UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION




WASHINGTON,
DC  20549




FORM
10-K/A


(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,
2008




 ̈
            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 ofincorporation
      or organization)
              
              (I.R.S.
      Employer Identification No.)23082
      Barents Sea Circle, Lake Forest, California
              
              92630(Address
      of principal executive offices)
              
              (ZipCode)




(949)
470-2300
 (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
              
              OTC
      Bulletin Board
 
 Securities
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 well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.  Yes  ̈  No þ
  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  ̈  No þ
  Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
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.                 Yes
þ   No
 ̈
  
 
 Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of 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-K.  þ
  Indicate
by check mark whether the registrant is a large accelerated filer,  a
non-accelerated filer, or a smaller reporting company  See the
definitions of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
 
 Large
      accelerated filer  ̈
                  Accelerated
      filer  ̈Non-accelerated
      filer  ̈ (Do
      not check if a smaller reporting company
                  Smaller
      reporting company þ
 Indicate
by check mark whether the Registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.).
 Yes  ̈   No
þ
 
  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 the last
business day of the registrant’s most recently completed second fiscal
quarter.
  The
market value of the voting stock held by non-affiliates of the issuer as of
September 30, 2007 (most recently completed second fiscal quarter) was
approximately $23,723,429.
  As of
June 27, 2008 the Company had 41,089,703 shares of its $0.001 par value common
stock issued and outstanding.
  DOCUMENTS
INCORPORATED BY REFERENCE
  Inapplicable.




TABLE OF
CONTENTS
  PagePART
      I
              
              5ITEM
      1.
              BUSINESS.
              5ITEM
      1A.
              RISK
      FACTORS.
              21ITEM
      1B.
              UNRESOLVED
      STAFF COMMENTS.
              21ITEM
      2.
              PROPERTIES
              21ITEM
      3.
              LEGAL
      PROCEEDINGS
              22ITEM
      4.
              SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
              22PART
      II
              
              23ITEM
      5.
              MARKET
      FOR THE REGISTRANT’S COMMON EQUITY AND  RELATED STOCKHOLDER
      MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
              23ITEM
      6.
              SELECTED
      FINANCIAL DATA
              27ITEM
      7.
              MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATION
              27ITEM
      7A.
              QUANTITATIVE
      AND QUALITATIVE DISCLOSURE ABOUT MARKET  RISK
              41ITEM
      8.
              FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA
              41ITEM
      9.
              CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
              42ITEM
      9A .
              CONTROLS
      AND PROCEDURES
              42ITEM
      9B .
              OTHER
      INFORMATION
              43PART
      III
              
              44ITEM
      10.
              DIRECTORS,
      EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
              44ITEM
      11.
              EXECUTIVE
      COMPENSATION
              48ITEM
      12.
              SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
              58ITEM
      13.
              CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE
              59ITEM
      14.
              PRINCIPAL
      ACCOUNTING FEES AND SERVICES
              61PART
      IV
              
              62ITEM
      15.
              EXHIBITS
      AND FINANCIAL STATEMENT SCHEDULES
              62SIGNATURES
              
              63
 
 Page
3
  PART I
 
 
 In
this Annual Report on Form 10-K 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 ANNUAL REPORT ON FORM 10-K, INCLUDING
SOME UNDER “DESCRIPTION OF BUSINESS”, “RISK FACTORS” AND “MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 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 ANNUAL REPORT ON FORM 10-K, 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
ANNUAL REPORT ON FORM 10-K. 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
 
 PART
I
  
 ITEM
1. BUSINESS.
 
 We are a
cryogenic transport container company, involved in the safe transport of
biological specimens at temperatures below zero 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
four years.
   Overview:
 
 The
principal focus of the Company is to further develop and launch, the CryoPort
Express® One-Way Shipper System, a line of one-time use 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 150° 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 temperatures (less than -150°C).
 
 The
Company currently manufactures a line of reusable cryogenic dry
shippers.  These provide the cryogenic technology for the development
of the CryoPort Express® One-Way Shipper System and serve as the 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 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 CryoPort Express®
One-Way Shipper System product manufactured from alternative, lower cost
materials, which will reduce overall operating costs.  As with the
reusable shippers, the one-way system will 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 new
CryoPort Express® One-Way Shipper System products shares 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 new CryoPort Express® One-Way Shipper System
products.  There are two general sizes planned.  A larger
size of approximately 5 liters capacity, based on a product that has been
produced for 5 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
one-way use status is primarily one of cost and convenience 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 impact 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, spillproof
packaging system.  This secondary system, outer packaging has a low
cost that lends itself to disposability.  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 12,000 square feet of manufacturing and
office space in Lake Forest, California and has six full-time employees and four
consultants.
 
 Page
6
  History:
 
 Cryoport,
Inc. (the “Company”) was originally incorporated under the name G.T.5-Limited
(“GT5”) on May 25, 1990 as a Nevada Corporation.  Upon completion of a
Share Exchange Agreement, on March 15, 2005 the Company changed its name to
Cryoport, Inc. and acquired all of the issued and outstanding shares of Cryoport
Systems, Inc. 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, Inc, originally formed in 1999 as a California limited liability
company and reorganized into a California corporation on December 11, 2000,
remains the operating company under Cryoport, Inc.
  
 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 centigrade or less, for up to 10
days.
 
 These
products, which are in full production at the Company’s Lake Forest, 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.  In 2005, the
Company introduced a new 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
PSX1000 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 LN2 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 LN2.  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.
  Page
7
 
 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 have lead to the introduction of
smaller size units constructed of lower cost materials and utilizing high volume
manufacturing methods that is making it practical to offer the CryoPort Express®
One-Way Shipper System consisting of limited use cryogenic packages. It is the
Company’s intent to phase out the AR1000, DS650 and the DG1000 over the next 6
to 12 months, allowing the Company to concentrate on its cutting-edge technology
in the CryoPort Express® One-Way Shipper System.
 
 An
important feature of the Company’s shippers, including the CryoPort Express®
One-Way Shipper 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 CryoPort
Express® One-Way Shipper System.
 
 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 CryoPort Express®
One-Way Shipper and the DG1000 shipper inclue 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.
 
 Page
8
 
 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 provide the one-time use
cryogenic packages offered by the CryoPort Express® One-Way Shipper
System.
  The
Company is currently in transition from the hard case reusable shippers to the
CryoPort Express® One-Way Shipper System. The phase-out of these reusable
shippers is planned over the next 6 to 12 months. The Company plans to continue
research and development efforts to continually improve the features of the
CryoPort Express® One-Way Shipper and to further enable both higher mass
manufacturing and additional cost reduction opportunities.
 
 The
Company’s driving logic in developing the CryoPort Express® One-Way Shipper
System continues to be:
 
 ·
                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.
 
 ·
                To
      provide a cost effective shipper that can compete with the economics of
      using dry ice and dry ice shippers.
 
 
 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 continuing the development of the CryoPort Express® One-Way Shipper
System, which utilizes a one-time use shipping device that performs as well as
its reusable shippers to eliminate the customer’s need for return or disposal of
the shipper, and the costs associated therewith plus the costs associated with
maintaining and managing an inventory of shippers, as well as significantly
minimizes loss of specimen viability during the shipping process.
  Page
9
 
 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.
 
 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 Tegrant (formerly 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.  During the year ended March 31, 2008 the Company had one
distributor, Tegrant, which accounted for ­­­62% of the Company’s
overall sales volumes.  These sales were in the Company’s reusable
shippers that will be phased-out over the next 6 to 12 months.
  The
Company’s geographical sales for the year ended March 31, 2008 were as
follows:
 
 USA
                  87.3%Europe
                  10.0%Asia
                  2.4%
 
 Customer
Base:
 
 The
Company believes that the primary customers for its dry vapor shippers (both the
reusable and the CryoPort Express® One-Way Shipper System) are concentrated in
the following markets for the following reasons:
 ·
                  Pharmaceutical
      clinical trials
 ·
                  Gene
      biotechnology
 ·
                  Transport
      of infectious materials and dangerous
goods
 ·
                  Pharmaceutical
      distribution
 ·
                  Human
      assisted reproduction artificial
insemination
   Page
10
 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.  The
Company has developed and obtained IATA certification of the CryoPort Express®
One-Way Shipper System, it is 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 has developed the CryoPort Express®
One-Way Shipper to meet the shipping requirements of this market.
  Page
11
 
 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 CryoPort Express®
One-Way Shipper is suited to this type of research and development.
 
 Pharmaceutical
Distribution.The current focus for the CryoPort Express® One-Way Shipper
System 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.
  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, frozenshipping
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 LN2 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 the CryoPort Express® One-Way Shipper System,
there is no currently known competition. The Company 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
12
 
 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 ReportandUS
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
 
 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., -150°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
13
 
 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;
 ·
                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.
  Page
14
 
 Due to
the limitations of dry ice, shipment of specimens at true cryogenic temperatures
can only be accomplished using liquid nitrogen (LN2) 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:
 
 ·
                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.
  Page
15
 
 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 LN2 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
LN2
shipping containers.   In addition, many users have expressed a
strong interest in the production of a dry vapor LN2 shipper
that is inexpensive enough to be used in a disposable or limited usage
manner.  The current sales price of CryoPort’s reusable shippers range
from $735 to $1,095.  The price range for the new CryoPort Express®
One-Way Shipper System ranges from $75 to $100 per use plus transportation
costs, depending on size and contractual commitments.
 
 As
previously noted, dry vapor LN2 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, LN2 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 LN2 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.
 
 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 dry shippers offered by
the CryoPort Express® One-Way Shipper System greatly enhance the reliability of
the quality control required.
  Page
16
 
 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 below, 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 the
Company’s 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.
  The
Company believes that it has developed, and is developing, products that are
ideally suited to address the issues presented by these trends.
  Page
17
  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 2007 and
2008 continued to center around the investigation of higher volume manufacturing
capabilities and 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.  A unit dose shipper was developed
for the CryoPort Express® One-Way Shipper System and designs of a second concept
were completed.  Other research and development effort has been
directed toward improvements to the liquid nitrogen retention system to render
it more reliable in the general shipping environment and to the design of the
outer packaging for all sizes of shippers to be offered by the CryoPort Express®
One-Way Shipper System.  The Company’s research and development
expenditures during the fiscal years ended March 31, 2008 and 2007 were $166,227
and $87,857, 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 Lake Forest, 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.
  Page
18
 
 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.
      9, 2002
                
                Oct.
      8, 2012Trademark
                
                7,586,797,8
                
                Apr.
      16, 2002
                
                Apr.
      16, 2012
 
 
 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 continues to file trademark
and patent applications covering any newly developed products, 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.
  Page
19
 
 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
20
 
 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.
 
 
  ITEM
1A.  RISK FACTORS
  Not
applicable.
  
  ITEM
1B.    UNRESOLVED STAFF COMMENTS
  None
  
 ITEM
2.   PROPERTIES.
 
 The
Company’s corporate, research and development, and warehouse facilities are
located in one Company-leased office and warehouse building with approximately
12,000 square feet.  The facilities are located at 20382 Barents Sea
Circle, Lake Forest, CA 92630.  The Company currently makes base lease
payments of approximately $12,000 per month, due at the beginning of each month,
pursuant to a two year lease through August 2010 with renewal options for three
additional one year lease terms.  The landlord is Viking Investors,
Barents Sea, 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.
 
 Page
21
 
 
 
 ITEM
3.   LEGAL PROCEEDINGS.
 
 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 upon the Company’s condition or results of
operations.
 
 
 
 ITEM
4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS.
 
 On
October 16, 2007, a special shareholders’ meeting was held in Las Vegas, Nevada
for the purpose of holding a shareholder vote on a proposal to amend and restate
the Company’s Articles of Incorporation.  Prior to the meeting and in
compliance with Nevada law and the Bylaws of the Company, a Proxy Statement and
Proxy were provided to all shareholders of the record date, September 19,
2007.  A quorum of shareholders required to hold the meeting were
present, appearing either by Proxy or in person.  The proposal to
Amend and Restate the Company’s Articles of Incorporation passed with 88.5% of
the votes present or by Proxy cast in favor of the proposal; 9.9% of the votes
present or by Proxy cast against the proposal; and 1.6% of the votes present or
by Proxy abstained.  The Amended and Restated Articles of
Incorporation became effective as of October 16, 2007 and can be viewed as
Exhibit 5.1 filed with the Company’s Form 8-K on October 19,
2007.  The Amended and Restated Articles of Incorporation effectively
increased the total number of voting common stock authorized to be issued of the
Company to 125,000,000 and increased the authorized number of directors to
nine.
  Page
22
 
 PART II
 
 
 
 ITEM
5. MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES.
 
 
 Presently,
the Company’s common stock is traded through the OTC Bulletin Board under the
symbol CYRX.OB.  In August, 2007, the Company’s market maker, Spartan
Securities Group, Ltd., of Boca Raton, Florida, successfully completed the
15c211 process with the Financial Industry Regulatory Authority, FINRA (formerly
NASD).  Effective September 11, 2007, the company’s shares became
listed on the OTC Bulletin Board.  Previously, the Company’s stock had
been traded through the PinkSheets under the symbol CYRX.PK since January 2005.
Prior to January 2005, there was no published price for the Company’s common
stock. The Company’s Form 10-SB became effective in February
2006.  There can be no assurances that an active public market for the
Company’s common stock will develop or be sustained.
 
 
 Fiscal 2008
                  
                  High
                  
                  
                  Low1st
      Quarter
                  
                  $
                  3.30
                  
                  
                  $
                  0.772nd
      Quarter
                  
                  
                  1.70
                  
                  
                  
                  0.613rd
      Quarter
                  
                  
                  1.47
                  
                  
                  
                  0.704th
      Quarter
                  
                  
                  1.37
                  
                  
                  
                  0.85
 
  Fiscal 2007
                  
                  High
                  
                  
                  Low1st
      Quarter
                  
                  $
                  4.20
                  
                  
                  $
                  2.002nd
      Quarter
                  
                  
                  2.50
                  
                  
                  
                  0.503rd
      Quarter
                  
                  
                  0.53
                  
                  
                  
                  0.204th
      Quarter
                  
                  
                  2.00
                  
                  
                  
                  0.28
 
 As of
June 27, 2008, the quoted price of the Company’s stock was
$0.70.  Stockholders are urged to obtain current market quotations for
the Company’s common stock.
  Page
23
 
 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. The Articles of Incorporation were again amended and restated
on October 16, 2007, to authorize the issuance of 125,000,000 shares of Common
Stock at a par value of $0.001 per share. As of June 27, 2008, there were
41,089,703 shares of common stock issued and outstanding shares held by 120
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.
 
 
 Preferred
Stock:
 
 There is
no preferred stock authorized.
 
 
 Stock
Options and Warrants:
 
 As of
June 27, 2008 there were outstanding stock options and warrants to purchase up
to 29,603,815 shares of the Company’s common stock.  The outstanding
options and warrants were issued by the Company in connection with various debt
and equity financings and compensation agreements. These options and warrants
are exercisable at prices ranging from $0.04 to $3.25 per share, with a weighted
average exercise price of $0.51 per share, and have expiration dates ranging
from February 28, 2009 to May 18, 2019.
 
 
 Transfer
Agent and Registrar:
 
 The
Transfer Agent and Registrar for the Company’s Common Stock is Integrity Stock
Transfer, 3027 East Sunset Road, - Suite 103, Las Vegas, Nevada,
89120.
   Page
24
 
 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 two 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 2008, 3,652,710 shares of the Company’s common stock were sold to
investors at an average price of $0.22 per share resulting in proceeds of
$789,501 to the Company, net of issuance costs of $89,635.
 
 During
fiscal 2008, the Company issued 156,250 shares of common stock resulting from
exercises of warrants at an average exercise price of $0.69 per share resulting
in proceeds of $107,500.
 
 During
fiscal 2008, the Company issued 386,726 shares of common stock resulting from
cashless exercises of 465,469 warrants converted using an average market price
of approximately $1.19 per share resulting in 78,743 warrants used for the
cashless conversion.
  During
fiscal 2008, the Company issued 375,000 shares of common stock in lieu of fees
paid to a consultant.  These shares were issued at a value of $1.02
per share (based on the stock price on the agreement dates after a fifteen
percent deduction as the shares are restricted) for a total cost of $382,500
which has been included in selling general and administrative expenses for the
year ended March 31, 2008.
  During
fiscal 2008, the Company issued 150,000 S-8 registered shares of common stock in
lieu of fees paid to a consultant for a 36 month consulting
agreement.  These shares were issued at a value of $.80 per share
(based on the stock price on the agreement date) for a total cost of $120,000
which is being amortized over the life of the service agreement.
  Page
25
  During
fiscal 2007, 4,692,000 shares of the Company’s common stock were sold to
investors at an average price of $0.22 per share resulting in proceeds of
$902,028 to the Company, net of issuance costs of $112,372.
 
 During
fiscal 2007, the Company issued 8,333 shares of common stock resulting from
exercises of warrants at an average exercise price of $0.30 per share resulting
in proceeds of $2,500.
 
 The
following schedules list the sales of shares of common stock net of offering
costs (excluding exercises of options and warrants) and issuances of options and
warrants during the fiscal years ended 2008 and 2007.
 
 Fiscal
      2008Common
      Stock
                    
                    
                    Warrants$
                    
                    
                    Shares
                    
                    
                    Avg
                      Price
                    
                    
                    Issued
                    
                    
                    Ex.
                      PriceQtr
      1
                    
                    $
                    554,140
                    
                    
                    
                    3,443,335
                    
                    
                    $
                    0.16
                    
                    
                    
                    6,052,000
                    
                    
                    $
                    0.35Qtr
      2
                    
                    
                    166,606
                    
                    
                    
                    209,375
                    
                    
                    $
                    0.70
                    
                    
                    
                    1,115,271
                    
                    
                    $
                    0.55Qtr
      3
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    9,216,981
                    
                    
                    $
                    1.03Qtr
      4
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    790,550
                    
                    
                    $
                    1.38$
                    699,866
                    
                    
                    
                    3,652,710
                    
                    
                    
                    
                    
                    
                    
                    17,174,802
  Fiscal
      2007Common
      Stock
                      
                      
                      Warrants$
                      
                      
                      Shares
                      
                      
                      Avg
                        Price
                      
                      
                      Issued
                      
                      
                      Ex.
                        PriceQtr
      1
                      
                      $
                      22,185
                      
                      
                      
                      17,000
                      
                      
                      $
                      1.50
                      
                      
                      
                      -
                      
                      
                      
                      -Qtr
      2
                      
                      
                      166,605
                      
                      
                      
                      188,000
                      
                      
                      $
                      1.02
                      
                      
                      
                      846,750
                      
                      
                      $
                      1.00Qtr
      3
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -Qtr
      4
                      
                      
                      713,238
                      
                      
                      
                      4,487,000
                      
                      
                      $
                      0.18
                      
                      
                      
                      412,200
                      
                      
                      $
                      0.28$
                      902,028
                      
                      
                      
                      4,692,000
                      
                      
                      
                      
                      
                      
                      
                      1,258,950
 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
26
 
 Equity
Compensation Plan Information:
 
 The
Company currently maintains one equity compensation plan, referred to as the
2002 Stock Incentive Plan (the “2002 Plan”).  The Company’s
Compensation and Governance Committee is responsible for making reviewing and
recommending grants of options under this plan which are approved by the Board
of Directors. 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.  In June 2007, 50,000 common stock shares were granted
upon the exercise of stock options issued pursuant to the 2002
Plan.  No other restricted shares have been granted pursuant to the
2002 Plan as of June 27, 2008.
  Other
Securities Activities:
 
 None
 
 Issuer
Purchases of Equity Securities:
 
 As of
June 27, 2008 The Company has not made any repurchases of its common stock
shares.
 
 
 ITEM
6. SELECTED
FINANCIAL DATA
 
 Not
applicable.
  ITEM
7. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
 
 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, 2008 and 2007 and the related
consolidated statements of operations, cash flows and stockholders’ deficit for
the years ended March 31, 2008 and 2007, and the related notes to the
consolidated financial statements (see Part II, Item 8 - 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.
  Page
27
  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 one-way cryogenic shipper.  Lack of adequate
funding in prior years has delayed full implementation of the Company’s 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.  The Company has continued to raise funds through private
placement offerings to allow the Company to focus on the market research and
product development of the CryoPort Express® One-Way Shipper System while,
minimizing overall expenditures, however more significant funding was required
to successfully launch the new product line. During this time the Company was
searching for these funding sources. In October 2007, the Company completed
financing through convertible debentures, which has allowed for additional
capital purchases for manufacturing ramp-up in anticipation of the new product
launch.   The Company is currently introducing the CryoPort
Express® One-Way Shipper System product line in limited quantities to selective
customers.  A broad launch to the general market is expected to follow
after feedback from this introductory distribution of the CryoPort Express®
One-Way Shipper System 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.
  The
Company has discussed 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 customers for the
new CryoPort Express® One-Way Shipper System 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.
 
  Going
Concern
  As
reported in the Report of Independent Registered Public Accounting Firm on the
Company’s March 31, 2008 and 2007 financial statements, the Company has incurred
recurring losses and negative cash flows from operations since
inception.  These factors, among others, raise substantial doubt about
the Company’s ability to continue as a going concern.
  Page
28
  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 expected
launch of the new CryoPort Express® One-Way Shipper System, (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 reusable
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.
  The
Company has not generated significant revenues from operations and has no
assurance of any future significant revenues.  The Company incurred
net losses of $4,564,054 and $2,326,259 during the years ended March 31, 2008
and 2007, respectively.  In addition, the Company used $1,820,250 in
its operating activities during the year ended March 31, 2008.  These
factors, among others, raise substantial doubt about the Company’s ability to
continue as a going concern.
  The
Company’s management has recognized 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.  In response
to this need for capital, on October 1, 2007, the Company issued to four
accredited investors Original Issue Discount 8% Senior Secured Convertible
Debentures (the “Debentures”) having a combined principal face amount of
$4,707,705 and generating gross proceeds of $4,001,551.   After accounting
for commissions, legal and other fees, the net proceeds to the Company totaled
$3,436,551 (see Note 10 to the accompanying consolidated financial
statements).  On May 30, 2008 the Company received additional net
proceeds of $870,625 from an additional convertible debenture (see Note 14 to
the accompanying consolidated financial statements).  As a result of
the recent financing, the Company had an aggregate cash and cash equivalents and
restricted cash balance of $2,483,127 as of June 26, 2008.  Management
projects that these proceeds will allow the launch of the Company’s new CryoPort
Express® One-Way Shipper and provide the Company with the ability to continue as
a going concern, which the Company expects to be reflected in its next quarterly
reporting.
  Management
is committed to utilizing the proceeds of these recent financings to fully
execute its business plan and grow at the desired rate to achieve sustainable
profitable operations.  To further facilitate the ability of the
Company to continue as a going concern the Company’s management has begun taking
the following steps:
  1)
                      Focusing
      all efforts on the successful launch of the CryoPort Express® One-Way
      Shipper. Now that funds have been made available management efforts will
      be focused on utilizing all resources towards the acquisition of raw
      materials to provide adequate inventory levels and towards the expansion
      of manufacturing and processing capabilities to support the launch of the
      CryoPort Express® One-Way Shipper.
  Page
29
   2)
                      Continuing
      to minimize operating and financing expenditures as necessary to ensure
      the availability of funds until revenues generated and cash collections
      adequately support the continued business operations.  The
      Company’s largest expenses for the year ended March 31, 2008,
      relate  to non-cash expenses including (i) $1,214,986non-cash expense
      included in interest expense relating to the amortization of discounts on
      convertible debentures, (ii) non-cash expense recorded in selling, general
      and administrative costs of $402,500 which were primarily related to the
      payment of 375,000 common stock shares in lieu of cash for consulting
      services relating to achieving financing arrangements for the Company,
      (iii) $880,765 non-cash expense recorded in selling, general and
      administrative costs related to the valuation of warrants issued to
      various consultants, directors, and employees, and (iv) approximately
      $285,000 interest expense, including non-cash amortized discounts and fees
      and accrued interest related to the convertible debentures which the
      Company intends to pay in common stock shares at a conversion rate of
      $0.84.  For the year ended March 31, 2008, the Company also
      incurred cash expenses of (i) approximately $95,000 for the audit fees
      related to the filing of the Company’s annual and quarterly reports, SB-2
      filing pursuant to the requirements of the convertible debentures
      financing, and to the filing of the Company’s annual tax returns and (ii)
      approximately $27,000 moving expenses incurred for the relocation of the
      Company’s operations from Brea, California to Lake Forest,
      California.  The remaining operating expenses for the year ended
      March 31, 2008 related primarily to minimal personnel costs, rent and
      utilities and meeting the legal and reporting requirements of a public
      company.
  3)
                      Utilizing
      part-time consultants and requiring employees to manage multiple roles and
      responsibilities whenever possible as the Company has historically
      utilized in its efforts to keep operating costs
  low.
  4)
                      Continuing
      to require that key employees and the Company’s Board of Directors receive
      Company stock in lieu of cash as a portion 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.
  5)
                      Maintaining
      current levels for sales, marketing, engineering, scientific and operating
      personnel and cautiously and gradually adding critical and key personnel
      only as necessary to support the successful launch and expected revenue
      growth of the of the CryoPort Express® One-Way Shipper and any further
      expansion of the Company’s product offerings in the reusable and one-way
      cryogenic shipping markets, leading it to additional revenues and
      profits.
  6)
                      Adding
      other expenses such as customer service, administrative and operations
      staff only commensurate with producing increased
  revenues.
  7)
                      Focusing
      current research and development efforts only on final and future
      development, production and distribution of the CryoPort Express® One-Way
      Shipper System.
  8)
                      Increasing
      sales and marketing resource efforts to focus on marketing and sales
      research into the bio-pharmaceutical, clinical trials and cold-chain
      distribution industries in order to ensure the Company is in a better
      position for a timely and successful launch of the CryoPort Express®
      One-Way Shipper System.
   Page
30




Research
and Development
  The
Company has completed the research and development efforts associated
with  phase one of its new product line, the CryoPort Express® One-Way
Shipper System, a line of use-and-return dry cryogenic shippers, for the
transport of biological materials.  The Company continues to provide
ongoing research associated with the CryoPort Express® One-Way Shipper System,
as it develops improvements in both the manufacturing processes and product
materials for the purpose of achieving additional cost efficiencies. 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, 2008 and 2007,
research and development costs were $166,227 and $87,857,
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, employee benefits, 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, 2008 the Company’s current assets of $2,731,080 exceeded current
liabilities of $1,749,871 by $981,209.
  Total
assets increased to $3,460,889 at March 31, 2008 from $483,687 at March 31, 2007
as a result of cash received from the financing through convertible debentures
and the sale of common stock partially offset by cash funds used in operating
activities.
  The
Company’s total outstanding indebtedness increased to $3,461,070 at March 31,
2008 from $2,771,519 at March 31, 2007 primarily from the issuance of
convertible debentures and increases in accrued interest on notes payable to
related parties, which were partially offset by a decrease in accounts payable,
accrued salaries expenses, notes payable, notes payable to officer and a
decrease in accrued warranty costs.
  On
October 1, 2007, the Company issued to four accredited investors Original Issue
Discount 8% Senior Secured Convertible Debentures (the “Debentures”) having a
principal face amount of $4,707,705 and generating gross proceeds of $4,001,551.
 After accounting for commissions, legal and other fees, the net proceeds
to the Company totaled $3,436,551 (see Note 10 to the accompanying consolidated
financial statements).
  Page
31
  In
accordance with the Convertible Debenture Agreement as amended on February 19,
2008, the principal amount under the Debentures is payable to the investors in
24 monthly redemption payments which commenced on March 31, 2008.  The
Company may elect to make principal redemptions in shares of common
stock.   If the Company elects to make principal redemptions in
common stock, the conversion rate will be the lesser of (a) the Conversion Price
(as defined below), or (b) 85% of the lesser of (i) the average of the volume
weighted average price for the ten consecutive trading days ending immediately
prior to the applicable date a principal redemption is due or (ii) the average
of such price for the ten consecutive trading days ending immediately prior to
the date the applicable shares are issued and delivered if such delivery is
after the principal redemption due date.  On March 31, 2008, the
Company converted principal redemptions totaling $188,308 into 224,176
registered common stock shares using the conversion price of $0.84 per
share.
  At any
time, holders may convert the Debentures into shares of common stock at a fixed
conversion price of $0.84, subject to adjustment in the event the Company issues
common stock (or securities convertible into or exercisable for common stock) at
a price below the conversion price as such price may be in effect at various
times (the “Conversion Price”).  On January 31, 2008, $100,000 of
Debentures was converted by an investor.  Using the conversion rate of
$0.84 per the terms of the Debenture, 119,047 registered common stock shares
were issued to the investor.
  Quarterly
interest payments for these convertible debentures are payable in cash and
commenced on January 1, 2008.  The Company may elect to make interest
payments in shares of common stock provided, generally, that it is not in
default under the Debentures and it has met certain equity conditions prior to
the due date of the interest payments.  If the Company elects to make
interest payments in common stock, the conversion rate will be the lesser of (a)
the Conversion Price (as defined below), or (b) 85% of the lesser of (i) the
average of the volume weighted average price for the ten consecutive trading
days ending immediately prior to the applicable date an interest payment is due
or (ii) the average of such price for the ten consecutive trading days ending
immediately prior to the date the applicable shares are issued and delivered if
such delivery is after the interest payment date.  During the year
ended March 31, 2008, the Company converted accrued interest payments of
$186,975 accrued interest on the convertible notes into 222,590 shares of common
stock using a conversion rate of $0.84 per share.  As of March 31,
2008, the Company had recorded $5,446 accrued interest on the convertible notes
included in the accompanying consolidated balance sheet and a total of $192,421
of interest expense related to the face rate of interest in the
accompanying consolidated statement of operations for the year ended March 31,
2008.
  As of
March 31, 2008, the principal balances of the Debentures totaled
$4,419,397 of which the current portion of $1,936,884 is included in the
Company’s current liabilities in the accompanying consolidated balance sheet for
March 31, 2008.
 
 The
Debentures rank senior to all of the Company’s current and future indebtedness
and are secured by substantially all of the Company’s assets.
  Page
32
 
 On March
31, 2008, the Company issued 224,176 shares of registered common stock for
principal redemptions totaling $188,308 and 110,501 common stock shares for
March 2008 interest payments totaling $92,821 to the holders of the Debentures
using the conversion rate of $0.84.  In April 2008, the Company was
notified by the holders that the qualifying equity conditions had not been fully
satisfied with relation to the conversion of the principal and interest payments
made by the Company on March 31, 2008.  As a result, in April 2008 the
Company rescinded and cancelled 140,143 shares of registered common stock for
principal redemptions totaling $117,720 and submitted the cash payments in the
same amounts to those holders.  Pursuant to a one-time waiver
agreement with one of the Debenture holders, the remaining $70,588 of the March
31 principal redemption was adjusted to reflect a one-time conversion rate of
$0.70 and, in April 2008 the Company issued the holder 16,807 additional
registered shares in consideration.   Also in consideration of a
one-time waiver with the Debenture holders, the full amount of the March 31,
2008 interest payments were adjusted to reflect a one-time conversion price of
$0.70 and in April 2008 the Company issued the Debenture holders 22,099
additional common stock shares.  As of March 31, 2008, the Company has
recorded additional interest expense for the Debentures of $5,446 related to the
one-time conversion rate adjustments of the March 31, 2008 principal and
interest payments from $0.84 to $0.70.
 
 The
Company had a non-interest bearing note payable to a third party for $77,304,
which was due in April 2003.  As of March 31, 2008, the remaining
unpaid balance was $12,000.  The Company has made the final payments
on the note of $5,000 in April 2008 and $7,000 in May 2008.
  As of
March 31, 2008 and 2007, the Company had aggregate principal balances of
$1,249,500 and $1,339,500 respectively, 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 which
commenced April 1, 2006 of $2,500, and which increased by an aggregate of $2,500
every six months to the current maximum aggregate payment of $10,000 per month.
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 $78,243 and $85,595 for the years ended
March 31, 2008 and 2007, respectively.  Accrued interest, which is
included in related-party notes payable in the accompanying balance sheets,
related to these notes amounted to $482,584 and $404,341 as of March 31, 2008
and 2007, respectively.  As of March 31, 2008, the Company had not
made the required payments under the related-party notes which were due on
January 1, February 1, and March 1, 2008.  However, pursuant to the
note agreements, the Company has a 120-day grace period to pay missed payments
before the notes are in default.  On April 29, 2008, May 30, 2008, and
June 27, 2008, the Company paid the January 1, February 1 and March 1 payments
respectively, due on these related party notes.  Management expects to
continue to pay all payments due prior to the expiration of the 120-day grace
periods.
  Page
33
 
 In August
2006, Peter Berry, the Company’s Chief Executive Officer, agreed to convert his
deferred salaries to a long-term note payable.  Under the terms of
this note, monthly payments of $3,000 have made to Mr. Berry beginning in
January 2007.  In January 2008, these payments increased to $6,000 and
remain at that amount until the loan is fully paid in December
2010.  Interest of 6% per annum on the outstanding principal balance
of the note began to accrue on January 1, 2008 and will be paid on a
monthly basis along with the monthly principal payment beginning in January
2008.  As of March 31, 2008 and 2007, the total amount of deferred
salaries under this arrangement is $201,115 and $242,950, respectively, of which
$129,115 and $197,950, respectively is recorded as a long-term liability in the
accompanying consolidated balance sheets.
 
 The
following table lists all notes payable and their principal balances as of March
31, 2008:
  Lender
                      Origination
      Date
                      Maturity
      Date
                      Principal
      Bal.
                        March
      31, 2008
                      Interest
      RateConvertible
      Debentures
                      Oct.
      2007
                      Mar.
      2010
                      $4,419,397
                      
                      8%Patrick
      Mullens
                      Aug.
      2001
                      Jun.
      2011
                      $362,500
                      
                      6%Marc
      Grossman
                      Feb.
      2001
                      Sep.
      2011
                      $306,000
                      
                      6%David
      Petreccia
                      Apr.
      2001
                      Mar.
      2011
                      $263,000
                      
                      6%Jeffrey
      Dell
                      Aug.
      2001
                      Nov.
      2009
                      $232,000
                      
                      6%Raymond
      Takahashi
                      Jun.
      2003
                      Feb.
      2008
                      $86,000
                      
                      6%Peter
      Berry
                      Sep.
      2006
                      Dec.
      2010
                      $201,115
                      
                      6%Falk,
      Shaff & Ziebell
                      Mar.
      2002
                      Jun.
      2008
                      $12,000
                      
                      n/a




The
Company has incurred negative cash flows from operations of $1,820,250 for the
year ended March 31, 2008 due to insufficient sales of the Company’s reusable
product group resulting from the Company’s shift in its sales and marketing
focus to the development and planned introduction of the CryoPort Express®
One-Way Shipper System which the Company initiated during the third quarter of
fiscal 2006, and to the operating costs related to the maintenance of minimal
selling, general and administrative and research and development activities to
support the development of the new product line.  These negative cash
flows from operations for the year ended March 31, 2008 have been financed
primarily through net proceeds of $3,436,551 from the October 2007 convertible
debentures and from net proceeds of $699,866 raised by issuance of common stock.
During the year ended March 31, 2008, proceeds from exercise of warrants were
$107,500 for the year ended March 31, 2008 and net proceeds from the line of
credit was 115,500.  Repayments of notes payable principal balances
during the year ended March 31, 2008 were $190,000.
  Page
34
 
 The
Company’s combined cash balance as of March 31, 2008 was $2,434,701, including
restricted cash. On June 9, 2008, the Company completed an additional financing
through the issuance of a convertible debenture, and net proceeds received by
the Company totaled $870,625 (see Note 14 of the accompanying consolidated
financial statements).
 
 Based on
presently known commitments and plans, the Company expects to fund its continued
operations through use of cash on hand and cash receipts from sales resulting
from the full launch of the CryoPort Express® One-Way Shipper as well as
through  proceeds from exercises of existing outstanding financing
related warrants or additional long-term or equity financing.  The
Company management is currently focusing on the ramp up of its sales and
marketing and manufacturing activities towards the successful launch the
CryoPort Express® One-Way Shipper System product line as well as funding
continued operations through additional long term debt or equity
financing.
 
 The
Company does not expect to incur capital expenditures commensurate with the ramp
up of operations for the launch of the CryoPort Express® One-Way Shipper System
and sales volume increases.  Future capital expenditures for
manufacturing equipment for the launch of the CryoPort Express® One-Way Shipper
System are expected to be funded out of line of credit or 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.
 
 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 consolidated financial statements:
  Page
35
 
 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
its inventories 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.
 
 Impairment of Long-Lived
Assets.  The Company assesses the recoverability of its
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.
 
 Deferred Financing Costs.  Deferred
financing costs represent costs incurred in connection with the issuance of the
convertible notes payable.  Deferred financing costs are being
amortized over the term of the financing instrument on a straight-line basis,
which approximates the effective interest method.
 
 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.
  Page
36
 
 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.
 
 Stock-Based
Compensation.     The Company accounts for
equity issuances to non-employees in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 123, Accounting for Stock Based Compensation, and
Emerging Issues Task Force ("EITF") Issue No. 96-18, Accounting for Equity Instruments that are Issued to
Other Than Employees for Acquiring, or in Conjunction with Selling, Goods and
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.
 
 On April
1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123
(revised 2004), Share-Based Payment,
(“SFAS 123(R)”) which establishes standards for the accounting of transactions
in which an entity exchanges its equity instruments for goods or services,
primarily focusing on accounting for transactions where an entity obtains
employee services in share-based payment transactions. SFAS No. 123(R) requires
a public entity to measure the cost of employee services received in exchange
for an award of equity instruments, including stock options, based on the
grant-date fair value of the award and to recognize it as compensation expense
over the period the employee is required to provide service in exchange for the
award, usually the vesting period. SFAS 123(R) supersedes the Company’s previous
accounting under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“APB
25”). In March 2005, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 107 (“SAB 107”) relating to SFAS 123(R). The Company has
applied the provisions of SAB 107 in its adoption of SFAS 123(R).
 
 The
Company adopted SFAS 123(R) using the modified prospective transition method,
which required the application of the accounting standard as of April 1, 2006,
the first day of the Company’s fiscal year 2007. The Company’s consolidated
financial statements as of and for the years ended March 31, 2008 and 2007
reflect the impact of SFAS 123(R).
 
 The value
of the portion of the award that is ultimately expected to vest is recognized as
expense over the requisite service periods in our consolidated statement of
operations. As stock-based compensation expense recognized in the consolidated
statement of operations for the year ended March 31, 2008 is based on awards
ultimately expected to vest, it has been reduced for estimated forfeitures. SFAS
No. 123(R) requires forfeitures to be estimated at the time of grant and
revised, if necessary, in subsequent periods if actual forfeitures differ from
those estimates. The estimated average forfeiture rate for the year ended March
31, 2008 was zero as the Company has not had a significant history of
forfeitures.
  Page
37
 
 Employee
stock-based compensation expense recognized under SFAS No. 123(R) for the year
ended March 31, 2008 was $752,140, determined by the Black-Scholes valuation
model.  As of March 31, 2008, total unrecognized compensation cost,
related to unvested stock options and warrants was approximately $105,965, which
is expected to be recognized as an expense over a weighted-average period of 2
years. See Note 2 to the Company’s consolidated financial statements for
additional information.
 
 Convertible Debentures.  If the
conversion feature of conventional convertible debt provides for a rate of
conversion that is below market value, this feature is characterized as a
beneficial conversion feature (“BCF”).  A BCF is recorded by the
Company as a debt discount pursuant to EITF Issue No. 98-5, “Accounting for Convertible Securities with
Beneficial Conversion Features or Contingency Adjustable Conversion
Ratio,” (“EITF 98-05”) and EITF Issue No. 00-27, “Application of EITF Issue No. 98-5 to Certain
Convertible Instruments” (“EITF 00-27”).  In those
circumstances, the convertible debt will be recorded net of the discount related
to the BCF.  The Company amortizes the discount to interest expense
over the life of the debt using the effective interest method (see Note 10 of
the accompanying consolidated financial statements).
 
 Recent
Accounting Pronouncements
 
 The
Financial Accounting Standards Board (“FASB”) has issued SFAS No. 157, Fair Value Measurements. This new standard
provides guidance for using fair value to measure assets and liabilities. Under
SFAS No. 157, fair value refers to the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market
participants in the market in which the reporting entity transacts. In this
standard, the FASB clarifies the principle that fair value should be based on
the assumptions market participants would use when pricing the asset or
liability. In support of this principle, SFAS No. 157 establishes a fair value
hierarchy that prioritizes the information used to develop those assumptions.
The fair value hierarchy gives the highest priority to quoted prices in active
markets and the lowest priority to unobservable data, for example, the reporting
entity’s own data. Under the standard, fair value measurements would be
separately disclosed by level within the fair value hierarchy. The provisions of
SFAS No. 157 are effective for financial statements issued for fiscal years
beginning after November15, 2007, and interim periods within those fiscal years.
Earlier application is encouraged, provided that the reporting entity has not
yet issued financial statements for that fiscal year, including any financial
statements for an interim period within that fiscal year. The adoption of this
pronouncement is not expected to have material effect on the Company’s
consolidated financial statements.
  Page
38
 
 In July
2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statement No. 109 (“FIN 48”).  FIN 48
clarifies the accounting for uncertainty in income taxes by prescribing the
recognition threshold a tax position is required to meet before being recognized
in the financial statements.  It also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure, and transition.  The Company adopted FIN 48
effective on April 1, 2007.  The adoption of FIN 48 did not have a
material impact on the Company’s consolidated results of operations and
financial condition.
 
 On
February 15, 2007, the FASB issued FASB Statement No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities - Including an Amendment of FASB Statement No. 115.
SFAS No. 159 permits an entity to choose to measure many financial instruments
and certain other items at fair value. This option is available to all entities,
including not-for-profit organizations. Most of the provisions in SFAS No. 159
are elective; however, the amendment to FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity
Securities, applies to all entities with available-for-sale and trading
securities. Some requirements apply differently to entities that do not report
net income.  The fair value option established by SFAS No. 159 permits
all entities to choose to measure eligible items at fair value at specified
election dates. A business entity will report unrealized gains and losses on
items for which the fair value option has been elected in earnings (or another
performance indicator if the business entity does not report earnings) at each
subsequent reporting date. SFAS No. 159 is effective as of the beginning of an
entity’s first fiscal year that begins after November 15, 2007.  The
adoption of this pronouncement is not expected to have material effect on the
Company’s consolidated financial statements.
 
 Impact of Contractual Obligations and Commercial
Commitments.   The following summarizes the Company’s
contractual obligations at March 31, 2008 and the effects such obligations are
expected to have on liquidity and cash flow in future periods.
  Payments Due by PeriodContractual Obligations
                
                Total
                
                
                Less than 1 Yr
                
                
                1-3 Years
                
                
                4-5 Years
                
                
                After 5 YearsRelated
      Party Notes
                
                $
                1,249,500
                
                
                $
                150,000
                
                
                $
                240,000
                
                
                $
                240,000
                
                
                $
                619,500Note
      Payable to P. Berry
                
                
                201,115
                
                
                
                72,000
                
                
                
                129,115
                
                
                
                -
                
                
                
                -Convertible
      Debentures (a)
                
                
                4,419,397
                
                
                
                1,936,884
                
                
                
                2,482,513
                
                
                
                -
                
                
                
                -Third
      Party Notes
                
                
                12,000
                
                
                
                12,000
                
                
                
                -
                
                
                
                -
                
                
                
                -Line
      of Credit
                
                
                115,943
                
                
                
                115,943
                
                
                
                -
                
                
                
                -
                
                
                
                -Total
      Contractual Cash Obligations
                
                $
                5,997,955
                
                
                $
                2,286,827
                
                
                $
                2,851,628
                
                
                $
                240,000
                
                
                $
                619,500




(a)  Convertible
      debentures are expected to be paid in equivalent common stock using a
      contractual conversion rate of $0.84 per common stock
    share.




Page
39




Impact of Inflation. From time to
time, the Company experiences price increases from third-party manufacturers and
these increases cannot always be passed on to the Company’s customers. While
these price increases have not had a material impact on the Company’s historical
operations or profitability in the past, they could affect sales in the
future.
 
 Results
of Operations – Year Ended March 31, 2008 Compared to Year Ended March 31,
2007.
 
 Net Sales.  During
the year ended March 31, 2008 the Company generated $83,564 from reusable
shipper sales compared to revenues of $67,103 during the year ended March 31,
2007, an increase of $16,461 (24.5%).  These low revenues in both
years is primarily due to the Company’s shift initiated in mid-2006 in its sales
and marketing focus from the reusable shipper product line to the further
development and planned product launch of the CryoPort Express® One-Way Shipper
System for its introduction into the biopharmaceutical industry sector and to
the delays in the Company’s securing adequate funding for the manufacturing and
marketing launch of the new product line.  Additionally, continued
product manufacturing upgrades slowed production activities of the reusable
shippers.
 
 Cost of Sales.  Cost
of sales for the year ended March 31, 2008 increased $209,432 (118.4%) to
$386,371 from $176,939 for the year ended March 31, 2007 as the result of
increased fixed overhead manufacturing costs as the result of the Company’s
shift in focus and preparation for the launch of the new CryoPort Express®
One-Way Shipper System and the additional costs related to the relocation of the
Company’s operations to Lake Forest, CA in September 2007.  During
both periods, cost of sales exceeded sales due to fixed manufacturing costs and
plant underutilization.
 
 Gross Loss.  Gross
loss for the year ended March 31, 2008 increased by $192,971 (175.7%) to
$302,807 compared to $109,836 for the year ended March 31, 2007.  The
increase in the gross loss is due to increased fixed overhead manufacturing
costs as the result of the company’s shift in focus and preparation for the
launch of the new CryoPort Express® One-Way Shipper System and the additional
costs related to the relocation of the Company’s operations to Lake Forest, CA
in September 2007.
 
 Selling, General and Administrative
Expenses.  Selling, general and administrative expenses
increased by $651,550 (34.3%) to $2,550,778 for the year ended March 31,
2008  compared to $1,899,228 for the year ended March 31, 2007 due
mainly to increases in  general and administrative costs of $489,849
and selling expenses of $161,701.  The increase in general and
administrative expenses was primarily due to $1,283,265 of option and warrant
related charges as the result of: issuances of warrants to employees and
directors in accordance with the provisions of SFAS 123(R) and issuances of
common stock and warrants for services, lease agreement and fixed asset
purchases.  Additional general and administrative expense increases
were the result of increased legal fees, insurance premiums, salaries and travel
expenses.  The increase in selling expenses was primarily related to
increased salaries expenses, travel costs  and trade show and
advertising expenses which were the result of market research, product
development and the launch preparation for the CryoPort Express® One-Way Shipper
System.
  Page
40
 
 Research and Development
Expenses.  Research and development expenses increased by
$78,370 (89.2%) to $166,227 for the year ended March 31, 2008 as compared to
$87,857 for the year ended March 31, 2007 in relation to the progression of the
research and development activity, related to the product development and launch
preparation for the CryoPort Express® One-Way Shipper System.  These
research and development expense increases included additional project costs for
development of the web based customer service portal, as well as increases in
consulting fees travel expenses and third party certification
testing.
 
 Interest
Expense.  Interest expense increased by $1,364,980 (599.4%) to
$1,592,712 for the year ended March 31, 2008 as compared to $227,738 for the
year ended March 31, 2007 primarily as the result of $1,214,986 of amortized
convertible debt discount, $284,616 accrued interest expense and 87,706
amortized deferred financing expenses accrued interest expense related to the
convertible debentures which were offset by decreased interest expense from
related party notes and other notes payable as the result of decreased principal
balances.
 
 Interest
Income.  Interest income increased $50,076 (100.0%) for the
year ended March 31, 2008 as compared to $0 for the year ended March 31, 2007
primarily as the result of interest earned on cash deposit balances in the
Company’s money market account.
 
 Net Loss.  As a
result of the factors described above, the net loss for the year ended March 31,
2008 increased by $2,237,795 (96.2%) to $4,564,054 or ($0.12) per share compared
to $2,326,259 or ($0.08) per share for the year ended March 31,
2007.
 
 
 ITEM
7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
 
 Not
applicable.
 
 ITEM
8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
 The
Consolidated Financial Statements and Notes thereto and the Report of
Independent Registered Public Accounting Firm appearing on pages F-1 through
F-38 of Exhibit 13.1 are incorporated herein by reference to this Annual Report
on Form 10-K.
 
 Page
41
 
 ITEM
9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
 
 None.
 
 
 ITEM
9A.  CONTROLS AND PROCEDURES
 
 Evaluation
of Disclosure Controls and Procedures.
 
 As of the
end of the period covered by this report, the Company’s management, under the
supervision and with the participation of the Chief Executive Officer and Vice
President of Finance, carried out an evaluation of the effectiveness of the
design and operation of the Company’s disclosure controls and procedures (as
such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended, and section 404 of the Sarbanes-Oxley Act).
Based upon that evaluation, the Chief Executive Officer and Vice President of
Finance concluded that the Company’s disclosure controls and procedures were
effective to provide reasonable assurance that material information relating to
the Company is made known to management, including the Chief Executive Officer
and Vice President of Finance. They have concluded, after evaluating the
effectiveness of the Company’s disclosure controls and procedures as of March
31, 2008, 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 Control Over Financial Reporting.
 
 There
have been no significant changes in the Company’s internal controls over
financial reporting during the most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
controls over financial reporting.
 
 Management’s
Report on Internal Control Over Financial Reporting
 
 The
management of Cryoport, Inc. is responsible for establishing and maintaining
adequate internal control over financial reporting, as such term is defined in
Exchange Act Rule 13a-15(f) under the Securities Exchange Act of 1934, as
amended (The Exchange Act) to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles. Under the supervision and with the participation of the Company’s
management, including its Chief Executive Officer and Vice President of
Finance,  an evaluation was conducted of the effectiveness of the
Company’s internal control over financial reporting based on the framework set
forth in Internal Control – Integrated
Frameworkissued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this evaluation under the framework set forth in
Internal Control – Integrated Frameworkmanagement concluded that the Company’s internal control over financial
reporting was effective as of March 31, 2008.
  Page
42
 
 An
internal control system over financial reporting has inherent limitations and
may not prevent or detect misstatements.  Therefore even those systems
determined to be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation.
 
 This
annual report does not include an attestation report of our independent
registered public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by the
Company’s independent registered public accounting firm pursuant to temporary
rules of the Securities & Exchange Commission that permit the Company to
provide only management’s report in this annual report.
 
  ITEM
9B.   OTHER INFORMATION
 
 None




Page
43




PART
III
 
 ITEM
10:   DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
 
 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
      ElectedPeter
      Berry
              60
              Director
      and Chief Executive Officer, President
              2003Dee
      S. Kelly, CPA
              46
              Vice
      President of Finance
              2003Kenneth
      G. Carlson
              54
              Vice
      President of Sales and Marketing
              2005Bret
      Bollinger
              41
              Vice
      President of Operations
              2008Thomas
      Fischer, PhD
              61
              Director,
      Vice Chairman of the Board
              2005Gary
      C. Cannon
              57
              Director,
      Secretary of the Board
              2005Adam
      M. Michelin
              64
              Director
              2005Stephen
      L. Scott
              56
              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 24 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
44
 
 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.
 
 Bret Bollinger, became Vice
president of Operations for CryoPort in February 2008.  Prior to
joining the Company, Mr. Bollinger was Director of Operations and Engineering
for Triangle Brass Manufacturing from July 2003 to January 2008.  Mr.
Bollinger served as a Business Process Consultant for Vistant Corporation, a
division of Cardinal Health from July of 2001 through July 2003 and as
Operations and Order Fulfillment Manager for Ingersoll-Rand’s Safety and
Security Sector, Falcon Lock Company from July of 1999 to July of
2001.  Mr. Bollinger has extensive background in manufacturing
environments, including experience with opening both manufacturing and assembly
plants domestically as well as in Mexico.  In addition, he has
experience in new product design and implementation.  Mr. Bollinger
holds a Bachelor of Science in Mechanical Engineering from Sacramento 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 21
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, of
Naturade, Inc.a position he has held since November, 2007.  Mr.
Michelin has held several leadership positions including CEO for Enterprise
Group from March 2005, Principle of Kibel Green, Inc., a position he held for 11
years prior to joining Enterprise Group, and Partner of KPMG for 10
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.
  Page
45
 
 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 hold a directorship in any other reporting company
except:  Adam Michelin is Director, CEO/President and Treasurer of
Redux Holdings, Inc. (RDXH); CEO/Chairman Naturade Inc.(NRDCQ) and Gary Cannon
is Secretary and General Counsel of Redux Holdings, Inc. (RDXH) and General
Counsel for the Affordable Energy Group, Inc. and for Global Development and
Environmental Resources, Inc., both publicly traded companies.
  Page
46
 
 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.
 
 Board
of Directors Meetings and Committees:
 
 During
the fiscal year ended March 31, 2008, there were nine meetings of the board of
directors as well as several actions taken with the unanimous written consent of
the directors.  The Board has established an Audit Committee and a
Compensation and Governance Committee.  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.
 
 Audit
Committee
 
 The
Company’s board of directors has a formally established audit committee and an
adopted  Audit Committee Charter.  During the year ended
March 31, 2008, the Company’s Audit Committee held two meetings.  The
Company has determined that Adam Michelin, Audit Committee Chairman, qualifies
as an “audit committee financial expert” as defined in Item 401(h) of Regulation
S-K. of the Securities and Exchange Commission rules and is “independent” within
the meaning of Rule 4200(a) (15) of the National Association of Securities
Dealers.  Mr. Fischer and Mr. Scott 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.
 
 Compensation
and Governance Committee
 
 The
current members of the Compensation and Governance Committee as appointed by the
Board are Thomas Fischer, Chairman, Gary Cannon, and Steven Puente. Mr. Puente
is an outside expert consultant serving on the Compensation and Governance
Committee.
 
 Nominating
Procedures and Criteria
 
 The
Company does not have a nominating committee.  The function of the
nominating committee is handled by the Company’s Compensation and Governance
Committee.
  Page
47
 
 Compensation
Committee Interlocks and Insider Participation
 
 Gary
Cannon is Secretary of the Company, none of the other members of the
Compensation Committee is or has been an officer or employee 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, 2008, 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 Board
of Directors has adopted a Code of Ethics applicable to the Chief Executive
Officer, the Vice President of Finance, all senior financial officers and all
other employees. The Code of Ethics of the Company is available, free of charge,
on request by writing to the Secretary of the Company at 20382 Barents Sea
Circle, Lake Forest, CA, 92630.
 
  ITEM
11.   EXECUTIVE COMPENSATION.
 
 2008 Executive Base Salary
and Incentive Compensation Determination
 
 Peter
Berry
 
 Mr. Berry
has served as the Company’s President and Chief Executive Officer since April,
2003.  Mr. Berry currently has an annual base salary of
$192,000.  Mr. Berry has an employment agreement with the Company
which originally expired November 1, 2005.  Based on the
recommendations of the Compensation Committee, in December 2005, December 2006
and again in November 2007, the Board has approved the extension of Mr. Berry’s
employment contract for additional one-year terms with the same base salary as
that provided for in the last year of the original employment
agreement.  Under the extended terms of his employment agreement, Mr.
Berry is eligible for an annual cash bonus of up to 40% of his base salary,
based on goals and objectives met as recommended by the Compensation Committee
and approved by the full Board of Directors.  During the fiscal year
2008, the Board approved a $30,000 cash bonus for Mr. Berry.  Based on
the recommendation of the Compensation Committee and approval by the Board, Mr.
Berry was granted incentive awards of 26,200 fully vested warrants exercisable
at $0.75 per share on August 27, 2007 and 26,200 fully vested warrants
exercisable at $1.07 per share on February 28, 2008. The exercise prices of the
warrants are equal to the fair value of the Company’s stock as of the grant
dates.  Mr. Berry also receives compensation in the form of health
care benefits from the Company.
  Page
48
 
 Dee
S. Kelly
 
 Ms. Kelly
has served as the Company’s Vice President, Finance since August
2003.  Ms. Kelly, a California licensed Certified Public Accountant,
works part-time for the Company as a consultant on a monthly retainer basis of
$10,000 per month.  Based on the recommendation of the Compensation
Committee and approval by the Board, Ms. Kelly was granted incentive awards of
61,000 fully vested warrants exercisable at $1.07 per share on February 28,
2008. The exercise price of the warrants is equal to the fair value of the
Company’s stock as of the grant date.  Ms. Kelly does not have an
employment contract with the Company.
 
 Kenneth
G. Carlson
 
 Mr.
Carlson has served as the Company’s Vice President of Sales and Marketing since
August 2005.  Mr. Carlson currently receives an annual salary of
$120,000 per year and has no employment contract.  Based on the
recommendation of the Compensation Committee and approval by the Board, Mr.
Carlson was granted incentive awards of 65,000 fully vested warrants exercisable
at $1.07 per share on February 28, 2008. The exercise price of the warrants is
equal to the fair value of the Company’s stock as of the grant
date.  Mr. Carlson also receives compensation in the form of health
care benefits from the Company.
 
 Bret
Bollinger
 
 Mr.
Bollinger became the Company’s Vice President of Operations in February
2008.  Mr. Bollinger currently receives an annual salary of $130,000
per year pursuant to an employment contract.  Under the terms of his
employment agreement, Mr. Bollinger is eligible for an annual bonus from 30% to
50% of his base salary based on goals and objectives met, payable in either cash
or warrants, as determined by the Chief Executive Officer and approved by the
Board of Directors. Based on the recommendation of the Compensation Committee
and approval by the Board, Mr. Bollinger was granted incentive awards of 150,000
warrants exercisable at $1.07 per share on February 28, 2008 which vest at a
rate of 50,000 upon grant date, 50,000 on February 28, 2009 and 50,000 on
February 28, 2010.  The exercise price of the warrants is equal to the
fair value of the Company’s stock as of the grant date.  Mr. Bollinger
also receives compensation in the form of health care benefits from the
Company.
 
 Page
49
 
 SUMMARY
COMPENSATION TABLE
 
 The table
below summarizes the total compensation paid or earned by the Company’s Chief
Executive Officer, and three other most highly compensated executive officers
for the years ended March 31, 2008 and 2007.
  Name
      and
                    Principal
      Position
                  
                  Fiscal
                    Year
                  
                  
                  Salary
                    $
                  
                  
                  Bonus
                    $
                  
                  
                  Option
      and Warrant
                    Awards
                    $
      (3)
                  
                  
                  All
      Other
                    Compensation
                    $
                  
                  
                  Total
                    $Peter
      Berry,
                    Chief Executive
      Officer
                  
                  
                  2008
                  
                  
                  $
                  136,000
                  
                  
                  $
                  30,000
                  
                  
                  $
                  47,395
                  
                  
                  $
                  3,300
                  
                  
                  $
                  216,695and
      Director (1)
                  
                  
                  2007
                  
                  
                  $
                  96,000
                  
                  
                  $
                  30,000
                  
                  
                  $
                  58,283
                  
                  
                  $
                  3,300
                  
                  
                  $
                  187,583Dee
      S. Kelly,
                    Vice President, Finance
      (2)
                  
                  
                  2008
                  
                  
                  $
                  106,000
                  
                  
                  $
                  16,000
                  
                  
                  $
                  64,639
                  
                  
                  $
                  -
                  
                  
                  $
                  186,6392007
                  
                  
                  $
                  89,000
                  
                  
                  $
                  -
                  
                  
                  $
                  180,113
                  
                  
                  
                  
                  
                  
                  $
                  269,113Kenneth
      Carlson,
                    Vice President, Sales
                  
                  
                  2008
                  
                  
                  $
                  106,000
                  
                  
                  $
                  14,000
                  
                  
                  $
                  68,877
                  
                  
                  $
                  4,540
                  
                  
                  $
                  193,417and
      Marketing (3)
                  
                  
                  2007
                  
                  
                  $
                  72,846
                  
                  
                  $
                  -
                  
                  
                  $
                  173,877
                  
                  
                  $
                  4,020
                  
                  
                  $
                  250,743Bret
      Bollinger,
                    Vice President
                  
                  
                  2008
                  
                  
                  $
                  21,667
                  
                  
                  $
                  -
                  
                  
                  $
                  52,983
                  
                  
                  $
                  1,196
                  
                  
                  $
                  75,846Operations
      (4)






(1)
              Mr.
      Berry’s Option and Warrant awards for 2007 includes $58,283 related to the
      vesting of options granted in prior years.(2)
              Ms.
      Kelly bills the Company for her earnings as a part-time contract employee
      and deferred approximately $20,000 of her billings during fiscal year
      2008.  Ms. Kelly’s Option and Warrant awards for 2007 includes
      $5,867 related to the vesting of options granted in prior
      years.(3)
              Reflects
      the dollar amount recognized for financial reporting purposes for the year
      ended March 31, 2008, in accordance with SFAS 123(R) of warrant and stock
      option awards pursuant to the 2002 Stock Option Plan, and thus includes
      amounts from awards granted in and prior to 2008.  Assumptions
      used in the calculation of these amounts are included in Note 11, Stock
      Options and Warrants.  All stock warrants were granted at the
      closing market price of the Company’s stock on the date of
      grant.  See Note 11 – Stock Options and
  Warrants.(4)
              Mr.
      Bollinger became Vice President of Operations in February 2008. At that
      time, he was granted 150,000 warrants of which 50,000 with a fair value of
      $52,983, vested upon issuance. The balance of warrants issued to Mr.
      Bollinger vest 50,000 in February 2009 and 50,000 in February
      2010.
 
  Page
50
 The All
Other Compensation column in the 2008 Summary Compensation Table consists of the
following:
  Name
      and
                  Principal
      Position
                
                Fiscal
      Year
                
                Perquisites
      and Other Personal Benefits
                  $
                
                
                Tax
      Reimburse-ments
                  $
                
                
                Insurance
      Premiums
                  $
                
                
                Company
      Contributions to
                  401(k)
      plan
                  $
      (1)
                
                
                Severence
      Payments/ Accruals
                  $
                
                
                Change
      in
                  Control
      Payments
                  /Accruals
                  $
                
                
                Total
                  $Peter
      Berry,
                
                2008
                
                $
                -
                
                
                $
                -
                
                
                $
                3,300
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                3,300Chief
      Executive Officer and Director
                
                2007
                
                $
                -
                
                
                $
                -
                
                
                $
                3,300
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                3,300Dee
      S. Kelly,
                
                2008
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Vice
      President, Finance
                
                2007
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Kenneth
      G. Carlson,
                
                2008
                
                $
                -
                
                
                $
                -
                
                
                $
                4,540
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                4,540Vice
      President, Sales and Marketing
                
                2007
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Bret
      Bollinger,
                  Vice
      President, Operations
                
                2008
                
                $
                -
                
                
                $
                -
                
                
                $
                1,196
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                1,196
  (1)
                  The
      Company does not currently offer a 401(k) plan due to the low number of
      eligible employees.
  Page
51
  Outstanding
Equity Awards at Fiscal Year-End:
 
 The
following table provides information on the holdings of equity awards by the
named executive officers as of March 31, 2008.
  Warrant
      and Option AwardsName
                    
                    Grant
                      Date
                    
                    Number
      of
                      Securities
                      Underlying
                      Unexercised
                      Options
      and Warrants
                      (#)
                      Exercisable
                    
                    Number
      of
                      Securities
                      Underlying
                      Unexercised
                      Options
      and Warrants
                      (#)
                      Unexercisable
                    
                    Equity
                      Incentive
                      Plan Awards
                      Number
      of
                      Securities
                      Underlying
                      Unexercised
                      Unearned
                      Options
      and Warrants
                      (#)
                    
                    Exercise
                      Price
                      ($)
                    
                    Expiration
                      DatePeter
      Berry
                    
                    11/1/02
                    
                    500,000
                    
                    -
                    
                    -
                    
                    $0.50
                    
                    11/1/124/1/03
                    
                    250,000
                    
                    -
                    
                    -
                    
                    $0.50
                    
                    4/1/1311/1/03
                    
                    250,000
                    
                    -
                    
                    -
                    
                    $0.60
                    
                    11/1/138/1/04
                    
                    367,970
                    
                    -
                    
                    -
                    
                    $0.04
                    
                    8/1/148/27/07
                    
                    26,200
                    
                    -
                    
                    -
                    
                    $0.75
                    
                    8/27/172/28/08
                    
                    26,200
                    
                    -
                    
                    -
                    
                    $1.07
                    
                    2/27/18Dee
      S. Kelly
                    
                    10/1/03
                    
                    75,000
                    
                    -
                    
                    -
                    
                    $0.60
                    
                    10/1/138/1/04
                    
                    36,752
                    
                    -
                    
                    -
                    
                    $0.04
                    
                    8/1/148/3/06
                    
                    158,500
                    
                    -
                    
                    -
                    
                    $1.00
                    
                    8/3/161/3/07
                    
                    61,000
                    
                    -
                    
                    -
                    
                    $0.28
                    
                    1/3/172/28/08
                    
                    61,000
                    
                    -
                    
                    -
                    
                    $1.07
                    
                    2/27/18Kenneth
      G. Carlson
                    
                    8/3/06
                    
                    157,000
                    
                    -
                    
                    -
                    
                    $1.00
                    
                    8/3/161/3/07
                    
                    65,000
                    
                    -
                    
                    -
                    
                    $0.28
                    
                    1/3/172/28/08
                    
                    65,000
                    
                    -
                    
                    -
                    
                    $1.07
                    
                    2/27/18Bret
      Bollinger
                    
                    2/28/08
                    
                    50,000
                    
                    -
                    
                    100,000
                    
                    $1.07
                    
                    2/27/18
  Aggregated
Warrant and Option Exercises in last Fiscal Year and Fiscal Year-End Warrant and
Option Values:
 
 Shares
                            Acquired
                            on
                          
                          
                          Value
                          
                          
                          Number
      of Shares Underlying
                            Unexercised
                            Warrants
      and Options at
                            March
      31, 2008
                          
                          
                          Value
      of Unexercised
                            In-the-Money
                            Warrants
      and Options at
                            March
      31, 2008 (1)Name
                          
                          Exercise
                          
                          
                          Realized
                          
                          
                          Exercisable
                          
                          
                          Unexercisable
                          
                          
                          Exercisable
                          
                          
                          UnexercisablePeter
      Berry
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          1,420,370
                          
                          
                          
                          -
                          
                          
                          $
                          1,102,838
                          
                          
                          
                          -Dee
      S. Kelly
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          392,252
                          
                          
                          
                          -
                          
                          
                          $
                          179,460
                          
                          
                          
                          -Kenneth
      G. Carlson
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          287,000
                          
                          
                          
                          -
                          
                          
                          $
                          96,780
                          
                          
                          
                          -Bret
      Bollinger
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          50,000
                          
                          
                          
                          100,000
                          
                          
                          $
                          6,000
                          
                          
                          $
                          12,000
 _____________________
  (1)           The
values of the unexercised in-the-money warrants and options have been calculated
on the basis of the estimated fair market value at March 31, 2008 of based on
average selling price of recent unregistered common stock sales of $1.19, less
the applicable exercise price, multiplied by the number of shares acquired on
exercise.
 
 Page
52
 
 Pension
Benefits
 
 None of
the Company’s named executive officers are covered by a defined pension plan,
defined contribution plan, or other similar benefit plan that provides for
payments or other benefits.
  
 Nonqualified
Defined Contribution And Other Nonqualified Deferred Compensation
Plans
 
 The
Company does not maintain any nonqualified compensation plans.
 
 
 Director
Compensation
  Compensation
for the Board of Directors is governed by the Company’s Compensation and
Governance Committee.  The Company began making cash payments to the
directors as approved by the Compensation and Governance Committee in October
2007.  Directors who are also employees do not receive any additional
compensation for services performed as a member of the Company’s Board of
Directors or any committees thereof.  Non-employee directors receive
an annual cash retainer fee of $12,700, payable in quarterly installments of
$3,175 each.  Non-employee directors each receive meeting fees of
$1,000 for quarterly board meetings and shareholder meetings, if
any.  Committee members receive fees of $1,000 for audit committee
meetings, and $900 for compensation committee meetings. Certain Board positions
receive additional quarterly retainer fees as follows: Compensation Committee
Chairman $1,250, Board Vice Chairman $1,275, Chairman of the Audit Committee
$1,850 and Board Secretary $1,600. From time to time the Company grants stock
warrants to the directors with exercise prices equal to the fair value as of
grant date based on external expert reports and guidance through the
Compensation and Governance Committee recommendations.
  
 Page
53
  Director
Compensation Table
  The
following table sets forth the compensation of the non-employee directors of the
Company during the year ended March 31, 2008.
  Director
                        
                        Fees
      Earned or Paid in Cash
                          ($)(2)
                        
                        
                        Stock
      Awards
                          ($)(1)
                        
                        
                        Warrant
      and Option Awards
                          ($)
      (1)
                        
                        
                        Total
                          ($)Gary
      C. Cannon (2)
                        
                        $
                        12,650
                        
                        
                        
                        —
                        
                        
                        $
                        167,560
                        
                        
                        $
                        180,210Thomas
      Fischer (3)
                        
                        $
                        17,100
                        
                        
                        
                        —
                        
                        
                        $
                        67,961
                        
                        
                        $
                        85,111Adam
      M. Michelin (4)
                        
                        $
                        13,950
                        
                        
                        
                        —
                        
                        
                        $
                        61,142
                        
                        
                        $
                        75,092Stephen
      L. Scott (5)
                        
                        $
                        9,250
                        
                        
                        
                        —
                        
                        
                        $
                        52,672
                        
                        
                        $
                        61,922
 
 (1)
                        Reflects
      the dollar amount recognized for financial reporting purposes for the year
      ended March 31, 2008, in accordance with SFAS 123(R) of warrant and stock
      option awards pursuant to the 2002 Stock Option Plan, and thus includes
      amounts from awards granted in and prior to 2008.  Assumptions
      used in the calculation of these amounts are included in Note 11, Stock
      Options and Warrants.  All stock warrants were granted at the
      closing market price of the Company’s stock on the date of
      grant.
  (2)
                        The
      Company began making cash payments for directors’ services in October
      2007.  Fees Paid in Cash as shown in this schedule represent
      payments for directors’ services for the period of October 1, 2007 through
      March 31, 2008.
  (3)
                        Mr.
      Cannon was paid $6,350 for director fees at the rate of $3,175 per quarter
      for the period October 1, 2007 through March 31, 2008. He was also paid
      $1,900 for two Board of Directors’ Meetings, $1,800 for two Compensation
      and Governance Committee Meetings, and $1,000 for a Special Shareholders’
      Meeting.  For his services as Corporate Secretary, Mr. Cannon
      received $1,600 for the period of January 1, 2008 through March 31,
      2008.   Mr. Cannon serves as General Counsel for the
      Company pursuant to a retainer arrangement.  For the year ended
      March 31, 2008 he was paid a total of $88,248 for retainer
      fees.  Mr. Cannon was granted 30,400 fully vested warrants
      exercisable at $0.75 per share on August 27, 2007, 9,000 fully vested
      warrants exercisable at $1.05 per share n January 25, 2008, 30,400 fully
      vested warrants exercisable at $1.07 per share on February 28, 2008 and
      3,000 fully vested warrants exercisable at $1.08 per share on March 21,
      2008.
   Page
54
  (4)
                        Mr.
      Fischer was paid $6,350 for director fees at the rate of $3,175 per
      quarter, $2,550 for his service as Vice-Chairman at the rate of $1,275 per
      quarter and $2,500 for his service as Chairman of the Compensation and
      Governance Committee at the rate of $1,250 per quarter for the period
      October 1, 2007 through March 31, 2008.  He was also paid $1,900
      for two Board of Directors’ Meetings, $1,800 for two Compensation and
      Governance Committee Meetings, $1,000 for one Audit Committee Meeting and
      $1,000 for a Special Shareholders’ Meeting. Mr. Fischer was granted
      incentive awards of 33,000 fully vested warrants exercisable at $0.75 per
      share on August 27, 2007 and 40,800 fully vested warrants exercisable at
      $1.07 per share on February 28,
2008.
  (5)
                        Mr.
      Michelin was paid $6,350 for director fees at the rate of $3,175 per
      quarter,  and $3,700 for his service as Chairman of the Audit
      Committee at the rate of $1,850 per quarter for the period October 1, 2007
      through March 31, 2008.  He was also paid $1,900 for two Board
      of Directors’ Meetings, $1,000 for one Audit Committee Meeting and $1,000
      for a Special Shareholders’ Meeting.  Mr. Michelin was granted
      incentive awards of 33,800 fully vested warrants exercisable at $0.75 per
      share on August 27, 2007 and 33,800 fully vested warrants exercisable at
      $1.07 per share on February 28,
2008.
  (6)
                        Mr.
      Scott was paid $6,350 for director fees at the rate of $3,175 per quarter
      for the period October 1, 2007 through March 31, 2008.  He was
      also paid $1,900 for two Board of Directors’ Meetings and $1,000 for one
      Audit Committee Meeting. Mr. Scott was granted incentive awards of 29,000
      fully vested warrants exercisable at $0.75 per share on August 27, 2007
      and 29,200 fully vested warrants exercisable at $1.07 per share on
      February 28, 2008.
   Employment
Contracts:
  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 Executive Officer.  Based on the
recommendations of the Compensation Committee, in December 2005, December 2006
and again in November 2007, the Board has approved the extension of Mr. Berry’s
employment contract for additional one-year terms with the same base salary as
that provided for in the last year of the original employment
agreement.  Under the extended terms of his employment agreement, Mr.
Berry’s current annual salary is $192,000 and he is eligible for an annual cash
bonus of up to 40% of his base salary, based on goals and objectives met as
recommended by the Compensation Committee and approved by the full Board of
Directors.  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 which was included in Mr. Berry’s accrued salaries as of March 31, 2006
and converted into a note payable during fiscal 2007.  Mr. Berry’s
bonuses earned for the years ended March 31, 2008 and 2007 based on the terms of
the agreement were approved by the Board for $30,000 each year.
  Page
55
  Bret
Bollinger is subject to an employment agreement which became effective February
1, 2008 pursuant to which he is employed as the Company’s Vice President of
Operations.  Under the terms of his employment agreement, as approved
by the Compensation Committee, Mr. Bollinger’s current annual salary is $130,000
and he is eligible for an annual cash bonus from 30% to 50% of his base salary
based on targeted goals and objectives met, payable in either cash or warrants,
as determined by the Chief Executive Officer and approved by the Board of
Directors. Based on the recommendation of the Compensation Committee and
approval by the Board, Mr. Bollinger was granted incentive awards of 150,000
warrants exercisable at $1.07 per share on February 28, 2008 which vest at a
rate of 50,000 upon grant date, 50,000 on February 28, 2009 and 50,000 on
February 28, 2010.  The exercise price of the warrants is equal to the
fair value of the Company stock as of the grant date. In the event that the
Company terminates Mr. Bollinger’s employment without “cause”, as defined in the
Agreement, then upon such termination, the Company is obligated to pay to Mr.
Bollinger as severance an amount equal to six months of his then current base
salary.
  The
Company has no other employment agreements.
  Potential
Payments On Termination Or Change In Control:
 
 Pursuant
to the terms of Mr. Berry’s employment agreement, in the event that the Company
terminates Mr. Berry’s employment without “cause” or for change of control of
the leadership of the Company, 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 current base
salary, plus any earned incentive bonus.  Pursuant to the terms of Mr.
Bollinger’s employment agreement, in the event that the Company terminates Mr.
Bollinger’s employment without “cause” or for change in control of the
leadership of the Company as defined by the agreement, as defined in the
Agreement, then upon such termination, the Company is obligated to pay to Mr.
Bollinger as severance an amount equal to six months of his current base
salary.  Aside from Mr. Berry’s and Mr. Bollinger’s employment
contracts and one provision in the Company’s 2002 Stock Option Plan discussed in
the next paragraph, the Company does not provide any additional payments to
named executive officers upon their resignation, termination, retirement, or
upon a change of control.
  Page
56
 
 The 2002
Stock Option Plan provides that in the event of a “change of control,” all
options shares will become fully vested and may be immediately exercised by the
person who holds the option.
 
 
 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”).  The Company’s
Compensation and Governance Committee is responsible for making reviewing and
recommending grants of options under this plan which are approved by the Board
of Directors. 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.  In June 2007, 50,000 common stock shares were granted
upon the exercise of stock options issued pursuant to the 2002
Plan.  No other restricted shares have been granted pursuant to the
2002 Plan as of June 27, 2008.
  Page
57
 
 The
following table sets forth certain information as of March 31, 2008 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
                        
                        
                        2,438,613
                        
                        
                        
                        $0.45
                        
                        
                        
                        2,511,387Equity
      compensation plans not approved by stockholders
                        
                        
                        N/A
                        
                        
                        
                        N/A
                        
                        
                        
                        N/A2,438,613
                        
                        
                        
                        $0.45
                        
                        
                        
                        2,511,387
 ITEM
12. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.
 
 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 27, 2008, 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 27,
2008, there were 41,089,703 shares of common stock
outstanding.  Unless otherwise indicated, the address of each
beneficial owner listed below is c/o CryoPort, Inc., 20382 Barents Sea Circle,
Lake Forest, California 92821.
 
 The
following table gives effect to the shares of common stock issuable within 60
days of  March 31, 2008, 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:
  
 Page
58
  Beneficial
      Owner
                          
                          Number
      of Shares
                              Beneficially
      Owned
                          
                          Percentage
      of Shares
                              Beneficially
      OwnedExecutive
      Officers and Directors:Peter
      Berry
                          
                          1,420,370
                          (1)
                          
                          2.1%Dee
      S. Kelly
                          
                          392,252
                          (1)
                          
                          0.6%Kenneth
      G. Carlson
                          
                          287,000
                          (1)
                          
                          0.4%Gary
      C. Cannon
                          
                          227,600
                          (1)
                          
                          0.4%Adam
      M.  Michelin
                          
                          182,600
                          (1)
                          
                          0.3%Thomas
      S. Fischer, PhD
                          
                          176,400
                          (1)
                          
                          0.3%Stephen
      L. Scott
                          
                          128,211
                          (1)
                          
                          0.2%Bret
      Bollinger
                          
                          50,000
                          (1)
                          
                          0.1%All
      directors and named executive officers as a group (8
    persons)
                          
                          2,864,433
                          
                          
                          4.3%Beneficial
      Owner
                          
                          Number
      of Shares
                              Beneficially
      Owned
                          
                          Percentage
      of Shares
                              Beneficially
      Owned*Other
      Stockholders:Enable
      Growth Partners LP
                          
                          7,408,334
                          (1) (2)
                          
                          4.9%BridgePointe
      Master Fund, Ltd.
                          
                          5,215,496
                          (1) (2)
                          
                          4.9%
 
 *
                          The
      number and percentage of shares beneficially owned is determined in
      accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the
      information is not necessarily indicative of beneficial ownership for any
      other purpose. Under such rule, beneficial ownership includes any shares
      as to which the selling stockholder has sole or shared voting power or
      investment power and also any shares, which the selling stockholder has
      the right to acquire within 60 days. Nevertheless, for purposes of this
      table only (other than the column entitled “Percentage Beneficial
      Ownership after Offering”), for each selling stockholder does not give
      effect to the 4.9% limitation on the number of shares that may be held by
      each stockholder as agreed to in the warrant held by each selling
      stockholder which limitation is subject to waiver by the holder upon 61
      days prior written notice to us (subject to a further non-waivable
      limitation of 9.99%).(1)
                          Includes
      shares which individuals shown above have the right to acquire as of March
      31, 2008, or within 60 days thereafter, pursuant to outstanding stock
      options and/or warrants as follows:  Mr. Berry - 1,420,370
      shares; Ms. Kelly -392,252 shares; Mr. Carlson – 287,000 shares; Mr.
      Cannon – 227,600 shares; Mr. Michelin – 182,600 shares; Mr. Fischer –
      176,400 shares;  Mr. Scott – 128,200 shares; Mr. Bollinger –
      50,000 shares; Enable Growth Partners LP – 4,375,001 shares and
      BridgePointe Master Fund, Ltd – 3,151,259
  shares.
  (2)
                          Includes
      shares which individuals shown above have the right to acquire as of March
      31, 2008, or within 60 days thereafter, pursuant to outstanding
      convertible debentures as follows:  Enable Growth Partners LP –
      2,800,000 shares and BridgePointe Master Fund, Ltd – 1,897,758
      shares.
  ITEM
13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE.
 
 In August
2006, Peter Berry, the Company’s Chief Executive Officer, agreed to convert his
deferred salaries to a long-term note payable.  Under the terms of
this note, monthly payments of $3,000 have made to Mr. Berry beginning in
January 2007.  In January 2008, these payments increased to $6,000 and
remain at that amount until the loan is fully paid in December
2010.  During the years ended March 31, 2008 and 2007, note payments
totaling $45,000 and $9,000, respectively had been made to Mr. Berry pursuant to
this note.  Interest of 6% per annum on the outstanding principal
balance of the note began accruing on January 1, 2008 and is paid on a monthly
basis along with the monthly principal payment beginning in January
2008.  As of March 31, 2008 and 2007, the total amount of deferred
salaries under this arrangement is $201,115 and $242,950, respectively and is
recorded as notes payable in the accompanying consolidated balance sheets (see
Note 9).
  Page
59
 
 Since
June 2005, the Company has retained the legal services of Gary C. Cannon,
Attorney at Law, for a monthly retainer fee.  Since that same time,
Mr. Cannon has also served as the Company’s Secretary and a member of the
Company’s Board of Directors.  In December 2007, Mr. Cannon’s monthly
retainer for legal services was increased from $6,500 per month to $9,000 per
month.  The total amount paid to Mr. Cannon for retainer fees and
out-of-pocket expenses for the years ended March 31, 2008 and 2007 were $88,248
and $78,500, respectively.  Additionally, during fiscal 2008 Mr.
Cannon was paid board fees totaling $12,650.  During fiscal year 2008
Mr. Cannon was granted a total of 72,800 warrants with an average exercise price
of $0.93 per share, and 117,792 warrants with an average exercise price of $0.76
during fiscal 2007.  All warrants granted to Mr. Cannon were issued
with an exercise price which equaled the fair value of the Company’s shares on
the grant date.
 
 On
October 13, 2006, various shareholders advanced the Company short term, zero
interest loans ranging from $2,700 to $5,000 each, totaling
$12,700.  In December 2006 and January 2007, these loans were paid in
full and have no outstanding balances as of March 31, 2008.
 
 As of
March 31, 2008 the Company had aggregate principal balances of $1,249,500 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 which commenced April 1, 2006 of $2,500, and which increased 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 $78,243
and $85,595 for the years ended March 31, 2008 and 2007,
respectively.  Accrued interest, which is included in notes payable in
the accompanying balance sheet, related to these notes amounted to $482,584 and
$404,341 as of March 31, 2008 and 2007, respectively.  As of March 31,
2008, the Company had not made the required payments under the related-party
notes which were due on January 1, February 1, and March 1,
2008.  However, pursuant to the note agreements, the Company has a
120-day grace period to pay missed payments before the notes are in
default.  On April 29, 2008, May 30, 2008, and June 27, 2008, the
Company paid the January 1, February 1 and March 1 payments respectively, due on
these related party notes.  Management expects to continue to pay all
payments due prior to the expiration of the 120-day grace periods.  No
new borrowings have been made by the Company from these related parties as of
June 29, 2008.
 
 
 Page
60
 
 ITEM
14.   PRINCIPAL ACCOUNTING FEES AND SERVICES.
 
 The Audit
Committee which is composed of three independent directors and the Company’s
Vice President of Finance, has selected KMJ Corbin & Company LLP as
independent accountants to audit the Company’s books, records, accounts and
financial statements for the fiscal year ended March 31, 2008.  KMJ
Corbin & Company LLP previously audited the Company’s financial statements
during the fiscal year ended March 31, 2007.
 
 Audit,
Audit Related, Tax and Non-Audit Fees:
 
 Aggregate
fees for professional services rendered to the Company by KMJ Corbin &
Company LLP for the years ended March 31, 2008 and 2007 were as
follows:
 
 Services
      Provided
                            
                            2008
                            
                            
                            2007Audit
      Fees
                            
                            $
                            70,360
                            
                            
                            $
                            88,429Audit
      Related Fees
                            
                            
                            15,700
                            
                            
                            
                            -Tax
      Fees
                            
                            
                            8,520
                            
                            
                            
                            6,725All
      Other Fees
                            
                            
                            -
                            
                            
                            
                            -Total
                            
                            $
                            94,580
                            
                            
                            $
                            95,154
 
 Audit
Fees.  The aggregate fees billed for the years ended March 31, 2008
and 2007 were for the audits of the Company’s financial statements and reviews
of the interim financial statements included in the annual and quarterly
reports.
 
 Audit
Related Fees.  Audit related fees for the year ended March 31, 2008
were incurred as a result of the Company’s SB-2 and S-8
filings.  There were no fees billed for the year ended March 31, 2007
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, 2008
and 2007 for professional services related to tax compliance, tax advice and tax
planning.
 
 All Other
Fees.  There were no other fees billed for the years ended March 31,
2008 and 2007 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 KMJ
Corbin & Company LLP and the estimated fees related to these
services.
 Page
61
 
 PART
IV
 
 ITEM
15.      EXHIBITS AND FINANCIAL
STATEMENTS
 
 (a)
                                1.
                                Financial
      StatementsThe
      Consolidated Financial Statements and Report of Independent Registered
      Public Accounting Firm are included in Exhibit 13.1 and are incorporated
      herein by reference pursuant to Item 8 of this Annual Report on Form
      10-K.
 
 Index
      to Financial Statements
 
 Page
      in
                                  Exhibit
      13.1Report
      of Independent Registered Public Accounting Firm
                                F-1Consolidated
      Balance Sheets at March 31, 2008 and 2007
                                F-2Consolidated
      Statements of Operations for each of the twoyears
      in the period ended March 31, 2008
                                F-3Consolidated
      Statements of Changes in Stockholders’Deficit
      for each of the two years in theperiod
      ended March 31, 2008
                                F-4Consolidated
      Statements of Cash Flows for each of the twoyears
      in the period ended March 31, 2008
                                F-6Notes
      to Consolidated Financial Statements
                                F-82.
                                Financial
      Statement SchedulesAll
      financial statement schedules are omitted because they were not required
      or the required information is included in the Consolidated Financial
      Statements and the related Notes thereto located in Exhibit
      13.1.3.
                                Exhibit
      IndexSee
      Exhibit Index on page 64 of this Annual Report on Form
    10-K.(b)
                                ExhibitsSee
      Exhibit Index on page 64 of this Annual Report on Form
10-K(c)
                                Financial
      Statement SchedulesSee
      (a)(2) above.
 
  
 Page
62
  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:
      July 14, 2008
                                  By:/s/ Peter BerryPeter
      BerryPresident
      and Chief Executive OfficerDated:
      July 14, 2008
                                  By:/s/ Dee
      S. KellyDee
      S. KellyVice
      President of Finance
 
 
 
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
duly signed below by the following persons on behalf of the registrant and in
the capacities and dates indicated.
  
 
 Signatures
                                  
                                  Title
                                  
                                  Date/s/ Peter Berry
                                  
                                  President,
      Chief Executive Officer and Director
                                  
                                  July
      14, 2008Peter
      Berry/s/ Thomas Fischer
                                  
                                  Vice
      Chairman of the Boardof
      Directors
                                  
                                  July
      14, 2008Thomas
      Fischer, PhD/s/ Gary C. Cannon
                                  
                                  Secretary
      and Director
                                  
                                  July
      14, 2008Gary
      C. Cannon/s/ Adam M. Michelin
                                  
                                  Director
                                  
                                  July
      14, 2008Adam
      M. Michelin/s/ Stephen L. Scott
                                  
                                  Director
                                  
                                  July
      14, 2008Stephen
      L. Scott
 
  Page
63




Item
15(a)3                                                                Exhibit
Index
  Exhibits
32.1 and 32.2 are furnished herewith and should not be deemed to be “filed under
the Securities Exchange Act of 1934.”
 
 Exhibit
 Number                                                                                                                                 Document
 
 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, 2005.3.4.1
              Amended
      and Restated Articles of Incorporation dated October 19,
    2008.3.5
              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.
   Page
64
  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, 2002.3.15
              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.4.1
              Form
      of Debenture – Original Issue Discount 8% Secured Convertible Debenture
      dated September 28, 2007.4.1.1
              Amendment
      to Convertible Debenture dated February 19, 2008.4.1.2
              Amendment
      to Convertible Debenture dated April 30, 2008.4.1.2.1
              Annex
      to Amendment to Convertible Debenture dated April 30,
  2008.4.2
              Form
      of Common Stock Purchase Warrant dated September 28,
  2007.4.3
              Original
      Issue Discount 8% Secured Convertible Debenture dated May 30,
      2008.4.4
              Common
      Stock Purchase Warrant dated May 30,
2008.
   Page
65
  4.5
              Common
      Stock Purchase Warrant dated May 30, 2008.10.1
              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, 2005.10.18
              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, 2006.10.2
              Letter
      of Intent dated January 3, 2007, by CryoPort, Inc. and Commodity Sourcing
      Group.10.2.1
              Corrected
      Letter of Intent dated January 3, 2007, by CryoPort, Inc. and Commodity
      Sourcing Group.10.3
              Business
      Alliance Agreement dated April 27, 2007, by CryoPort, Inc. and American
      Biologistics Company LLC.10.3.1
              Corrected
      Business Alliance Agreement dated April 27, 2007, by CryoPort, Inc. and
      American Biologistics Company LLC.10.4
              Consultant
      Agreement dated April 18, 2007 between CryoPort, Inc. and Malone and
      Associates, LLC.
   Page
66
  10.5
              Lease
      Agreement dated July 2, 2007 between CryoPort, Inc. and Viking Investors –
      Barents Sea LLC.10.6
              Securities
      Purchase Agreement dated September 27, 2007.10.7
              Registration
      Rights Agreement dated September 27, 2007.10.8
              Security
      Agreement dated September 27, 2007.10.9
              Sitelet
      Agreement between FedEx Corporate Services, Inc. and CryoPort Systems,
      Inc. dated January 23, 2008.10.10
              Securities
      Purchase Agreement dated May 30, 2008.10.11
              Registration
      Rights Agreement dated May 30, 2008.10.12
              Waiver
      dated May 30, 200810.13
              Security
      Agreement dated May 30, 2008.10.14
              Termination
      of Services Letter to First Capital Investors dated August 3,
      2007.*13.1
              Consolidated
      Financial Statements and related Notes thereto.*23.1
              Consent
      of Independent Registered Public Accounting Firm - KMJ Corbin &
      Company LLP.*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
   Page 67
  EXHIBIT
INDEX
 
 Exhibit No.
                Description3.1
                State of Nevada Corporate Charter for G.T. 5-
      Limited,Incorporated by reference to the Company’s Registration
      Statement on Form 10-SB/A4 dated February 23, 2006.3.2
                Articles of Incorporation Of  G.T
      5-Limited,Incorporated by reference to the Company’s Registration
      Statement on Form 10-SB/A4 dated February 23, 2006.3.3
                Amendment to Articles of Incorporation of G T.
      5-Limited issue 100M sharesIncorporated by reference to the
      Company’s Registration Statement on Form 10-SB/A4 dated February 23,
      2006.3.4
                Amendment of Articles of Incorporationof
      G.T.5-Limited name change to CryoPort, Inc, Incorporated by
      reference to the Company’s Registration Statement on Form 10-SB/A4 dated
      February 23, 2006.3.4.1
                Amended and Restated Articles of
      Incorporation, Incorporated by reference to the Company’s Current
      Report on Form 8-K dated October 19, 2007.3.5
                Amended and Restated By-Laws Of CryoPort,
      Inc. Incorporated by reference to the Company’s Registration
      Statement on Form 10-SB/A4 dated February 23, 2006.3.6
                Articles of Incorporation CryoPort Systems, Inc.Incorporated by reference to the Company’s Registration Statement
      on Form 10-SB/A4 dated February 23, 2006.3.7
                By-Laws of CryoPort Systems, Inc.Incorporated by reference to the Company’s Registration Statement
      on Form 10-SB/A4 dated February 23, 2006.3.8
                CryoPort, Inc. Stock Certificate SpecimenIncorporated by reference to the Company’s Registration Statement
      on Form 10-SB/A4 dated February 23, 2006.3.9
                Code of Conduct for CryoPort, Inc.Incorporated by reference to the Company’s Registration Statement
      on Form 10-SB/A4 dated February 23, 2006.3.10
                Code of Ethics for Senior OfficersIncorporated by reference to the Company’s Registration Statement
      on Form 10-SB/A4 dated February 23, 2006.3.11
                Statement of Policy on Insider TradingIncorporated by reference to the Company’s Registration Statement
      on Form 10-SB/A4 dated February 23, 2006.3.12
                CryoPort, Inc. Audit Committee CharterIncorporated by reference to the Company’s Registration Statement
      on Form 10-SB/A4 dated February 23,
2006.
   Page
68
  3.13
                CryoPort Systems, Inc. 2002 Stock Incentive
      Plan Incorporated by reference to the Company’s Registration
      Statement on Form 10-SB/A4 dated February 23, 2006.3.14
                Stock Option Agreement ISO – SpecimenIncorporated by reference to the Company’s Registration Statement
      on Form 10-SB/A4 dated February 23, 2006.3.15
                Stock Option Agreement NSO –SpecimenIncorporated by reference to the Company’s Registration Statement
      on Form 10-SB/A4 dated February 23, 2006.3.16
                Warrant Agreement – SpecimenIncorporated
      by reference to the Company’s Registration Statement on Form 10-SB/A4
      dated February 23, 2006.3.17
                Patents and Trademarks3.17.1
                CryoPort Systems, Inc. Patent #6,467,642On
      File with Company3.17.2
                CryoPort Systems, Inc. Patent #6,119,465On
      File with Company3.17.3
                CryoPort Systems, Inc. Patent #6,539,726On
      File with Company3.17.4
                CryoPort Systems, Inc.
      Trademark  #7,583,478,7On File with
    Company3.17.5
                CryoPort Systems, Inc. Trademark #7,586,797,8On File with Company4.1
                Form of Debenture – Original Issue Discount 8%
      Secured Convertible Debenture dated September 28, 2007.
      Incorporated by reference to the Company’s Registration Statement on Form
      SB-2 dated November 9, 2007.4.1.1
                Amendment to Convertible Debenture dated
      February 19, 2008. Incorporated by reference to the Company’s Current
      Statement on Form 8-K dated March 7, 2008.4.1.2
                Amendment to Convertible Debenture dated
      April 30, 2008. Incorporated by reference to the Company’s Current
      Statement on Form 8-K dated April 30, 2008.4.1.2.1
                Annex to Amendment to Convertible Debenture
      dated April 30, 2008. Incorporated by reference to the Company’s Current
      Statement on Form 8-K dated April 30, 2008.4.2
                Form of Common Stock Purchase Warrant dated
      September 28, 2007. Incorporated by reference to the Company’s
      Registration Statement on Form SB-2 dated November 9,
  2007.4.3
                Original Issue Discount 8% Secured Convertible
      Debenture dated May 30, 2008. Incorporated by reference to the
      Company’s Current Report on Form 8-K dated June 9,
2008.4.4
                Common Stock Purchase Warrant dated May 30,
      2008. Incorporated by reference to the Company’s Current Report on Form
      8-K dated June 9, 20084.5
                Common Stock Purchase Warrant dated May 30,
      2008. Incorporated by reference to the Company’s Current Report on Form
      8-K dated June 9, 200810.1
                Contracts
   Page
69
  10.1.1
                Stock Exchange Agreement associated with the
      merger of G.T.5-Limited and CryoPort Systems, Inc. dated 03/05/01.
      Incorporated by reference to the Company’s Registration Statement on Form
      10-SB/A4 dated February 23, 2006.10.1.2
                Commercial Promissory Notes between CryoPort, Inc.
      and D. PetrecciaIncorporated by reference to the Company’s
      Registration Statement on Form 10-SB/A4 dated February 23,
      2006.10.1.3
                Commercial Promissory Notes between CryoPort, Inc.
      and J. DellIncorporated by reference to the Company’s Registration
      Statement on Form 10-SB/A4 dated February 23, 2006.10.1.4
                Commercial Promissory Notes between CryoPort, Inc.
      and M. GrossmanIncorporated by reference to the Company’s
      Registration Statement on Form 10-SB/A4 dated February 23,
      2006.10.1.5
                Commercial Promissory Notes between CryoPort, Inc.
      and P. Mullens Incorporated by reference to the Company’s
      Registration Statement on Form 10-SB/A4 dated February 23,
      2006.10.1.6
                Commercial Promissory Notes between CryoPort, Inc.
      and R. TakahashiIncorporated by reference to the Company’s
      Registration Statement on Form 10-SB/A4 dated February 23,
      2006.10.1.7
                Lease Agreement between CryoPort Systems, Inc. and
      Brea Hospital Properties, LLC.Incorporated by reference to the
      Company’s Registration Statement on Form 10-SB/A4 dated February 23,
      2006.10.1.8
                Exclusive and Representation Agreement Between
      CryoPort Systems, Inc. and CryoPort Systems Ltda.Incorporated by
      reference to the Company’s Registration Statement on Form 10-SB/A4 dated
      February 23, 2006.10.1.9
                Secured Promissory Note and Loan Agreement between
      Ventana Group, LLC and CryoPort, Inc. dated May 12, 2006Incorporated by reference to the Company’s Registration Statement
      on Form 10-SB/A4 dated February 23, 2006.10.2
                Letter of Intent dated January 3, 2007, by
      CryoPort, Inc. and Commodity Sourcing Group Incorporated by
      reference to the Company’s Current Report on Form 8-K dated April 27,
      2007.10.2.1
                Corrected Letter of Intent dated January 3, 2007,
      by CryoPort, Inc. and Commodity Sourcing Group Incorporated by
      reference to the Company’s Current Report on Form 8-K/A dated May 2,
      2007.10.3
                Business Alliance Agreement dated April 27, 2007,
      by CryoPort, Inc. and American Biologistics Company LLC
      Incorporated by reference to the Company’s Current Report on Form 8-K
      dated April 27, 2007.10.3.1
                Corrected Business Alliance Agreement dated April
      27, 2007, by CryoPort, Inc. and American Biologistics Company LLC
      Incorporated by reference to the Company’s Current Report on Form 8-K/A
      dated May 2, 2007.10.4
                Lease Agreement dated July 2, 2007 between
      CryoPort, Inc. and Viking Investors – Barents Sea LLC. Incorporated
      by reference to the Company’s Quarterly Report on Form 10-QSB for the
      quarter ended September 30, 2007.
   Page
70
  10.5
                Consultant Agreement dated April 18, 2007 between
      CryoPort, Inc. and Malone and Associates, LLC. Incorporated by
      reference to the Company’s Quarterly Report on Form 10-QSB for the quarter
      ended September 30, 2007.10.6
                Securities Purchase Agreement dated
      September 27, 2007. Incorporated by reference to the Company’s
      Registration Statement on Form SB-2 dated November 9,
  2007.10.7
                Registration Rights Agreement dated
      September 27, 2007. Incorporated by reference to the Company’s
      Registration Statement on Form SB-2 dated November 9,
  2007.10.8
                Security Agreement dated September 27,
      2007. Incorporated by reference to the Company’s Registration Statement on
      Form SB-2 dated November 9, 2007.10.9
                Sitelet Agreement between FedEx Corporate
      Services, Inc. and CryoPort Systems, Inc. dated January 23, 2008.
      Incorporated by reference to the Company’s Current Report on Form 8-K
      dated February 1, 2008.10.10
                Securities Purchase Agreement dated May 30,
      2008. Incorporated by reference to the Company’s Current Report on Form
      8-K dated June 9, 2008.10.11
                Registration Rights Agreement dated May 30,
      2008. Incorporated by reference to the Company’s Current Report on Form
      8-K dated June 9, 2008.10.12
                Waiver dated May 30, 2008. Incorporated by
      reference to the Company’s Current Report on Form 8-K dated June 9,
      2008.10.13
                Security Agreement dated May 30, 2008.
      Incorporated by reference to the Company’s Current Report on Form 8-K
      dated June 9, 2008.10.14
                Termination of Services Letter to First Capital
      Investors dated August 3, 2007. Incorporated by reference to the
      Company’s Current Report on Form 8-K dated August 3,
  2008.13.1
                Consolidated Financial Statements and Notes
      thereto for the periods ended March 31, 2008 and 2007. Filed
      Herewith.23.1
                Consent of Independent Registered Public
      Accounting Firm - KMJ Corbin & Company LLP. Filed
      Herewith.31.1
                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
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71