporation ("Union Carbide") in the Ontario Superior Court of Justice, Court
File No.: 292270188 seeking damages resulting from Union Carbide's breach of
environmental representations and warranties under the Amended and Restated
Purchase and Sale Agreement, dated January 31, 1986 ("Agreement"). Pursuant
to the Agreement, Viskase Corporation and various affiliates (including
Viskase Canada) purchased from Union Carbide and Union Carbide Films
Packaging, Inc., our cellulosic casings business and plastic barrier films
business ("Business"), which purchase included a facility in Lindsay,
Ontario, Canada ("Site"). Viskase Canada is claiming that Union Carbide
breached several representations and warranties and deliberately and/or
negligently failed to disclose to Viskase Canada the existence of
contamination on the Site.

In November 2000, the Ontario Ministry of the Environment ("MOE") notified
Viskase Canada that it had evidence to suggest that the Site was a source of
polychlorinated biphenyl ("PCB") contamination. Viskase Canada and The Dow
Chemical Company, corporate successor to Union Carbide ("Dow"), have been
working with the MOE in investigating the PCB contamination and developing
and implementing, if appropriate, a remedial plan for the Site and the
affected area.

The Company and Dow have reached an agreement in principle for resolution of
all outstanding matters between them whereby Dow would repurchase the Site
for $1.375 million (Canadian), would be responsible for, and assume the cost
of remediation of the Site, and would indemnify Viskase Canada and its
affiliates, including the Company, in relation to all related environmental
liabilities at the Site and dismissal of the action referred to above. As of
March 31, 2005, we had a reserve of $0.5 million (U.S.) for property
remediation and cost.

In 1993, the Illinois Department of Revenue ("IDR") submitted a proof of
claim against Envirodyne Industries, Inc. (now known as Viskase Companies,
Inc.) and our subsidiaries in Bankruptcy Court, Bankruptcy Case Number 93 B
319 for alleged liability with respect to the IDR's denial of our allegedly
incorrect utilization of certain loss carry-forwards of certain of our
subsidiaries. In September 2001, the Bankruptcy Court denied the IDR's claim
and determined the debtors were not responsible for 1998 and 1999 tax
liabilities, interest and penalties. The IDR appealed the Bankruptcy Court's
decision to the United States District Court, Northern District of Illinois,
Case Number 01 C 7861; and in February 2002 the district court affirmed the
Bankruptcy Court's order. IDR appealed the district court's order to United
States Court of Appeals for the Seventh Circuit, Case Number 02-1632. On
January 6, 2004, the appeals court reversed the judgment of the district
court and remanded the case for further proceedings. The matter is now before
the Bankruptcy Court for further determination. As of March 31, 2005, the tax
liabilities, interest and penalties claimed totaled approximately $2.9
million.

During 1999 and 2000, we and certain of our subsidiaries and one other
sausage casings manufacturer were named in ten virtually identical civil
complaints filed in the United States District Court for the District of New
Jersey. The District Circuit ordered all of these cases consolidated in Civil
Action No. 99-5195-MLC (D.N.J.). Each complaint brought on behalf of a
purported class of sausage casings customers alleges that the defendants
unlawfully conspired to fix prices and allocate business in the sausage
casings industry. In 2001, all of the consolidated cases were transferred to
the United States District

                                                     33

<PAGE>
Court for the Northern District of Illinois, Eastern Division. We strongly
deny the allegations set forth in these complaints.

In May 2004, we entered into settlement agreement, without the admission of
any liability ("Settlement Agreement") with the plaintiffs. Under terms of
the Settlement Agreement, the plaintiffs fully released us and our
subsidiaries from all liabilities and claims arising from the civil action in
exchange for the payment of a $0.3 million settlement amount, which amount
was reserved in the December 31, 2003 financial statements.

In August 2001, the Department of Revenue of the Province of Quebec, Canada
issued an assessment against Viskase Canada in the amount of $2.7 million
(Canadian) plus interest and possible penalties. This assessment is based
upon Viskase Canada's failure to collect and remit sales tax during the
period July 1, 1997 to May 31, 2001. During this period, Viskase Canada did
not collect and remit sales tax in Quebec on reliance of the written advice
of our outside accounting firm. Viskase Canada filed a Notice of Objection in
November 2001 with supplementary submission in October 2002. The Notice of
Objection found in favor of the Department of Revenue. We have appealed the
decision. The ultimate liability for the Quebec sales tax lies with the
customers of Viskase Canada during the relevant period. Viskase Canada could
be required to pay the amount of the underlying sales tax prior to receiving
reimbursement for such tax from our customers. We have, however, provided for
a reserve of $0.3 million (U.S.) for interest and penalties, if any, but have
not provided for a reserve for the underlying sales tax. Viskase Canada is
negotiating with the Quebec Department of Ministry to avoid having to collect
the sales tax from customers who will then be entitled to credit for such
sales tax collected. Those negotiations have resulted in Viskase Canada
making a settlement offer, whereby Viskase Canada would pay $0.3 million
(Canadian) and there would be no collection of the underlying sales tax from
the customers of Viskase Canada. The settlement offer has been recommended
internally for approval by the ultimate decision making authority within the
Quebec Department of Revenue.

Under the Clean Air Act Amendments of 1990, various industries, including
casings manufacturers, will be required to meet maximum achievable control
technology ("MACT") air emissions standards for certain chemicals. MACT
standards applicable to all U.S. cellulosic casing manufacturers were
promulgated June 11, 2002. We submitted extensive comments to the EPA during
the public comment period. Compliance with these new rules is required by
June 13, 2005, although we have obtained a one-year extension for both of our
facilities. To date, we have spent approximately $8.0 million in capital
expenditures for MACT, and expect to spend an additional $2.4 million over
the next 12 months, to become compliant with MACT rules at our two U.S.
extrusion facilities. Although we are in the process of installing the
technology necessary to meet these emissions standards at our two extrusion
facilities, our inability to do so, or our
inability to receive any further compliance extensions from the necessary
regulatory agencies, if required, could result in substantial penalties,
including civil fines of up to $65 thousand per facility per day or a
shutdown of our U.S. extrusion operations.

We are involved in these and various other legal proceedings arising out of
our business and other environmental matters, none of which are expected to
have a material adverse effect upon results of operations, cash flows or
financial condition.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
         ----------------------------------------------------------

The Company is exposed to certain market risks related to foreign currency
exchange rates. In order to manage the risk associated with this exposure to
such fluctuations, the Company occasionally uses derivative financial
instruments. The Company does not enter into derivatives for trading
purposes.

The Company also prepared sensitivity analyses to determine the impact of a
hypothetical 10% devaluation of the U.S. dollar relative to the European
receivables, payables, sales and purchases denominated in U.S. dollars. Based
on its sensitivity analyses at March 31, 2005, a 10% devaluation of the U.S.
dollar would benefit the Company's consolidated balance sheet by
approximately $49 thousand.

                                                     34

<PAGE>

The Company purchases gas futures contracts to lock in set rates on gas
purchases. The Company uses this strategy to minimize its exposure to
volatility in natural gas. These products are not linked to specific assets
and liabilities that appear on the balance sheet or to a forecasted
transaction and, therefore, do not qualify for hedge accounting. As such, the
loss on the change in fair value of the futures contracts was recorded in
other income, net and is immaterial.

ITEM 4.  CONTROLS AND PROCEDURES
         -----------------------

We maintain a system of disclosure controls and procedures designed to
provide reasonable assurance that information we are required to disclose in
the reports that we file or submit under the Securities Exchange Act of 1934,
as amended, is recorded, processed, summarized and reported within the time
periods specified in Securities and Exchange Commission rules and forms. Our
management, with the participation of our chief executive officer and our
chief financial officer, evaluated the effectiveness of our disclosure
controls and procedures as of March 31, 2005. Based on that evaluation, our
chief executive officer and chief financial officer have concluded that, as
of such date, our disclosure controls and procedures were effective at the
reasonable assurance level.

There have been no significant changes in our internal control over financial
reporting that occurred during the quarter ended March 31, 2005 that have
materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.

                                                     35

<PAGE>

PART II. OTHER INFORMATION

Item 1 - Legal Proceedings
         -----------------

For a description of pending litigation and other contingencies, see Part 1,
Note 10, Contingencies in Notes to Consolidated Financial Statements for
Viskase Companies, Inc. and Subsidiaries.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
         -----------------------------------------------------------

On January 13, 2005, prior to the effectiveness of the Form S-4 registration
statement relating to our 11.5% Senior Secured Notes, we issued options to
certain of our senior management exercisable in the aggregate for 485,000
shares at an exercise price of $2.90 per share. One-third of the options vest
on each of the first, second and third anniversaries of the date of grant,
subject to acceleration in certain events. The options were issued without
registration pursuant to Rule 701 under the Securities Act of 1933 as we were
not subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934 at the time the grants were made and the
grants otherwise met the requirements of Rule 701.

Item 3 - Defaults Upon Senior Securities
         -------------------------------

None.

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

None.

Item 5 - Other Information
         -----------------

None.

Item 6 - Exhibits
         --------

31.1  Certification of Principal Executive Officer Pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002.

31.2  Certification of Principal Financial Officer Pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002.

32.1  Certification of Principal Executive Officer Pursuant to 18 U.S.C.
      Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.

32.2  Certification of Principal Financial Officer Pursuant to 18 U.S.C.
      Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.

                                                     36

<PAGE>



                                   SIGNATURES
                                   ----------



Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                   VISKASE COMPANIES, INC.
                                   -----------------------
                                   Registrant



                      By:  /s/  Gordon S. Donovan
                           -----------------------------------------
                           Gordon S. Donovan
                           Vice President and Chief Financial Officer
                             (Duly authorized officer and principal financial
                             officer of the registrant)







Date:  May 16, 2005

                                                     37

<PAGE>



                                                                 Exhibit 31.1

                      CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
               PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert L. Weisman, certify that:

1)  I have reviewed this quarterly report on Form 10-Q of Viskase Companies,
    Inc.;

2)  Based on my knowledge, this report does not contain any untrue statement
    of a material fact or omit to state a material fact necessary to make the
    statements made, in light of the circumstances under which such
    statements were made, not misleading with respect to the period covered
    by this report;

3)  Based on my knowledge, the financial statements, and other financial
    information included in this report, fairly present in all material
    respects the financial condition, results of operations and cash flows of
    the registrant as of, and for, the periods presented in this report;

4)  The registrant's other certifying officer(s) and I are responsible for
    establishing and maintaining disclosure controls and procedures (as
    defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
    and have:

    a)  Designed such disclosure controls and procedures, or caused such
        disclosure controls and procedures to be designed under our
        supervision, to ensure that material information relating to the
        registrant, including its consolidated subsidiaries, is made known to
        us by others within those entities, particularly during the period in
        which this report is being prepared;

    b)  Evaluated the effectiveness of the registrant's disclosure controls
        and procedures and presented in this report our conclusions about the
        effectiveness of the disclosure controls and procedures as of the end
        of the period covered by this report based on such evaluation; and

    c)  Disclosed in this report any change in the registrant's internal
        control over financial reporting that occurred during the
        registrant's most recent fiscal quarter (the registrant's fourth
        fiscal quarter in the case of an annual report) that has materially
        affected, or is reasonably likely to materially affect, the
        registrant's internal control over financial reporting; and

5)  The registrant's other certifying officer(s) and I have disclosed, based
    on our most recent evaluation of internal control over financial
    reporting, to the registrant's auditors and the audit committee of the
    registrant's board of directors (or persons performing the equivalent
    functions):

    a)  All significant deficiencies and material weaknesses in the design or
        operation of internal control over financial reporting which could
        adversely affect the registrant's ability to record, process,
        summarize and report financial information; and

    b)  Any fraud, whether or not material, that involves management or other
        employees who have a significant role in the registrant's internal
        control over financial reporting.



Date:  May 16, 2005

                                 /s/ Robert L. Weisman
                                 -------------------------------
                                       Robert L. Weisman
                                       President and Chief Executive Officer

                                                     38

<PAGE>

                                                                 Exhibit 31.2

               CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
         PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gordon S. Donovan, certify that:

1)  I have reviewed this quarterly report on Form 10-Q of Viskase Companies,
    Inc.;

2)  Based on my knowledge, this report does not contain any untrue statement
    of a material fact or omit to state a material fact necessary to make the
    statements made, in light of the circumstances under which such
    statements were made, not misleading with respect to the period covered
    by this report;

3)  Based on my knowledge, the financial statements, and other financial
    information included in this report, fairly present in all material
    respects the financial condition, results of operations and cash flows of
    the registrant as of, and for, the periods presented in this report;

4)  The registrant's other certifying officer(s) and I are responsible for
    establishing and maintaining disclosure controls and procedures (as
    defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
    and have:

    a)  Designed such disclosure controls and procedures, or caused such
        disclosure controls and procedures to be designed under our
        supervision, to ensure that material information relating to the
        registrant, including its consolidated subsidiaries, is made known to
        us by others within those entities, particularly during the period in
        which this report is being prepared;

    b)  Evaluated the effectiveness of the registrant's disclosure controls
        and procedures and presented in this report our conclusions about the
        effectiveness of the disclosure controls and procedures as of the end
        of the period covered by this report based on such evaluation; and

    c)  Disclosed in this report any change in the registrant's internal
        control over financial reporting that occurred during the
        registrant's most recent fiscal quarter (the registrant's fourth
        fiscal quarter in the case of an annual report) that has materially
        affected, or is reasonably likely to materially affect, the
        registrant's internal control over financial reporting; and

5)  The registrant's other certifying officer(s) and I have disclosed, based
    on our most recent evaluation of internal control over financial
    reporting, to the registrant's auditors and the audit committee of the
    registrant's board of directors (or persons performing the equivalent
    functions):

    a)  All significant deficiencies and material weaknesses in the design or
        operation of internal control over financial reporting which could
        adversely affect the registrant's ability to record, process,
        summarize and report financial information; and

    b)  Any fraud, whether or not material, that involves management or other
        employees who have a significant role in the registrant's internal
        control over financial reporting.

Date:  May 16, 2005

                           /s/ Gordon S. Donovan
                           ------------------------------------------------
                                Gordon S. Donovan
                                Vice President and Chief Financial Officer

                                                     39

<PAGE>

                                                                 Exhibit 32.1

                CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
                     PURSUANT TO 18 U.S.C. SECTION 1350,
                  AS ADOPTED PURSUANT TO SECTION 906 OF THE
                         SARBANES-OXLEY ACT OF 2002

In connection with the accompanying quarterly report on Form 10-Q of Viskase
Companies, Inc. (the "Company") for the quarter ended March 31, 2005, as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Robert L. Weisman, President and Chief Executive Officer of the
Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that, to my
knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly represents, in all
material respects, the financial condition and results of operations of the
Company.

Date:  May 16, 2005

                                      /s/ Robert L. Weisman
                                      --------------------------------------
                                      Robert L. Weisman
                                      President and Chief Executive Officer

A signed original of this written statement required by Section 906 of the
Sarbanes-Oxley Act of 2002 has been provided to the Company and will be
retained by the Company and furnished to the Securities and Exchange
Commission or its staff upon request.

                                                     40

<PAGE>

                                                                 Exhibit 32.2

                   CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
                        PURSUANT TO 18 U.S.C. SECTION 1350,
                    AS ADOPTED PURSUANT TO SECTION 906 OF THE
                           SARBANES-OXLEY ACT OF 2002

In connection with the accompanying quarterly report on Form 10-Q of Viskase
Companies, Inc. (the "Company") for the quarter ended March 31, 2005, as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Gordon S. Donovan, Vice President and Chief Financial Officer
of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that, to my
knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly represents, in all
material respects, the financial condition and results of operations of the
Company.

Date:  May 16, 2005

                                  /s/ Gordon S. Donovan
                                  ------------------------------------------
                                  Gordon S. Donovan
                                  Vice President and Chief Financial Officer


A signed original of this written statement required by Section 906 of the
Sarbanes-Oxley Act of 2002 has been provided to the Company and will be
retained by the Company and furnished to the Securities and Exchange
Commission or its staff upon request.

                                                     41

<PAGE>