****UNITED
      STATES****


**SECURITIES
        AND EXCHANGE COMMISSION**


**WASHINGTON,
      DC 20549**




**FORM
      10-KSB**


**(Mark
      One)**




**þ**
            **ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF
                1934**




**FOR
      THE FISCAL YEAR ENDED MARCH 31, 2006**


** ̈**
            **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: 000-51578**




**CryoPort,
      Inc.**


(Exact
      name of small business issuer as specified in its charter)




Nevada
            
            88-0313393(State
                or other jurisdiction of
              incorporation
                or organization)
            
            (I.R.S.
                Employer Identification No.)451
                Atlas Street, Brea, California
            
            92821(Address
                of principal executive offices)
            
            (ZipCode)(714)
                256-6100(Issuer’s
                telephone number)Securities
                registered under Section 12(b) of the Exchange Act:Title
                of each class
            
            Title
                of each exchange on which registeredCommon
                Stock, $.001 par value
            
            Pink
                SheetsSecurities
                registered under Section 12(g) of the Exchange Act:Common
                Stock, $.001 par value(Title
                of class)Indicate
                by check mark if the registrant is not required to file reports pursuant
                to Section 13 or Section 15(d) of the Act. Yes ̈NoþCheck
                whether the issuer (1) filed all reports required to be filed by
                Section
                13 or 15(d) of the Exchange Act of 1934 during the past 12 month
                (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.YesþNo ̈Check
                if there is no disclosure of delinquent filers pursuant to Item 405
                of
                Regulation S-K contained in this form and will not be contained,
                to the
                best of the registrant’s knowledge, in definitive proxy or information
                statements incorporated by reference in Part III of this Form 10-KSB
                or
                any amendment to this Form 10-KSB.þIndicate
                by check mark whether the Registrant is a shell company (as defined
                in
                Rule 12b-2 of the Exchange Act.).Yes ̈Noþ




The
                issuer’s revenue for the fiscal year ended March 31, 2006 was
                $152,298.State
                the aggregate market value of the voting and non-voting common equity
                held
                by non-affiliates computed by reference to the price at which the
                common
                equity was sold, or the average bid and asked price of common equity,
                as
                of a specified date within the past 60 days. (See definition of affiliate
                in Rule 12b-2 of the Exchange Act.)
              
              The
                market value of the voting stock held by non-affiliates of the issuer
                as
                of June 12, 2006 was approximately $75,221,740.As
                of June 12, 2006 the Company had 30,088,696 shares of its $0.001
                par value
                common stock issued and outstanding.
              
              **DOCUMENTS
                INCORPORATED BY REFERENCE**
              
              Inapplicable.
              
              Transitional
                Small Business Disclosure Format (check one)
              
              ****Yes ̈Noþ















**TABLE
      OF CONTENTS**




**Page**PART
                I
            
            
            
            4ITEM
                1.
            
            DESCRIPTION
                OF BUSINESS.
            
            5ITEM
                2.
            
            DESCRIPTION
                OF PROPERTY
            
            31ITEM
                3.
            
            LEGAL
                PROCEEDINGS
            
            31ITEM
                4.
            
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS
            
            31PART
                II
            
            
            
            32ITEM
                5.
            
            MARKET
                PRICE OF THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER
                MATTERS.
            
            32ITEM
                6.
            
            MANAGEMENT’S
                DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
            
            36ITEM
                7.
            
            FINANCIAL
                STATEMENTS (F-1 to F-24)
            
            45ITEM
                8.
            
            CHANGES
                IN AND DISAGREEMENTS WITH ACCOUNTANTS
            
            69ITEM
                8A.
            
            CONTROLS
                AND PROCEDURES
            
            69PART
                III
            
            
            
            70ITEM
                9:
            
            DIRECTORS,
                EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                SECTION
                16(a) OF THE EXCHANGE
            
            70ITEM
                10.
            
            EXECUTIVE
                COMPENSATION
            
            73ITEM
                11.
            
            SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
            
            77ITEM
                12:
            
            CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS
            
            78ITEM
                13.
            
            EXHIBITS
            
            79ITEM
                14.
            
            PRINCIPAL
                ACCOUNTANT FEES AND SERVICES
            
            81SIGNATURES
            
            
            
            83EXHIBIT
            
            INDEX
            
            84




Page
          3


**PART
      I**





*In
      this registration statement the terms “CryoPort”, “Company” and similar terms
      refer to CryoPort, Inc., and its wholly owned subsidiary CryoPort Systems,
      Inc.*





**SAFE
      HARBOR FOR FORWARD LOOKING STATEMENTS:**




THE
      COMPANY HAS MADE SOME STATEMENTS IN THIS REGISTRATION STATEMENT, INCLUDING
      SOME
      UNDER “BUSINESS”, “RISK FACTORS” AND “MANAGEMENT’S DISCUSSION AND ANALYSIS OR
      PLAN OF OPERATIONS,” AND ELSEWHERE, WHICH ARE FORWARD-LOOKING STATEMENTS. THESE
      STATEMENTS MAY DISCUSS THE COMPANY’S FUTURE EXPECTATIONS, CONTAIN PROJECTIONS OF
      ITS PLAN OF OPERATION OR FINANCIAL CONDITION OR STATE OTHER FORWARD-LOOKING
      INFORMATION. IN THIS REGISTRATION STATEMENT, FORWARD-LOOKING STATEMENTS ARE
      GENERALLY IDENTIFIED BY WORDS SUCH AS “ANTICIPATE”, “PLAN”, “BELIEVE”, “EXPECT”,
“ESTIMATE”, AND THE LIKE. FORWARD-LOOKING STATEMENTS INVOLVE FUTURE RISKS AND
      UNCERTAINTIES, AND THERE ARE FACTORS THAT COULD CAUSE ACTUAL RESULTS OR PLANS
      TO
      DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY THE STATEMENTS. THE FORWARD
      LOOKING INFORMATION IS BASED ON VARIOUS FACTORS AND IS DERIVED USING NUMEROUS
      ASSUMPTIONS. A READER, WHETHER INVESTING IN THE COMPANY’S SECURITIES OR NOT,
      SHOULD NOT PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH
      APPLY
      ONLY AS OF THE DATE OF THIS REGISTRATION STATEMENT. IMPORTANT FACTORS THAT
      MAY
      CAUSE ACTUAL RESULTS TO DIFFER FROM PROJECTIONS INCLUDE, BUT ARE NOT LIMITED
      TO,
      THE FOLLOWING:





·
            THE
                SUCCESS OR FAILURE OF MANAGEMENT’S EFFORTS TO IMPLEMENT THE COMPANY’S PLAN
                OF OPERATIONS;


·
            THE
                COMPANY’S ABILITY TO FUND ITS OPERATING
                EXPENSES;


·
            THE
                COMPANY’S ABILITY TO COMPETE WITH OTHER COMPANIES THAT HAVE A SIMILAR PLAN
                OF OPERATION;


·
            THE
                EFFECT OF CHANGING ECONOMIC CONDITIONS IMPACTING THE COMPANY’S PLAN OF
                OPERATION; AND


·
            THE
                COMPANY’S ABILITY TO MEET THE OTHER RISKS AS MAY BE DESCRIBED IN ITS
                FUTURE FILINGS WITH THE SECURITIES AND EXCHANGE
                COMMISSION.





THE
      COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY UPDATE OR REVISE ANY
      FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE
      EVENTS OR OTHERWISE.


Page
          4





**ITEM
      1. DESCRIPTION OF BUSINESS.**




We
      are a
      cryogenic transport container company, involved in the safe transport of
      biological specimens at frozen and cryogenic temperatures of minus
      160 ° centigrade. While over the past years most of our sales have been derived from
      the sale of our reusable product line, the Company’s long term potential and
      prospects will come from the one-way line of products which have been in
      development over the past couple of years.




**Overview:**





The
      principal focus of the Company is to develop a line of disposable (or one-way)
      dry cryogenic shippers for the transport of biological materials. A dry
      cryogenic shipper is a device that uses liquid nitrogen which is contained
      inside a vacuum insulated bottle as a refrigerant to provide storage
      temperatures below minus 160 ° centigrade. The dry shipper is designed such that there can be no pressure
      build
      up as the liquid nitrogen evaporates, or spillage of liquid nitrogen. A foam
      retention system is employed to ensure that liquid nitrogen stays inside the
      vacuum container. Biological specimens are stored in a “well” inside the
      container and refrigeration is provided by cold nitrogen gas evolving from
      the
      liquid nitrogen entrapped within the foam retention system. Biological specimens
      transported using the cryogenic shipper can include live cell pharmaceutical
      products; e.g., cancer vaccines, diagnostic materials, semen and embryos,
      infectious substances and other items that require continuous exposure to frozen
      or cryogenic temperature (less than -150 ° C).





The
      Company currently manufactures a line of reusable cryogenic dry shippers. These
      primarily serve as vehicles for the development of the cryogenic technology
      that
      supports the disposable product development but also are essential components
      of
      the infrastructure that supports testing and research activities of the
      pharmaceutical and biotechnology industries. The Company’s mission is to provide
      cost effective packaging systems for biological materials requiring, or
      benefiting from, a frozen or cryogenic temperature environment over an extended
      time period by introducing to market a cost effective disposable/one-time use
      cryogenic shipper. The conventional concept of cryogenic shipping employs the
      use of a high cost shipping container, used multiple times over multiple years.
      The Company plans to introduce the disposable/one-time product manufactured
      from
      alternative, lower cost materials, which eliminates the need to replenish the
      refrigerant during the shipping process resulting in lower overall operating
      costs. The Company’s intended future product is designed for one-time use with
      or without a disposable capability. Both methodologies eliminate the need to
      replenish the refrigerant during transport.





The
      Company’s production line incorporates innovative technologies developed for
      aerospace and other industries to develop products that are more cost effective,
      easier to use and more functional than the traditional dry ice devices and
      methods currently used for the shipment of temperature-sensitive
      materials.


Page
          5





The
      proposed disposable products are planned to share many of the characteristics
      and basic design details of the currently available reusable products. The
      expected shared characteristics include general geometry and shape, similar
      liquid capacities and similar thermal performance characteristics. As a result,
      much of the market experience gained from the sale of these products is directly
      relevant to the usage characteristics of the proposed disposable products.
      There
      are two general sizes planned. A larger size of approximately 5 liters capacity,
      based on a product that has been produced for 4 years, is planned for shipping
      larger quantities of material and / or for use when longer holding times are
      required. A smaller size of approximately 1 liter capacity is planned for unit
      dose shipments, or small quantity shipments, that are direct to the end user
      and
      thus require shorter holding times. Because the shipment quantity is fairly
      small, a shorter holding time capability does not admit an unacceptable
      financial risk of product loss. The basis of the migration from reusable status
      to disposable status is primarily one of cost and disposability which requires
      a
      generally lower cost product. Lower cost is achieved from higher production
      quantities, from lower cost materials and from automated manufacturing methods.
      The currently ongoing development related to these items is principally focused
      on material properties, particularly those properties related to the low
      temperature requirement and the vacuum retention characteristics; i.e.,
      permeability of the materials. Several different metallic and polymeric
      materials have been subjected to testing to this point. One non-traditional
      material has been qualified and is available for production subject to the
      demand for higher production quantities that will justify the capital
      investment. Other materials are currently being evaluated for long term vacuum
      retention characteristics by analyzing permeation properties. These are long
      term tests that are being conducted by a commercial, well known laboratory.
      Further on steps that are required to successfully market the products to a
      broad spectrum of potential customers are largely related to a perceived need
      to
      customize the product characteristics to specific customer’s requirements. This
      can only be accomplished once the potential customer is identified and
      preliminary discussions are begun relative to the specific needs of that
      customer. Items potentially involved at this stage include the required holding
      time, the required product capacity, the impacts of the distribution environment
      from in plant packing to end use unpacking. We believe that each potential
      customer may have a specific set of needs that can be satisfied from a catalog
      like listing of the generic characteristics of the planned products. Other
      advances additional to the development work on the cryogenic container include
      both an improved liquid nitrogen retention system and a secondary protective
      packaging system. This secondary system has a low cost that lends itself to
      disposal. Further, it adds an additional liquid nitrogen retention capability
      to
      further assure compliance with IATA and ICAO regulations that prohibit egress
      of
      liquid nitrogen from the shipping package





The
      Company currently occupies approximately 8,000 square feet of manufacturing
      and
      office space in Brea, California and has five full-time employees and ten
      consultants.


Page
          6





As
      reported in the Report of Independent Registered Public Accounting Firm on
      the
      Company’s March 31, 2006 and 2005 financial statements, the Company has incurred
      recurring losses from operations and has a stockholders’ deficit. These factors,
      among others, raise substantial doubt about the Company’s ability to continue as
      a going concern. See page 34, “Management’s Discussion and Analysis or Plan of
      Operation” for further discussion.




**History:**





The
      Company was originally incorporated under the name G.T.5-Limited on May 25,
      1990
      as a Nevada corporation. The Company’s original focus was to engage in the
      business of designing and building exotic body styles for automobiles compatible
      with the vehicle’s existing chassis. The Company provided a series of hand
      molded body style products that were based on the chassis designs of the Ford
      Mustang, Pantera, Ford Cobra and Ferrari Daytona Spider. The Company’s goal was
      to provide customers with a cost effective solution to developing a great look
      to their own vehicles without the high costs associated with buying very
      expensive new vehicles. Acceptance of the Company’s concept never materialized,
      and revenues during the past few years declined. In 2004, the Company did not
      have any revenues. As a result, the foregoing operations were discontinued.
      In
      January 2005, the Company’s board of directors determined that it would be in
      its best interests, and that of its shareholders, to find a suitable acquisition
      candidate.





In
      March
      2005, the Company entered into a Share Exchange Agreement with CryoPort Systems,
      Inc., a California corporation, and its stockholders, pursuant to which the
      Company acquired all of the issued and outstanding shares of CryoPort Systems,
      Inc. in exchange for 24,108,105 shares of the Company’s common stock (which
      represented approximately 81% of its total issued and outstanding shares of
      common stock following the close of the transaction). The exchange price was
      reached through discussions between CryoPort Systems, Inc.’s board of directors
      and stockholders, and GT-5 Limited’s board of directors and major stockholders,
      taking into account supply and demand factors as well as the historical share
      prices to non-insiders of each company. The acquisition was a transaction
      involving the cashless exchange of shares only. In connection with this
      transaction, the Company changed its name to CryoPort, Inc., effective March
      16,
      2005. In addition, the Company’s then directors and officers resigned, and the
      directors and officers of CryoPort Systems were elected to fill the vacancies
      created by such resignations.





CryoPort
      Systems, Inc., was originally formed in California in 1999 as a limited
      liability company and was reorganized into a California corporation in December
      2000. CryoPort Systems, Inc. was founded in 1999 principally to capitalize
      on
      servicing the transportation needs of the growing global “biotechnology
      revolution”.


Page
          7





**Our
      Products**




**The
      Company’s Current Product Line:**





***Reusable
      Cryogenic Dry Vapor Shippers.*** **** The
      Company has developed three lines of reusable cryogenic dry vapor shippers
      which
      the Company believes solve the specific problems in, and are responsive to
      the
      evolving needs of the market place of temperature-critical, frozen and
      refrigerated transport of biologicals. This line of shippers is capable of
      maintaining cryogenic temperatures of minus 150 or less, for up to 10 days.





These
      products, which are in full production at the Company’s Brea, California
      facility, consist of the AR1000, the DG1000 and the DS650. The DG1000 is
      designed for shipping biological material classified as dangerous goods by
      IATA
      standards. This shipper is IATA certified for the shipment of Class 6.2
      Dangerous Goods. The AR1000 is utilized primarily in the veterinary and human
      assisted reproduction markets. This shipper may be used where packaging of
      the
      biological material need not comply with IATA Packing Instructions 602 or 650.
      The DS650 is utilized for the shipment of specimens for diagnosis, treatment
      or
      evaluation of disease that must conform to the IATA 650 packaging standards.
      The
      Company has recently introduced a soft case for the same cryogenic Dewar;
      identified as the PSX1000 and the PS1000. These units are smaller, lighter
      in
      weight, and more easily handled than the units described above. The PSX shippers
      are also certified to IATA Packing Instruction 602 and 650.





These
      shippers are lightweight, low-cost, re-usable vapor phase liquid nitrogen
      storage containers that combine the best features of packaging, cryogenics
      and
      high vacuum technology. Each of these three shippers is composed of an aluminum
      metallic Dewar flask, with a well for holding the biological material in the
      inner chamber. A Dewar flask, or “thermos bottle,” is an example of a practical
      device in which the conduction, convection and radiation of heat are reduced
      as
      much as possible. A high surface, low density open cell plastic foam material
      surrounds the inner chamber for retaining the liquid nitrogen in-situ by
      absorption, adsorption and surface tension. Absorption is defined as the taking
      up of matter in bulk by other matter, as in dissolving of a gas by a liquid,
      whereas adsorption is the surface retention of solid, liquid or gas molecules,
      atoms or ions by a solid or liquid. This material absorbs LN 2 up to
      six times faster than currently used materials, while providing the shipper
      with
      a hold time and capacity to transport biological materials safely and
      conveniently. The annular space between the inner and outer Dewar chambers
      is
      evacuated to a very high vacuum (10 -6 Torr).
      The specimen-holding chamber has a primary cap to enclose the specimens, and
      a
      removable and replaceable secondary cap to further enclose the specimen holding
      container and to contain the LN 2 .
      The
      entire Dewar vessel is then wrapped in a plurality of insulating and cushioning
      materials and placed either in a hard plastic shipper shell, or in a ballistic
      nylon soft shell outer case with a hinged lid, as with the Company’s
      PSX1000.





The
      Company believes the above product configuration satisfies the needs of the
      markets that require the temperature-critical, frozen and refrigerated transport
      of biological materials, such as pharmaceutical clinical trials, gene
      biotechnology, infectious materials handling, and animal and human reproduction.
      Due to the Company’s unique proprietary technology and innovative design, its
      shippers are less prone to losing functional hold time when not kept in an
      upright position than the competing products. The Company’s continuing R&D
      efforts are expected to lead to the introduction of smaller size units
      constructed of lower cost materials and utilizing high volume manufacturing
      methods that will make it practical to offer disposable or limited use cryogenic
      packages.


Page
          8





Materials
      to be transported in the AR1000 shipper are typically placed in a canister
      that
      is lowered into the well of the shipper, which is held in place by the cap
      and
      neck tube. The materials to be transported in the DG1000 and DS650 shippers are
      placed in a bio-cartridge, which in turn is placed in a leak proof plastic
      bag.
      The canister, or vial holder, and its contents are surrounded by cold
      LN 2 vapor
      from the saturated absorbent filler.





An
      important feature of the DG1000, DS650 and the PSX shippers is their compliance
      with the stringent packaging requirements of IATA Packing Instructions 602
      and
      650, respectively. These instructions include the internal pressure (hydraulic)
      and drop performance requirements. The Company believes its shippers were the
      first cost-effective cryogenic shippers to comply with these regulations, which
      it hopes will substantially enhance product acceptance, and facilitate its
      marketing efforts for both its reusable shippers and its planned disposable
      shippers.





***Biological
      Material Holders for Infectious and Dangerous Goods.*** **** The
      Company has also developed a patented containment bag which is used in
      connection with the shipment of infectious or dangerous goods. The inner
      packaging of the DG1000 shipper contains watertight primary receptacles (one
      and
      one-half millimeter vials.) Up to five vials are then placed onto aluminum
      holders and up to fifteen holders (75 vials) are placed into an absorbent pouch,
      designed to absorb the entire contents of all the vials in the event of leakage.
      This pouch containing up to 75 vials is then placed in a watertight secondary
      packaging plastic bag capable of withstanding cryogenic temperatures, and then
      sealed. This entire package is then placed in a unique, patented, secondary
      containment bag, which is a plastic film based material, critical to the
      function of the overall cryogenic package. These bags use a pressure-sensitive
      adhesive closure much like a common overnight courier envelope. As a result,
      these bags are inherently disposable, one-use-only. This bag is then placed
      into
      the well of the cryogenic shipper. ****





***Artificial
      Insemination Canisters.*** **** The
      Company has also developed an artificial insemination canister for use with
      its
      AR1000 shipper. Semen straws, which resemble the familiar plastic stirrers
      for
      hot beverages and are similar in size, come in two sizes, based on volume -
      one-half cc and one-quarter cc. These straws are sealed at both ends and placed
      in small cylindrical “goblets” that are in turn placed into a twelve-inch long
      cane. Fifteen canes can be placed in the metallic cylindrical canister that
      fits
      within the well of the shipper. The canister has a flexible handle and separate
      vapor plug. Straws can also be stored in bulk in 65mm diameter goblets in two
      layers using a disposable canister or via the use of a lifter. With the
      disposable canister or lifter, up to 720 1⁄2 cc or 1600 1⁄4 cc straws can be stored
      in the AR1000.


Page
          9




**The
      Company’s Future Products:**





The
      Company’s continuing R&D efforts are expected to lead to the introduction of
      smaller size units constructed of lower cost materials and utilizing high volume
      manufacturing methods that will make it practical to offer disposable or limited
      use cryogenic packages.




The
      transition from a reusable shipper to a one-way shipper is planned during mid
      calendar year 2006 and will be accomplished initially by a simple reduction
      in
      the size of existing materials, the simplification of the outer protective
      shipping package and the use of established manufacturing practices.
      Subsequently, in order to enable higher volume production, alternate materials
      which are processed differently will be employed, with anticipated substantial
      cost reductions to be made to both the inner cryogenic Dewar and the outer
      integrated shipping case, while maintaining most of the Company’s proven,
      current manufacturing methods. This product will then be transitioned to a
      fully
      disposable one-way shipper with an appropriate recycling program. The one-way
      shipper will employ alternate materials of construction, which will further
      enable both higher mass manufacturing and additional cost reduction
      opportunities.





The
      Company’s driving logic in developing a one-way shipper is:





·
            To
                make the cost of the cryogenic package less than, or equal to, the
                total
                cost of ownership (on a one time use basis including return shipping
                and
                handling) of a reusable unit depending on the ultimate capacity and
                hold
                time of the shipper.





·
            To
                create the opportunity to ultimately offer a seamless “bio-express”
                courier service to the Company’s target markets via its strategic
                partners.





**Our
      Strategy:**




The
      Company’s present objective is to leverage its proprietary technology and
      developmental expertise to design, develop, manufacture and sell cryogenic
      shipping devices. The key elements of its strategy include:





***Expand
      the Company’s product offerings to address growing
      markets.*** ** Given
      the
      need for a temperature-sensitive shipping device that can cost effectively
      be
      used, the Company is diligently working to develop a disposable or one-time
      use
      shipping device that performs as well as its reusable shippers to eliminate
      the
      need for a return shipment and the costs associated therewith as well as
      eliminate any loss of specimen viability during the shipping
      process.





***Expand
      the Company’s marketing and distribution channels.*** ** The
      Company’s products serve the shipping needs of companies across a broad spectrum
      of industries on a growing international level. It is the Company’s goal to
      establish those contacts necessary to achieve a broader distribution of its
      products.


Page
          10





***Establish
      strategic partnerships.*** ** In
      order
      to expedite the Company’s time to market and increase its market presence, the
      Company is currently negotiating to establish strategic alliances to facilitate
      the manufacture, promotion and distribution of its products, including
      establishing alliances with shipping container manufacturers (both cryogenic
      and
      dry ice), integrated express companies, and freight forwarding
      companies.





**Sales
      and Marketing:**




The
      Company currently has an internal sales and marketing group which manages both
      its direct sales efforts and its third party resellers, which include Air
      Liquide and SCA Thermosafe. The Company also has relationships with several
      other distributors and agents. The Company’s current distribution channels cover
      the Americas, Europe and Asia. The Company has no distributors or agents that
      account for greater than 10% of overall sales volumes other than our independent
      South American sales agent. All agreements are non-exclusive with the exception
      of our South American sales agent. The Company’s South American agent is
      CryoPort Systems Ltda. in Sao Paulo, Brazil and all South American revenues
      reported have been generated by this agent in the Brazilian market. The
      Company’s current effective agreement with CryoPort Systems, Ltda. is an
      exclusive, ten year agreement, expiring on August 9, 2011, which provides a
      17%
      commission payable for all sales in the countries of South America (see Exhibit
      10.1.8). Subsequent to March 31, 2006, the Company accepted the request for
      termination of its contractual arrangement with CryoPort Systems, Ltda as its
      independent South American sales agent, as a result of CryoPort Systems, Ltda’s
      decision to close its business in Brazil.




The
      Company’s geographical sales for the year ended March 31, 2006 were as
      follows:





USA
            63.8%South
                America
            14.4%Europe
            14.4%Other
                North America
            5.5%Asia
            2.0%





**Customer
      Base:**





The
      Company believes that the primary customers for its dry vapor shippers (both
      reusable and the future one-way shippers) are concentrated in the following
      markets for the following reasons:





·
            Pharmaceutical
                clinical trials


·
            Gene
                biotechnology


·
            Transport
                of infectious materials and dangerous
                goods


Page
          11





·
            Pharmaceutical
                distribution


·
            Artificial
                insemination and embryo transfer in animals;
                and


·
            Human
                assisted reproduction artificial
                insemination





***Pharmaceutical
      Clinical Trials.*** Every
      pharmaceutical company developing a new drug that must be approved by the Food
      and Drug Administration conducts clinical trials to, among other things, test
      the safety and efficacy of the potential new drug. In connection with the
      clinical trials, the companies may enroll patients from all over the world
      who
      regularly submit a blood specimen at the local hospital, doctor’s office or
      laboratory. These samples are then sent to the specified testing laboratory,
      which may be local or in another country. The testing laboratories will
      typically set the requirements for the storage and shipment of blood specimens.
      While domestic shipping of these specimens is sometimes accomplished adequately
      using dry ice, international shipments present several problems, as dry ice,
      under the best of circumstances, can only provide freezing for up to 36 hours,
      in the absence of re-icing (which is quite costly). Because shipments of
      packages internationally can be delayed for more than 36 hours due to flight
      cancellations, incorrect destinations, labor problems, ground logistics and
      safety reasons, dry ice is not always a reliable and cost effective option.
      Clinical trial specimens are often irreplaceable because each one represents
      data at a prescribed point in time, in a series of specimens on a given patient,
      who may be participating in a trial for years. Sample integrity during the
      shipping process is vital to retaining the maximum number of patients in each
      trial. The Company’s shippers are ideally suited for this market, as the hold
      time provided by its shipper ensures that specimens can be sent over long
      distances with minimal concern that they will arrive in a condition that will
      cause their exclusion from the trial.





Furthermore,
      the IATA requires that all airborne shipments of laboratory specimens be
      transmitted in either IATA 650 or 602 certified packaging. As a result, shippers
      of long distance clinical trials specimens will be automatic candidates to
      use
      the DG1000, the Company’s 602-certified dangerous goods reusable shipper, or the
      DS650, 650-certified diagnostic specimen reusable shipper. Once the Company
      has
      developed and obtained IATA certification of a disposable dry vapor shipper,
      it
      will be ideally suited for this market, in particular due to the elimination
      of
      the cost to return the reusable shipper.





***Gene
      Biotechnology.*** **** According
      to a recent edition of the Corporate Technology Directory, there are
      approximately 3600 pharmaceutical and biotechnology companies in the United
      States. Of these companies, approximately 2600 are biotechnology companies
      and
      approximately 1000 are pharmaceutical companies. The gene biotechnology market
      includes basic and applied research and development in diverse areas such as
      stem cells, cloning, gene therapy, DNA tumor vaccines, tissue engineering,
      genomics, and blood products. Company’s participating in the foregoing fields
      rely on the frozen transport of specimens in connection with their research
      and
      development efforts.





***Transport
      of Infectious Materials and Dangerous Goods.*** **** The
      transport of potentially infectious materials demands strict adherence to
      regulations that protect public safety while maintaining the viability of the
      material being shipped. All blood products are considered to be potentially
      infective and must be treated as such. Pharmaceutical companies, private
      research laboratories and hospitals ship tissue cultures and microbiology
      specimens, which are also potentially infectious materials, between a variety
      of
      entities, including private and public health reference laboratories. Almost
      all
      specimens in this infectious materials category require either a refrigerated
      or
      frozen environment. **** According
      to a doctor at the National Institute of Health (NIH), over 2 million vials
      of
      potentially infective material are shipped domestically or internationally
      each
      year, within the NIH alone. The Company initially developed its DG1000 shipper
      to meet the shipping requirements of this market.


Page
          12





Partly
      in
      response to the attack on the World Trade Center and the anthrax scare,
      government officials and health care professionals are focusing renewed
      attention on the possibility of attacks involving biological and chemical
      weapons such as anthrax, smallpox and sarin gas. Efforts expended on research
      and development to counteract biowarfare agents requires the frozen transport
      of
      these agents to and from facilities conducting the research and development.
      Vaccine research, including methods of vaccine delivery, also requires frozen
      transport. The Company’s DG1000 **** shipper
      is suited to this type of research and development.





***Pharmaceutical
      Distribution.*** The
      current focus for the disposable products under development is in the area
      of
      pharmaceutical distribution. There are a significant number of therapeutic
      drugs
      and vaccines currently or soon to be, undergoing clinical trials. After the
      FDA
      approves them for commercial distribution, it will be necessary for the
      manufacturers to have a reliable and economical method of distribution to the
      physician who will administer the product to the patient. Although there are
      not
      now a large number of drugs, there are a substantial number in the development
      pipeline. It is likely that the most efficient and reliable method of
      distribution will be to ship a single dosage to the administering physician.
      These drugs are typically identified to individual patients and therefore will
      require a complete tracking history from the manufacturer to the patient. The
      most reliable method of doing this is to ship a unit dosage specifically for
      each patient. Because the drugs require maintenance at frozen or cryogenic
      temperatures, each such shipment will require a frozen or cryogenic shipping
      package. The Company anticipates being in a position to service that need.




***Artificial
      Insemination and Embryo Transfer in Animals.*** **** The
      primary animal artificial insemination market that the Company is interested
      in
      is the bovine market. Markets of secondary interest are the equine, swine,
      sheep
      and canine markets. The largest established market is dairy cattle, followed
      by
      beef cattle and horses. In addition, the swine breeding industry is rapidly
      converting to artificial insemination for breeding purposes.





The
      bovine semen shipping market can be divided into three distinct
      parts:





·
            The
                shipment of very large numbers of semen straws from one large artificial
                insemination company to another;


Page
          13





·
            The
                shipment of fewer straws from large artificial insemination companies
                to
                smaller distributors; and


·
            The
                “residential” shipment of small quantities of straws to small farms and
                dairies.





The
      last
      two categories are ideally suited for the use of the Company’s medium capacity
      AR1000 shipper or the PSX1000 shipper. The first category is viewed as one
      of
      limited potential as there are ****** fewer
      shipments, each containing a ****** very
      large numbers of straws. Even though the shipments in the first category
      initially contain larger numbers of straws, they are often broken down into
      much
      smaller numbers of straws and shipped to end users in medium capacity shippers,
      such as The Company’s AR1000 and PSX1000.





Although
      the bovine market is the largest and most mature market for shipping semen
      in
      dry vapor shippers, the use of this procedure for other species such as swine
      appears to be rapidly increasing.




Breeding
      horses by artificial insemination or embryo transfer is also becoming
      commonplace and has a growing international component. Shipping valuable animals
      for purposes of breeding is both costly and potentially injurious. The demand
      for desirable equine genetics for improving breeding stock has led to the
      shipment of semen or embryos to every part of the world.





Sheep,
      goats, dogs and exotic species are also being increasingly bred by artificial
      insemination. Airlines do not want to assume the liability of shipping live
      animals and discourage the practice whenever possible. While it was previously
      common for dogs to be shipped for breeding purposes, canine sperm banks are
      shipping semen at an increasing rate.





***Assisted
      Human Reproduction.*** According
      to The Wall Street Journal, January 6, 2000 issue, 30,000 infants are born
      annually in the United States through artificial insemination and according
      to
      Department of Health statistics, 10 million Americans annually are affected
      by
      infertility problems. It is estimated that this represents at least 50,000
      doses
      of semen. Since relatively few sperm banks provide donor semen,
      frozen ****** shipping
      is almost always involved. As with animal semen, human semen must be stored
      and
      shipped at cryogenic temperatures to retain viability, to stabilize the cells
      and to ensure reproducible results. This can only be accomplished with the
      use
      of liquid nitrogen or LN 2 dry
      vapor shippers. The Company anticipates that this market will continue to
      increase as this practice gains acceptance in new areas of the
      world.





**Competition:**





Within
      the Company’s intended markets for a low cost and disposable or limited usage
      Dewar, there is no currently known competition. CryoPort intends to become
      competitive by reason of improved technological characteristics and by
      introducing the concept of disposability and single use products. None of the
      traditional suppliers of cryogenic shippers is known to have competitive
      equipment nor are they expected to have anything available within a short period
      of time. The traditional suppliers, Chart Industries, Harsco, and Air Liquide
      have various models of dry shippers available that sell at prices that preclude
      any concept of disposability. On the other hand, they are more established
      and
      have larger organizations and have greater financial, operational, sales and
      marketing resources and experience in research and development than the Company
      does. Other competitive factors include the ability of the shipper to retain
      liquid nitrogen when placed in non-upright positions, the overall
“leak-proofness” of the package which determines compliance with shipping
      regulations and the overall weight and volume of the package which determines
      shipping costs.


Page
          14





**Industry
      Overview:**





The
      Company’s products are sold into a rapidly growing niche of the packaging
      industry focused on the temperature sensitive packaging and shipping of
      biological materials. Expenditures for “value added” packaging for frozen
      transport have been increasing for the past several years and are expected
      to
      continue to increase even more in the future as more domestic and international
      biotechnology firms introduce pharmaceutical products that require continuous
      refrigeration at cryogenic temperatures. This will require a greater dependence
      on passively controlled temperature transport systems (i.e., systems having
      no
      external power source). [References: Cryopak Industries *-
      Investment Package/Annual Report* and ** US
      Department of Commerce - *US
      Industrial Outlook.* ]





The
      Company believes that growth in the following markets has resulted in the need
      for increased efficiencies and greater flexibility in the temperature sensitive
      packaging market:





·
            Pharmaceutical
                clinical trials, including transport of tissue culture
                samples;


·
            Pharmaceutical
                commercial product distribution


·
            Transportation
                of diagnostic specimens;


·
            Transportation
                of infectious materials;


·
            Intra
                laboratory diagnostic testing;


·
            Transport
                of temperature-sensitive specimens by
                courier;


·
            Analysis
                of biological samples;


·
            Gene
                biotechnology and vaccine
                production;


·
            Food
                engineering; and


·
            Animal
                and human reproduction





Many
      of
      the biological products in these above markets require transport in a frozen
      state as well as the need for shipping containers which have the ability to
      maintain a frozen, cryogenic environment (e.g., -160°C) for a period ranging
      from two to ten days (depending on the distance and mode of shipment). These
      products include semen, embryo, tissue, tissue cultures, cultures of viruses
      and
      bacteria, enzymes, DNA materials, vaccines and certain pharmaceutical products.
      In some instances, transport of these products requires temperatures at, or
      approaching, -196°C.


Page
          15




One
      problem faced by many companies operating in these specialized markets is the
      limited number of cryogenic shipping systems serving their needs, particularly
      in the areas of pharmaceutical companies conducting clinical trials. The
      currently adopted protocol, and the most common method for packaging frozen
      transport in these industries is the use of solid carbon dioxide (dry ice).
      Dry
      ice is used in shipping extensively to maintain a frozen state for a period
      of
      one to four days. Dry ice is used in the transport of many biological products,
      such as pharmaceuticals, laboratory specimens and certain infectious materials
      that do not require true cryogenic temperatures. The common approach to shipping
      these items via ground freight is to pack the product in a container, such
      as an
      expanded polystyrene (Styrofoam) box or a molded polyurethane box, with a
      variable quantity of dry ice. The box is taped or strapped shut and shipped
      to
      its destination with freight charges based on its initial shipping
      weight.





With
      respect to shipments via specialized courier services, there is no standardized
      method or device currently in use for the purpose of transporting
      temperature-sensitive frozen biological specimens. One common method for courier
      transport of biologicals is to place frozen specimens, refrigerated specimens,
      and ambient specimens into a compartmentalized container, similar in size to
      a
      55 quart Coleman or Igloo cooler. The freezer compartment in the container
      is
      loaded with a quantity of dry ice at minus 78°C, while the refrigerated
      compartment at 8°C utilizes ice substitutes.





Two
      manufacturers of the polystyrene and polyurethane containers frequently used
      in
      the shipping and courier transport of dry ice frozen specimens are Insulated
      Shipping Containers, Inc. and SCA Thermosafe (formerly Polyfoam Packers
      Corporation). When these containers are used with dry ice, the average
      sublimation rate (e.g., the rate at which dry ice turns from a solid to a
      gaseous state) in a container with a one and one-half inch wall thickness is
      slightly less than three pounds per 24 hours. Other existing refrigerant systems
      employ the use of gel packs and ice substitutes for temperature maintenance.
      Gels and eutectic solutions (phase changing materials) with a wide range of
      phasing temperatures have been developed in recent years to meet the needs
      of
      products with varying specific temperature control requirements.





The
      use
      of dry ice and ice substitutes, however, regardless of external packaging used,
      are frequently inadequate because they do not provide low enough storage
      temperatures and, in the case of dry ice, last for only a few days without
      re-icing. As a result, companies run the risk of increased costs due to lost
      specimens and additional shipping charges due to the need to re-ice.





Some
      of
      the other disadvantages to using dry ice for shipping or transporting
      temperature sensitive products are as follows:





·
            Availability
                of a dry ice source;


·
            Handling
                and storage of the dry ice;


·
            Cost
                of the dry ice;


·
            Weight
                of containers when packed with dry
                ice;


Page
          16





·
            Securing
                a shipping container with a high enough R-value to hold the dry ice
                and
                product for the required time period;
                and


·
            Securing
                a shipping container that meets the requirements for International
                Air
                Transportation Association (“IATA”), the Department of Transportation
                (“DOT”), the Center for Disease Control (“CDC”), and other regulatory
                agencies.





Due
      to
      the limitations of dry ice, shipment of specimens at true cryogenic temperatures
      can only be accomplished using liquid nitrogen (LN 2 )
      dry
      vapor shippers, or by shipping over actual liquid nitrogen. While such shippers
      provide solutions to the issues encountered when shipping with dry ice, they
      too
      are experiencing some criticisms by users or potential users. For example,
      the
      cost for these products typically can range from $650 to $3,000 per unit, which
      can substantially limit their use for the transport of many common biologicals,
      particularly with respect to small quantities such as is the case with direct
      to
      the physician drug delivery. Because of the initial cost and limited production
      of these containers, they are designed to be reusable. However, the cost of
      returning these heavy containers can be significant, particularly in
      international markets, because most applications require only one-way
      shipping.





Another
      problem with these existing systems relates to the hold time of the unit in
      a
      normal, upright position versus the hold time when the unit is placed on its
      side or inverted. The liquid nitrogen can leak out of the container when it
      is
      positioned on its side or inverted. This leaking will compromise the
      dependability of these dry shippers, particularly when used in circumstances
      requiring lengthy shipping times. The Company’s current reusable shippers have
      only a 40% reduction in hold time when placed on their sides or inverted. One
      of
      the Company’s significant competitors, Chart Industries, Inc., publishes on
      their web site, a 60% reduction in hold time when its units are placed on their
      side and a 90% reduction when its units are inverted. Since other competitors
      use similar absorbent materials to that used by Chart Industries, Inc., the
      Company believes the performance characteristics will be similar for their
      products of this particular size and volume.





Finally,
      these containers are often promoted as being durable due to their metal
      construction. However, rough handling can result in the puncturing of the outer
      shell or cracking at the neck area, resulting in the loss of the high vacuum
      insulation. This renders the shippers useless. A hard-shell shipping enclosure
      is available as an optional accessory to provide additional protection for
      these
      units at an additional cost to the user. The metal construction also adds to
      the
      weight of the container, thereby adding substantially to shipping
      costs.





**The
      CryoPort Solution:**





During
      the past several years, a number of trends have emerged in the
      temperature-sensitive packaging industry as a result of economic and
      technological changes. The Company has focused its product development efforts
      to respond to what it perceives to be the more significant of these trends,
      specifically the following:


Page
          17





·
            Smaller,
                more efficient packaging (increasing thermal
                density);


·
            Emphasis
                on decreasing costs and system
                simplification;


·
            Need
                for turnkey services;


·
            Development
                of international programs and
                markets;


·
            Centralization
                of commercial products and services;
                and


·
            Development
                of regulatory standards.





***Smaller,
      More Efficient Packaging.*** **** Advances
      in both materials and manufacturing technology have made it possible to reduce
      the size, weight, complexity and cost of packaging, while increasing the
      capabilities of high performance packaging. These advances are the result of
      developments in the aerospace industry in the areas of high strength, low weight
      materials and thermal technology. The Company is applying this technology in
      its
      product development efforts, and believes that it is at the forefront of
      applying this technology in the public sector. The Company’s development efforts
      are focused on the application of polymers and high volume metal casting and
      forming methods that have traditionally been excluded from the cryogenic
      industry because product quantities have been too low to efficiently utilize
      these materials and methods. Cryoport currently manufactures its reusable
      shipper with an approximate liquid nitrogen volume of five liters. The Company’s
      future intended products will be a range of shippers with liquid nitrogen
      capacities from approximately one to five liters in size.





***Emphasis
      on Decreasing Costs and System Simplification.*** **** Because
      current dry vapor LN 2 shipping
      containers are expensive, many users do not keep an ample supply on hand.
      Consequently, some users require that these be returned promptly. This often
      results in very expensive express return shipping which will significantly
      magnify as shipping volumes increase. This has created a demand for smaller,
      lower cost dry vapor LN 2 shipping
      containers. In addition, many users have expressed a strong interest in the
      production of a dry vapor LN 2 shipper
      that is inexpensive enough to be used in a disposable or limited usage manner.
      The current price of CryoPort’s reusable shippers range from $735 to $1,095. The
      price range for the proposed disposable/one way shippers when developed is
      initially expected to range from $50 to $175 per use, depending on
      size.





As
      previously noted, dry vapor LN 2 shipping
      containers are made of medium gauge metal that makes them vulnerable to denting
      and breaking and increases shipping costs due to the added weight. Additionally,
      their design requires that they be kept in an upright position to achieve
      advertised hold times. If they are placed in a horizontal position,
      LN 2 can leak
      out or boil off, substantially reducing their hold times. The Company
      anticipates manufacturing its shippers in smaller sizes from lighter weight
      materials that significantly reduce their weight (thereby reducing shipping
      costs) and manufacturing cost, which will allow them to be used one time for
      outbound shipments. Additionally, the patented absorbent used to hold the
      LN 2 much
      more efficiently retains liquid when its shippers are positioned on their sides
      or inverted. The Company has significantly reduced the possible loss of liquid
      nitrogen refrigerant that all dry shippers experience when not kept
      vertical.


Page
          18





***Turnkey
      Services.*** **** The
      pharmaceutical industry depends on clinical trials for Food and Drug
      Administration approval of new drugs. A significant number of these trials
      require frozen transport of specimens obtained from patients in the study.
      A
      number of pharmaceutical companies now specify temperature-sensitive frozen
      packaging and services as part of “turnkey” contracts with contract research
      organizations. To meet the demands of their customers, freight forwarding
      companies, such as World Courier, Federal Express and DHL, take responsibility
      for procuring appropriate packaging, shipping by airline, and delivering the
      specimens to the point of analytical testing. This comprehensive service
      addresses the stringent requirements imposed by pharmaceutical companies to
      ensure appropriate quality control for their clinical studies. The Company
      believes its reusable and disposable dry shippers will greatly enhance the
      reliability of the quality control required.





***Development
      of International Programs and Markets.*** **** The
      biotechnology and pharmaceutical industries are now transnational industries
      with locations in various parts of the industrially developed and developing
      world. Since many products produced by these industries must be shipped in
      temperature-sensitive packaging, the logistical problems presented by longer
      distances, and sometimes unreliable forwarding entities, are becoming of greater
      concern. Weekends, holidays, lost containers, hot weather and indirect courier
      routes all place a strain on the ability of current shipping devices to provide
      appropriate temperatures when extraordinary delays are encountered. Because
      the
      Company’s shippers are able to maintain frozen or cryogenic temperatures of
      minus 150°C, or less, for up to 10 days, its shippers are better able to insure
      the integrity of specimens affected by unexpected shipping delays. Further,
      the
      maximum guaranteed temperature hold time of our 5 liter shipper is 16 days
      which
      is quoted under perfect and ideal conditions when in a "static" (i.e.
      stationary) condition only. The functional (in shipping use) hold time of this
      same 5 liter shipper is 10 days. Functional hold times are intended to be an
      indication only of how many days a shipper can be expected
      to hold its temperature when subjected to normal shipping
      usage .




***Centralization
      of Commercial Products and Services.*** **** In
      recent
      years, the competitive environment in health care has intensified rapidly,
      while
      increased managed care participation, coupled with Medicare and Medicaid
      reimbursement issues, have placed significant pressure to increase efficiency
      on
      market segments that service the health care industry. These include the
      diagnostic clinical laboratory industry and pharmaceutical industry. In response
      to these, and other pressures, the clinical laboratory industry experienced
      a
      consolidation, through both acquisition and attrition, which resulted in fewer,
      more centralized testing locations, processing a larger volume of specimens.
      With fewer testing sites processing increased volumes, a tremendous strain
      has
      been placed on the traditional modes for transporting these goods.




With
      respect to the pharmaceutical industry, the emergence of international
      pharmaceutical conglomerates through mergers and acquisitions, such as Smith
      Kline Beecham, and the dramatic growth of relatively new companies such as
      Amgen, coupled with the emergence of contract research organizations, such
      as
      Quintiles (with testing laboratories in Atlanta, Georgia, Buenos Aires,
      Edinburgh, Pretoria, Singapore and Melbourne), which contract with
      pharmaceutical companies to handle, among other things, clinical trials and
      testing, means that distribution networks for the transport of
      temperature-sensitive products have become much more complex.




Page
          19




The
      Company believes that it has developed, and is developing, products that are
      ideally suited to address the issues presented by these trends.




***Development
      of Regulatory Standards.*** **** The
      shipping of diagnostic specimens, infectious substances and dangerous goods,
      whether via air or ground, falls under the jurisdiction of many state, federal
      and international agencies. The quality of the containers, packaging materials
      and insulation that protect a specimen determine whether or not it will arrive
      in a usable condition. Many of the regulations for transporting dangerous goods
      in the United States are determined by international rules formulated under
      the
      auspices of the United Nations. For example, the International Civil Aviation
      Organization (“ICAO”) is the United Nations organization that develops
      regulations (Technical Instructions) for the safe transport of dangerous goods
      by air. If shipment is by air, compliance with the rules established by IATA
      is
      required. IATA is a trade association made up of airlines and air cargo carriers
      that publishes annual editions of the IATA Dangerous Goods Regulations. These
      regulations interpret and add to the ICAO Technical Instructions to reflect
      industry practices. Additionally, the CDC has regulations (published in the
      Code
      of Federal Regulations) for interstate shipping of specimens, and the
      Occupational Safety and Health Organization (“OSHA”) also addresses the safe
      handling of Class 6.2 Substances. The Company’s DG1000 meets packing instruction
      602 and 650 and is certified for the shipment of Class 6.2 Dangerous Goods
      per
      the requirements of the International Civil Aviation Organization (ICAO)
      Technical Instructions for the Safe Transport of Dangerous Goods by Air and
      the
      International Air Transport Association (IATA).





**Research
      and Development:**





The
      Company’s principal research and development activities for the years 2005 and
      2006 continued to center around the investigation of materials of construction
      for the products and packages with the view of identifying those materials
      that
      yield fabrication costs consistent with the concept of disposability. Prototypes
      of one version of a unit dose transport system were developed and preliminary
      designs of a second concept were completed. Other research and development
      effort was directed toward improvements to the liquid nitrogen retention system
      to render it more reliable in the general shipping environment. The Company’s
      research and development expenditures during the fiscal years ended March 31,
      2006 and 2005 were $254,487 and $98,698, respectively.





**Manufacturing:**





The
      component parts for the Company’s products are primarily manufactured at third
      party manufacturing facilities. The Company also has a warehouse at the
      corporate offices in Brea, California, where the Company is capable of
      manufacturing certain parts and full assembly of its products. Most of the
      components that the Company uses in the manufacture of its products are
      available from more than one qualified supplier. For some components, however,
      there are relatively few alternate sources of supply and the establishment
      of
      additional or replacement suppliers may not be accomplished immediately,
      however, the Company has identified alternate qualified suppliers which the
      Company believes could replace existing suppliers. Should this occur, the
      Company believes the maximum disruption of production could be a short period
      of
      time, on the order of approximately four to six weeks. The Company anticipates
      that this will initially be the case with the outer shell the Company is
      developing for its disposable shipper.


Page
          20




Primary
      manufacturers include Spaulding Composites Company, Peterson Spinning and
      Stamping, Lydall Industrial Thermal Solutions, Ludwig, Inc., and Porex Porous
      Products Group. There are no specific agreements with any manufacturer nor
      are
      there any long term commitments to any. It is believed that any of the currently
      used manufacturers could be replaced within a short period of time as none
      have
      a proprietary component nor a substantial capital investment specific to the
      Company’s products.





The
      Company’s manufacturing process uses non-hazardous cleaning solutions which are
      provided and disposed of by an EPA approved supplier. EPA compliance costs
      for
      the company are therefore negligible.





**Patents:**





In
      order
      to remain competitive, the Company must develop and maintain protection on
      the
      proprietary aspects of its technologies. The Company relies on a combination
      of
      patents, copyrights, trademarks, trade secret laws and confidentiality
      agreements to protect its intellectual property rights. The Company currently
      holds two issued U.S. trademarks and three issued U.S. patents primarily
      covering various aspects of its products. In addition, the Company intends
      to
      file for additional patents to strengthen its intellectual property rights.
      The
      technology covered by the above indicated patents refer to matters specific
      to
      the use of liquid nitrogen dewars relative to the shipment of biological
      materials. The concepts include those of disposability, package configuration
      details, liquid nitrogen retention systems, systems related to thermal
      performance, systems related to packaging integrity, and matters generally
      relevant to the containment of liquid nitrogen. Similarly, the trademarks
      mentioned relate to the cryogenic temperature shipping activity. Patents and
      trademarks currently held by the Company include:





Type:
            
            No.
            
            Issued
            
            ExpirationPatent
            
            
            6,467,642
            
            
            Oct.
                22, 2002
            
            
            Oct.
                21, 2022Patent
            
            
            6,119,465
            
            
            Sep.
                19, 2000
            
            
            Sep.
                18, 2020Patent
            
            
            6,539,726
            
            
            Apr.
                1, 2003
            
            
            Mar
                31, 2023Trademark
            
            
            7,583,478,7
            
            
            Oct.
                29, 1999
            
            
            Oct.
                28, 2009Trademark
            
            
            7,586,797,8
            
            
            Dec.
                8, 1999
            
            
            Dec.
                7, 2009




Page
          21


The
      Company’s success depends to a significant degree upon its ability to develop
      proprietary products and technologies and to obtain patent coverage for these
      products and technologies. The Company intends to continue to file patent
      applications covering any newly developed products, components, methods and
      technologies. However, there can be no guarantee that any of its pending or
      future filed applications will be issued as patents. There can be no guarantee
      that the U.S. Patent and Trademark Office or some third party will not initiate
      an interference proceeding involving any of its pending applications or issued
      patents. Finally, there can be no guarantee that its issued patents or future
      issued patents, if any, will provide adequate protection from competition,
      as
      discussed below.





Patents
      provide some degree of protection for the Company’s proprietary technology.
      However, the pursuit and assertion of patent rights involve complex legal and
      factual determinations and, therefore, are characterized by significant
      uncertainty. In addition, the laws governing patent issuance and the scope
      of
      patent coverage continue to evolve. Moreover, the patent rights the Company
      possesses or are pursuing generally cover its technologies to varying degrees.
      As a result, the Company cannot ensure that patents will issue from any of
      its
      patent applications, or that any of its issued patents will offer meaningful
      protection. In addition, the Company’s issued patents may be successfully
      challenged, invalidated, circumvented or rendered unenforceable so that its
      patent rights may not create an effective barrier to competition. Moreover,
      the
      laws of some foreign countries may not protect its proprietary rights to the
      same extent, as do the laws of the United States. There can be no assurance
      that
      any patents issued to the Company will provide a legal basis for establishing
      an
      exclusive market for its products or provide it with any competitive advantages,
      or that patents of others will not have an adverse effect on its ability to
      do
      business or to continue to use its technologies freely.





The
      Company may be subject to third parties filing claims that its technologies
      or
      products infringe on their intellectual property. The Company cannot predict
      whether third parties will assert such claims against it or whether those claims
      will hurt its business. If the Company is forced to defend itself against such
      claims, regardless of their merit, the Company may face costly litigation and
      diversion of management’s attention and resources. As a result of any such
      disputes, the Company may have to develop, at a substantial cost, non-infringing
      technology or enter into licensing agreements. These agreements may be
      unavailable on terms acceptable to it, or at all, which could seriously harm
      the
      Company’s business or financial condition.





The
      Company also relies on trade secret protection of its intellectual property.
      The
      Company attempts to protect trade secrets by entering into confidentiality
      agreements with third parties, employees and consultants. It is possible that
      these agreements may be breached, invalidated or rendered unenforceable, and
      if
      so, the Company’s trade secrets could be disclosed to its competitors. Despite
      the measures the Company has taken to protect its intellectual property, parties
      to its agreements may breach confidentiality provisions in its contracts or
      infringe or misappropriate its patents, copyrights, trademarks, trade secrets
      and other proprietary rights. In addition, third parties may independently
      discover or invent competitive technologies, or reverse engineer its trade
      secrets or other technology. Therefore, the measures the Company is taking
      to
      protect its proprietary technology may not be adequate.


Page
          22


**Government
      Regulation:**





The
      Company is subject to numerous federal, state and local laws relating to such
      matters as safe working conditions, manufacturing practices, environmental
      protection, fire hazard control, and disposal of hazardous or potentially
      hazardous substances. The Company may incur significant costs to comply with
      such laws and regulations now or in the future.





Users
      of
      the Company’s shippers are subject to state, federal and international
      government and/or agency regulation with respect to the shipment of diagnostic
      specimens, infectious substances and dangerous goods. The quality of the
      containers, packaging materials and insulation that protect a specimen determine
      whether or not it will arrive in a usable condition. Many of the regulations
      for
      transporting dangerous goods in the United States are determined by
      international rules formulated under the auspices of the United Nations.
      Companies shipping certain items must comply with any applicable Department
      of
      Transportation and ICAO regulations, as well as rules established by IATA,
      the
      CDC, OSHA and any other relevant regulatory agency.





**RISK
      FACTORS:**




*You
      should carefully consider all of the material risks of the Company’s business,
      including those described below, in addition to the other information contained
      in this registration statement. This registration statement contains
      forward-looking statements that involve risks and uncertainties. The Company’s
      actual results could differ materially from those contained in the
      forward-looking statements. Factors that may cause such differences include,
      but
      are not limited to, those discussed below as well as those discussed elsewhere
      in this prospectus.*





**Concern
      that the Company will continue as a going concern.**




***There
      is uncertainty that the Company will continue as a going concern. The Company
      has a history of operating losses, has substantial outstanding indebtedness
      that
      the Company may be unable to repay or convert to equity and will need to
      carefully manage its liquidity. The Company will continue to need additional
      funds, and if additional capital is not available, the Company may have to
      limit, scale back or cease its operations.***





The
      Company’s consolidated financial statements report recurring losses and an
      accumulated deficit. For the years ended March 31, 2006 and 2005, the Company
      incurred net losses of $1,522,101 and $1,038,110, respectively, and its
      operations have used $1,155,962 and $1,018,116 of cash, respectively. As of
      March 31, 2006 and 2005, the Company had accumulated deficit balances of
      $7,038,891 and $5,516,790, respectively


Page
          23


At
      March
      31, 2006, the Company had approximately $1,747,686 of outstanding indebtedness
      in the form of short-term and long-term promissory notes and accrued interest.
      Of such amount, $1,678,686 is long-term debt and an additional $69,000 is
      considered short-term debt. Included in this indebtedness are notes representing
      an aggregate of $1,259,500 in principal amount of outstanding indebtedness
      owed
      to four former directors and principal shareholders and $110,000 in principal
      amount to R. Takahashi, a CryoPort Inc. shareholder. These notes represent
      working capital advances made to the Company, for which the indebtedness is
      evidenced by demand notes bearing interest at the rate of 6% per annum and
      which
      provide for repayment in the form of scheduled monthly payments beginning April
      1, 2006. Any funds applied to repay the Company’s outstanding indebtedness will
      not be available to fund its business. The Company may be unable to raise the
      funds necessary to repay its debt and the holders of past due amounts may seek
      to enforce their rights against it.





Based
      on
      presently known commitments and plans the Company expects to fund its operations
      through the first quarter of 2007 mainly from cash from the following sources:
      short term debt financing, proceeds from issuances of common stock, operating
      cash received on accounts receivable, and cash on hand. The Company management
      is currently focused on raising cash to fund the sales and marketing and
      manufacturing process development activities to launch the one-way product
      line
      as well as funding continued operations through long term debt or equity
      financing, capital raises from the issuance of common stock, and equipment
      lease
      financing sources.




Revenues
      may not grow in the future, and the Company may not generate sufficient revenues
      for profitability. If the Company becomes profitable, the Company may not be
      able to sustain profitable operations. If the Company is unable to generate
      a
      sufficient amount of sales of its products to fund its operations and repay
      its
      outstanding indebtedness, the Company will need to seek alternative funding
      sources.





The
      Company also expects to incur additional costs towards expansion of its
      manufacturing processes, sales and marketing, research and development and
      administrative functions related to the one-way shipper product line. The
      Company may also need additional funding for possible strategic acquisitions
      of
      synergistic businesses, products and/or technologies. If the Company is unable
      to achieve sufficient long term debt or equity financing, and adequate operating
      funds are not available, the Company may be required to defer or limit some
      or
      all of its manufacturing, sales and marketing, and/or research and development
      projects, which would cause delay in the launch of the one-way product
      line.





The
      Company will need to seek alternative funding sources from private or public
      placements of debt or equity, institutional or other lending sources, pursue
      strategic partners, sell certain assets or change operating plans to accommodate
      its liquidity issues. There is no assurance that the Company will be able to
      obtain any additional funds on favorable terms. Further, if the Company issues
      additional equity securities, the new equity securities may have rights or
      warrants or other securities exercisable for, or convertible into its capital
      stock, preferences or privileges senior to those of existing holders of its
      common stock. Any sales of additional shares of the Company’s capital stock are
      likely to dilute its existing shareholders. Alternatively, the Company may
      borrow money from commercial lenders, possibly at high interest rates, which
      will increase the risk of your investment in the Company. The Company may also
      be required to seek funding through licensing to others on products or
      technologies that the Company otherwise would seek to commercialize
      itself.


Page
          24


The
      Company’s cash requirements may vary materially from those now planned due to a
      number of factors, including, without limitation, the amount of revenues the
      Company generates from sales of its products, changes in its regulatory and
      marketing programs, production costs, anticipated research and development
      efforts, costs resulting from changes in the focus and direction of its research
      and development programs, and competitive advances that make it harder for
      it to
      market and sell its products. If adequate funds are not available, the Company
      may be required to reduce capital expenditures and delay, scale back or
      eliminate some of its research, development, sales and marketing initiatives,
      which would have a material adverse effect on its business, results of
      operations and ability to achieve profitability.




**Potential
      difficulties or unanticipated cost in establishing product in the
      market.**





***If
      the Company experiences delays, difficulties or unanticipated costs in
      establishing the sales, distribution and marketing capabilities necessary to
      successfully commercialize its products, the Company will have difficulty
      maintaining and increasing its sales.***





The
      Company is continuing to develop sales, distribution and marketing capabilities
      in the Americas, Europe and Asia. It will be expensive and time-consuming for
      it
      to develop a global marketing and sales network. Moreover, the Company may
      choose, or find it necessary, to enter into additional strategic collaborations
      to sell, market and distribute its products. The Company may not be able to
      provide adequate incentive to its sales force or to establish and maintain
      favorable distribution and marketing collaborations with other companies to
      promote its products. In addition, any third party with whom the Company has
      established a marketing and distribution relationship may not devote sufficient
      time to the marketing and sales of its products thereby exposing the Company
      to
      potential expenses in exiting such distribution agreements. The Company, and
      any
      of its third-party collaborators, must also market its products in compliance
      with federal, state, local and international laws relating to the providing
      of
      incentives and inducements. Violation of these laws can result in substantial
      penalties. If the Company is unable to successfully motivate and expand its
      marketing and sales force and further develop its sales and marketing
      capabilities, or if its distributors fail to promote its products, the Company
      will have difficulty maintaining and increasing its sales.


Page
          25


**Failure
      to compete effectively.**





***If
      the Company is not able to compete effectively, the Company may experience
      decreased demand for its products, which may result in price
      reductions.***





The
      Company has two significant competitors in the cryogenic shipping container
      industry, Harsco Corporation and Chart Industries, Inc. The Company’s success
      depends upon its ability to develop and maintain a competitive position in
      the
      temperature sensitive dry shipper markets. The Company’s competitors are well
      established with greater financial resources. As a result, they may develop
      products quicker or at lower costs, that may directly compete with the Company’s
      future products.
      In addition, these competitors may develop technologies that render the
      Company’s products obsolete or otherwise noncompetitive.




The
      Company may not be able to improve its products or develop new products or
      technologies quickly enough to maintain a competitive position in its market
      and
      continue to commercially develop its business. Moreover, the Company may not
      be
      able to compete effectively, and competitive pressures may result in less demand
      for its products and impair its ability to become profitable.





**Failure
      to attract or retain skilled personnel.**





***If
      the Company does not attract and retain skilled personnel, the Company will
      not
      be able to expand its business.***




The
      Company’s future success will depend in large part upon its ability to attract
      and retain highly skilled engineering, operational, managerial and marketing
      personnel, particularly as the Company expands its activities in product
      development, and sales and manufacturing. The Company faces significant
      competition for these types of persons from other companies. The ability to
      attract personnel to the Company’s vision depends both on the availability of
      skills and the ability of the Company to offer compensation and challenge
      compatible to career goals of potentially available individuals. The Company
      believes that the growth factors in the target markets are sufficient to attract
      the interest of well-qualified candidates for all positions as the need arises.
      To date, the Company has not experienced difficulties in attracting or retaining
      qualified personnel, however, there is no guarantee that there will be
      well-qualified candidates in the future to choose from. Consequently, if the
      Company is unable to attract and retain skilled personnel, the Company will
      not
      be able to expand its business.


Page
          26


**Patents,
      trade secrets, and proprietary rights of others.**





***The
      Company’s success depends, in part, on its ability to obtain patent protection
      for the Company’s products, preserve its trade secrets, and operate without
      infringing the proprietary rights of others.***





The
      Company’s policy is to seek to protect its proprietary position by, among other
      methods, filing U.S. and foreign patent applications related to its technology,
      inventions and improvements that are important to the development of its
      business. The Company has three
      U.S. patents relating
      to various aspects of its products. The Company’s patents or patent applications
      may be challenged, invalidated or circumvented in the future or the rights
      granted may not provide a competitive advantage. The Company intends to
      vigorously protect and defend its intellectual property. Costly and
      time-consuming litigation brought by the Company may be necessary to enforce
      its
      patents and to protect its trade secrets and know-how, or to determine the
      enforceability, scope and validity of the proprietary rights of
      others.




The
      Company also relies upon trade secrets, technical know-how and continuing
      technological innovation to develop and maintain its competitive position.
      The
      Company typically requires its employees, consultants, advisors and suppliers
      to
      execute confidentiality agreements in connection with their employment,
      consulting, or advisory relationships with the Company. If any of these
      agreements are breached, the Company may not have adequate remedies available
      thereunder to protect its intellectual property or the Company may incur
      substantial expenses enforcing its rights. Furthermore, the Company’s
      competitors may independently develop substantially equivalent proprietary
      information and techniques or otherwise gain access to its proprietary
      technology, or the Company may not be able to meaningfully protect its rights
      in
      unpatented proprietary technology.





The
      Company cannot assure that its current and potential competitors and other
      third
      parties have not filed or in the future, will not file patent applications
      for,
      or have not received or in the future will not receive, patents or obtain
      additional proprietary rights that will prevent, limit or interfere with its
      ability to make, use or sell its products either in the U.S. or internationally.
      In the event the Company was to require licenses to patents issued to third
      parties, such licenses may not be available or, if available, may not be
      available on terms acceptable to the Company. In addition, the Company cannot
      assure that the Company would be successful in any attempt to redesign its
      products or processes to avoid infringement or that any such redesign could
      be
      accomplished in a cost-effective manner. Accordingly, an adverse determination
      in a judicial or administrative proceeding or failure to obtain necessary
      licenses could prevent the Company from manufacturing and selling its products,
      which would harm its business.





The
      Company is not aware of any other company that is infringing any of the
      Company’s patents or trademarks nor does the Company believe that it is
      infringing on the patents or trademarks of any other person or
      organization.


Page
          27


**Manufacturing
      delays or interruptions in production.**




***If
      the Company experiences manufacturing delays or interruptions in production,
      then the Company may experience customer dissatisfaction and its reputation
      could suffer*** *.*




If
      the
      Company fails to produce enough products at its own manufacturing facility
      or at
      a third-party manufacturing facility, the Company may be unable to deliver
      products to its customers on a timely basis, which could lead to customer
      dissatisfaction and could harm its reputation and ability to compete. The
      Company currently acquires various component parts for its products from a
      number of independent manufacturers in the United States. The Company would
      likely experience significant delays or cessation in producing its products
      if a
      labor strike, natural disaster, local or regional conflict or other supply
      disruption were to occur at any of its main suppliers. If the Company is unable
      to procure a component from one of its manufacturers, the Company may be
      required to enter into arrangements with one or more alternative manufacturing
      companies which may cause delays in producing its products. In addition, because
      the Company depends on third-party manufacturers, its profit margins may be
      lower, which will make it more difficult for the Company to achieve
      profitability. To date, the Company has not experienced any material delays
      to
      the point that its ability to adequately service customer needs has been
      compromised. As the business develops and quantity of production increases,
      it
      becomes more likely that such problems could arise.





**Limited
      number of suppliers** .




***Because
      the Company relies on a limited number of suppliers, the Company may experience
      difficulty in meeting its customers’ demands for its products in a timely manner
      or within budget.***




The
      Company currently purchases key components of its products from a variety of
      outside sources. Some of these components may only be available to the Company
      through a few sources, however, management has identified alternative materials
      and suppliers should the need arise. The Company generally does not have
      long-term agreements with any of its suppliers.




Consequently,
      in the event that the Company’s suppliers delay or interrupt the supply of
      components for any reason, the Company could potentially experience higher
      product costs and longer lead times in order fulfillment. Suppliers that the
      Company materially relies upon are Spaulding Composites Company and Lydall
      Thermal Acoustical Sales.


Page
          28


**Potential
      dilution of existing stockholders.**





***If
      the Company is unable to generate sufficient revenue to provide the cash
      required to fund its operations in the future, the Company may be required
      to
      issue additional equity or convertible debt securities to provide its operations
      with additional working capital, which, in turn, will have the effect of
      diluting the relative ownership of its existing
      stockholders.***




The
      Company has supplemented the cash deficit arising from its operations with
      the
      proceeds from the sale of common stock, and will, if necessary, continue to
      supplement with cash from private or public placements of debt or equity. The
      issuance of additional equity or convertible debt securities will have the
      effect of reducing the percentage ownership of its current stockholders. In
      addition, these equity or convertible debt securities may have additional
      rights, preferences or privileges to those of its common stock, such as
      registration rights and preferences in liquidation. In the event the Company
      is
      required to raise additional funds to support its operations, additional funds
      may not be available on terms favorable to its company, or at all. If adequate
      funds are not available or are not available on acceptable terms, the Company
      may not be able to fund its operations or otherwise continue as a going concern.
      As a result, the Company’s auditors have issued a going concern
      opinion.





**Liquidity
      of Company common stock.**





***The
      Company’s common stock is subject to penny stock regulation, which may affect
      its liquidity.***





Because
      the Company will initially have its shares of common stock quoted on the
      Over-The-Counter Bulletin Board, its shares will be subject to regulations
      of
      the Securities and Exchange Commission (the “Commission”) relating to the market
      for penny stocks. Penny stock, as defined by the Penny Stock Reform Act, is
      any
      equity security not traded on a national securities exchange or quoted on the
      NASDAQ National or Small Cap Market that has a market price of less than $5.00
      per share. The penny stock regulations generally require that a disclosure
      schedule explaining the penny stock market and the risks associated therewith
      be
      delivered to purchasers of penny stocks and impose various sales practice
      requirements on broker-dealers who sell penny stocks to persons other than
      established customers and accredited investors. The broker-dealer must make
      a
      suitability determination for each purchaser and receive the purchaser's written
      agreement prior to the sale. In addition, the broker-dealer must make certain
      mandated disclosures, including the actual sale or purchase price and actual
      bid
      offer quotations, as well as the compensation to be received by the
      broker-dealer and certain associated persons. The regulations applicable to
      penny stocks may severely affect the market liquidity for its common stock
      and
      could limit your ability to sell your securities in the secondary
      market.


Page
          29


**Sale
      of Company shares may depress share price.**





***The
      sale of substantial shares of the Company’s common stock may depress its stock
      price.***





As
      of
      June 12, 2006, the Company had 30,088,696 shares of common stock outstanding,
      and the last reported sales price of its common stock on the PinkSheets was
      $2.50 per share. The Company could also issue up to approximately 3,632,737
      additional shares of common stock upon the exercise of outstanding options
      and
      warrants as further described in the following table:





**Description
                of instrument**
            
            **Number
                of Shares Outstanding**
            
            **Weighted
                Average Per Share Exercise Price**Common
                shares issuable upon exercise of outstanding stock options
            
            
            2,488,613
            
            $
            0.45Common
                shares issuable upon exercise of outstanding warrants
            
            
            1,144,124
            
            $
            0.79Total
            
            
            3,632,737
            
            $
            0.56





**Accounting
      for Stock Options.**





***A
      recently adopted change in the way companies must account for stock options
      may
      affect the Company’s earnings and cause the Company to change its compensation
      practices.*** **




The
      Company currently accounts for the issuance of stock options under Accounting
      Principles Board (“APB”) Opinion No. 25, *Accounting
      for Stock Issued to Employees* .
      In
      December 2004, the Financial Accounting Standards Board (“FASB”) adopted the
      Statement of Financial Accounting Standards (“SFAS”) No. 123(R), *Share-Based
      Payment* ,
      which
      will require the Company to account for equity under its stock plans as a
      compensation expense and its net income and earnings per share will be reduced.
      Currently, the Company records compensation expense only in connection with
      option grants that have an exercise price below fair market value. For option
      grants that have an exercise price at fair market value, the Company calculates
      compensation expense and discloses their impact on net income (loss) and
      earnings (loss) per share, as well as the impact of all stock-based compensation
      expense, in a footnote to its consolidated financial statements. SFAS No. 123(R)
      requires the Company to adopt the new accounting method in its fiscal year
      beginning April 1, 2006, and will require the Company to expense stock based
      benefit awards, stock options, restricted stock and stock appreciation rights,
      as compensation cost.


Page
          30


**ITEM
                2.**
            **DESCRIPTION
                OF PROPERTY**.****




The
      Company’s corporate, research and development, and warehouse facilities are
      located in one Company-leased office and warehouse building with a square
      footage of approximately 8,000 square feet. The facilities are located at 451
      Atlas Street, Brea, California 92821. The Company currently makes lease payments
      of $7,500 per month. The lease is a two year lease with rent due at the
      beginning of each month. The landlord is Brea Hospital Properties, LLC. The
      facilities are in good condition and are suitable for the Company’s current
      requirements. The Company currently does not own any real property.




**ITEM
                3.**
            **LEGAL
                PROCEEDINGS.**





The
      Company is not currently a party to any pending, nor is the Company aware of
      any
      threatened, legal, governmental, administrative or judicial
      proceedings.





**ITEM
                4.**
            **SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY
                HOLDERS.**





During
      fiscal year ended March 31, 2006 and through June 12, 2006 no matters arose
      which required submission to a vote of the Company’s security holders.


Page
          31


**PART
      II**





**ITEM
                5.**
            **MARKET
                PRICE FOR THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER
                MATTERS.**





The
      Company’s Form 10-SB became effective in February, 2006. Shares in common stock
      have never traded on any securities exchange. As of June 12, 2006, the Company
      has applied to permit its common stock to trade on the over-the-counter bulletin
      board (OTCBB). There can be no assurance that an active public market for the
      Company’s common stock will develop or be sustained.





Presently,
      the Company’s common stock is traded through the PinkSheets under the symbol
      CYRX.PK. The Company’s stock is considered penny stock and is, therefore,
      subject to the Securities Enforcement Remedies and Penny Stock Reform Act of
      1990. Penny stock is defined as any equity security not traded on a national
      stock exchange or quoted on NASDAQ and that has a market price of less than
      $5.00 per share. Additional disclosure is required in connection with any trades
      involving a stock defined as a penny stock (subject to certain exceptions),
      including the delivery, prior to any such transaction, of a disclosure schedule
      explaining the penny stock market and the associated risks. Broker-dealers
      who
      recommend such low-priced securities to persons other than established customers
      and accredited investors satisfy special sales practice requirements, including
      a requirement that they make an individualized written suitability determination
      for the purchase and receive the purchaser's written consent prior to the
      transaction **.** Prior
      to
      January, 2005, there was no published price for the Company’s common stock on
      the PinkSheets.





Based
      on
      information from Finance.yahoo.com, for the fiscal quarter ended March 31,
      2006,
      the quoted high and low price of the Company’s common stock were $6.05 and
      $4.00, respectively. As of June 12, 2006, the quoted price of the Company’s
      stock was $2.50.





**Description
      of Securities**





**Common
      Stock:**





The
      Company’s Articles of Incorporation, filed on May 25, 1990, authorizes the
      issuance of 5,000,000 shares of Common Stock at a par value of $0.001 per share.
      The Articles of Incorporation were amended and restated on October 12, 2004,
      to
      authorize the issuance of 100,000,000 shares of Common Stock at a par value of
      $0.001 per share. As of June 12, 2006, there were 30,088,696 shares of common
      stock issued and outstanding shares held by 449 shareholders of record. Holders
      of Common Stock are entitled to one vote for each share on all matters to be
      voted on by the stockholders. Holders of Common Stock have no cumulative voting
      rights. Holders of shares of Common Stock are entitled to share ratable in
      dividends, if any, as may be declared from time to time by the Board of
      Directors in its discretion, from funds legally available therefore. In the
      event of liquidation, dissolution, or winding up of the Company, the holders
      of
      shares of Common Stock are entitled to share pro rata all assets remaining
      after
      payment in full of all liabilities. Holders of Common Stock have no pre-emptive
      or other subscription rights, and there are no conversion rights or redemption
      or sinking fund provisions with respect to such shares. All of the outstanding
      Common Stock is, and the shares offered by the Company pursuant to this offering
      will be, issued and delivered, fully paid and non-assessable.


Page
          32


**Preferred
      Stock:**





There
      is
      no preferred stock authorized.




**Warrants:**




As
      of
      June 12, 2006 there were outstanding warrants to purchase up to 847,458 shares
      of the Company’s common stock. The outstanding warrants were issued by CryoPort
      Systems, Inc. in connection with various debt and equity financings and assumed
      by the Company in connection with the Share Exchange Agreement. These warrants
      are exercisable at prices ranging from $0.30 to $1.00 per share, with a weighted
      average exercise price of $0.61 per share, and have expiration dates ranging
      from June 16, 2006 to December 2010.





**Stock
      Options:**





As
      of
      June 12, 2006, there were outstanding options to purchase up to a total of
      2,488,613 shares of the Company’s common stock. The options were granted by
      CryoPort Systems, Inc. pursuant to the 2002 Plan. In connection with the Share
      Exchange Agreement, the Company assumed the 2002 Plan and the obligations
      associated with all outstanding stock options. These options are exercisable
      at
      prices ranging from $0.04 to $1.00 per share, with an average exercise price
      of
      $0.45 per share.





**Transfer
      Agent and Registrar:**





The
      Transfer Agent and Registrar for the Company’s Common Stock is Integrity Stock
      Transfer, 2920 N. Green Valley Parkway, Building 5 - Suite 527, Henderson,
      Nevada, 89014.


Page
          33


**Dividends:**





The
      Company has not paid any dividends on its common stock and does not expect
      to do
      so in the foreseeable future. The Company intends to apply any future earnings
      to expanding its operations and related activities.





The
      payment of cash dividends in the future will be at the discretion of the Board
      of Directors and will depend on such factors as earnings levels, capital
      requirements, the Company’s financial condition and other factors deemed
      relevant by the Board of Directors. In addition, the Company’s ability to pay
      dividends may become limited under future loan or financing agreements of the
      Company that may restrict or prohibit the payment of dividends.




**Recent
      Sales of Unregistered Securities:**




The
      following is a summary of transactions by the Company during the past three
      years involving the issuance and sale of the Company’s securities that were not
      registered under the Securities Act of 1933, as amended (the “Securities Act”).
      All securities sold by the Company were sold to individuals, trusts or others
      as
      accredited investors as defined under Regulation D under the Securities Act,
      as
      amended.





During
      fiscal 2006, 142,000 shares of the Company’s common stock were sold to investors
      at a price of $3.50 per share resulting in proceeds of $435,540 to the Company,
      net of issuance costs of $61,460.




During
      fiscal 2006, the Company issued 71,592 shares of common stock resulting from
      cashless exercises of 82,134 warrants converted using an average market price
      of
      approximately $5.80 per share resulting in 10,621 warrants used for the cashless
      conversion.




During
      fiscal 2006, the Company issued 159,999 shares of common stock resulting from
      exercises of warrants at an average exercise price of approximately $0.34 per
      share resulting in proceeds of $55,000.




During
      fiscal year 2005, the Company sold 11,962,522 shares of common stock at prices
      ranging from $0.04 to $0.75 resulting in proceeds of $1,609,971, net of offering
      costs of $80,113.




During
      fiscal 2004, the Company sold 840,638 shares of common stock at prices ranging
      from $0.50 to $0.70 resulting in gross proceeds of $459,984.




Page
          34


The
      following schedules list the sales of shares of common stock (excluding
      exercises of warrants) and issuances of warrants and options during the fiscal
      years ended 2006 and 2005.




Fiscal
                  2006Common
                  Stock
              
              Warrants
              
              Options$
              
              Shares
              
              Avg
                  Price
              
              Issued
              
              Ex.
                  Price
              
              Issued
              
              Ex.
                  PriceQtr
                  1
              
              $
              -
              
              
              -
              
              $
              3.50
              
              
              -
              
              
              -
              
              
              -
              
              
              -Qtr
                  2
              
              
              273,000
              
              
              78,000
              
              $
              3.50
              
              
              -
              
              
              -
              
              
              -
              
              
              -Qtr
                  3
              
              
              126,000
              
              
              36,000
              
              $
              3.50
              
              
              -
              
              
              -
              
              
              -
              
              
              -Qtr
                  4
              
              
              98,000
              
              
              28,000
              
              $
              3.50
              
              
              -
              
              
              -
              
              
              -
              
              
              -$
              497,000
              
              
              142,000
              
              
              
              
              
              -
              
              
              
              
              
              -




Fiscal
                2005Common
                Stock
            
            Warrants
            
            Options$
            
            Shares
            
            Avg
                Price
            
            Issued
            
            Ex.
                Price
            
            Issued
            
            Ex.
                PriceQtr
                1
            
            $
            141,000
            
            
            235,000
            
            $
            0.60
            
            
            318,333
            
            $
            0.30
            
            
            150,000
            
            $
            0.80Qtr
                2
            
            
            174,343
            
            
            4,358,575
            
            $
            0.04
            
            
            -
            
            
            -
            
            
            643,613
            
            $
            0.04Qtr
                3
            
            
            382,866
            
            
            6,046,450
            
            $
            0.06
            
            
            20,375
            
            $
            0.75
            
            
            40,375
            
            $
            0.68Qtr
                4
            
            
            991,875
            
            
            1,322,497
            
            $
            0.75
            
            
            82,133
            
            $
            0.75
            
            
            -
            
            
            -$
            1,690,084
            
            
            11,962,522
            
            
            
            
            
            420,841
            
            
            
            
            
            833,988





The
      issuances of the securities of the Company in the above transactions were deemed
      to be exempt from registration under the Securities Act by virtue of Section
      4(2) thereof or Regulation D promulgated thereunder, as a transaction by an
      issuer not involving a public offering. With respect to each transaction listed
      above, no general solicitation was made by either the Company or any person
      acting on the Company’s behalf; the securities sold are subject to transfer
      restrictions; and the certificates for the shares contained an appropriate
      legend stating such securities have not been registered under the Securities
      Act
      and may not be offered or sold absent registration or pursuant to an exemption
      therefrom.


Page
          35


**Other
      Securities Activities:**





In
      connection with the consummation of the Company’s Share Exchange Agreement dated
      March 16, 2005, with the shareholders of CryoPort Systems, Inc., the Company
      issued a total of 24,108,105 shares of its common stock to the shareholders
      of
      CryoPort Systems, Inc. in exchange for all issued and outstanding shares of
      CryoPort Systems, Inc.





In
      connection with the Share Exchange Agreement with CryoPort Systems, Inc. in
      March 2005 (see Note 1), the Company issued 1,000,000 shares to Mr. Dante
      Panella, a majority stockholder, in exchange for Mr. Panella’s surrender of
      1,354,891 shares of Cryoport Systems’ common stock.




In
      August
      2004, the Company settled a pending wrongful termination lawsuit involving
      a
      former employee with consideration being paid to the plaintiff in the form
      of
      265,420 shares of the Company’s common stock valued at $10,617 based on $0.04
      per share (estimated fair value at date of settlement), and $25,000 in cash,
      which is included in accrued liabilities in the Company’s consolidated balance
      sheets at March 31, 2006 and 2005, to be paid 90 days subsequent to the Company
      operating under a positive cash flow basis.




**ITEM
                6.**
            **MANAGEMENT’S
                DISCUSSION AND ANALYSIS OR PLAN OF OPERATION****.**





**Liquidity
      and Capital Resources**





**Total
      assets**




Cryoport,
      Inc. (the “Company”), was originally formed with the intention to first develop
      a reusable line of cryogenic shippers and once underway, to begin the research
      and development of a disposable, one-way cryogenic shipper. Since initial
      formation the company has not had the funds to fully implement its business
      plan. The reusable line of cryogenic shippers has been in production since
      2002,
      however, anticipated difficulties in penetrating the well established market
      for
      reusable cryogenic shippers, as well as a need for continuous redevelopment
      of
      the product line has allowed for only limited revenue generation from the sale
      of the reusable cryogenic shipper. During this time, the Company maintained
      research and development activities focused on the new product line of one-way
      shippers. Until the beginning of the prior year, the limited revenues produced
      from the reusable product line along with limited capital funding required
      the
      Company to assign only minimal resources to the development of the one-way
      cryogenic shippers. During the last quarter of the Company’s 2005 operations,
      funding of $991,875 was raised through a private placement offering of common
      stock under Regulation D. These funds were raised to allow the Company to focus
      on accelerating the development and launch of its one-way product line. The
      Company has since been focusing significant resources to the development of
      a
      working prototype of this one-way shipper with the goal of launching the new
      product into the market during the second quarter of fiscal year 2007. While
      it
      had been the Company’s plan to introduce the one-way shipper product line in
      limited quantities to selective customers during the first quarter of calendar
      year 2006, lack of adequate funding due to fund raising targets not being met,
      has caused the Company to revise the estimates for the one-way shipper product
      release and manufacturing as well as sales and marketing ramp-up timetables.
      A
      broad launch to the general market will follow after feedback from this
      introductory distribution is received and customer demand is further understood.
      A higher volume demand is expected to develop as pharmaceutical products
      requiring cryogenic or frozen protection come to market.




Page
          36


The
      Company is currently discussing development of a shipper from the one-way
      product line under confidentiality agreements for drug delivery with several
      vaccine manufacturers. Although the Company has received and fulfilled purchase
      orders from these vaccine manufacturers, the Company does not currently have
      any
      pending purchase orders. These potential one-way shipper customers are currently
      using the Company’s reusable shippers in clinical trials. To address the high
      volume ramp up necessary to provide these customers with one-way shippers,
      the
      Company is currently involved in negotiations for a manufacturing and
      distribution partnership with two large, and well established manufacturing
      companies.





**General
      Overview**




The
      following discussion and analysis of the Company’s financial condition and
      results of operations should be read in conjunction with the audited
      consolidated balance sheets as of March 31, 2006 and 2005 and the related
      consolidated statements of operations, cash flows and stockholders’ deficit for
      the years ended March 31, 2006 and 2005, and the related notes (see Part II,
      Item 7 - Financial Statements). This discussion contains forward-looking
      statements, based upon current expectations that involve risks and
      uncertainties, such as the Company’s plans, objectives, expectations and
      intentions.




**Going
      Concern**




As
      reported in the Report of Independent Registered Public Accounting Firm on
      the
      Company’s March 31, 2006 and 2005 financial statements, the Company has incurred
      recurring losses from operations and has a stockholders’ deficit. These factors,
      among others, raise substantial doubt about the Company’s ability to continue as
      a going concern.




There
      are
      significant uncertainties which negatively affect the Company’s operations.
      These are principally related to (i) the limited distribution network for the
      Company’s reusable product line, (ii) the early stage development of the
      Company’s one-way product and the possible need to enter a strategic
      relationship with a larger manufacturer capable of high volume production and
      distribution, (iii) the absence of any commitment or firm orders from key
      customers in the Company’s target markets for the reusable or the one-way
      shippers, (iv) the success in bringing products concurrently under development
      to market with the Company’s key customers. Moreover, there is no assurance as
      to when, if ever, the Company will be able to conduct the Company’s operations
      on a profitable basis. The Company’s limited sales to date for the Company’s
      product, the lack of any purchase requirements in the existing distribution
      agreements and those currently under negotiations, make it impossible to
      identify any trends in the Company’s business prospects. There is no assurance
      the Company will be able to generate sufficient revenues or sell any equity
      securities to generate sufficient funds when needed, or whether such funds,
      if
      available, will be obtained on terms satisfactory to the Company.




Page
          37


The
      Company has not generated significant revenues from operations and has no
      assurance of any future significant revenues. The Company incurred net losses
      of
      $1,522,101 and $1,038,110 for the years ended December 31, 2006 and 2005
      respectively. In addition, at March 31, 2006 the Company’s accumulated deficit
      was $7,038,891 and the Company had a negative working capital deficit of
      $538,235. The management recognizes that the Company must obtain additional
      capital for the further development and launch of the one-way product and the
      eventual achievement of sustained profitable operations.




The
      company anticipates that unless it is able to raise or generate proceeds of
      at
      least $3,000,000 within the next 12 months, although operations will continue,
      it will be unable to fully execute its business plan, which will result in
      it
      not growing at the desired rate. Should this situation occur, management is
      committed to operating on a smaller scale until generated revenues or future
      funding can support expansion.




In
      order
      to continue as a going concern, management has begun taking the following
      steps:




1)
            Continuing
                to obtain additional capital through a private placement offering,
                initiated in April 2006 of common stock under Regulation D. Management
                anticipates that the proceeds from this offering will provide 2 to
                6
                months of operating capital.




2)
            Obtain
                immediate funds through short-term debt financing. Management anticipates
                that the proceeds from this offering will provide 3 to 6 months of
                operating capital.




3)
            Obtain
                adequate funding for long term operations through debt or equity
                financing. The Company management is currently focusing on raising
                cash to
                fund the sales and marketing and manufacturing process development
                activities to launch the one-way product line as well as funding
                continued
                operations through long term debt or equity
                financing.




Page
          38


4)
            Continuing
                to maintain minimal operating expenditures through stringent cost
                containment measures. The Company’s largest expenses currently relate to
                personnel and meeting the legal and reporting requirements of a public
                company.




5)
            Utilizing
                part-time consultants and asking employees to manage multiple roles
                and
                responsibilities whenever possible to keep operating costs
                low.




6)
            Continuing
                to require that key employees and the Company’s Board of Directors receive
                Company stock in lieu of cash as all or part of their compensation
                in an
                effort to minimize monthly cash flow. With this strategy the Company
                has
                established a critical mass of experienced business professionals
                capable
                of taking the Company forward.




7)
            Cautiously
                and gradually adding key sales, marketing, engineering, scientific
                and
                operating personnel only as available funds permit and as necessary
                to
                help launch the one-way product line and to expand the Company’s product
                offerings in the cryogenic shipping markets, leading to additional
                revenues and profits.




8)
            Adding
                other expenses such as customer service, administrative and operations
                staff only as available funds permit and commensurate with increased
                sales
                volumes and revenues.




9)
            Focusing
                current research and development efforts only on the development
                of
                production processes and distribution methods for the newly developed
                one-way shipper product line.





**Research
      and Development**




Due
      to
      the ongoing nature of the research, the Company is unable to ascertain with
      certainty the total estimated completion dates and costs associated with all
      phases. As with any research effort, there is uncertainty and risk associated
      with whether these efforts will produce results in a timely manner so as to
      enhance the Company’s market position. For the years ended March 31, 2006 and
      2005, research and development costs were $254,487 and $98,698, respectively.
      Company sponsored research and development costs related to future products
      and
      redesign of present products are expensed as incurred and include such costs
      as
      salaries, employees benefits and costs determined utilizing the Black-Scholes
      option-pricing model for options issued to the Scientific Advisory Board and
      prototype design and materials costs.





**Liquidity
      and Capital Reserves**




As
      of
      March 31, 2006 the Company’s current liabilities of $764,855 exceeded current
      assets of $226,620 by $538,235. Approximately 39% of current liabilities
      represent accrued payroll for executives who have opted to defer taking salaries
      until the Company has achieved positive operating cash flows.




Page
          39


Total
      assets decreased to $293,505 at March 31, 2006 from $1,080,428 at March 31,
      2005
      as a result of funds used in operating activities partially offset by cash
      received from the sale of common stock.




The
      Company’s total outstanding indebtedness increased to $2,443,541 at March 31,
      2006 from $2,260,463 at March 31, 2005 primarily from the increases in accrued
      interest on notes payable, accounts payable and accrued salaries which were
      partially offset by a decrease in warranty costs related to the decreased sales.
      As of March 31, 2006, the Company owed $59,440 of remaining principal to Falk,
      Shaff & Ziebell, LLP based on an unsecured interest bearing note at 5%
      compound interest which originated from a March 2002 note payable related to
      conversion of outstanding legal bills. The original maturity date of this note
      was December 31, 2002, however, the terms of this note were subsequently amended
      in May 2004 to lower the monthly payments and eliminate the interest, as a
      result of the Company’s financial situation and inability to meet the original
      terms of the note.




The
      remaining notes payable balance is comprised of unsecured indebtedness owed
      to
      five related parties including former board of directors members representing
      working capital advances made to the Company from February 2001 through March
      2005. These notes bear interest at the rate of 6% per annum and provide for
      principal payments beginning April 2006 of $2,500 monthly and increasing by
      $2,500 every six months to a maximum of $10,000. Any remaining unpaid principal
      and accrued interest is due at maturity on various dates from February 2008
      through June 2011.




Notes
      Payable:




Lender
            
            Origination
                Date
            
            Maturity
                Date
            
            Principal
                Bal. Mar. 31, 2006
            
            Interest
                RatePatrick
                Mullens
            
            Aug.
                2001
            
            Jun.
                2011
            
            $386,500
            
            6%Marc
                Grossman
            
            Feb.
                2001
            
            Sep.
                2011
            
            $330,000
            
            6%David
                Petreccia
            
            Apr.
                2001
            
            Mar.
                2011
            
            $287,000
            
            6%Jeffrey
                Dell
            
            Aug.
                2001
            
            Nov.
                2009
            
            $256,000
            
            6%Raymond
                Takahashi
            
            Jun.
                2003
            
            Feb.
                2008
            
            $110,000
            
            6%Falk,
                Shaff & Ziebell
            
            Mar.
                2002
            
            Jun.
                2008
            
            $59,440
            
            n/a




The
      Company has incurred negative cash flows from operations of $1,155,962 for
      the
      year ended March 31, 2006 due to decreased sales of the Company’s reusable
      product group resulting from the Company’s shift in its sales and marketing
      focus during the third fiscal quarter to the introduction of the one-way shipper
      and to the increased costs of research and development of the one-way shipper.
      These negative cash flows from operations plus capital expenditures of $42,050
      for the year ended March 31, 2006 have been financed through proceeds from
      funds
      raised by issuance of common stock. Net proceeds from issuances of common stock
      were $435,540 for the year ended March 31, 2006. Proceeds from exercise of
      warrants were $55,000 for the year ended March 31, 2006. There was no increase
      in notes payable principal balances during the year ended March 31, 2006.




Page
          40




The
      Company’s cash balance as of March 31, 2006 was $4,723. Based on presently known
      commitments and plans the Company expects to fund its operations through the
      first quarter of 2007 mainly from cash from the following sources: short term
      debt financing, proceeds from issuances of common stock, operating cash received
      on accounts receivable, and cash on hand. The Company management is currently
      focused on raising cash to fund the sales and marketing and manufacturing
      process development activities to launch the one-way product line as well as
      funding continued operations through long term debt or equity financing, capital
      raises from the issuance of common stock, and equipment lease financing sources.




The
      Company does not expect to incur any material capital expenditures until
      adequate long term funding is obtained for the launch of the one-way product
      or
      sales volumes increase substantially. Future capital expenditures for
      manufacturing equipment for the launch of the one-way product are expected
      to be
      funded out of lease financing.




**Critical
      Accounting Policies:**




The
      Company’s consolidated financial statements have been prepared in accordance
      with accounting principles generally accepted in the United States. The
      preparation of these financial statements requires us to make estimates and
      judgments that affect the reported amounts of assets, liabilities, revenues
      and
      expenses, and related disclosure of contingent assets and liabilities. The
      Company bases its estimates on historical experience and on various other
      assumptions that are believed to be reasonable under the circumstances, the
      results of which form the basis of making judgments about the carrying values
      of
      assets and liabilities that are not readily apparent from other sources. Actual
      results may differ from these estimates under different assumptions or
      conditions, however, in the past the estimates and assumptions have been
      materially accurate and have not required any significant changes. Specific
      sensitivity of each of the estimates and assumptions to change based on other
      outcomes that are reasonably likely to occur and would have a material effect
      is
      identified individually in each of the discussions of the critical accounting
      policies described below. Should the Company experience significant changes
      in
      the estimates or assumptions which would cause a material change to the amounts
      used in the preparation of the Company’s financial statements, material
      quantitative information will be made available to investors as soon as it
      is
      reasonably available.


Page
          41




The
      Company believes the following critical accounting policies, among others,
      affect the Company’s more significant judgments and estimates used in the
      preparation of the Company’s financial statements:




*Allowance
      for Doubtful Accounts.* The
      Company maintains allowances for doubtful accounts for estimated losses
      resulting from the inability of the Company’s customers to make required
      payments. The allowance for doubtful accounts is based on specific
      identification of customer accounts and the Company’s best estimate of the
      likelihood of potential loss, taking into account such factors as the financial
      condition and payment history of major customers. The Company evaluates the
      collectibility of the Company’s receivables at least quarterly. Such costs of
      allowance for doubtful accounts is subject to estimates based on the historical
      actual costs of bad debt experienced, total accounts receivable amounts, age
      of
      accounts receivable and any knowledge of the customers’ ability or inability to
      pay outstanding balances. If the financial condition of the Company’s customers
      were to deteriorate, resulting in impairment of their ability to make payments,
      additional allowances may be required. The differences could be material and
      could significantly impact cash flows from operating activities.




*Inventory.* The
      Company writes down the Company’s inventory for estimated obsolescence or
      unmarketable inventory equal to the difference between the cost of inventory
      and
      the estimated market value based upon assumptions about future demand, future
      pricing and market conditions. Inventory reserve costs are subject to estimates
      made by the company based on historical experience, inventory quantities, age
      of
      inventory and any known expectations for product changes. If actual future
      demands, future pricing or market conditions are less favorable than those
      projected by management, additional inventory write-downs may be required and
      the differences could be material. Such differences might significantly impact
      cash flows from operating activities. Once established, write-downs are
      considered permanent adjustments to the cost basis of the obsolete or
      unmarketable inventories.




*Intangible
      Assets.* The
      Company has adopted SFAS No.142, “Goodwill and Other Intangible Assets.” SFAS
      No. 142 requires that goodwill and intangible assets that have indefinite lives
      not be amortized but rather be tested at least annually for impairment, and
      intangible assets that have finite useful lives be amortized over their useful
      lives. If the Company’s patents and trademarks are challenged, current values
      could become impaired. Currently the Company is not aware of any existing
      infringements or other such challenges to its patents or trademarks that would
      cause possible impairment to their values.




SFAS
      No.
      142 provides specific guidance for testing goodwill and intangible assets that
      will not be amortized for impairment.  Goodwill will be subject to
      impairment reviews by applying a fair-value-based test at the reporting unit
      level, which generally represents operations one level below the segments
      reported by the Company.  An impairment loss will be recorded for any
      goodwill that is determined to be impaired.  The Company performs
      impairment testing on all existing goodwill at least annually.


Page
          42




*Impairment
      of Long-Lived Assets.* The
      Company assesses the recoverability of the Company’s long-lived assets by
      determining whether the depreciation and amortization of long-lived assets
      over
      their remaining lives can be recovered through projected undiscounted cash
      flows. The amount of long-lived asset impairment is measured based on fair
      value
      and is charged to operations in the period in which long-lived asset impairment
      is determined by management. Manufacturing fixed assets are subject to
      obsolescence potential as result of changes in customer demands, manufacturing
      process changes and changes in materials used. The Company is not currently
      aware of any such changes that would cause impairment to the value of its
      manufacturing fixed assets.




*Accrued
      Warranty Costs* ***.*** **** The
      Company estimates the costs of the standard warranty, included with the reusable
      shippers at no additional cost to the customer for a period up to one year.
      These estimated costs are recorded as accrued warranty costs at the time of
      product sale. These estimated costs are subject to estimates made by the Company
      based on the historical actual warranty costs, number of products returned
      for
      warranty repair and length of warranty coverage.




*Revenue
      Recognition.* Product
      sales revenue is recognized upon passage of title to customers, typically upon
      shipment of product. Any provision for discounts and estimated returns are
      accounted for in the period the related sales are recorded. Products are
      generally sold with right of warranty repair for a one year period but with
      no
      right of return. Estimated costs of warranty repairs are recorded as accrued
      warranty costs as described above. Products shipped to customers for speculation
      purposes are not considered sold and no revenue is recorded by the Company
      until
      sales acceptance is acknowledged by the customer.




**Results
      of Operations - Year Ended March 31, 2006**





**Net
      Sales.** During
      the year ended March 31, 2006 the Company generated $152,298 from reusable
      shipper sales compared to revenues of $271,429 during the year ended March
      31,
      2005, a decrease of $119,131 (43.9%). This revenue decrease is primarily due
      to
      the Company’s shift in its sales and marketing focus during the last two
      quarters to the introduction of the one-way shipper into the biotech industry
      sector and the delays experienced in the planned final development and launch
      of
      the one-way shipper as a result of the funding targets not being met as.
      Additionally, product manufacturing upgrades slowed production activities of
      the
      reusable shippers. ****





**Cost
      of Sales.** Cost
      of
      sales for the year ended March 31, 2006 decreased $184,000 (36.8%) to $315,650
      from $499,650 for the year ended March 31, 2005 as the result of increased
      production overhead efficiencies as a result of the Company’s cost containment
      efforts. During both periods, cost of sales exceeded sales due to fixed
      manufacturing costs and plant underutilization.


Page
          43





**Gross
      Loss.** Gross
      loss for the year ended March 31, 2006 decreased by $64,869 (28.4%) to $163,352
      compared to $228,221 for the year ended March 31, 2005. The decrease in the
      gross loss is due to increased production overhead efficiencies as a result
      of
      the Company’s cost containment efforts.





**Selling,
      General and Administrative Expenses.** Selling,
      general and administrative expenses increased by $400,291 (64.3%) to $1,023,088
      for the year ended March 31, 2006 as compared to $622,797 for the year ended
      March 31, 2005 due mainly to: (i) increased sales and marketing costs by
      $185,499 related to increased trade shows, travel and consultant expenses
      related to market research of the one-way product line, and; (ii) increased
      general and administrative costs by $214,792 related to increased regulatory
      compliance costs including additional legal and accounting fees related to
      the
      share exchange agreement and public filings.





**Research
      and Development Expenses.** Research
      and development expenses increased by $155,789 (158%) to $254,487 for the year
      ended March 31, 2006 as compared to $98,698 for the year ended March 31, 2005
      related to the significant increase in the development activity including the
      prototype development of the one-way product line.





**Interest
      Expense.** Interest
      expense decreased by $5,391 (6.0%) to $80,377 for the year ended March 31,
      2006
      as compared to $85,768 for the year ended March 31, 2005 as the result of the
      payback of a portion of the related party notes payable in March
      2005.





**Net
      Loss.** As
      a
      result of the factors described above, the net loss for the year ended March
      31,
      2006 increased by $483,991 (46.6%) to $1,522,101 or ($0.05) per share compared
      to $1,038,110 or ($0.06) per share for the year ended March 31,
      2005.




**Forward
      Looking Statements**




**This
      Report on Form 10-KSB contains forward-looking statements** .
      Such
      forward-looking statements which the Company makes involve known and unknown
      risks, uncertainties and other factors which may cause the Company's actual
      results, performance or achievements to be materially different from any future
      results, performance or achievements expressed or implied by such
      forward-looking statements. Factors that could cause actual results to differ
      materially from the forward-looking statements include quarterly and yearly
      fluctuations in results, the progress of research and the development of that
      research and the other risks detailed from time to time in the Company’s
      reports, including this filing. These forward-looking statement speak only
      as
      the date hereof, and should not be given undue reliance. Actual results may
      vary
      significantly. The Company undertakes no obligation to publicly update or revise
      any forward-looking statements, whether as a result of new information, future
      events or otherwise.




44





**ITEM
          7. FINANCIAL STATEMENTS**
 
 **REPORT
          OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 To
          the
          Board of Directors of
 CryoPort,
          Inc.
 
 We
          have
          audited the accompanying consolidated balance sheets of CryoPort, Inc.
          (the
“Company”) as of March 31, 2006 and 2005, and the related consolidated
          statements of operations, stockholders' deficit and cash flows for the
          years
          then ended. These consolidated financial statements are the responsibility
          of
          the Company's management. Our responsibility is to express an opinion on
          these
          consolidated financial statements based on our audits.
 
 We
          conducted our audits in accordance with the standards of the Public Company
          Accounting Oversight Board (United States). Those standards require that
          we plan
          and perform the audits to obtain reasonable assurance about whether the
          consolidated financial statements are free of material misstatement. An
          audit
          includes examining, on a test basis, evidence supporting the amounts and
          disclosures in the consolidated financial statements. The Company is not
          required to have, nor were we engaged to perform, an audit of its internal
          control over financial reporting. Our audits included consideration of
          internal
          control over financial reporting as a basis for designing audit procedures
          that
          are appropriate in the circumstances, but not for the purpose of expressing
          an
          opinion on the effectiveness of the Company's internal control over financial
          reporting. Accordingly, we express no such opinion.  An audit also includes
          assessing the accounting principles used and significant estimates made
          by
          management, as well as evaluating the overall financial statement presentation.
          We believe that our audits provide a reasonable basis for our opinion.
 
 In
          our
          opinion, the consolidated financial statements referred to above present
          fairly,
          in all material respects, the financial position of CryoPort, Inc. at March
          31,
          2006 and 2005, and the results of its operations and its cash flows for
          the
          years then ended in conformity with accounting principles generally accepted
          in
          the United States of America.
 
 The
          accompanying consolidated financial statements have been prepared assuming
          that
          the Company will continue as a going concern.  As discussed in Note 1 to
          the consolidated financial statements, the Company has incurred recurring
          losses, and has a stockholders' deficit of $2,150,036 and negative working
          capital of $538,235 at March 31, 2006.  These factors, among others, raise
          substantial doubt about the Company's ability to continue as a going
          concern.  Management's plans in regard to these matters are also described
          in Note 1.  The consolidated financial statements do not include any
          adjustments relating to the recoverability and classification of asset
          carrying
          amounts or the amount and classification of liabilities that might result
          should
          the Company be unable to continue as a going concern.
 
 Corbin
          & Company, LLP
 Irvine,
          California
 June
          17,
          2006
  Page
              F-1
  **CRYOPORT,
          INC.**
 
 **CONSOLIDATED
          BALANCE SHEETS**
 
 
 **March
                    31,****2006**
                
                **2005****ASSETS**Current
                    assets:Cash
                
                $
                4,723
                
                $
                720,195Accounts
                    receivable, net
                
                
                22,306
                
                
                44,547Inventories
                
                
                190,321
                
                
                150,980Prepaid
                    expenses and other current assets
                
                
                9,270
                
                
                51,118Total
                    current assets
                
                
                226,620
                
                
                966,840Fixed
                    assets, net
                
                
                57,520
                
                
                96,940Intangible
                    assets, net
                
                
                9,365
                
                
                16,648$
                293,505
                
                $
                1,080,428**LIABILITIES
                    AND STOCKHOLDERS’ DEFICIT**Current
                    liabilities:Accounts
                    payable
                
                $
                223,070
                
                $
                162,985Accrued
                    expenses
                
                
                112,061
                
                
                104,040Accrued
                    warranty costs
                
                
                59,532
                
                
                70,500Accrued
                    salaries
                
                
                301,192
                
                
                246,431Current
                    portion of related party notes payable
                
                
                45,000
                
                
                -Current
                    portion of note payable
                
                
                24,000
                
                
                24,000Total
                    current liabilities
                
                
                764,855
                
                
                607,956Related
                    party notes and accrued interest payable,net
                    of current portion
                
                
                1,643,246
                
                
                1,609,067Note
                    payable, net of current portion
                
                
                35,440
                
                
                43,440Total
                    liabilities
                
                
                2,443,541
                
                
                2,260,463Commitments
                    and contingenciesStockholders’
                    deficit:Common
                    stock, $0.001 par value; 100,000,000 sharesauthorized;
                    30,081,696 (2006) and 29,708,105 (2005)shares
                    issued and outstanding
                
                
                30,082
                
                
                29,708Additional
                    paid-in capital
                
                
                4,858,773
                
                
                4,307,047Accumulated
                    deficit
                
                
                (7,038,891
                )
                
                (5,516,790
                )Total
                    stockholders’ deficit
                
                
                (2,150,036
                )
                
                (1,180,035
                )$
                293,505
                
                $
                1,080,428
 
 See
          Report of Independent Registered Public Accounting Firm and Accompanying
          Notes
          to Consolidated Financial Statements.
  Page
              F-2
  **CRYOPORT,
          INC.**
 
 **CONSOLIDATED
          STATEMENTS OF OPERATIONS**
 
  **For
                    The Years Ended March 31,****2006**
                
                **2005**Net
                    sales
                
                $
                152,298
                
                $
                271,429Cost
                    of sales
                
                
                315,650
                
                
                499,650Gross
                    loss
                
                
                (163,352
                )
                
                (228,221
                )Operating
                    expenses:Selling,
                    general and administrative expenses
                
                
                1,023,088
                
                
                622,797Research
                    and development expenses
                
                
                254,487
                
                
                98,698Total
                    operating expenses
                
                
                1,277,572
                
                
                721,495Loss
                    from operations
                
                
                (1,440,924
                )
                
                (949,716
                )Other
                    expense:Interest
                    expense
                
                
                (80,377
                )
                
                (85,768
                )Loss
                    on disposal of assets
                
                
                -
                
                
                (1,826
                )Total
                    other expense
                
                
                (80,377
                )
                
                (87,594
                )Loss
                    before income taxes
                
                
                (1,521,301
                )
                
                (1,037,310
                )Income
                    taxes
                
                
                800
                
                
                800Net
                    loss
                
                $
                (1,522,101
                )
                $
                (1,038,110
                )Net
                    loss available to common stockholders per common share:Basic
                    and diluted loss per common share
                
                $
                (0.05
                )
                $
                (0.06
                )Basic
                    and diluted weighted average common shares outstanding
                
                
                29,888,702
                
                
                17,907,557
  See
          Report of Independent Registered Public Accounting Firm and Accompanying
          Notes
          to Consolidated Financial Statements.
  Page
              F-3
  **CRYOPORT,
          INC.**
 
 **CONSOLIDATED
          STATEMENTS OF STOCKHOLDERS’ DEFICIT**
 
 **Common
                    Stock**
                
                **Additional
                    Paid-in**
                
                **Accumulated**
                
                **Total**
                  **Stockholders’****Shares**
                
                **Amount**
                
                **Capital**
                
                **Deficit**
                
                **Deficit**Balance,
                    April 1, 2004
                
                
                13,387,730
                
                $
                13,388
                
                $
                2,640,202
                
                $
                (4,478,680
                )
                $
                (1,825,090
                )Issuance
                    of common stock for cash, net of issuance costs of $80,113
                
                
                11,962,522
                
                
                11,963
                
                
                1,598,008
                
                
                -
                
                
                1,609,971Issuance
                    of common stock in connection with a legal settlement
                
                
                265,420
                
                
                265
                
                
                10,352
                
                
                -
                
                
                10,617Common
                    stock returned by founders to reduce dilution
                
                
                (1,507,567
                )
                
                (1,508
                )
                
                1,508
                
                
                -
                
                
                -Common
                    stock issued in merger with GT5
                
                
                5,600,000
                
                
                5,600
                
                
                (5,600
                )
                
                -
                
                
                -Fair
                    value of stock options issued to consultants
                
                
                -
                
                
                -
                
                
                62,577
                
                
                -
                
                
                62,577Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,038,110
                )
                
                (1,038,110
                )Balance,
                    March 31, 2005
                
                
                29,708,105
                
                
                29,708
                
                
                4,307,047
                
                
                (5,516,790
                )
                
                (1,180,035
                )Issuance
                    of common stock for cash, net of issuance costs of $61,460
                
                
                142,000
                
                
                142
                
                
                435,398
                
                
                -
                
                
                435,540Exercise
                    of warrants for cash
                
                
                159,999
                
                
                160
                
                
                54,840
                
                
                -
                
                
                55,000Exercise
                    of cashless warrants
                
                
                71,592
                
                
                72
                
                
                (72
                )
                
                -
                
                
                -Fair
                    value of stock options issued to consultants
                
                
                -
                
                
                -
                
                
                61,560
                
                
                -
                
                
                61,560Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,522,101
                )
                
                (1,522,101
                )Balance,
                    March 31, 2006
                
                
                30,081,696
                
                $
                30,082
                
                $
                4,858,773
                
                $
                (7,038,891
                )
                $
                (2,150,036
                )
 
 See
            Report of Independent Registered Public Accounting Firm and Accompanying
            Notes
            to Consolidated Financial Statements.
  Page
                F-4
 
 **CRYOPORT,
          INC.**
 
 **CONSOLIDATED
          STATEMENTS OF CASH FLOWS**
  **For
                    The Years Ended March 31,****2006**
                
                **2005**Cash
                    flows from operating activities:Net
                    loss
                
                $
                (1,522,101
                )
                $
                (1,038,110
                )Adjustments
                      to reconcile net loss to net cashused
                      in operating activities:Depreciation
                    and amortization
                
                
                88,753
                
                
                92,596Loss
                    on disposal of assets
                
                
                -
                
                
                1,826Provision
                    for doubtful accounts
                
                
                48,610
                
                
                -Fair
                    value of stock options issued to consultants
                
                
                61,560
                
                
                62,577Fair
                    value of common stock issued in connection with a legal
                    settlement
                
                
                -
                
                
                10,617Changes
                    in operating assets and liabilities:Accounts
                    receivable, net
                
                
                (26,369
                )
                
                (32,163
                )Inventories
                
                
                (39,341
                )
                
                (97,863
                )Prepaid
                    expenses and other current assets
                
                
                41,848
                
                
                (43,942
                )Accounts
                    payable
                
                
                60,085
                
                
                (131,429
                )Accrued
                    expenses
                
                
                8,021
                
                
                12,258Accrued
                    warranty costs
                
                
                (10,968
                )
                
                38,625Accrued
                    salaries
                
                
                54,761
                
                
                24,428Accrued
                    interest
                
                
                79,179
                
                
                82,464Net
                    cash used in operating activities
                
                
                (1,155,962
                )
                
                (1,018,116
                )Cash
                    flows used in investing activities:Purchases
                    of fixed assets
                
                
                (42,050
                )
                
                (14,879
                )Cash
                    flows from financing activities:Proceeds
                    from borrowings under notes payable
                
                
                -
                
                
                190,000Repayments
                    of notes payable
                
                
                (8,000
                )
                
                (52,864
                )Proceeds
                    from issuance of common stock, net
                
                
                435,540
                
                
                1,609,971Proceeds
                    from exercise of warrants
                
                
                55,000
                
                
                -Net
                    cash provided by financing activities
                
                
                482,540
                
                
                1,747,107Net
                    change in cash
                
                
                (715,472
                )
                
                714,112Cash,
                    beginning of year
                
                
                720,195
                
                
                6,083Cash,
                    end of year
                
                $
                4,723
                
                $
                720,195Supplemental
                    disclosure of cash flow information:Cash
                    paid during the year for:Interest
                
                $
                1,198
                
                $
                3,304Income
                    taxes
                
                $
                800
                
                $
                800
 See
            Report of Independent Registered Public Accounting Firm and Accompanying
            Notes
            to Consolidated Financial Statements.
  Page
                F-5
  **CRYOPORT,
          INC.**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
          The Years Ended March 31, 2006 and 2005**
 
 **NOTE
          1 –
          ORGANIZATION AND BUSINESS**
 
 Organization
 
 Cryoport,
          Inc. (the “Company”) was originally incorporated under the name G.T.5-Limited
          (“GT5”) on May 25, 1990 as a Nevada Corporation. The Company was engaged in the
          business of designing and building exotic body styles for automobiles compatible
          with the vehicle’s existing chassis.
 
 On
          March
          15, 2005, the Company entered into a Share Exchange Agreement (the “Agreement”)
          with Cryoport Systems, Inc. (“Cryoport Systems”), a California corporation, and
          its stockholders whereby the Company acquired all of the issued and outstanding
          shares of Cryoport Systems in exchange for 24,108,105 shares of its common
          stock
          (which represented approximately 81% of the total issued and outstanding
          shares
          of common stock following the close of the transaction). Cryoport Systems
          was
          originally formed in 1999 as a California limited liability company and
          was
          reorganized into a California corporation on December 11, 2000. Cryoport
          Systems
          was founded to capitalize on servicing the transportation needs of the
          growing
          global “biotechnology revolution.” Effective March 16, 2005, the Company changed
          its name to Cryoport, Inc. The transaction has been recorded as a reverse
          acquisition (see Note 2).
 
 The
          principal focus of the Company is to develop a line of disposable (or one-way)
          dry cryogenic shippers for the transport of biological materials. These
          materials include live cell pharmaceutical products; e.g., cancer vaccines,
          diagnostic materials, reproductive tissues, infectious substances and other
          items that require continuous exposure to cryogenic temperature (less than
          -150 ° C).
          The
          Company currently manufactures a line of reusable cryogenic dry shippers.
          These
          primarily serve as vehicles for the development of the cryogenic technology
          that
          supports the disposable product development but also are essential components
          of
          the infrastructure that supports testing and research activities of the
          pharmaceutical and biotechnology industries. The Company’s mission is to provide
          cost effective packaging systems for biological materials requiring, or
          benefiting from, a cryogenic temperature environment over an extended period
          of
          time.
 
 Going
          Concern
 
 The
          accompanying consolidated financial statements have been prepared in conformity
          with accounting principles generally accepted in the United States of America,
          which contemplate continuation of the Company as a going concern. The Company
          has not generated significant revenues from operations and has no assurance
          of
          any future revenues. The Company incurred net losses of $1,522,101 and
          $1,038,110 during the years ended March 31, 2006 and 2005, respectively.
          The
          Company has a cash balance of $4,723 at March 31, 2006. In addition, at
          March
          31, 2006, the Company’s stockholders’ deficit was $2,150,036 and its negative
          working capital of $538,235. These factors, among others,
          raise substantial doubt about the Company’s ability to continue as a going
          concern. The Company’s management recognizes that the Company must obtain
          additional capital for the eventual achievement of sustained profitable
          operations. Management’s plans include obtaining additional capital through
          equity funding sources. However, no assurance can be given that additional
          capital, if needed, will be available when required or upon terms acceptable
          to
          the Company or that the Company will be successful in its efforts to negotiate
          an extension of its existing debt. The accompanying consolidated financial
          statements do not include any adjustments that might result from the outcome
          of
          this uncertainty.
  Page
              F-6
  **CRYOPORT,
            INC.**
 
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
            The Years Ended March 31, 2006 and 2005**
  **NOTE
          2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 Basis
          of Presentation
 
 The
          accompanying consolidated financial statements have been prepared in accordance
          with accounting principles generally accepted in the United States of America.
          The acquisition of Cryoport Systems by the Company has been accounted for
          as a
          reverse acquisition, whereby the assets and liabilities of Cryoport Systems
          are
          reported at their historical cost. The Company had no assets or operations
          at
          the date of acquisition. The reverse acquisition resulted in a change in
          reporting entity for accounting and reporting purposes. Accordingly, the
          accompanying consolidated financial statements have been retroactively
          restated
          for all periods presented to report the historical financial position,
          results
          of operations and cash flows of Cryoport Systems. Since the Company’s
          stockholders retained 5,600,000 shares of common stock in connection with
          the
          reverse acquisition, such shares have been reflected as if they were issued
          to
          the Company on the date of acquisition for no consideration as part of
          a
          corporate reorganization.
 
 Principles
          of Consolidation
 
 The
          consolidated financial statements include the accounts of Cryoport, Inc.
          and its
          wholly owned subsidiary, Cryoport Systems, Inc. All intercompany accounts
          and
          transactions have been eliminated.
 
 Use
          of
          Estimates
 
 The
          preparation of consolidated financial statements in conformity with accounting
          principles generally accepted in the United States of America requires
          management to make estimates and assumptions that affect the reported amounts
          of
          assets and liabilities and disclosure of contingent assets and liabilities
          at
          the date of the financial statements and the reported amounts of revenues
          and
          expenses during the reporting periods. Actual results could differ from
          estimated amounts. The Company’s significant estimates include allowances for
          doubtful accounts and sales returns, recoverability of
          long-lived assets, allowances for inventory obsolescence, accrued warranty
          costs, deferred tax assets and their accompanying valuations and product
          liability reserves.
  Page
              F-7
  **CRYOPORT,
            INC.**
 
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
            The Years Ended March 31, 2006 and 2005**
 **NOTE
          2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
          continued**
  Concentrations
          of Credit Risk
  *Cash*
 
 The
          Company maintains its cash accounts in financial institutions. Accounts
          at these
          institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”)
          up to $100,000. At March 31, 2006 and 2005, the Company had cash balances
          of $0
          and $582,538, respectively, which were in excess of the FDIC insurance
          limit.
          The Company performs ongoing evaluations of these institutions to limit
          its
          concentration risk exposure.
  *Customers*
 
 The
          Company grants credit to customers within the United States of America
          and to a
          limited number of international customers, and does not require collateral.
          Sales to international customers are secured by advance payments or letters
          of
          credit. The Company’s ability to collect receivables is affected by economic
          fluctuations in the geographic areas and industries served by the Company.
          Reserves for uncollectible amounts and estimated sales returns are provided
          based on past experience and a specific analysis of the accounts which
          management believes are sufficient. Accounts receivable at March 31, 2006
          and
          2005 are net of reserves for doubtful accounts and sales returns of
          approximately $54,000 and $5,000 respectively. Although the Company expects
          to
          collect amounts due, actual collections may differ from the estimated
          amounts.
 
 The
          Company has foreign sales primarily in Europe, Latin America and Canada.
          Foreign
          sales are primarily under exclusive distribution agreements with international
          distributors. During 2006 and 2005, the Company had foreign sales of
          approximately $55,206 and $53,500, respectively, which constituted approximately
          36% and 20% of net sales, respectively.
 
 The
          majority of the Company’s customers are in the bio-pharmaceutical and animal
          breeding industries. Consequently, there is a concentration of receivables
          within these industries, which is subject to normal credit risk.
 
 Fair
          Value of Financial Instruments
 
 The
          Company’s consolidated financial instruments consist of cash, accounts
          receivable, related party notes payable, payables, accrued expenses and
          a note
          payable to a third party. The carrying value for all such instruments,
          except
          the related party notes payable, approximates fair value at March 31, 2006
          and
          2005. The fair value of the related party notes payable is not determinable
          as
          the transactions were with related parties.
  Page
              F-8
  **CRYOPORT,
            INC.**
 
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
            The Years Ended March 31, 2006 and 2005**
  **NOTE
          2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
          continued**
 
 Inventories
 
 Inventories
          are stated at the lower of standard cost or current estimated market value.
          Cost
          is determined using the first-in, first-out method. Work in process and
          finished
          goods include material, labor and applied overhead. The Company periodically
          reviews its inventories and records a provision for excess and obsolete
          inventories based primarily on the Company’s estimated forecast of product
          demand and production requirements. Once established, write-downs of inventories
          are considered permanent adjustments to the cost basis of the obsolete
          or excess
          inventories.
 
 Fixed
          Assets
 
 Fixed
          assets are stated at cost, net of accumulated depreciation and amortization.
          Depreciation and amortization of fixed assets are provided using the
          straight-line method over the following useful lives:
 
 Furniture
                    and fixtures
                
                7
                    yearsMachinery
                    and equipment
                
                5-7
                    yearsLeasehold
                    improvements
                
                Lesser
                    of lease term or estimated useful
                    life
 
 Betterments,
          renewals and extraordinary repairs that extend the lives of the assets
          are
          capitalized; other repairs and maintenance charges are expensed as incurred.
          The
          cost and related accumulated depreciation and amortization applicable to
          assets
          retired are removed from the accounts, and the gain or loss on disposition
          is
          recognized in current operations.
 
 Intangible
          Assets
 
 *Patents
          and Trademarks*
 
 Patents
          and trademarks are amortized using the straight-line method over their
          estimated
          useful life of five years.
  Page
              F-9
  **CRYOPORT,
          INC.**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
          The Years Ended March 31, 2006 and 2005**
 **NOTE
          2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
          continued**
 
 Long-Lived
          Assets
 
 The
          Company’s management assesses the recoverability of its long-lived assets upon
          the occurrence of a triggering event by determining whether the depreciation
          and
          amortization of long-lived assets over their remaining lives can be recovered
          through projected undiscounted future cash flows. The amount of long-lived
          asset
          impairment, if any, is measured based on fair value and is charged to operations
          in the period in which long-lived asset impairment is determined by management.
          At March 31, 2006 and 2005, the Company’s management believes there is no
          impairment of its long-lived assets. There can be no assurance however,
          that
          market conditions will not change or demand for the Company’s products will
          continue, which could result in impairment of its long-lived assets in
          the
          future.
 
 Accrued
          Warranty Costs
 
 Estimated
          costs of the Company’s standard warranty, included with products at no
          additional cost to the customer for a period up to one year, are recorded
          as
          accrued warranty costs at the time of product sale. Costs related to servicing
          the standard warranty are charged to the accrual as incurred.
  The
          following represents the activity in the warranty accrual during the years
          ended
          March 31:
 
 **2006**
                
                **2005**Beginning
                    warranty accrual
                
                $
                70,500
                
                $
                31,875Increase
                    in accrual (charged to cost of sales)
                
                
                13,484
                
                
                65,625Charges
                    to accrual (product replacements)
                
                
                (24,452
                )
                
                (27,000
                )Ending
                    warranty accrual
                
                $
                59,532
                
                $
                70,500
 
 Revenue
          Recognition
 
 Revenue
          is recognized in accordance with Staff Accounting Bulletin (“SAB”) No. 101, *Revenue
          Recognition in Financial Statements* ,
          as
          revised by SAB 104. The Company recognizes revenue when products are shipped
          to
          a customer and the risks and rewards of ownership and title have passed
          based on
          the terms of the sale. The Company records a provision for sales returns
          and
          claims based upon historical experience. Actual returns and claims in any
          future
          period may differ from the Company’s estimates.
  Page
              F-10
  **CRYOPORT,
          INC.**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
          The Years Ended March 31, 2006 and 2005**
 **NOTE
          2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
          continued**
 
 Accounting
          for Shipping and Handling Revenue, Fees and Costs
 
 The
          Company classifies amounts billed for shipping and handling as revenue
          in
          accordance with Emerging Issues Task Force (“EITF”) Issue No. 00-10, *Accounting
          for Shipping and Handling Fees and Costs* .
          Shipping and handling fees and costs are included in cost of sales.
 
 Advertising
          Costs
 
 The
          Company expenses the cost of advertising when incurred as a component of
          consolidated selling, general and administrative expenses. During 2006
          and 2005,
          the Company expensed $71,525 and $13,227, respectively, in advertising
          costs.
 
 Research
          and Development Expenses
 
 The
          Company expenses internal research and development costs as incurred. Third
          party research and development costs are expensed when the contracted work
          has
          been performed.
 
 Stock-Based
          Compensation
 
 The
          Company accounts for equity instruments issued to non-employees in accordance
          with the provisions of Statement of Financial Accounting Standards (“SFAS”) No.
          123, *Accounting
          for Stock-Based Compensation* ,
          and
          EITF Issue No. 96-18, *Accounting
          for Equity Instruments that are Issued to Other Than Employees for Acquiring,
          or
          in Conjunction with Selling Goods or Services* .
          All
          transactions in which goods or services are the consideration received
          for the
          issuance of equity instruments are accounted for based on the fair value
          of the
          consideration received or the fair value of the equity instrument issued,
          whichever is more reliably measurable. The measurement date used to determine
          the fair value of the equity instrument issued is the earlier of the date
          on
          which the third-party performance is complete or the date on which it is
          probable that performance will occur.
 
 SFAS
          No.
          123 allows an entity to continue to measure compensation cost related to
          stock
          and stock options issued to employees using the intrinsic method accounting
          prescribed by Accounting Principles Board (“APB”) Opinion No. 25, *Accounting
          for Stock Issued to Employees* .
          Under
          APB No. 25, compensation cost, if any, is recognized over the respective
          vesting
          period based on the difference, on the date of grant, between the fair
          value of
          the Company's common stock and the grant price. Entities electing to remain
          with
          the accounting method of APB No. 25 must make pro forma disclosures of
          net loss
          and loss per share, as if the fair value method of accounting defined in
          SFAS
          No. 123 had been applied.
 
 Page
              F-11
  **CRYOPORT,
          INC.**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
          The Years Ended March 31, 2006 and 2005**
  **NOTE
          2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
          continued**
 
 The
          Company has a stock-based employee compensation plan, which is described
          more
          fully in Note  10. The Company accounts for employee options granted under
          this plan under the recognition and measurement principles of APB No. 25,
          and
          related interpretations. No stock-based employee compensation cost is reflected
          in the accompanying consolidated statements of operations, as all employee
          options granted during the years ended March 31, 2006 and 2005 were issued
          at or
          above the estimated fair market value of the Company’s common stock on the date
          of grant. The following table illustrates the effect on net loss and loss
          per
          share if the Company had applied the fair value recognition provisions
          of SFAS
          No. 123 to stock-based employee compensation.
 
 **For
                    The Years Ended March 31,****2006**
                
                **2005**Net
                    loss as reported
                
                $
                (1,522,101
                )
                $
                (1,038,110
                )Deduct:Total
                    stock-based employee compensation under fair value based method
                    for all
                    awards, net of related tax effects
                
                
                (86,106
                )
                
                (123,327
                )Pro
                    forma net loss
                
                $
                (1,608,207
                )
                $
                (1,161,437
                )Basic
                    and diluted loss per share –
                    as
                    reported
                
                $
                (0.05
                )
                $
                (0.06
                )Basic
                    and diluted loss per share –
                    pro
                    forma
                
                $
                (0.05
                )
                $
                (0.07
                )
 
 Income
          Taxes
 
 The
          Company accounts for income taxes in accordance with SFAS No. 109, *Accounting
          for Income Taxes* .
          Under
          the asset and liability method of SFAS No. 109, deferred tax assets and
          liabilities are recognized for the future tax consequences attributable
          to
          differences between the financial statement carrying amounts of existing
          assets
          and liabilities and their respective tax bases. Deferred tax assets and
          liabilities are measured using enacted tax rates expected to apply to taxable
          income in the years in which those temporary differences are expected to
          be
          recovered or settled. Under SFAS No. 109, the effect on deferred tax assets and
          liabilities of a change in tax rates is recognized in income in the period
          that
          includes the enactment date. A valuation allowance is provided for certain
          deferred tax assets if it is more likely than not that the Company will
          not
          realize tax assets through future operations. The Company is a subchapter
          "C"
          corporation and files a federal income tax return. The Company files separate
          state income tax returns for California and Nevada.
  Page
              F-12
  **CRYOPORT,
          INC.**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
          The Years Ended March 31, 2006 and 2005**
 **NOTE
          2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
          continued**
 
 Basic
          and Diluted Loss Per Share
 
 Basic
          loss per common share is computed based on the weighted average number
          of shares
          outstanding during the period. Diluted loss per share is computed by dividing
          net loss by the weighted average shares outstanding assuming all potential
          dilutive common shares were issued. Basic and diluted loss per share are
          the
          same as the effect of stock options and warrants on loss per share are
          anti-dilutive and thus not included in the diluted loss per share
          calculation.  The
          impact under the treasury stock method of dilutive stock options and warrants
          would have resulted in an increase of 2,915,972 and 1,288,173 incremental
          shares
          for the years ended March 31, 2006 and 2005.
 
 The
          following is a reconciliation of the numerators and denominators of the
          basic
          and diluted loss per share computations for the years ended March
          31:
 
 **2006**
                
                **2005**Numerator
                    for basic and diluted loss per share:Net
                    loss available to common stockholders
                
                $
                (1,522,101
                )
                $
                (1,038,110
                )Denominator
                    for basic and diluted loss per common share:Weighted
                    average common shares outstanding
                
                
                29,888,702
                
                
                17,907,557Net
                    loss per common share available to common stockholders
                
                $
                (0.05
                )
                $
                (0.06
                )
 
 Recent
          Accounting Pronouncements
 
 In
          November 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
          151, *Inventory
          Costs, an amendment of ARB No. 43, Chapter 4* .
          The
          amendments made by SFAS No. 151 clarify that abnormal amounts of facility
          expense, freight, handling costs, and wasted materials (spoilage) should
          be
          recognized as current-period charges and require the allocation of fixed
          production overheads to inventory based on the normal capacity of the production
          facilities. The guidance is effective for inventory costs incurred during
          fiscal
          years beginning after June 15, 2005. Earlier application is permitted for
          inventory costs incurred during fiscal years beginning after November 23,
          2004.
          The Company is in the process of evaluating whether the adoption of SFAS
          No. 151
          will have a significant impact on the Company's overall results of operations
          or
          financial position.
  Page
              F-13
 **CRYOPORT,
            INC.**
 
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
            The Years Ended March 31, 2006 and 2005**
  **NOTE
          2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
          continued**
 
 In
          December 2004, the FASB issued SFAS No. 123 (revised 2004), *Share-Based
          Payment* (“SFAS
          123(R)”), which is a revision of SFAS No. 123. SFAS 123(R) supersedes APB 25,
          and amends SFAS No. 95, *Statement
          of Cash Flows* .
          Generally, the approach in SFAS 123(R) is similar to the approach described
          in SFAS No. 123. However, SFAS 123(R) requires all share-based payments
          to
          employees, including grants of employee stock options, to be recognized
          in the
          income statement based on their fair values. Pro forma disclosure is no
          longer
          an alternative. The provisions of this statement are effective for the
          Company
          as of April 1, 2006. The Company expects to adopt SFAS 123(R) in the first
          fiscal quarter of fiscal year 2007.
 
 SFAS
          123(R) requires companies to recognize in the income statement the grant-date
          fair value of stock options and other equity-based compensation issued
          to
          employees. SFAS 123(R) also establishes accounting requirements for measuring,
          recognizing and reporting share-based compensation, including income tax
          considerations. Upon adoption of SFAS 123(R), the Company will be required
          to
          determine the transition method to be used at the date of adoption. The
          allowed
          transition methods are the modified prospective application and the modified
          retrospective application. Under the modified prospective application,
          the cost
          of new awards and awards modified, repurchased or cancelled after the required
          effective date and the portion of awards for which the requisite service
          has not
          been rendered (unvested awards) that are outstanding as of the required
          effective date will be recognized as the requisite service is rendered
          on or
          after the required effective date. The compensation cost for that portion
          of
          awards shall be based on the grant-date fair value of those awards as calculated
          for either recognition or pro forma disclosures under SFAS 123. The modified
          retrospective application requires companies to record compensation expense
          for
          all unvested stock options and restricted stock beginning with the first
          disclosed period restated. The Company plans to adopt SFAS 123(R) using
          the
          modified prospective application.
 
 As
          permitted by SFAS No. 123, the Company currently accounts for share-based
          payments to employees using APB 25’s intrinsic value method and, as such,
          recognizes no compensation cost for employee stock options. Accordingly,
          the
          adoption of SFAS 123(R)’s fair value method will have a negative impact on the
          Company’s results of operations, although it will have no impact on its overall
          financial position. The impact of adopting SFAS 123(R) cannot be predicted
          at
          this time because it will depend on levels of share-based payments granted
          in
          the future. However, had the Company adopted SFAS 123(R) in prior periods,
          the
          impact of that standard would have approximated the impact of SFAS No.
          123 as
          described in the disclosure of pro forma net loss and loss per share in
          Note 1
          to the Company’s financial statements. SFAS 123(R) also requires the benefits of
          tax deductions in excess of recognized compensation cost to be reported
          as a
          financing cash flow, rather than as an operating cash flow as required
          under
          current accounting literature. The requirement will reduce net operating
          cash
          flows and increase net financing cash flows in periods of adoption.
 
 Page
              F-14
 **CRYOPORT,
            INC.**
 
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
            The Years Ended March 31, 2006 and 2005**
 **NOTE
          2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
          continued**
 
 In
          December 2004, the FASB issued SFAS No. 153, *Exchange
          of Nonmonetary Assets - an amendment of APB Opinion No 29, Accounting for
          Nonmonetary Transactions* .
          SFAS
          No. 153 eliminates the exception for non-monetary exchanges of similar
          productive assets, which were previously required to be recorded on a carryover
          basis rather than a fair value basis. Instead, this statement provides
          that
          exchanges of non-monetary assets that do not have commercial substance
          be
          reported at carryover basis rather than a fair value basis. A non-monetary
          exchange is considered to have commercial substance if the future cash
          flows of
          the entity are expected to change significantly as a result of the exchange.
          The
          provisions of this statement are effective for nonmonetary asset exchanges
          occurring in fiscal periods beginning after June 15, 2005. The Company
          does not
          expect the adoption of SFAS No. 153 to have an impact on its financial
          condition or
          results of operations.
 
 In
          June 2005, the FASB issued SFAS No. 154, *Accounting
          Changes and Error Corrections* ,
          a
          replacement of APB Opinion No. 20, *Accounting
          Changes* ,
          and
          Statement No. 3, *Reporting
          Accounting Changes in Interim Financial Statements* .
          SFAS
          No. 154 changes the requirements for the accounting for and reporting of
          a
          change in accounting principle. Previously, most voluntary changes in accounting
          principles were required recognition via a cumulative effect adjustment
          within
          net income of the period of the change. SFAS No. 154 requires retrospective
          application to prior periods’ financial statements, unless it is impracticable
          to determine either the period-specific effects or the cumulative effect
          of the
          change. SFAS No. 154 is effective for accounting changes made in fiscal
          years beginning after December 15th, 2005; however, SFAS No. 154 does
          not change the transition provisions of any existing accounting pronouncements.
          The adoption of SFAS No. 154 is not expected have a material effect on the
          Company’s financial position, results of operations or cash flows.
 
 **NOTE
          3 – INVENTORIES**
 
 Inventories
          at March 31, 2006 and 2005 consists of the following:
 
 **2006**
                
                **2005**Raw
                    materials
                
                $
                106,950
                
                $
                111,538Work
                    in process
                
                
                57,790
                
                
                21,582Finished
                    goods
                
                
                25,581
                
                
                17,860$
                190,321
                
                $
                150,980
 
 Page
              F-15
  **CRYOPORT,
          INC.**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
          The Years Ended March 31, 2006 and 2005**
 **NOTE
          4 – FIXED ASSETS**
 
 Fixed
          assets consist of the following at March 31:
 
 **2006**
                
                **2005**Furniture
                    and fixtures
                
                $
                22,982
                
                $
                18,768Machinery
                    and equipment
                
                
                437,501
                
                
                407,376Leasehold
                    improvements
                
                
                15,611
                
                
                7,900476,094
                
                
                434,044Less
                    accumulated depreciation and amortization
                
                
                (418,574
                )
                
                (337,104
                )$
                57,520
                
                $
                96,940
 
 Depreciation
          and amortization expense for fixed assets for the years ended March 31,
          2006 and
          2005 was $81,470 and $83,344, respectively.
 
 **NOTE
          5 – INTANGIBLE ASSETS**
 
 Intangible
          assets consist of the following at March 31:
 
 **2006**
                
                **2005**Assets
                    subject to amortization:Patents
                    and trademarks
                
                $
                46,268
                
                $
                46,268Less
                    accumulated amortization
                
                
                (36,903
                )
                
                (29,620
                )$
                9,365
                
                $
                16,648
 
 Amortization
          expense for intangible assets for the years ended March 31, 2006 and 2005
          was
          $7,283 and $9,252, respectively. All of the Company’s intangible assets are
          subject to amortization.
 
 Estimated
          future annual amortization expense pursuant to these intangible assets
          is as
          follows:
 
 **Years
                    Ending**
                  **March
                    31,**2007
                
                $
                4,6832008
                
                $
                4,682
 
 Page
              F-16
  **CRYOPORT,
          INC.**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
          The Years Ended March 31, 2006 and 2005**
 **NOTE
          6 – INCOME TAXES**
 
 The
          tax
          effects of temporary differences that give rise to deferred taxes at
          March 31, 2006 and 2005 are as follows:
 
 **2006**
                
                **2005**Deferred
                    tax asset:Net
                    operating loss carryforward
                
                $
                2,593,000
                
                $
                2,150,000Accrued
                    expenses and reserves
                
                
                85,000
                
                
                235,000Expenses
                    recognized for granting of options and warrants
                
                
                81,000
                
                
                56,000Total
                    gross deferred tax asset
                
                
                2,759,000
                
                
                2,441,000Less
                    valuation allowance
                
                
                (2,759,000
                )
                
                (2,441,000
                )$
                -
                
                $
                -
 
 The
          valuation allowance increased during the years ended March 31, 2006 and
          2005 by
          approximately $318,000 and $441,000, respectively. No current provision
          for
          income taxes for the years ended March 31, 2006 and 2005 is required,
          except for minimum state taxes, since the Company incurred taxable losses
          during
          such years.
 
 The
          provision for income taxes for both fiscal 2006 and 2005 was $800 and differs
          from the amount computed by applying the U.S. Federal income tax rate of
          34% to
          loss before income taxes as a result of the following:
 
 **2006**
                
                **2005**Computed
                    tax benefit at federal statutory rate
                
                $
                (518,000
                )
                $
                (355,000
                )State
                    income tax benefit, net of federal effect
                
                
                (90,000
                )
                
                (62,000
                )Increase
                    in valuation allowance
                
                
                318,000
                
                
                441,000Other
                
                
                290,800
                
                
                (23,200
                )$
                800
                
                $
                800
 
 As
          of
          March 31, 2006, the Company had net operating loss carry forwards of
          approximately $6,500,000 and $6,500,000 for federal and state income tax
          reporting purposes, respectively, which expire at various dates through
          2026 and
          2016, respectively.
  Page
              F-17
  **CRYOPORT,
          INC.**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
          The Years Ended March 31, 2006 and 2005**
 **NOTE
          6 – INCOME TAXES, continued**
 
 The
          utilization of the net operating loss carry forwards might be limited due
          to
          restrictions imposed under federal and state laws upon a change in ownership.
          The amount of the limitation, if any, has not been determined at this time.
          A
          valuation allowance is provided when it is more likely than not that some
          portion or all of the deferred tax assets will not be realized. As a result
          of
          the Company’s continued losses and uncertainties surrounding the realization of
          the net operating loss carry forwards, the Company has recorded valuation
          allowances equal to the net deferred tax asset amounts as of March 31,
          2006 and
          2005.
 
 **NOTE
          7 – COMMITMENTS AND CONTINGENCIES**
 
 Operating
          Leases
 
 The
          Company has leased its facility in Brea, California on a month-to-month
          basis
          with varying monthly payments. On April 1, 2005, the Company entered into
          a
          noncancelable operating lease requiring ten monthly payments of $7,500
          and
          expiring on April 1, 2007.
 
 As
          of
          March 31, 2006, future minimum rental payments required under the existing
          noncancelable operating lease are as follows:
 
 **Years
                    Ending**
                  **March
                    31,**
                
                **OperatingLease**2007
                
                $
                75,000
 
 Total
          rental expense was approximately $ 75,000
          and $ 20,000 for the
          years ended March 31, 2006 and 2005, respectively.
 
 Litigation
 
 The
          Company becomes a party to product litigation in the normal course of business.
          The Company accrues for open claims based on its historical experience
          and
          available insurance coverage. In the opinion of management, there are no
          legal
          matters involving the Company that would have a material adverse effect
          on the
          Company’s financial condition or results of operations.
  Page
              F-18
 **CRYOPORT,
            INC.**
 
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
            The Years Ended March 31, 2006 and 2005**
  **NOTE
          7 – COMMITMENTS AND CONTINGENCIES, continued**
 
 During
          2004, a former employee initiated a wrongful termination lawsuit against
          the
          Company. The Company expensed all costs related to this matter as incurred
          in
          the accompanying consolidated financial statements. In August 2004, both
          parties
          agreed to settle the lawsuit with consideration being paid to the plaintiff
          in
          the form of 265,420 shares of the Company’s common stock valued at $10,617 based
          on $0.04 per share (estimated fair value at date of settlement), and $25,000
          in
          cash, which is included in accrued liabilities in the accompanying consolidated
          balance sheets at March 31, 2006 and 2005, to be paid 90 days subsequent
          to the
          Company operating under a positive cash flow basis. The total settlement
          cost of
          $35,617 is reflected in selling, general and administrative expenses in
          the
          accompanying statement of operations for the year ended March 31,
          2005.
 
 Indemnities
          and Guarantees
 
 The
          Company has made certain indemnities and guarantees, under which it may
          be
          required to make payments to a guaranteed or indemnified party, in relation
          to
          certain actions or transactions. The Company indemnifies its directors,
          officers, employees and agents, as permitted under the laws of the States
          of
          California and Nevada. In connection with its facility lease, the Company
          has
          indemnified its lessor for certain claims arising from the use of the facility.
          In connection with its business merger, the Company has indemnified the
          merger
          candidate for certain claims arising from the failure of the Company to
          perform
          any of its representation or obligations under the agreements. The duration
          of
          the guarantees and indemnities varies, and is generally tied to the life
          of the
          agreement. These guarantees and indemnities do not provide for any limitation
          of
          the maximum potential future payments the Company could be obligated to
          make.
          Historically, the Company has not been obligated nor incurred any payments
          for
          these obligations and, therefore, no liabilities have been recorded for
          these
          indemnities and guarantees in the accompanying consolidated balance sheets.
 
 **NOTE
          8 – NOTES PAYABLE**
 
 The
          Company has an unsecured, non-interest bearing note payable to a third
          party.
          The Company is currently required to make monthly payments of $2,000 as
          agreed
          upon with the third party. As of March 31, 2006 and 2005, the remaining
          unpaid
          balance was $59,440 and $67,440, respectively.
 
 As
          of
          March 31, 2006 and 2005, the Company had principal balances of $1,369,500
          in
          outstanding unsecured indebtedness owed to five related parties, including
          four
          former members of the board of directors representing working capital advances
          made to the Company from February 2001 through March 2005. These notes
          bear
          interest at the rate of 6% per annum and provide for aggregate monthly
          principal
          payments beginning April 1, 2006 of $2,500, which increase by $2,500 every
          six
          months to a maximum of $10,000 per month. Any remaining unpaid principal
          and
          accrued interest is due at maturity on various dates through March 1, 2015.
  Page
              F-19
  **CRYOPORT,
          INC.**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
          The Years Ended March 31, 2006 and 2005**
 **NOTE
          8 – NOTES PAYABLE, continued**
 
 Related
          party interest expense under these notes was $79,179 and $82,464 for the
          years
          ended March 31, 2006 and 2005, respectively. Accrued interest, which is
          included
          in notes payable in the accompanying balance sheet, related to these notes
          amounted to $318,746 and $239,567 as of March 31, 2006 and 2005, respectively.
          Subsequent to year end the Company failed to make the required payments
          under
          the notes. However, pursuant to the note agreements, the Company has a
          120 day
          grace period to pay missed payments before the notes are in default. Management
          expects to pay all payments due prior to the expiration of the 120 day
          grace
          period.
 
 Future
          maturities of notes payable at March 31, 2006 are as follows:
 
 **Years
                    Ending**
                  **March
                    31,**
                
                **Related**
                  **Party**
                
                **Third**
                  **Party**
                
                **Total**2007
                
                $
                45,000
                
                $
                24,000
                
                $
                69,000.002008
                
                
                105,000
                
                
                24,000
                
                
                129,000.002009
                
                
                120,000
                
                
                11,440
                
                
                131,440.002010
                
                
                120,000
                
                
                -
                
                
                120,000.002011
                
                
                120,000
                
                
                -
                
                
                120,000.00Thereafter
                
                
                859,500
                
                
                -
                
                
                859,500.00$
                1,369,500
                
                $
                59,440
                
                $
                1,428,940.00
 
 **NOTE
          9 – COMMON STOCK**
 
 During
          fiscal 2006, the Company sold 142,000 shares of common stock at a price
          of $3.50
          per share resulting in gross proceeds of $497,000 net of offering costs
          of
          $61,460.
 
 During
          fiscal 2006, the Company issued 71,592 shares of common stock resulting
          from
          cashless exercises of 82,134 warrants converted using an average market
          price of
          approximately $5.80 per share resulting in 10,621 warrants used for the
          cashless
          conversion.
 
 During
          fiscal 2006, the Company issued 159,999 shares of common stock resulting
          from
          exercises of warrants at an average exercise price of $0.34 per share resulting
          in proceeds of $55,000.
 
 During
          fiscal 2005, the Company sold 11,962,522 shares of common stock at prices
          ranging from $0.04 to $0.75 resulting in gross proceeds of $1,609,971,
          net of
          offering costs of $80,113.
 
 In
          connection with the Share Exchange Agreement with CryoPort Systems, Inc.
          in
          March 2005 (see Note 1), the Company issued 1,000,000 shares to Mr. Dante
          Panella, a majority stockholder, in exchange for Mr. Panella’s surrender of
          1,354,891 shares of CryoPort Systems, Inc. common stock.
 
 Page
              F-20
  **CRYOPORT,
            INC.**
 
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
            The Years Ended March 31, 2006 and 2005**
 **NOTE
          10 – STOCK OPTIONS**
 
 Effective
          October 1, 2002, the Company adopted the 2002 Stock Option Plan (the “2002
          Plan”). The stockholders of the Company approved the 2002 Plan on October 1,
          2002. Under the 2002 Plan, incentive stock options and nonqualified options
          may
          be granted to officers, employees and consultants of the Company for the
          purchase of up to 5,000,000 shares of the Company’s common stock. The exercise
          price per share under the incentive stock option plan shall not be less
          than
          100% of the fair market value per share on the date of grant. The exercise
          price
          per share under the non-qualified stock option plan shall not be less than
          85%
          of the fair market value per share on the date of grant. Expiration dates
          for
          the grants may not exceed 10 years from the date of grant. The 2002 Plan
          terminates on October 1, 2012.
 
 Under
          the
          terms of the 2002 Plan, the Company granted options to purchase 367,970
          shares
          of the Company’s common stock under incentive stock option agreements in 2005,
          and granted options to purchase 466,018 shares of the Company’s common stock
          under non-qualified stock option agreements in 2005. No incentive stock
          options
          or non-qualified stock options were granted during the year ended March
          31,
          2006. All options granted have an exercise price equal to the fair market
          value
          at the date of grant, vest upon grant or agreed upon vesting schedules
          and
          expire five years from the date of grant. Therefore, there was no compensation
          expense recognized for options issued to employees during 2005. Pursuant
          to SFAS
          No. 123, total compensation expense recognized for options issued to consultants
          in prior years was $61,560 and $62,577 during 2006 and 2005, respectively.
          As of
          March 31, 2006 and 2005, there were 2,488,613 and 2,508,988 options
          outstanding respectively, at an average exercise price of $0.45 per share
          under
          the 2002 Plan. There were no stock options granted subsequent to March 31,
          2006. The Company had 2,511,387 options available for grant under the 2002
          Plan
          at March 31, 2006.
 
 The
          following summarizes stock option activity for the years ended March 31,
          2006 and 2005:
  **2006**
                
                **2005****Options**
                
                **Weighted
                    Average Exercise Price**
                
                **Options**
                
                **Weighted
                    Average Exercise Price**Outstanding,
                    beginning of year
                
                
                2,508,988
                
                $
                0.45
                
                
                1,675,000
                
                $
                0.59Granted
                
                
                -
                
                
                -
                
                
                833,988
                
                
                0.17Exercised
                
                
                -
                
                
                -
                
                
                -
                
                
                -Expired/forfeited
                
                
                (20,375
                )
                
                0.45
                
                
                -
                
                
                -Outstanding,
                    end of year
                
                
                2,488,613
                
                $
                0.45
                
                
                2,508,988
                
                $
                0.45Exercisable,
                    end of year
                
                
                2,311,261
                
                $
                0.45
                
                
                2,050,644
                
                $
                0.44Weighted
                    average fair value of options granted
                
                
                
                
                $
                -
                
                
                
                
                $
                0.08
  Page
              F-21
 **CRYOPORT,
            INC.**
 
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
            The Years Ended March 31, 2006 and 2005**
  **NOTE
          10 – STOCK OPTIONS, continued**
 
 The
          following table summarizes information about stock options outstanding
          and
          exercisable at March 31, 2006:
 
 **Outstanding**
                
                **Exercisable****Exercise
                    Price**
                
                **Number
                    of Shares**
                
                **Weighted
                    Average Exercise Price**
                
                **Weighted
                    Average Remaining Contractual Life (Years)**
                
                **Number
                    of Shares**
                
                **Weighted
                    Average Exercise Price**$1.00
                
                225,000
                
                $1.00
                
                1.7
                
                225,000
                
                $1.00$0.50-$0.60
                
                1,620,000
                
                $0.55
                
                2.2
                
                1,442,648
                
                $0.55$0.04
                
                643,613
                
                $0.04
                
                3.3
                
                643,613
                
                $0.042,488,613
                
                
                
                
                
                2,311,261
 
 The
          fair
          value of each option granted during 2005 to employees and directors was
          estimated using the Black-Scholes option-pricing model on the date of grant
          using the following assumptions: (i) no dividend yield, (ii) average
          volatility of 60%, (iii) weighted-average risk-free interest rate of
          approximately 3.21%, and (iv) expected lives of five years.
 
 **NOTE
          11 – STOCK WARRANTS**
 
 From
          time
          to time, the Company issues warrants pursuant to various consulting agreements
          and other compensatory arrangements.
 
 During
          the year ended March 31, 2005, the Company issued warrants to purchase
          318,334
          shares of the Company’s common stock at an exercise price of $0.30 per share. No
          warrants were exercised as of March 31, 2005. As these warrants were issued
          in
          connection with fund raising activities and considered issuance costs,
          no
          consulting expense was recognized for these warrants in the accompanying
          statement of operations. All of the warrants are fully vested and are
          exercisable from April 1, 2006 to June 16, 2006.
 
 During
          the year ended March 31, 2005, the Company issued warrants to purchase
          102,509 shares of the Company’s common stock at an exercise price of $0.75 per
          share. As these warrants were issued in connection with fund raising activities,
          no consulting expense was recognized for these warrants in the accompanying
          statement of operations. All of the warrants are fully vested and are
          exercisable from April 1, 2006 through June 16, 2006. In June 2005, 82,133
          warrants were exercised pursuant to a cashless exercise provision resulting
          in
          71,592 shares issued net of 10,621 warrants used at a market price of $5.80
          per
          share for the conversion.
 
 Page
              F-22
 **CRYOPORT,
            INC.**
 
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
            The Years Ended March 31, 2006 and 2005**
  **NOTE
          11 – STOCK WARRANTS, continued**
 
 Certain
          warrants issued in conjunction with fundraising activities contain a cashless
          exercise provision. Under the provision, the holder of the warrant surrenders
          those warrants whose fair market value is sufficient to affect the exercise
          of
          the entire warrant quantity. The warrant holder then is issued shares based
          on
          the remaining net warrant and no proceeds are obtained by the Company.
          The
          surrendered warrants are cancelled by the Company in connection with this
          transaction.
 
 The
          fair
          value of each warrant granted during 2005 to consultants and other service
          providers was estimated using the Black-Scholes option-pricing model on
          the date
          of grant using the following assumptions: (i) no dividend yield,
          (ii) average volatility of 60%, (iii) weighted-average risk-free
          interest rate of approximately 1.7% to 4.0%, and (iv) expected life of two
          to three years, respectively.
 
 The
          following represents a summary of the warrant activity for the years ended
          March 31, 2006 and 2005:
  **2006**
                
                **2005****Warrants**
                
                **Weighted
                    Average Exercise Price**
                
                **Warrants**
                
                **Weighted
                    Average Exercise Price**Outstanding,
                    beginning of year
                
                
                1,832,257
                
                $
                0.74
                
                
                1,411,416
                
                $
                0.83Issued
                
                
                -
                
                
                -
                
                
                420,841
                
                
                0.41Exercised
                
                
                (242,133
                )
                
                0.10
                
                
                -
                
                
                -Expired/forfeited
                
                
                (446,000
                )
                
                0.06
                
                
                -
                
                
                -Outstanding
                    and exercisable, end of year
                
                
                1,144,124
                
                $
                0.79
                
                
                1,832,257
                
                $
                0.74Weighted
                    average fair value of warrants granted
                
                
                
                
                $
                -
                
                
                
                
                $
                0.34
 
 Page
              F-23
 
 **CRYOPORT,
          INC.**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **For
          The Years Ended March 31, 2006 and 2005**
 **NOTE
          11 – STOCK WARRANTS, continued**
 
 The
          following table summarizes information about warrants outstanding and
          exercisable at March 31, 2006:
 
 **Exercise
                    Price**
                
                **Number
                    of Warrants Outstanding and Exercisable**
                
                **Weighted
                    Average Remaining Contractual Life (Years)**
                
                **Weighted
                    Average Exercise Price**$2.50
                
                
                100,000
                
                
                0.2
                
                $
                2.50$0.80
                    - $1.00
                
                
                143,750
                
                
                1.3
                
                $
                0.87$0.50
                    - $0.75
                
                
                707,041
                
                
                3.8
                
                $
                0.57$0.30
                
                
                193,334
                
                
                0.1
                
                $
                0.301,144,125
 
 **NOTE
          12 – RELATED PARTY TRANSACTIONS**
 
 In
          June
          2005, the Company retained the legal services of Gary C. Cannon, Attorney
          at Law
          for a monthly retainer fee of $6,500. At that same time, Mr. Cannon also
          became
          the Company’s Secretary and a member of the Company’s Board of Directors. The
          total amount paid to Mr. Cannon for retainer fees and out-of-pocket expenses
          for
          the year ended March 31, 2006 was $64,624.
 
 **NOTE
          13 – SUBSEQUENT EVENTS**
 
 In
          April
          2006, the Company entered into Agency Agreements with various brokers to
          raise
          funds in a private placement offering of common stock under Regulation
          D. In
          connection with this agreement, in May 2006, 7,000 shares of the Company’s
          common stock were sold to investors at a price of $1.50 per share for gross
          proceeds of $9,135 to the Company, net of issuance costs of $1,365.
 
 On
          May
          12, 2006, the Company arranged for short term financing of $175,000, pursuant
          to
          a Loan Agreement and related Secured Promissory Note with Ventana Group,
          LLC.
          Disbursements to the Company under the Note are based on achievement of
          milestones reached towards finalizing a long term equity financing agreement.
          As
          of June 12, 2006, the Company has received $60,000 of funds under this
          Note. The
          Note is secured by machinery and equipment owned by the Company. Per the
          terms
          of the Note, interest on the unpaid principal balance of the Note are accrued
          at
          a monthly rate of 2% and is payable along with all outstanding principal
          on
          August 10, 2006.
  Page
              F-24
 **ITEM
                **8.****
              **CHANGES
                    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                    DISCLOSURE.**


In
      May
      2005, the Company retained the independent registered public accounting firm
      of
      Corbin and Company, LLP to audit its financial statements for the fiscal years
      ended March 31, 2005 and 2004. There were no disagreements with Corbin and
      Company on accounting or financial disclosures. The Company had no existing
      relationship with an independent accountant prior to its engagement of Corbin
      and Company, LLP.




**ITEM
          8A.** **CONTROLS
          AND PROCEDURES**





**Evaluation
      of Disclosure Controls and Procedures.**




The
      Company’s Chief Executive Officer and Vice President of Finance carried out an
      evaluation of the effectiveness and operation of the Company’s disclosure
      controls and procedures. They have concluded after evaluating the effectiveness
      of the Company’s disclosure controls and procedures as of March 31, 2006, that
      as of that date, the Company’s disclosure controls and procedures were effective
      and designed to ensure that material information relating to the Company would
      be made known to them by others.




**Changes
      in Internal Controls.**




There
      have been no significant changes in the Company’s internal controls or in other
      factors that could significantly affect those controls subsequent to the
      evaluation date.


Page
          69




**PART
      III**




**ITEM
                9:**
            **DIRECTORS,
                EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                SECTION
                16(a) OF THE EXCHANGE.**





**Directors
      and Executive Officers** **of the Registrant:**





The
      following table sets for the name and age of each director and executive
      officer, the year first elected as a director and/or executive officer and
      the
      position(s) held with the Company:





**Name**
            
            **Age**
            
            **Position**
            
            **Date
                Elected**Peter
                Berry
            
            58
            
            Chief
                Executive Officer, President and Director
            
            2003Dee
                S. Kelly, CPA
            
            44
            
            Vice
                President of Finance
            
            2003Kenneth
                G. Carlson
            
            52
            
            Vice
                President of Sales and Marketing
            
            2005Gary
                C. Cannon
            
            55
            
            Secretary
                and Director
            
            2005Adam
                M. Michelin
            
            62
            
            Director
            
            2005Stephen
                L. Scott
            
            54
            
            Director
            
            2005Thomas
                Fischer, PhD
            
            59
            
            Director
            
            2005





**Background
      of Directors and Officers** **:**





**Peter
      Berry,** became
      the Company’s President, Chief Executive Officer and a member of the Company’s
      Board of Directors in connection with the Share Exchange Agreement. Mr. Berry
      joined CryoPort Systems, Inc. as a consultant in 2002 and became its President,
      Chief Executive Officer, Chief Operating Officer and a member of its Board
      of
      Directors in 2003. Prior to joining the Company, Mr. Berry was Vice President
      Sales & Marketing for BOC Cryostar, AG in Switzerland from 1996 to 2000 and
      principal of a private consulting practice from 2001 to 2003. Mr. Berry has
      over
      30 years executive experience in cryogenic equipment with Union Carbide, BOC
      Group and MVE International. He also has business start up, turnaround,
      sales/marketing and operations background experience, both domestic and
      international, in manufacturing and service based industries.





**Dee
      S. Kelly,**  **CPA** ,
      became
      Vice President of Finance for the Company in August 2003. Ms. Kelly was formerly
      with Ernst & Young, LLP and has 22 years experience in public and private
      accounting. She has held executive financial positions with international
      bio-tech and medical device manufacturers. Ms. Kelly recently served as Vice
      President, Controller for Equifax Financial Services, Inc. from 1995 to 2000.
      Ms. Kelly joined the Company in 2003. Prior to joining the Company, Ms. Kelly
      was Corporate Controller for MacGillivray Freeman Films from 2000 to 2001,
      Corporate Controller for Masimo Corporation, a manufacturer of patient
      monitoring devices from 2001 to 2002 and principal of a private consulting
      practice since 2002.


Page
          70





**Kenneth
      Carlson, MBA,** became
      Vice President of Sales for the Company in August, 2005. Prior to joining the
      Company, Mr. Carlson was Vice President, General Manager of Phoenix Life
      Solutions, LLC, a marketer of defibrillators and emergency response
      systems.  From 2000 to 2003, Mr. Carlson was Vice President, Sales for
      Falcon Waterfree Technologies, LLC, and from 1999 to 2000 he served as Vice
      President, Sales for Titan Scan Corporation, a manufacturer of electron-beam
      sterilization systems for medical products.  Mr. Carlson has over 20 years
      of experience in sales, marketing and senior management roles for medical device
      and healthcare technology companies such as Johnson & Johnson and Zimmer,
      Inc.  His background has involved strategic planning for start-up and early
      stage companies, including product introduction and distribution planning.
      Mr.
      Carlson received his Bachelor of Science degree from the University of Southern
      California and his Masters of Business degree from Arizona State
      University.





**Gary
      C. Cannon** ,
      became
      the Company’s Secretary and a member of the Company’s Board of Directors in June
      2005. Prior to joining the Company, Mr. Cannon was securities counsel and
      compliance officer for The Affordable Energy Group, Inc. from November 2004
      to
      May 2005, and general and securities counsel for World Transport Authority,
      Inc.
      from July 2003 to November 2004. Mr. Cannon was in private practice from August
      2000 to July 2003, and has practiced law for the past 18 years, representing
      all
      sizes of businesses in such areas as, formation, mergers and acquisitions,
      financing transactions, tax planning, and employee relations. Mr. Cannon has
      done extensive securities work and has served as a compliance officer for
      companies with respect to the Sarbanes-Oxley Act, and other compliance matters.
      Mr. Cannon obtained his Juris Doctorate from National University School of
      Law,
      his Masters of Business degree from National University and his Bachelor of
      Arts
      from United States International University.





**Adam
      M. Michelin** ,
      became
      a member of the Company’s Board of Directors in June 2005. Mr. Michelin is
      currently the Chief Executive Officer, and a principal, of the Enterprise Group,
      a position he has held since March 2005. Prior to the Enterprise Group, Mr.
      Michelin was a principal with Kibel Green, Inc. for a period of 11 years. Mr.
      Michelin has over 30 years of practice in the areas of executive leadership,
      operations and is very experienced in evaluating, structuring and implementing
      solutions for companies in operational and/or financial crisis. Mr. Michelin
      received his Juris Doctorate from the University of West Los Angeles and his
      Bachelor of Science from Tri State University. Mr. Michelin has also done MBA
      course work at New York University.


Page
          71





**Thomas
      S. Fischer, PhD** ,
      has
      over 20-years experience as a healthcare executive with a special emphasis
      on
      using information, analytic tools and technology to solve problems and improve
      operations. Currently retired, he consults in the healthcare sector. Dr. Fischer
      previously served as Senior Vice President and Chief Administrative Officer
      at
      Blue Shield of California from 1997 to 1999, and as Senior Vice President,
      Chief
      Information Officer from 1994 to 1997. Prior to Blue Shield, he held senior
      management positions with Kaiser Foundation Health Plan, Inc. for 12 years.
      Dr.
      Fischer obtained his Doctor of Philosophy in Mathematics from the University
      of
      Nebraska and his Bachelor of Science and Master of Science degrees from Portland
      State University.





**Stephen
      L. Scott** is a
      management and organizational consultant with over 20-years experience with
      diverse manufacturing businesses, including a specific background with
      developmental stage companies. Since 1996, Mr. Scott has been President of
      Technology Acquisition Group, providing expertise in corporate growth planning,
      strategic partner development, finance, operations, team building, product
      opportunity identification, corporate re-engineering and mergers and
      acquisitions. In addition to early stage and small companies, he has performed
      projects with Fortune 1000 firms such as IBM, GE, AT&T, Bristol-Myers
      Squibb, Warner-Lambert, Johnson & Johnson and Ayerst-Wyeth. Mr. Scott
      received his Juris Doctorate and Masters of Business Administration degrees
      from
      National University and his Bachelor of Science degree from the University
      of
      Akron.





The
      officers of the Company hold office until their successors are elected and
      qualified, or until their death, resignation or removal.





None
      of
      the directors or officers holds a directorship in any other reporting
      company.





None
      of
      the directors or officers listed above has:





·
            had
                a bankruptcy petition filed by or against any business of which that
                person was a general partner of executive officer either at the time
                of
                the bankruptcy or within two years prior to that
                time;


·
            had
                any conviction in a criminal proceeding, or been subject to a pending
                criminal proceeding;


·
            been
                subject to any order, judgment, or decree by any court of competent
                jurisdiction, permanently or temporarily enjoining, barring, suspending
                or
                otherwise limiting such person’s involvement in any type of business,
                securities or banking activities;


·
            been
                found by a court of competent jurisdiction, the Commission, or the
                Commodity Futures Trading Commission to have violated a federal or
                state
                securities or commodities law.


Page
          72





**Board
      of Directors Meetings and Committees:**





During
      the fiscal year ended March 31, 2006, there were five meetings of the board
      of
      directors as well as several actions taken with the unanimous written consent
      of
      the directors. The Company formally established an audit committee and adopted
      an Audit Committee Charter at its board of directors meeting held on August
      19,
      2005. Adam M. Michelin, who qualifies as the “audit committee financial expert,”
as defined in the applicable Securities and Exchange Commission rules and is
      “independent” as defined by the applicable rules under the NASDAQ Listing
      standards, was elected chairman of the committee. Mr. Thomas, Mr. Scott and
      Ms.
      Kelly comprise the remaining audit committee members. The audit committee
      reviews the qualifications of the independent auditors, our annual and interim
      financial statements, the independent auditor’s report, significant reporting or
      operating issues and corporate policies and procedures as they relate to
      accounting and financial controls. The Board is currently reviewing the
      requirements for and the need to set up an executive committee and other
      committees to help its board of directors oversee the operations of the
      Company.





**Section
      16(a) Beneficial Ownership Reporting Compliance.**





Section
      16(a) of the Securities Exchange Act of 1934, as amended, requires our officers
      and directors and those persons who beneficially own more than 10% of the
      Company’s outstanding shares of common stock to file reports of securities
      ownership and changes in such ownership with the Securities and Exchange
      Commission. Officers, directors, and greater than 10% beneficial owners are
      also
      required by rules promulgated by the SEC to furnish us with copies of all
      Section 16(a) forms they file.





Based
      solely upon a review of the copies of such forms furnished to the Company,
      we
      believe that during the year ended March 31, 2006, all Section 16(a) filing
      requirements applicable to our officers, directors and greater than 10%
      beneficial owners were complied with.





**Code
      of Ethics for Principal Executive Officers and Senior Financial
      Officers.**





The
      Company has adopted a Code of Ethics for Principal Executive Officers and Senior
      Financial Officers.





**ITEM
      10.**  **EXECUTIVE
      COMPENSATION.**




**Executive
      Compensation:**





The
      following table sets forth the compensation earned for all services rendered
      to
      the Company in all capacities for each of the three fiscal years ended March
      31,
      2006, 2005 and 2004, respectively by the Company’s Chief Executive, Vice
      President of Finance and Vice President of Sales and Marketing.


Page
          73





**Summary
      Compensation Table**


**Long-Term
                Compensation****Annual
                Compensation****(1)**
            
            **Number
                of
                Shares****Name
                and Position**
            
            **Fiscal
                Year**
            
            **Salary**
            
            **Bonus**
            
            **Underlying
                Options**Peter
              Berry
            
            
            2006
            
            $
            94,250
            
            
            –
            
            
            –CEO
                and President
            
            
            2005
            
            $
            90,915
            
            $
            100,000
            (2)
            
            367,9702004
            
            $
            89,250
            
            
            –
            
            
            500,000Dee
                S. Kelly
            
            
            2006
            
            $
            81,000
            
            
            n/a
            
            
            –Vice
                President, Finance
            
            
            2005
            
            $
            60,000
            
            
            n/a
            
            
            36,7522004
            
            $
            28,300
            
            
            n/a
            
            
            75,000Kenneth
                G. Carlson
            
            
            2006
            
            $
            49,000
            
            
            n/a
            
            
            –Vice
                President, Sales&
                Marketing







(1)
            The
                column for “Other Annual Compensation” has been omitted because there is
                no compensation required to be reported in that column. The aggregate
                amount of perquisites and other personal benefits provided to each
                executive officer listed above is less than the lesser of $50,000
                and 10%
                of his or her total annual salary and
                bonus.




(2)
            Mr.
                Berry’s bonus earned for fiscal year 2005 was approved for a total of
                $100,000 to be paid in installments over the following periods; $65,000
                during fiscal year 2007 and $35,000 during fiscal year 2008.




**Option
      Grants in Last Fiscal Year:**





The
      Company made no grants of options during the last fiscal year. The Company
      has
      never granted any restricted shares.





**Aggregated
      Option Exercises in last Fiscal Year and Fiscal Year-End Option
      Values:**





**Shares
                Acquired on Exercise**
            
            **Value
                Realized**
            
            **Number
                of Shares Underlying Unexercised Options at**
              **March
                31, 2006**
            
            **Value
                of Unexercised**
              **In-the-Money
                Options at**
              **March
                31, 2006****(1)****Name**
            
            
            
            
            
            **Exercisable**
            
            **Unexercisable**
            
            **Exercisable**
            
            **Unexercisable**Peter
                Berry
            
            
            0
            
            
            
            
            
            0
            
            
            1,284,618
            
            
            83,352
            
            $
            3,998,120
            
            $
            250,056Dee
                S. Kelly
            
            
            0
            
            
            
            
            
            0
            
            
            97,752
            
            
            14,000
            
            $
            304,062
            
            $
            40,600





(1)  The
      values of the unexercised in-the-money options have been calculated on the
      basis
      of the estimated fair market value at March 31, 2006, of $3.50 based on average
      selling price of recent unregistered common stock sales, less the applicable
      exercise price, multiplied by the number of shares acquired on
      exercise.


Page
          74





**Compensation
      of Directors:**





Historically,
      the Company has not compensated its directors for their attendance at meetings.
      As the Board of Directors plans to establish formal audit, compensation and
      nominating committees, comprised of independent directors, it is anticipated
      that non-employee directors will receive both cash fees and grants of stock
      option or warrants.





**Employment
      Agreement:**





Peter
      Berry is subject to an employment agreement with the Company dated November
      1,
      2002, as amended March 17, 2003, pursuant to which he has been employed as
      the
      Company’s President and Chief Operating Officer. The Agreement provides for an
      initial annual base salary of $84,000, which increased to $88,000 and $93,000
      in
      years two and three, respectively. Pursuant to the terms of the Agreement the
      Company extended Mr. Berry’s employment agreement for a period of one year
      through November 1, 2007, at a base salary of $96,000. On November 1, 2002,
      pursuant to the Agreement, the Company granted Mr. Berry a stock option to
      purchase up to 500,000 shares of common stock at an exercise price of $.50
      per
      share, which option vested as to 125,000 shares on the first anniversary of
      the
      date of grant, and thereafter vests in 36 equal monthly installments through
      November 11, 2006. In the event that the Company terminates Mr. Berry’s
      employment without “cause”, as defined in the Agreement, or fails to renew the
      Agreement except for “cause”, then upon such termination, the Company is
      obligated to pay to Mr. Berry as severance an amount equal to his then current
      base salary, plus any earned incentive bonus. In March 2003, the Agreement
      was
      amended to reflect Mr. Berry’s agreement to a reduced base salary during the
      first year of $60,000, and agreement to forego eligibility for an incentive
      bonus for such year. In exchange for the foregoing, the Company granted Mr.
      Berry an additional stock option to purchase an additional 250,000 shares of
      its
      common stock at a price of $.50 per share. The option was vested as to 125,000
      shares on the date of grant, and 62,500 shares on each of September 30, 2003
      and
      March 31, 2004. All other terms of the Agreement remained unchanged. The
      agreement was further amended by board consent, due to the financial condition
      of the company in 2004 at Mr. Berry’s request, to eliminate the 100% bonus
      provision per the contract in year two and defer this bonus into the third
      year
      of the employment contract. This entitled Mr. Berry to earn up to 200% of his
      then salary in the third contract year. Mr. Berry’s bonus earned for the third
      year of the Agreement was approved for a total of $100,000 to be paid in
      installments over the following periods; $65,000 during fiscal year 2007 and
      $35,000 during fiscal year 2008.


Page
          75




**Change
      in Control Agreements:**





There
      are
      no understandings, arrangements or agreements known by management at this time
      which would result in a change in control of CryoPort ,
      Inc. or
      any subsidiary.





**Equity
      Compensation Plan Information:**





The
      Company currently maintains one equity compensation plan, referred to as the
      2002 Stock Incentive Plan (the “2002 Plan”). As the Company does not have a
      formal compensation committee, the Board of Directors is responsible for
      granting options under this plan. The 2002 Plan, which was approved by its
      shareholders in October 2002, allows for the grant of options to purchase up
      to
      5,000,000 shares of its common stock. The 2002 Plan provides for the granting
      of
      options to purchase shares of the Company’s common stock at prices not less than
      the fair market value of the stock at the date of grant and generally expire
      ten
      years after the date of grant. The stock options are subject to vesting
      requirements, generally 3 or 4 years. The 2002 Plan also provides for the
      granting of restricted shares of common stock subject to vesting requirements.
      No restricted shares have been granted pursuant to the 2002 Plan as of June
      12,
      2006.





The
      following table sets forth certain information as of March 31, 2006 concerning
      the Company’s common stock that may be issued upon the exercise of options or
      pursuant to purchases of stock under its 2002 Plan:





**(a)**
            
            **(b)**
            
            **(c)****Plan
                Category**
            
            **Number of Securities
                to be Issued Upon the Exercise of Outstanding
                Options**
            
            **Weighted-Average
                Exercise Price of Outstanding Options**
            
            **Available
                for Future Issuance Under Equity Compensation Plans (Excluding Securities
                Reflected in Column (a))**Equity
                compensation plans approved by stockholders
            
            
            2,488,613
            
            $
            0.45
            
            
            2,511,387Equity
                compensation plans not approved by stockholders
            
            
            N/A
            
            
            N/A
            
            
            N/A2,488,613
            
            $
            0.45
            
            
            2,511,387




Page
          76





**ITEM
                11.**
            **SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                MANAGEMENT.**





**Security
      Ownership of Certain Beneficial Owners** **:**





The
      following table sets forth information with respect to the beneficial ownership
      of the Company’s common stock as of June 12, 2006, by each person or group of
      affiliated persons known to the Company to beneficially own 5% or more of its
      common stock, each director, each named executive officer, and all of its
      directors and named executive officers as a group. As of June 12, 2006, there
      were 30,088,696 shares
      of
      common stock outstanding. Unless otherwise indicated, the address of each
      beneficial owner listed below is c/o CryoPort, Inc., 451 Atlas Street, Brea,
      California 92821.





The
      following table gives effect to the shares of common stock issuable within
      60
      days of March 31, 2006, upon the exercise of all options and other rights
      beneficially owned by the indicated stockholders on that date. Unless otherwise
      indicated, the persons named in the table have sole voting and sole investment
      control with respect to all shares beneficially owned:




**Beneficial
                Owner**
            
            **Number
                of Shares Beneficially Owned**
            
            **Percentage
                of Shares Beneficially Owned****Executive
                Officers and Directors:**Peter
                Berry
            
            
            1,305,450
            (1)
            
            3.8
            %Dee
                S. Kelly
            
            
            101,752
            (1)
            
            0.3
            %Kenneth
                G. Carlson
            
            
            0
            
            
            0.0
            %Adam
                M. Michelin
            
            
            0
            
            
            0.0
            %Gary C.
              Cannon
            
            
            0
            
            
            0.0
            %Stephen
              L.
              Scott
            
            
            0
            
            
            0.0
            %Thomas
                S. Fischer, PhD
            
            
            0
            
            
            0.0
            %All
                directors and named executive officers as a group (6
                persons)
            
            
            1,407,202
            
            
            4.1
            %




**Beneficial
                Owner**
            
            **Number
                of Shares Beneficially Owned**
            
            **Percentage
                of Shares Beneficially Owned****Other
                5% Stockholders:**Patrick
                Mullens, M.D.
            
            
            2,592,153
            
            
            7.6
            %Raymond
                Takahashi, M.D.
            
            
            2,518,012
            (1)
            
            7.4
            %David
                Petreccia, M.D.
            
            
            2,081,751
            (1)
            
            6.1
            %Dante
                Panella
            
            
            1,950,000
            
            
            5.7
            %





(1)
            Includes
                shares which individuals shown above have the right to acquire as
                of March
                31, 2006, or within 60 days thereafter, pursuant to outstanding stock
                options and/or warrants as follows: Mr. Berry - 1,305,450 shares;
                Dr.
                Takahashi - 583,333 shares; Dr. Petreccia - 83,333 shares; and Ms.
                Kelly
                101,752 shares.


Page
          77




**ITEM
      12.**  **CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS.**





In
      connection with the Share Exchange Agreement with CryoPort Systems, Inc. in
      March 2005 (see Note 1), the Company issued 1,000,000 shares to Mr. Dante
      Panella, a majority stockholder in exchange for Mr. Panella’s surrender of
      1,354,891 shares of Cryoport Systems’ common stock. At the time of the Share
      Exchange agreement, Mr. Panella held the position of President, CEO of GT-5
      Limited. Pursuant to the Share Exchange Agreement the Company’s then directors
      and officers resigned, and the directors and officers of CryoPort Systems,
      Inc.
      were elected to fill the vacancies created by such resignations. The company’s
      name was then changed to Cryoport, Inc. Since the time of the Share Exchange
      Agreement, Mr. Panella has not been involved in the management of Cryoport,
      Inc.




During
      2004, in connection with a private placement offering, Mr. Panella purchased
      a
      total of 1,217,225 shares of CryoPort Systems, Inc. common stock for $0.04
      per
      share with total proceeds of $48,689 received by the Company as follows: 250,000
      shares purchased on July 23, 2005, 342,225 shares purchased on October 20,
      2005,
      and 625,000 shares purchased on November 15, 2005.




In
      June
      2005, the Company engaged Mr. Gary Cannon’s services as outside counsel at the
      rate of $6,000 per month. Mr. Cannon is the Company’s secretary and a member of
      its board of directors.





As
      of
      March 31, 2006 the Company had aggregate principal balances of $1,369,500 in
      outstanding unsecured indebtedness owed to five related parties including four
      former board of directors representing working capital advances made to the
      Company from February 2001 through March 2005. These notes bear interest at
      the
      rate of 6% per annum and provide for total monthly principal payments beginning
      April 1, 2006 of $2,500, which increase by $2,500 every six months to a maximum
      of $10,000. Any remaining unpaid principal and accrued interest is due at
      maturity on various dates through March 1, 2015. Related party interest expense
      under these notes was $79,179 and $82,464 for the years ended March 31, 2006
      and
      2005, respectively. Accrued interest, which is included in notes payable in
      the
      accompanying balance sheet, related to these notes amounted to $318,746 and
      $239,567 as of March 31, 2006 and 2005, respectively. Subsequent to year end
      the
      Company failed to make the required payments under the notes. However, pursuant
      to the note agreements, the Company has a 120 grace period to pay missed
      payments before the notes enter default. Management expects to pay all payments
      due prior to the expiration of the 120 day grace period. No new borrowings
      have
      been made by the Company from these related parties as of June 12,
      2006.


Page
          78





**ITEM
      13.**  **DESCRIPTION
      OF EXHIBITS**




3.1
            
            Corporate
                Charter for G.T.5-Limited issued by the State of Nevada on March
                15,
                2005.3.2
            
            Articles
                of Incorporation for G.T.5-Limited filed with the State of Nevada
                in May
                25, 1990.3.3.
            
            Amendment
                to Articles of Incorporation of G.T.5-Limited increasing the authorized
                shares from 5,000,000 to 100,000,000 shares filed with the State
                of Nevada
                on October 12, 2004.3.4
            
            Amendment
                to Articles of Incorporation changing the name of the corporation
                from
                G.T.5-Limited to CryoPort, Inc. filed with the State of Nevada on
                March
                16, 2005.3.5
            
            Amended
                and Restated By-Laws of CryoPort, Inc. adopted by the Board of Directors
                on June 22, 2005.3.6
            
            Articles
                of Incorporation of CryoPort Systems, Inc. filed with the State of
                California on December 11, 2000, including Corporate Charter for
                CryoPort
                Systems, Inc. issued by the State of California on December 13,
                2000.3.7
            
            By-Laws
                of CryoPort Systems, Inc. adopted by the Board of Directors on December
                11, 2000.3.8
            
            CryoPort
                Systems, Inc. Stock Certificate Specimen.3.9
            
            Code
                of Conduct for CryoPort, Inc. pending adoption by Board of
                Directors.3.10
            
            Code
                of Ethics for Senior Officers of CryoPort, Inc. and subsidiaries
                pending
                adoption by Board of Directors.3.11
            
            Statement
                of Policy on Insider Trading pending adoption by Board of
                Directors.3.12.
            
            CryoPort,
                Inc. Audit Committee Charter, under which the Audit Committee will
                operate, adopted by the Board of Directors on August 19,
                2005.3.13
            
            CryoPort
                Systems, Inc. 2002 Stock incentive Plan adopted by the Board of Directors
                on October 1, 2002.3.14
            
            Stock
                Option Agreement ISO - Specimen adopted by the Board of Directors
                on
                October 1, 2002.




Page
          79




3.15
            
            Stock
                Option Agreement NSO - Specimen adopted by Board of Directors on
                October
                1, 2002.3.16
            
            Warrant
                Agreement - Specimen adopted by the Board of Directors on October
                1,
                2002.3.17
            
            Patents
                and Trademarks3.17.1
            
            CryoPort
                Systems, Inc. Patent #6,467,642 information sheet and Assignment
                to
                CryoPort Systems, Inc. document.3.17.2
            
            CryoPort
                Systems, Inc. Patent #6,119,465 information sheet and Assignment
                to
                CryoPort Systems, Inc. document.3.17.3
            
            CryoPort
                Systems, Inc. Patent #6,539,726 information sheet and Assignment
                to
                CryoPort Systems, Inc. document.3.17.4
            
            CryoPort
                Systems, Inc. Trademark #7,583,478,7 information sheet and Assignment
                to
                CryoPort Systems, Inc. document.3.17.5
            
            CryoPort
                Systems, Inc. Trademark #7,586,797,8 information sheet and Assignment
                to
                CryoPort Systems, Inc. document.10.1
            
            Contracts10.1.1
            
            Stock
                Exchange Agreement associated with the merger of G.T.5-Limited and
                CryoPort Systems, Inc. signed on March 15, 2005.10.1.2
            
            Commercial
                Promissory Note between CryoPort, Inc. and D. Petreccia executed
                on August
                26, 2005.10.1.3
            
            Commercial
                Promissory Note between CryoPort, Inc. and J. Dell executed on September
                1, 2005.10.1.4
            
            Commercial
                Promissory Note between CryoPort, Inc. and M. Grossman executed on
                August
                25, 2005.10.1.5
            
            Commercial
                Promissory Note between CryoPort, Inc. and P. Mullens executed on
                September 2, 2005.10.1.6
            
            Commercial
                Promissory Note between CryoPort, Inc. and R. Takahashi executed
                on August
                25, 2005.10.1.7
            
            Lease
                Agreement between CryoPort Systems, Inc. and Brea Hospital Properties,
                LLC, executed on March 11, 2005.




Page
          80




10.1.8
            
            Exclusive
                and Representation Agreement between Cryoport Systems, Inc. and CryoPort
                Systems, Ltda. executed on August 9, 2001.*10.1.9
            
            Secured
                Promissory Note and Loan Agreement between Ventana Group, LLC and
                CryoPort, Inc. dated May 12, 2006*31.1
            
            Rule
                13a-14(a)/15d-14(a) Certification of Chief Executive
                Officer*31.2
            
            Rule
                13a-14(a)/15d-14(a) Certification of Chief Financial
                Officer*32.1
            
            Certification
                Pursuant to U.S.C. §1350 of Chief Executive Officer*32.2
            
            Certification
                Pursuant to U.S.C. §1350 of Chief Financial
                Officer





*
            filed
                herewith




**ITEM
      14.**  **PRINCIPAL
      ACCOUNTANT FEES AND SERVICES.**





The
      Audit
      Committee which is composed of three independent directors and the Company’s
      Vice President of Finance, has selected Corbin & Company, LLP as independent
      accountants to audit the Company’s books, records, accounts and financial
      statements for the fiscal year ended March 31, 2006. Corbin & Company, LLP
      previously audited the Company’s financial statements during the fiscal year
      ended March 31, 2005.




**Audit
      and Non-Audit Fees:**




Aggregate
      fees for professional services rendered to the Company by Corbin & Company,
      LLP for the years ended March 31, 2006 and 2005 were as follows:




**Services
                Provided**
            
            **2006**
            
            **2005**Audit
                Fees
            
            $
            60,180
            
            $
            69,100Audit
                Related Fees
            
            
            –
            
            
            –Tax
                Fees
            
            
            7,240
            
            
            –All
                Other Fees
            
            
            11,025
            
            
            –Total
            
            $
            78,445
            
            $
            69,100


Audit
        Fees. The aggregate fees billed for the years ended March 31, 2006 and 2005
        were
        for the audits of the Company’s financial statements and reviews of the interim
        financial statements included in the annual and quarterly reports.


Page
          81




Audit
      Related Fees. There were no fees billed for the years ended March 31, 2006
      and
      2005 for the audit or review of the Company’s financial statements that are not
      reported under Audit Fees.




Tax
      Fees.
      The aggregate fees billed for the years ended March 31, 2006 and 2005 for
      professional services related to tax compliance, tax advice and tax
      planning.




All
      Other
      Fees. The aggregate other fees billed for the year ended March 31, 2006 were
      for
      services related to the Company’s Registration Form 10-SB and other filings.
      There were no other fees billed for the year ended March 31, 2005 other than
      the
      services described above.




**Audit
      Committee Pre-Approval Policies and Procedures:**




The
      Audit
      Committee has implemented pre-approval policies and procedures related to the
      provision of audit and non-audit services. Under these procedures, the Audit
      Committee pre-approves both the type of services to be provided by Corbin &
Compnay, LLP and the estimated fees related to these services.


Page
          82


**SIGNATURES**





In
      accordance with Section 13(a) or 15(d) of the Exchange Act, the registrant
      has
      caused this report to be signed on its behalf by the undersigned, thereto duly
      authorized.




CryoPort,
              Inc.Dated:
              June 24, 2006
            By:Peter
                Berry
              President
                and Chief Executive OfficerDated: June 24, 2006
            By:Dee
                  S. Kelly
                Vice
                  President of Finance




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





**Signatures**
            
            **Title**
            
            **Date**President,
                Chief Executive
            
            June
                24, 2006Peter
                Berry
            
            Officer
                and DirectorSecretary
                and Director
            
            June
                24, 2006Gary
                C. CannonDirector
            
            June
                24, 2006Adam
                M. MichelinDirector
            
            June
                24, 2006Stephen
                L. ScottDirector
            
            June
                24, 2006Thomas
                Fischer, PhD




Page
          83





**EXHIBIT
      INDEX**





**Exhibit
                No.**
            
            **Description**
            
            **Page
                or Method of Filing**3.1
            
            State
                of Nevada Corporate Charterfor
                G.T. 5- Limited
            
            (1)3.2
            
            Articles
                of IncorporationOf
                G.T 5-Limited
            
            (1)3.3
            
            Amendment
                to Articles of Incorporationof
                G T. 5-Limited issue 100M shares
            
            (1)3.4
            
            Amendment
                of Articles of Incorporationof
                G.T.5-Limited name change toCryoPort,
                Inc
            
            (1)3.5
            
            Amended
                and Restated By-LawsOf
                CryoPort, Inc.
            
            (1)3.6
            
            Articles
                of IncorporationCryoPort
                Systems, Inc.
            
            (1)3.7
            
            By-Laws
                of CryoPort Systems, Inc.
            
            (1)3.8
            
            CryoPort,
                Inc. Stock Certificate Specimen
            
            (1)3.9
            
            Code
                of Conduct for CryoPort, Inc.
            
            (1)3.10
            
            Code
                of Ethics for Senior Officers
            
            (1)3.11
            
            Statement
                of Policy on Insider Trading
            
            (1)3.12
            
            CryoPort,
                Inc. Audit Committee Charter
            
            (1)3.13
            
            CryoPort
                Systems, Inc. 2002 StockIncentive
                Plan
            
            (1)3.14
            
            Stock
                Option Agreement ISO - Specimen
            
            (1)3.15
            
            Stock
                Option Agreement NSO -Specimen
            
            (1)3.16
            
            Warrant
                Agreement - Specimen
            
            (1)3.17
            
            Patents
                and Trademarks3.17.1
            
            CryoPort
                Systems, Inc. Patent #6,467,642
            
            On
                File with Company3.17.2
            
            CryoPort
                Systems, Inc. Patent #6,119,465
            
            On
                File with Company3.17.3
            
            CryoPort
                Systems, Inc. Patent #6,539,726
            
            On
                File with Company




Page
          84




3.17.4
            
            CryoPort
                Systems, Inc. Trademark #7,583,478,7
            
            On
                File with Company3.17.5
            
            CryoPort
                Systems, Inc. Trademark #7,586,797,8
            
            On
                File with Company10.1
            
            Contracts10.1.1
            
            Stock
                Exchange Agreement associated with the merger of G.T.5-Limited and
                CryoPort Systems, Inc. dated 03/05/01.
            
            (1)10.1.2
            
            Commercial
                Promissory Notes betweenCryoPort,
                Inc. and D. Petreccia
            
            (1)10.1.3
            
            Commercial
                Promissory Notes betweenCryoPort,
                Inc. and J. Dell
            
            (1)10.1.4
            
            Commercial
                Promissory Notes betweenCryoPort,
                Inc. and M. Grossman
            
            (1)10.1.5
            
            Commercial
                Promissory Notes betweenCryoPort,
                Inc. and P. Mullens
            
            (1)10.1.6
            
            Commercial
                Promissory Notes betweenCryoPort,
                Inc. and R. Takahashi
            
            (1)10.1.7
            
            Lease
                Agreement between CryoPortSystems,
                Inc. and Brea Hospital Properties, LLC.
            
            (1)10.1.8
            
            Exclusive
                and Representation AgreementBetween
                CryoPort Systems, Inc. andCryoPort
                Systems Ltda.
            
            (1)10.1.9
            
            Secured
                Promissory Note and Loan Agreement between Ventana Group, LLC and
                CryoPort, Inc. dated May 12, 2006
            
            Filed
                Herewith31.1
            
            Rule
                13a-14(a)/15d-14(a) Certification of Chief Executive
                Officer
            
            Filed
                Herewith31.2
            
            Rule
                13a-14(a)/15d-14(a) Certification of Chief/Financial
                Officer
            
            Filed
                Herewith32.1
            
            Certification
                Pursuant to U.S.C. §1350 of Chief Executive Officer
            
            Filed
                Herewith32.2
            
            Certification
                Pursuant to U.S.C. §1350 of Chief Financial Officer
            
            Filed
                Herewith





(1)
            Incorporated
                by reference to the Company’s Registration Statement on Form 10-SB/A4
                dated February 23, 2006.


Page
          85