UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C. 20549
                                   FORM 20-F
(Mark One)
[_] REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR (G) OF THE SECURITIES
EXCHANGE ACT OF 1934

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO __________

Commission file number 0-31481
                             ASTRIS ENERGI INC.
             (Exact name of Registrant as specified in its charter)
                                 Not Applicable
                 (Translation of Registrant's Name into English)
                                     ONTARIO
                 (Jurisdiction of incorporation or organization)
                            2175 DUNWIN DRIVE, UNIT 6
                       MISSISSAUGA, ONTARIO L5L 1X2 CANADA
                    (Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.
                                      NONE
Securities registered or to be registered pursuant to Section 12(g) of the Act.
                                  COMMON SHARES
                                (Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act.
                                      NONE
                                (Title of Class)
Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report.
                            13,340,219 COMMON SHARES
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
reporting requirements for the past 90 days.
                         Yes [x]             No [_]

Indicate by check mark which financial statement item the registrant has
elected to follow.
                         Item 17 [X]         Item 18 [_]
(Applicable only to Issuers involved in Bankruptcy proceedings during the past
five years) Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.

                        Yes [_]             No [_]

<PAGE>
                               TABLE OF CONTENTS
                                                                       Page No.
                                                                       --------

Part I.......................................................................2

   Item 1. Identity of Directors, Senior Management and Advisers.............2

   Item 2. Offer Statistics and Expected Timetable...........................2

   Item 3. Key Information...................................................2

   Item 4. Information on the Company.......................................10

   Item 5. Operating and Financial Review and Prospects.....................22

   Item 6. Directors, Senior Management and Employees.......................27

   Item 7. Major Shareholders and Related Party Transactions................32

   Item 8. Financial Information............................................35

   Item 9. The Offer and Listing............................................35

   Item 10. Additional Information..........................................37

   Item 11. Quantitative and Qualitative Disclosures About Market Risk......43

   Item 12. Description of Securities Other than Equity Securities......... 44

Part II.....................................................................44

   Item 13. Defaults, Dividend Arrearages and Delinquencies.................44

   Item 14. Material Modifications to the Rights of Security Holders
            and Use of Proceeds............................................ 44

   Item 15. [Reserved.].....................................................44

   Item 16. [Reserved.].....................................................44

Part III....................................................................44

   Item 17. Financial Statements............................................44

   Item 18. Financial Statements............................................44

   Item 19. Exhibits........................................................44




                                       i


<PAGE>








FORWARD LOOKING STATEMENTS Certain statements in this annual report are based
upon the beliefs of management of Astris Energi Inc., as well as assumptions
made by and information currently available to management, and such statements
may constitute "forward-looking statements" within the meaning of the U. S.
Private Securities Litigation Reform Act of 1995. Investors should note that
many factors, some of which are discussed elsewhere in this Report, could
affect the future operations and the future financial results of the Company
and could cause future operations and future financial results to differ
materially from those expressed in such forward-looking statements.







































                                     Page 1
<PAGE>
PART I.

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.
     Not Applicable.

ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE.
     Not Applicable.

ITEM 3.  KEY INFORMATION.

A.  SELECTED FINANCIAL DATA.

     The following table sets forth, in Canadian dollars, selected historical
information concerning the Company presented in accordance with Canadian GAAP
and is qualified by reference to the consolidated financial statements and
notes thereto. See "Item 18. Financial Statements".

<TABLE>
<CAPTION>
------------------------------------------------------------------------------
              As at         As at         As at         As at         As at
          December 31,  December 31,  December 31,  December 31,  December 31,
              2001          2000          1999          1998          1997
------------------------------------------------------------------------------
<S>          <C>           <C>           <C>           <C>           <C>
                                          RESTATED
Revenue        $26,787       $22,824       $21,919        $6,052        $5,504
------------------------------------------------------------------------------
Net Loss from
Continuing
Operations    (632,073)     (412,228)      (40,666)     (138,650)      (89,568)
------------------------------------------------------------------------------
Net Loss      (593,984)      (35,580)      (40,666)     (138,650)      (89,568)
------------------------------------------------------------------------------
Net Loss per
Share            (.047)        (.003)        (.004)        (.013)        (.011)
------------------------------------------------------------------------------
Total Assets   177,600       281,705       147,662       165,379       136,550
------------------------------------------------------------------------------
Long Term
Obligations    417,287       417,287       452,491       452,491       450,491
------------------------------------------------------------------------------
Capital
Stock        2,059,226     1,435,298     1,086,676     1,086,676     1,086,676
------------------------------------------------------------------------------
Average
Number of
Shares      12,638,160    11,446,010    10,643,556    10,188,556     8,310,000
------------------------------------------------------------------------------
Cash                 -             -             -             -            -
Dividends
------------------------------------------------------------------------------
</TABLE>

                                      Page 2
<PAGE>

     Revenue recognition in the consolidated financial statements is not
consistent with U.S. GAAP. Pursuant to Canadian GAAP, an initial payment of
CDN$25,000 that was received in October 1998 under the terms of a ten-year
license agreement between the Company and Energy Ventures Inc. (Canada) was
recognized over the first year of the agreement's term (October 1998 to
December 1999). Under U.S. GAAP, the initial payment received at the beginning

of a multi-year license, not attributable to any specific provision of goods
and services, must be pro-rated over the life of the license. Thus, under U.S.
GAAP, the initial payment of CDN$25,000 would be recognized differently, with
an allocation of CDN$417 to income in 1998, an allocation of CDN$2,500 each
year from 1999 to 2006, and a recognition of CDN$2,083 in 2007. See Note 2 on
Revenue Recognition in the Consolidated Financial Statements.

EXCHANGE RATES

     The following table sets out the exchange rates for the conversion of
Canadian dollars into United States dollars.  The exchange rates used are the
noon buying rates in New York City for cable transfers in foreign currencies,
as certified for customs purposes by the Federal Reserve Bank of New York.  The
table lists the rate in effect at the end of the following periods, the average
exchange rates (based on the average of the exchange rates on the last day of
each month in such periods), and the range of high and low exchange rates for
such periods.

<TABLE>
<CAPTION>
                             Year ended December 31,
      ----------------------------------------------------------------------
                          2001       2000      1999       1998      1997
      ----------------------------------------------------------------------
      <S>                  <C>        <C>       <C>        <C>       <C>
      End of Period        .63        .67       .68        .68       .72
      ----------------------------------------------------------------------
      Average for Period   .65        .67       .66        .71       .73
      ----------------------------------------------------------------------
      High for Period      .67        .70       .69        .73       .75
      ----------------------------------------------------------------------
      Low for Period       .63        .64       .63        .68       .71
      ----------------------------------------------------------------------
</TABLE>

     The following table sets out the range of high and low exchange rates,
for the conversion of Canadian dollars into United States dollars for each of
the corresponding months during 2001 and 2002.  The exchange rates used are the
noon buying rates in New York City for cable transfers in foreign currencies,
as certified for customs purposes by the Federal Reserve Bank of New York.






                                      Page 3
<PAGE>


<TABLE>
<CAPTION>
                  -------------------------------------------------
                           Month              High         Low
                  -------------------------------------------------
                  <S>                         <C>          <C>
                  December 2001                .63         .64
                  -------------------------------------------------
                  January 2002                 .62         .63
                  -------------------------------------------------
                  February 2002                .62         .63
                  -------------------------------------------------
                  March 2002                   .63         .63
                  -------------------------------------------------
                  April 2002                   .63         .64
                  -------------------------------------------------
                  May 2002                     .64         .65
                  -------------------------------------------------
                  June (through June 7,        .65         .65
                        2002)
                  -------------------------------------------------
</TABLE>

     The exchange rate on December 31, 2001 for the conversion of United States
dollars into Canadian dollars was $1.59 (CDN$1.00 = US$.63). As of June 7,
2002, the noon rate of exchange for the conversion of United States dollars
into Canadian dollars was $1.53 (CDN$1.00 = US$.65).  The exchange rates used
are the noon buying rates in New York City for cable transfers in foreign
currencies, as certified for customs purposes by the Federal Reserve Bank of
New York.

B.  CAPITALIZATION AND INDEBTEDNESS.

     Not Applicable.

C.  REASON FOR THE OFFER AND USE OF PROCEEDS.
     Not Applicable.

D.  RISK FACTORS. An investment in the securities of the Company involves a
high degree of risk. The following risk factors should be considered carefully
in evaluating the Company and its business. If any of the risks described below
occurs, the business, results of operations and financial condition of the
Company could be adversely affected.

     HISTORY OF LOSSES SINCE INCEPTION, EXPECTATION OF LOSSES IN THE IMMEDIATE
FUTURE, AND POSSIBILITY THAT THE COMPANY MAY NEVER ACHIEVE OR SUSTAIN
PROFITABILITY. The Company has incurred net losses each year since inception.
The accumulated deficit of the Company was CDN$2,582,439 as of December 31,
2001. It expects to continue to incur net losses at least through fiscal year
2002, and these losses may be substantial. To implement the current business
strategy, the Company will have to incur a high level of fixed operating
expenses and will continue to incur considerable research and development
expenses and capital expenditures. Accordingly, if additional capital, revenues

                                    Page 4
<PAGE>


and positive cash flows cannot be generated, to which no assurance can be
given, the Company will not achieve profitability. Even if profitability is
achieved, it may not be sustained or increased on a quarterly or annual basis.

     THE REPORT OF THE COMPANY'S INDEPENDENT ACCOUNTANT STATES THAT THE ABILITY
OF THE COMPANY TO CONTINUE AS A GOING CONCERN IS IN SUBSTANTIAL DOUBT. Whether
the Company continues as a going concern is dependent upon the Company's
ability to raise additional capital, the successful commercialization of one or
more of the Company's research projects, and the attainment of profitable
operations. The ability to generate future revenues will depend on a number of
factors, many of which are beyond control of the Company. These factors include
the rate of market acceptance of its fuel cell products, competitive
activities, regulatory developments and general economic trends.

     ABILITY TO OBTAIN ADDITIONAL CAPITAL, THEREBY RESULTING IN CURTAILMENT OR
CESSATION OF OPERATIONS. At December 31, 2001, the Company had a negative
working capital of CDN$111,106. The ability of the Company to realize its
objectives depends in large part upon obtaining additional capital. The Company
has a present need for capital in connection with its fuel cell development
activities and transition to commercial operations. The Company believes that
it will require up to CDN$10 million over the next three to five years to
establish a pilot program facility for the manufacture of an aggregate of 2,000
kilowatts per year of alkaline fuel cells in various sizes. There is no
assurance that any additional financing will be available on commercially
attractive terms, in a timely fashion, in sufficient amounts, not substantially
dilutive to shareholders, or at all. If adequate funds are not available, the
Company would have to scale back its operations, including its product
development, manufacturing and marketing activities, all of which could lead
ultimately to cessation of operations.

     LACK OF EXPERIENCE IN MANUFACTURING AND MARKETING PRODUCTS. To date, the
Company has derived revenues principally from sales of prototypes or small
ancillary products, contract research and government grants. Sales have been
limited to demonstration and prototype models. The Company's prototypes are
pre-commercial production products assembled on a one-off basis, by hand. The
Company is not yet adequately financed to produce commercial products. The
Company has not produced any prototypes on an automated basis and has not
designed an automated assembly facility. In addition, the Company still has not
been able to determine whether or not its prototypes can be assembled through
automation or if there is a sufficient level of product acceptance for the
Company to sell fuel cells in sufficient volume to become profitable.
The Company does not have the manufacturing experience to handle large
commercial requirements. It would have to rely on third-party manufacturers
until it can develop its own capacity. The Company may not be able to produce
or commercialize any of its products in a cost-effective manner and it may not
be able to successfully market these products. Production costs of the initial
commercial units may be higher than their sales price.  There can be no
assurance that higher production levels will occur or that sales prices will
ever exceed production costs.

     MARKET ACCEPTANCE OF THE FUEL CELL PRODUCTS MAY TAKE LONGER TO ACHIEVE OR
MAY NEVER BE ACHIEVED. The Company's alkaline fuel cell products represent a
new technology and any success will depend on this technology achieving market

                                      Page 5
<PAGE>

acceptance. Because the Company's products are designed to capitalize on
markets that presently utilize or are serviced by products from traditional and
well-established power generation sources, such as engine-generators, the

Company may face significant resistance from end-users to adopt a new and
alternative power source technology. Fuel cell products for portable and mobile
applications represent an emerging market. The Company does not know whether
its targeted customers will purchase such products.

     ABILITY TO MEET PROJECTED DEMAND FOR THE COMPANY'S PRODUCTS. Locating and
establishing new manufacturing facilities, if required, will place significant
demands on the Company's managerial, technical, financial and other resources.
The Company's business plan contemplates significant growth in sales and
personnel which may place a strain upon its current management systems and
resources, as well as its ability to obtain capital. As of June 2002, the
Company had fewer than 16 employees. The Company's business plan and
anticipated product sales will require the Company to hire, train and manage
additional employees and to establish or contract for production capacity. If
the Company is unable to hire the skilled employees it needs or to establish
its production capacity in a timely manner, it might be unable to fulfill
orders for its products or meet its business plans. There can be no assurance
that the Company will be able to effectively manage its anticipated growth.

     ABILITY TO COMPETE SUCCESSFULLY IN A HIGHLY COMPETITIVE MARKET. The
development and marketing of fuel cells and fuel cell systems is extremely
competitive. A number of firms throughout the world have established fuel cell
development programs. The Company competes directly with alternative energy and
entrenched power-generation and power-storage technologies. Competitors range
from development stage companies to major domestic and international companies.
Other companies may succeed in developing and bringing to market products or
technologies that are more cost-effective than those being developed by the
Company, or that would render its products and technology obsolete or non-
competitive in the marketplace. The Company's competitors have greater name
recognition, larger customer bases and significantly greater financial,
technical, marketing, public relations, sales, distribution and other resources
than the Company. There can be no assurance that the Company will be able to
compete effectively with such companies. In addition, the Company expects that
additional competition will develop, from both existing businesses in the
energy industry and from new entrants.

     DEPENDENCE ON THIRD-PARTY MANUFACTURERS. Until the Company has adequate
capital resources and sufficient demand for its products, the Company will
depend on third parties for the manufacture of its products and for parts
necessary to manufacture its products. If manufacturers or suppliers are unable
or unwilling to manufacture or provide the materials and components to
manufacture the Company's products on commercially reasonable terms, or at all,
delays in identifying and contracting for alternative manufacturing and supply
sources could adversely affect the ability to market the products.

     POSSIBLE FAILURE OF FIELD TESTS. The Company's golf car project was
completed in March 2001. The Company has demonstrated the golf car at a golf
club near Toronto, Ontario, and at a major conference on clean transportation
and alternative fuels held at the state capitol in St. Paul, Minnesota. The

                                       Page 6
<PAGE>
Company currently continues to field test the golf car product and plans to
conduct additional field tests in the future. Problems and delays could be
encountered during these field tests for a number of reasons, including the
failure of the Company's technology or the technology of third parties, as well
as the failure to maintain and service the prototypes properly. Any problem or
perceived problem with the field tests could materially harm the future
reputation and impair market acceptance of the Company's products, and thereby
reduce demand for those products.

     THE COMPANY MAY BE FOUND LIABLE TO PAY A LARGE AMOUNT TO A FORMER
DIRECTOR. The Company is currently a defendant in a litigation with a former
director who is seeking in excess of CDN$1,942,301. While the Company is
vigorously defending such action, there can be no assurance that the Company
will be found not liable for such damages. If found liable, there is no
assurance that the Company could pay such an award.

     POSSIBLE LIABILITY FOR INFRINGING THE INTELLECTUAL PROPERTY RIGHTS OF
OTHERS AND DIFFICULTIES IN PROTECTING THE COMPANY'S INTELLECTUAL PROPERTY.
Despite the Company's efforts to protect its proprietary rights, unauthorized
parties may attempt to copy aspects of the Company's products and product
designs, or to obtain and use information that the Company regards as
proprietary. If required, policing unauthorized use of the Company's
proprietary technology, may be difficult, time-consuming and costly. In
addition, the laws of certain countries in which the Company's products may be
sold or licensed do not protect its products and related intellectual property
rights to the same extent as the laws of Canada or the United States. The
Company does not believe that any of its products infringe the proprietary
rights of any third parties.
From time to time, however, third parties may contest the Company's rights to
use its intellectual property. Any such claims, with or without merit, could be
time-consuming, result in costly litigation, cause product shipment delays or
require the Company to enter into royalty or licensing agreements. Such royalty
or licensing agreements, if required, may not be available on terms acceptable
to the Company.

     NEED FOR COMPATIBILITY WITH THE PRODUCTS OF THIRD-PARTY MANUFACTURERS OR
POTENTIAL CUSTOMERS. The Company's success will depend in large part upon its
ability to make its products compatible with the products of third-party
manufacturers. The Company's products will be successful only if manufacturers
redesign or modify their existing products to fully incorporate the Company's
products and technologies. The Company's failure to make its products and
technologies compatible with the products of third-party manufacturers, or the
failure of potential customers to redesign or make necessary modifications to
their existing products to accommodate the Company's products would
significantly impair or preclude its ability to sell its products.

     ACCIDENTS INVOLVING THE FLAMMABLE FUELS USED WITH THE PRODUCTS COULD
IMPAIR THEIR MARKET ACCEPTANCE. The fuel cell products use hydrogen, which
typically is generated from gaseous and liquid fuels such as propane, natural
gas or methanol, in a process known as reforming. While the Company's fuel cell
products do not use these fuels in a combustion process, natural gas, propane
and hydrogen are flammable fuels that could leak into a residence or commercial
location and combust, if ignited by another source. Since the Company's
products have not yet gained widespread market acceptance, any accidents

                                        Page 7
<PAGE>
involving the Company's systems, or other fuel cell-based products, could
materially impede demand for the products. At present, the Company does not
carry insurance to cover such accidents.

     THE COMPANY'S PRODUCTS MAY FROM TIME TO TIME CONTAIN DESIGN DEFECTS THAT
ARE DIFFICULT TO DETECT AND CORRECT. Although the Company does not know of any
existing design defects, there can be no assurance that defects or flaws will
not be found in new products after commencement of commercial shipments or, if
discovered, that the Company will be able to successfully correct such defects
or flaws in a timely manner or at all. The occurrence of defects or flaws in
the Company's products could result in loss of, or delay in, market acceptance
of the Company's products.  Correcting such defects or flaws could require
significant expenditures by the Company. In addition, the failure of the
Company's products to perform to customer expectations could give rise to
warranty claims.

     DEPENDENCE ON ATTRACTING AND RETAINING KEY PERSONNEL. The success of the
Company is largely dependent on the performance of its key employees,
particularly Jiri K. Nor. Mr. Nor started Astris in 1983 and is the principal
developer of Astris' alkaline fuel cell technology. Additionally, the Company
is dependent on a small number of employees who have been with Astris for
numerous years and who actually construct Astris' technological components and
are familiar with its proprietary designs. Loss of the services of Mr. Nor or
the failure to attract and retain additional key employees with necessary
skills could have a material adverse impact upon the Company's growth and
profitability. Competition for highly skilled management, technical, research
and development and other employees is intense and the Company may not be able
to currently maintain key person life insurance policies on any of its
employees.

     RISKS INHERENT IN INTERNATIONAL OPERATIONS INCLUDING CURRENCY EXCHANGE
RATE FLUCTUATIONS AND TARIFF REGULATIONS. A substantial portion of the
Company's revenues is expected to be realized in currencies other than Canadian
dollars. The Company's operating expenses are primarily paid in Canadian
dollars. Fluctuations in the exchange rate between the Canadian dollar and such
other currencies may have a material effect on the Company's results of
operations. In particular, the Company may be adversely affected by a
significant strengthening of the Canadian dollar against the U.S. dollar and
the Czech Republic koruna. In addition, the Company does not intend to enter
into any hedging or other similar agreements or arrangements to protect it
against any of these currency risks. The Company may also be subject to tariff
regulations and requirements for export licenses, particularly with respect to
certain technologies, unexpected changes in regulatory requirements, longer
accounts receivable requirements and collections, difficulties in managing
international operations, potentially adverse tax consequences, restrictions on
repatriation of earnings and the burdens of complying with a wide variety of
foreign laws.

     POSSIBLE DIFFICULTIES BY UNITED STATES PERSONS TO EFFECT SERVICE OF
PROCESS WITHIN THE UNITED STATES UPON THE COMPANY OR ITS DIRECTORS OF OFFICERS,
OR TO REALIZE IN THE UNITED STATES UPON JUDGMENTS. The Company is an Ontario
corporation with its principal place of business in Canada. All of its
Directors and Officers are residents of Canada and all of the assets of such
persons and of the Company are located outside the United States. US Persons

                                      Page 8
<PAGE>
should not assume that Canadian courts (i) would enforce judgments of United
States courts obtained in actions against the Company or its Officers and
Directors predicated upon the civil liability provisions of the United States
federal securities laws or the securities or "blue sky" laws of any state
within the United States or (ii) would enforce, in original actions,
liabilities against the Company or its Officers and Directors predicated upon
the United States federal securities laws or any such state securities or blue
sky laws.

     THE COMPANY HAS NEVER PAID DIVIDENDS AND IT DOES NOT ANTICIPATE PAYING
DIVIDENDS IN THE FUTURE. The Company has never declared any cash dividends on
its Common Shares, and if the Company were to become profitable, it would be
expected that all of such earnings would be retained to support the business.
As a result, shareholders must rely on stock appreciation for any return on
their investment in the Common Shares.

     VOLATILE AND LIMITED MARKET FOR THE COMPANY'S COMMON SHARES. The Company's
Common Shares are not actively traded. The bid and asked prices for the Common
Shares in the pink sheets has fluctuated significantly.  The Company's Common
Shares began trading on the O.T.C. On June 20, 2001.  The Common Shares traded
in 2001 from a high of US$.75 to a low of US$0.15 per share. The Common Shares
are not presently publicly traded in Canada. Even with the commencement of
trading, there can be no assurance given that such activity will increase
investor recognition.

     APPLICATION OF THE SEC PENNY STOCK REGULATIONS AND RESTRICTIONS. The
Securities and Exchange Commission has adopted regulations which generally
define Penny Stocks to be an equity security that has a market price less than
$5.00 per share or an exercise price of less than US$5.00 per share.  This is
subject to certain exemptions based upon minimum assets or revenues. As of June
7, 2002, the closing bid and asked prices for the Common Shares were US$.16 and
US$.18 per share. As a Penny Stock, the Company's Common Shares may become
subject to Rule 15g-9 under the Securities Exchange Act of 1934, as amended, or
the Penny Stock Rule. This Rule imposes additional sales practice requirements
on broker-dealers that sell such securities to persons other than established
customers and "accredited investors" (generally defined as individuals with a
net worth in excess of US$1,000,000 or annual incomes exceeding US$200,000, or
combined annual income with spouse of US$300,000).  For transactions covered by
Rule 15g-9, a broker-dealer must make a special suitability determination for
the purchaser and have received the purchaser's written consent to the
transaction prior to sale. As a result, this Rule may affect the ability of
broker-dealers to sell the Company's securities and may affect the ability of
purchasers to sell any of the Company's securities in the secondary market.

     For any transaction involving a Penny Stock, unless exempt, the Rule
requires that prior to any transaction in a Penny Stock, a disclosure schedule
prepared by the SEC relating to the Penny Stock market is delivered.
Disclosures about sales commissions payable to both the broker-dealer and the
registered representative and about current quotations for the securities are
also required. Finally, monthly statements are required to be sent disclosing
recent price information for the Penny Stock held in the account and
information on the limited market in penny stock.



                                      Page 9
<PAGE>
ITEM 4. INFORMATION ON THE COMPANY.

A. HISTORY AND DEVELOPMENT OF THE COMPANY.

     Astris Energi Inc. ("AEI" or the "Company") was incorporated as Kayty
Exploration Ltd. on March 18, 1981, pursuant to the Companies Act of the
Province of Alberta, Canada to engage in oil and gas exploration activities.
The Company subsequently changed its name to Kayty Inc. in August 1987, changed
the place of incorporation to the Province of Ontario, Canada, and effected a


one-for-ten reverse split of its Common Shares. In December 1994, the Company
changed its name to WLD Inc. ("WLD") and effected a one-for-three reverse split
of its Common Shares, reducing the outstanding Common Shares to 5,000,000
shares. By 1995, WLD had ceased exploration activities and sought other
business activities. In December 1995, the Company acquired Astris Inc. in
exchange for 1,500,000 Common Shares and warrants for the purchase of 3,500,000
Common Shares, which warrants were subsequently exercised in 1997 at an
exercise price of CDN$0.05 per warrant.  Additionally in December 1995 the
Company changed its name to Astris Energi Inc. The purpose of the acquisition
was for the Company to obtain a potentially promising business activity, and
Astris Inc. was seeking to be part of a public company to facilitate raising
working capital to further the development of its fuel cell research.  AEI
began trading on the OTC.BB pink sheets under the trading symbol ASRNF on June
20, 2001.

     The Company's principal business office is located at 2175 Dunwin Drive,
Unit 6, Mississauga, Ontario, Canada L5L 1X2 and its telephone number is (905)
608-2000. The Company's e-mail address is mail@astrisfuelcell.com. The Company
maintains a website at astrisfuelcell.com. The Company is not incorporating, by
reference in this Form 20-F, the information on its website.

B. BUSINESS OVERVIEW.

THE COMPANY'S PURPOSE

     The Company's mission is to develop affordable fuel cells, fuel cell power
generators, and related small products for industrial, commercial, educational,
scientific, transportation and similar applications. The Company intends to
penetrate existing portable and other small generator markets with quiet,
odorless, non-polluting and highly efficient fuel cell generators, which can
compete both technically and economically with traditional energy sources.

DESCRIPTION OF THE COMPANY'S BUSINESS ACTIVITIES

     Since 1995, the Company has been engaged in the design, production and
commercialization of alkaline fuel cell systems for industrial, commercial and
retail markets. Specifically, the Company's main focus has been to develop and
market a one kilowatt alkaline fuel cell ("AFC") system which could be used to
power golf cars, in-plant material movers and similar small vehicles. In March
2001, the Company completed an operating golf car powered by an AFC fuel cell
system. The Company successfully demonstrated this AFC system powered golf car
at a golf club located near Toronto, Canada and at a major conference on clean
transportation and alternative fuels held at the state capitol in St. Paul,

                                     Page 10
<PAGE>
Minnesota. The Company plans to continue demonstrating and testing its AFC
system powered golf car project. The Company is currently seeking financing to
expand this golf car program.

     In addition, assuming success with the one to four kilowatt fuel cell
project, in the future the Company will also seek to develop and market AFC
systems up to ten or more kilowatts for other uses, such as powering small
vehicles, power supplies in individual homes and emergency, uninterruptible
power supplies for hospital emergency rooms and computers.

DESCRIPTION OF FUEL CELLS

     -- GENERAL

     Fuel cells are electrochemical devices, similar in certain respects to
batteries, that supply electricity for a wide variety of `off-grid'
requirements, presently served by gasoline and diesel generators. Fuel cells
generate electricity efficiently and cleanly from the electrochemical reaction
of hydrogen and oxygen. Hydrogen is typically derived from conventional fuels
such as natural gas or propane, while oxygen is drawn from the air. Fuel cells
enable chemical energy of fuels to be converted directly into electricity,
thereby avoiding the fundamental loss of efficiency and emission of pollutants
associated with the combustion process. In many instances where a generator or
gasoline powered engine is used today, a fuel cell is a potential substitute.
Applications are both mobile and stationary, for all kinds of vehicles and for
homes, commercial buildings, remote sites and for other situations requiring
electricity that are not connected to distributed power supplies. The Company
intends to focus its efforts initially on developing fuel cells capable of
producing one to four kilowatts.

     Fuels cells can be environmentally cleaner and more cost-effective than
power generation sources using fossil fuels. Fuel cells, which produce little
sound and only water as a waste product, offer great advantages over gasoline
generators, as such generators are often responsible for producing large
amounts of air and noise pollution. In addition, fuel cells are nominally at
least two times more energy efficient than current gasoline generators.

     There are currently five basic types of fuel cell technologies: Alkaline
("AFCs"), Proton Exchange Membrane ("PEMs"), Phosporic Acid ("PAFCs"), Molten
Carbonate ("MCFCs"), and Solid Oxide ("SOFCs"). In addition to AFCs, the other
fuel cell systems (PEMs, PAFCs, MCFCs and SOFCs) are generally all considered
to have viable commercial applications. However, these fuel cells differ in
cell materials and operating temperature. PAFCs, MCFCs and SOFCs operate at
high temperatures and are used primarily to produce megawatts of power for
utility-type power generation or co-generation. These three types are not
considered competitors of the two smaller fuel cell types, namely AFCs and
PEMs. The Company believes that AFCs and PEMs are the only fuel cells that are
presently of competitive relevance for relatively small power, stationary and
portable applications.  This belief is based on the fact that AFCs and PEMs
operate at ambient temperatures (0 to 100 degrees Celsius) and deliver
kilowatts which are more suited to meet the needs of small, off-grid
applications. The Company only deals with AFCs.



                                      Page 11
<PAGE>
     While both AFCs and PEM fuel cells have potential environmental and
efficiency advantages over traditional power sources, the Company believes that
AFCs can be manufactured less expensively, operated more efficiently and are
more practical in small-scale applications. See "Competition".

     It should be noted that fuel cells are still a young technology and many
technical and engineering challenges remain. In the past, attempts to build
fuel cells that could produce electricity continued to fail because of a lack
of understanding of electrode kinetics and the materials used. As a result,

technologies that were better understood and that produced larger quantities of
power, such as the internal combustion engine, gained greater public
acceptance. This public perception and the lack of a proven record of
accomplishment for fuel cells, further hampered their development by limiting
investment funds for fuel cell research.

     Perhaps the biggest problem with fuel cell production today is that fuel
cells are still very expensive to produce. One key reason for the high cost of
manufacturing fuel cells is that the low volume of production does not allow
for economies of scale. The Company believes that fuel cells utilizing its
recent technology can be constructed for approximately CDN$700 per kilowatt,
with the per kilowatt cost reduced to approximately CDN$350 per kilowatt upon
increasing the quantity of production. A cost of CDN$350 per kilowatt is
competitive with the cost of devices in the energy field as a whole, but is
more than the cost of producing kilowatts for automobile use, i.e. the internal
combustion engine (CDN$50 per kilowatt). As demand for fuel cells increases and
research and development continues the cost of manufacturing should be reduced
to make alkaline fuel cells more competitive with traditional energy sources.

     In addition, while fuel cells can produce energy more efficiently and are
environmentally cleaner than traditional sources of power, other energy sources
are more entrenched in the world economy. For instance, all golf cars currently
being manufactured are designed to be powered from batteries or internal
combustion engines. In order for fuel cells to be used in such products,
manufacturers must adjust their current designs to allow them to be capable of
being powered by fuel cells.

     However, due to new government pollution regulations, increased energy
costs and a growing demand for "off-grid" power supplies, demand for fuel cells
is increasing. The Company believes that this demand will increase as fuel
cells become better known to the public and more cost competitive with other
energy sources.

     -- ALKALINE FUEL CELLS

     An AFC system is an assembly comprised of fuel cell "stack(s)", which
generate electricity, together with ancillary components.  In an integrated
assembly, these "stack(s)" constitute a complete, operating fuel cell system.

     The Company believes that all principal material developmental issues in
alkaline fuel cell technology have been resolved by both the Company and the
industry at large. However, the Company believes that continued research and
development will improve alkaline fuel cell catalysts and electrode materials.
This should improve the cost/performance ratio of alkaline fuel cells to more
traditional energy sources.
                                       Page 12
<PAGE>

     The ancillary components to the AFC system supply, filter and re-circulate
hydrogen, air and liquid electrolyte to the stack(s), deliver electricity to
the end-use application, remove the aqueous by-product of the fuel cell
operation, and electrically and electronically control, coordinate and
integrate all the functions of the system into a single operating whole.

THE COMPANY'S PRODUCTS

     The Company presently offers commercial products ranging from
demonstration and educational fuel cells and accessories, to scientific
products such as electrochemical test cells, to associated electronic and
computer based test equipment, which is useful in research and development and
the testing of electrodes, fuel cells and batteries, and sub-kilowatt fuel
cells and stacks. For a description of these products, see "Small Fuel Cells
and Related Products" below.

     The Company's principal fuel cell product is a prototype system supplied
in sizes up to four kilowatts of electrical output. These prototypes are
pre-commercial products provided on a one-off basis to individual customers and
assembled by hand to the specification of the customer. Prototypes are in
contrast to "pilot production" systems, which are systems manufactured in a
pilot production facility not on a full commercial basis, and to commercial
systems, which are manufactured by volume production methods.

     The Company's systems of one-kilowatt output capacity have been sold in
Canada and in the Czech Republic for test purposes. The largest fuel cell
system sold by the Company was a four kilowatt unit that was purchased by the
Technical University of Mines, Ostrava, Czech Republic, to conduct research on
the viability of fuel cells to supply electricity in private homes. In August
2000, Astris s.r.o., a subsidiary of the Company, delivered a portable fuel
cell generator to the Czech Ministry of National Defense for testing purposes.

     The Company's primary current project is the development and construction
of a one kilowatt AFC system to power a golf car. The Company believes that
this project is the first stage toward the commercialization of its AFC
technology for larger systems, capable of powering forklifts, yachts and motor
homes. This project was budgeted to cost approximately US$250,000 and was
completed in March 2001. See "Description of the Company's Business Activities"
above.

     The Company is primarily targeting markets in North America and Europe for
the sale of small stationary and mobile applications including light vehicles
and emergency power supplies.

     The Company is also developing a new, larger proprietary electrode that
could be used for fuel cell systems larger than five kilowatts, and up to 10
kilowatts or more for use in small vehicles such as forklifts. The Company
anticipates that such a fuel cell will be ready for commercial application
within the next one to five years.

     The Company has also completed the initial research in the development of
an advanced fuel cell stack design for systems of up to 25 kilowatts or larger
for use in commercial buildings and automobiles. Such fuel cells will be

                                    Page 13
<PAGE>
developed initially as prototypes and will later be developed as commercial
products.

     The Company does not presently have any development, manufacturing, joint
development or marketing agreements in place for the development, construction
and sale of its fuel cells.

     In addition to the Company's fuel cell systems, the Company has several
small fuel cells and products for sale through its website.

RESEARCH AND DEVELOPMENT

     AEI has been involved in fuel cell research since its formation in 1983.
More than CDN$14 million has been expended on research activities, which
includes approximately CDN$6 million expended by the Institute of Hydrogen
Studies at the University of Toronto, whose rights AEI acquired in 1986.  AEI
had entered into the 1995 acquisition with WLD to be in a better position to
raise capital for additional research and development. As sufficient financing
was not obtained as part of the AEI acquisition, the research and development
activities in Canada were curtailed. Because labor costs are significantly
lower in the Czech Republic than Canada and the capital needs of Astris s.r.o.
for research and development activities are less than what would have been
required in Canada, the Company's research and development has primarily been
carried out in the Czech Republic, through the Company's 30%-owned subsidiary,
Astris s.r.o.  In January 1995, pursuant to a License Agreement, AI granted a
non-exclusive license to Astris s.r.o. for the production and sale of products
embodying or utilizing AI's fuel cell technology. The royalty fee is two
percent (2%) of the net sale price of licensed products sold by Astris s.r.o.
to third parties. Astris s.r.o. is obligated to grant the Company a free
worldwide irrevocable license on improvements of, and additions to, the
technology made by Astris s.r.o., and also to assign any patent rights thereto
to the Company. The License Agreement is to remain in effect until the
expiration of all Company patents related to the technology, subject to earlier
termination upon certain events.

     Astris s.r.o. has been engaged in fuel cell research and development since
1992. Its current research and development efforts are primarily focused on
electrode technology to improve the electrochemical efficiency, durability and
economy of alkaline fuel cells.  These research and development efforts have
also been focused on reduction of production costs, improving product quality
and consistency, and on identifying new features and innovations for future
product development. Expenditures on research and development at Astris s.r.o.
were approximately US$81,000 for 1998 and 1999. For the year ended December 31,
2001, the Company expended approximately CDN$500,000 on research and
development. The research and development budget for 2002 is contingent upon
the Company's ability to raise capital.

     ASTRIS s.r.o. has been awarded a 5 million Kc (Czech crown) grant from the
government of the Czech Republic.  Award of this grant will fund a cooperative
effort, launched in November 2001, between ASTRIS s.r.o. and the renowned
Academy of Science in the Czech Republic to enhance the advantages already
evident in alkaline fuel cell technology. Astris will also contribute to the
program.


                                      Page 14
<PAGE>


     The ASTRIS s.r.o. project especially targets development of a portable
alkaline fuel cell with 2.4 kilowatts power rating. In the 18-month project,
the government contribution will be 2.925 million Kc in the calendar year 2002,
with the remainder of the 5 million kilowatts funded in calendar 2003. Together
with the contribution of Astris Energi Inc, the total equals US$310,000. ASTRIS
will work closely with the Academy's Institute of Macromolecular Chemistry,
which is recognized worldwide for its work in polymers and related areas.  The
focus of the new development will be the third generation Astris alkaline fuel
cell stack MC250, which will become a key building block in fuel cell systems
up to 10 kilowatts in size.

     In October 1998, the Company entered into a License Agreement and an
Equipment Lease with Energy Ventures Inc. (Canada), a subsidiary of Energy
Ventures Inc., a Delaware corporation ("EVI"). EVI is a portable power
technology developer and integrator with activities in fuel cell and
rechargeable battery technology. Pursuant to the License Agreement, the Company
granted to EVI a nonexclusive worldwide license to use the Company's technology
relating to alkaline fuel cells in manufacturing, research and development,
marketing and commercial production.  The License called for an initial royalty
of CDN$25,000, and a percentage of gross sales of EVI products containing the
Company's technology.  The royalty rate is set at two and one half percent
(2.5%) for the first four years and two percent (2%) during the next six years,
with a CDN$10,000 a year minimum royalty, which commenced in 2001.

     In February 2001, EVI reported in its Form 10-KSB for September 30, 2000
that it expected to devote minimal resources to the development of the
Company's AFC technology in the near future.  Their company would instead
concentrate on the development of its Direct Methanol Fuel Cell technology, as
it believes that such technology offered EVI the best market entry prospect.
EVI did not pay the CDN$10,000 minimum royalty due March 31, 2001. The Company
and EVI have tentatively agreed to negotiate a settlement with respect to the
non-payment by EVI of the minimum annual royalty in early July 2001.  Board
representatives for AEI met with board representatives of EVI.  Discussion
centered on the current agreement between the two corporations and a future
possible share exchange by each company.  Another meeting with the management
of EVI was held in October 2001.  At that time, the Company discovered that EVI
changed its name to Energy Visions, Inc.  Management of Energy Visions, Inc.
acknowledges the outstanding indebtedness to AEI.  The Company is awaiting
further motions for settlement from Energy Visions, Inc.

     The Company also leased certain machinery, equipment and other property
relating to a laboratory operated by the Company to EVI for a period of ten
years at an annual rental of US$45,000. The lease also granted EVI an option to
purchase all the leased assets for CDN$1 after ten years. In 1998, EVI
purchased the leased assets by issuing 200,000 shares of its Common Stock to
the Company valued at $2.25 per share. The EVI Common Stock trades on the
O.T.C. Bulletin Board under the ticker symbol EGYV.OB. The Company sold more
than 83,900 of the 200,000 shares of EVI Common Stock in the spring of 2000 and
received net proceeds of US$257,337. The Company used the net proceeds to
complete the development of the golf car program. During the remainder of the
year 2000, the Company sold another 11,200 shares of EVI for proceeds of US
$29,286.  In the first quarter of year 2001, the Company sold the remaining

                                     Page 15
<PAGE>
102,900 shares of EVI Common Stock for net proceeds of US$63,957. As part of
the EVI Agreements, at the request of EVI, the Company granted to EVI options
to purchase the Company's Common Shares, to give EVI the opportunity to benefit
from the possible future success of the Company, in addition to receiving
marketing revenues. See "Compensation" below.

     The Income Tax Act of Canada contains various tax incentives for taxpayers
performing scientific research and experimental development ("SR&ED") in
Canada. Specifically, Canadian law permits public companies to receive tax
credits up to thirty five percent (35%) of amounts spent on salaries and
materials of a current and of a capital nature carried on in Canada.

     Upon filing a claim for SR&ED on Form T661 and acceptance thereof,
Canadian-controlled private corporations would receive the refundable amount in
the form of a cash reimbursement. Other Canadian companies (i.e. public
companies) are not granted a cash refund, but rather are entitled to a tax
credit equal to the non-refundable amount.

     For tax year 1995, when the Company was a Canadian-controlled private
corporation named Astris Inc., it submitted a request on Form T661 to the
Canada Custom and Revenue Agency (the "CRA") for a refund of CDN$157,720,
representing a portion of the research and development expenses for that year.
The CRA initially awarded the Company CDN$39,421. The Company successfully
challenged that determination. This matter has been resolved, and the Company
received a refund check in the amount of CDN$61,700 on October 26, 2001.  The
Company has additionally applied to the provincial authorities for a tax refund
of approximately CDN$10,000 for the same period.

    Since "going public" in Canada in December 1995, the Company's research and
development activities have been performed primarily outside of Canada. Due to
the limited nature of research and development activities undertaken by the
Company in Canada and the Company's limited financial condition, it has not
submitted a request for any SR&ED related tax credits since 1995. In the
future, when the Company's financial condition improves and it incurs expenses
coming within SR&ED, the Company would seek to apply for such tax credits,
subject to review and approval by the Canadian tax authorities.

     On August 23, 2001, AEI signed a Letter of Intent with ACE Golf Cars, a
division of ACE Concept, Inc. of Indian Wells, CA, covering the establishment
of a joint venture to develop and market fuel cell power systems for golf cars
and a variety of other small vehicles.  Under terms of the Letter of Intent,
ACE proposes to finance the 50-50 venture with an initial investment of $1.5
million and to be responsible for marketing and sales direct to the industry.
ACE continues to pursue financing for the project.  The Company is actively
pursuing other joint venture partners in the afore-mentioned fields for
development of similar small applications for AEI fuel cell units.

     The Company's projected research and development budget for 2002 is US$1
million subject to financing. Such amount will be used to commence development
and production of a 2 kilowatt bipolar fuel cell power module. If less than
US$1 million is obtained from financing, the Company will reduce its research
and development budget and the development and production of the bipolar fuel
cell power module will continue, albeit at a slower pace. If no adequate

                                     Page 16
<PAGE>

funding is secured, the research and development of the Company's fuel cell
products will have to be deferred until such financing is in place.

     The Company has leased premises in Mississauga, Ontario, which will
be used to facilitate implementation of the fuel cell powered golf car project.
The Company is undertaking the purchase of the equipment needed at these
premises. Assuming commercialization of its products, the Company would seek
strategic relationships with manufacturers which have suitable facilities and
access to the markets to produce the products.

INTELLECTUAL PROPERTY

     In 1986, Josef V. Soltys of Mississauga, Canada (a shareholder and former
director of the Company), assigned to AI a Canadian patent application for
QUICKCELL, a test cell structure for fuel cell technology. The patent, Canadian
Patent #1,295,679, issued February 11, 1992, expires February 11, 2009. The
Company also holds a United States patent, #5,0008,162, which was issued on
April 16, 1991, and expires on April 16, 2008, for the same product. A former
employee of AI, who was a co-inventor of such technology, did not assign any
right in such patents to the Company prior to his departure. Management does
not believe that these patents are material to the development of the intended
business goal. When appropriate the Company will seek patent protection for
other aspects of its fuel cell technology. However, the Company's policy is to
maintain the confidentiality of its products, and any disclosure in patent
applications could threaten the security of such information.

The Company has unregistered trademarks on some of its products, including
LABCELL 50, LABCELL 200, QUICKELL QC200 and TESTMASTER.

SMALL FUEL CELLS AND RELATED PRODUCTS
     In addition to developing fuel cells, the Company presently sells by mail
order small fuel cells, test cells and electronic test equipment. These
products were initially developed by Mr. Nor for use in the development of the
Astris fuel cell technology. They are described briefly, as follows:

     LABCELL(TM)50 is a 50 square centimeter, small alkaline fuel cell for
laboratory demonstration and experimentation which produces 1.5 to 6 volts.

     LABCELL(TM)200 is a 200 square centimeter, medium size alkaline fuel cell
for laboratory experimentation and small power applications which produces .75
to 12 volts.

     QUICKCELL(TM)QC200 is an electrochemical test cell designed for the
testing of gas diffusion or solid electrodes in a controlled laboratory
environment for fuel cell and battery research, development and quality
control.

     MODEL TL4 TEST LOAD is a monitor for fuel cells and batteries with a
built-in microprocessor. It functions to briefly interrupt the current and
take resistance-free cell readings up to 20 volts.





                                     Page 17
<PAGE>


     TESTMASTER(TM) is a powerful, integrated software package designed for
testing fuel cells and batteries. TESTMASTER(TM) performs all the tasks
required for short-tern or long-term testing of fuel cells or batteries,
monitoring, control, data collection and storage, and graphical data
representation.

     Astris s.r.o. produces and ships the small products on behalf of the
Company. The Company does not presently have any insurance on these products.
Insurance is obtained at the customer's request and expense. Astris s.r.o. does
not maintain a substantial inventory of the small products.

     The Company currently derives minor amounts of revenues from the sale of
the small products. It remains unknown whether the Company will be able to
further develop a market for these products. The Company is not aware of any
other entity, which markets products similar to its small products.

MARKETING

     The Company's small products are presently sold by mail order over an
Internet website maintained for the Company by Macnor Corp. Macnor Corp. pays
the Company a fee of five percent (5%) of the sales price. See Item 7 "Major
Shareholders and Related Party Transactions" of this Report. No change in that
arrangement is
presently foreseen.

     In October 2000, the Company entered into an agreement with
FuelCellStore.com, Inc. for the inclusion of the Company's products on the
FuelCellStore.com internet website on a non-exclusive basis for sales anywhere
in the world. FuelCellStore.com, Inc. receives a ten percent (10%) commission
based upon sales of the Company's products over its internet website.

     Currently, the prototypes of the Company's fuel cell systems are shipped
directly to the customer from the Czech Republic. Earlier shipments were from
both the Czech Republic and Canada. It is expected that the future customers of
the Company's fuel cell systems will be manufacturers of all types of products
which will be adapted to utilize the Company's fuel cell technology. The
Company expects such fuel cell systems will be shipped directly from its
facilities to such manufacturers or through a network of distributors and
agents to such manufacturers.

RAW MATERIALS AND SUPPLIES

     The principal raw materials that the Company uses are common and widely
available from numerous suppliers. The Company's principal materials are
largely various plastics, carbons, metal oxides and conventional metallic
components, which are all relatively inexpensive to obtain and which currently
do not present supply problems.





                                     Page 18
<PAGE>


COMPETITION

     Fuel cells are a competitive business. Competition arises from other fuel
cell companies and from entities engaged in offering other more conventional
energy services. The Company competes with companies that are developing all
types of fuel cells. While there are currently five basic types of fuel cell
technologies (see "Description of Fuel Cells" above), the Company believes that
AFCs and PEMs are the only fuel cells that are presently of competitive
relevance for the relatively small power, stationary and portable applications
that the Company intends to focus upon. This is because AFCs and PEMs operate
at ambient temperatures (above 0 degrees Celsius to 100 degrees Celsius) and
deliver kilowatts, which are more suited to meet the needs of small, off-grid
applications. The Company constructs only AFCs. While both AFC and PEM fuel
cells have potential environmental and efficiency advantages over traditional
power sources, the Company believes that AFCs can be manufactured less
expensively, more efficiently and more practically than PEMs in small-scale
applications.

     The Company has always believed that its main competitor is Ballard
Power Systems ("Ballard"), located in Vancouver, Canada, which concentrates on
PEMs. Ballard enjoys the most high-profile status of any fuel cell developer in
the world today. Because of its market status, any developer of AFC or PEM
technology must compete directly or indirectly with Ballard.

     Zetek, Europe's largest fuel cell company, announced in October 2001 that
its directors voted to file receivership for Zetek.  As a result of the Zetek
difficulties, the Company has been approached by a number of foreign
manufacturers interested in pursuing joint ventures for different applications.

     The Company's method for approaching this competitive challenge is simply
to focus on different market segments from those markets, which are currently
the focus for Ballard. For instance, Ballard appears committed, for the
foreseeable future, to developing fuel cells for use in buses and private
automobiles.  The Company is focusing instead on fuel cells for light vehicles,
such as golf cars and retirement vehicles.  However, there are no barriers to
Ballard, or any other known or unknown competitor of the Company, entering the
market covering lightweight vehicles. In addition to mobile applications, the
Company is also focusing on the potential market in stationary applications of
small-capacity fuel cells, as are other fuel cell companies. There are several
competitors in this market.

     Apart from specific market competition, the Company believes that AFCs
have inherent advantages over PEMs, regardless of specific applications. AFCs
use potassium hydroxide electrolyte, a chemically basic substance, while PEMs
are chemically acidic, requiring platinum as a catalyst. They also use an
expensive semi-permeable membrane as an electrolyte. In addition, AFCs have
been scientifically proven to be 10% more energy-efficient than PEMs and offer
a higher electricity yield from a given quantity of fuel. That is to say, while
PEMs might be 40-50% efficient, AFCs are 50-60% efficient. This provides a
significant advantage in terms of raw energy consumption and cost savings. In
addition, AFCs are able to start instantly, without warm-up, and operate at low
temperatures, even below freezing, to minus 50 degrees Celsius. PEMs can only
operate above freezing from 0 degrees Celsius to 100 degrees Celsius.

                                     Page 19
<PAGE>

     The capital cost required to produce AFCs is also less than that required
to produce PEMs of a similar size and number. Unlike fuel cells based upon PEM
technology, AFCs do not require platinum or machined graphite in their
electrodes, or expensive membranes for electrolyte. AFCs are the only type that
work with a broad range of non-noble electrocatalysts (metals and metal
oxides). In addition, AFCs use common industrial chemicals for their
electrolyte and AFC components are made of plastics, metal oxides, activated
carbon and other relatively inexpensive materials.  Most of the PEMs technology
products require exotic materials for production.

LEGAL PROCEEDINGS

     On November 10, 1999, E. Roy Birkett, a former director and officer of the
Company, instituted an action against the Company in the Superior Court of
Justice (Ontario) (File No. 99-CV-179868) seeking recovery of CDN$315,000 he
had advanced on behalf of the Company. Mr. Birkett had been the President of
the Company in 1995 when it acquired Astris Inc. Included in a March 1995
Letter of Intent for the acquisition of Astris Inc. was the binding obligation
of Mr. Birkett and the other then principals of the Company to advance funds to
keep Astris Inc. operating until such time as they had raised or arranged a
financing for the Company of a minimum of US$5 million dollars. Such financing
was never obtained. Mr. Birkett originally sought actual damages in excess of
CDN$315,000, plus costs. Initial examinations for discovery were completed in
October 2000.

     In February 2001, Mr. Birkett's counsel requested the Company to consent
to an expansion of Mr. Birkett's initial claim to $1,942,301 in order to cover
additional expenses he allegedly incurred on behalf of the Company in 1995 with
regards to the proposed financing. The Company has chosen not to oppose this
request as Canadian civil procedure allows permissive amendments to pleadings
up until judgment.

     The Company believes that Mr. Birkett's claims are without merit as the
repayment obligation was conditional upon the obtaining of the financing. In
addition, the Company believes that there is no meritorious basis to the
additional claim for expenses. The Company has defended itself vigorously in
this action and will continue to do so in the future.  In addition to defending
itself vigorously, the Company has also filed a counterclaim to seek damages of
CDN$5,000,000.  The examination of both parties has been completed, and a
pretrial hearing is scheduled for July 12, 2002 before an independent judge in
the Ontario Court.  The trial date is scheduled for October 7, 2002.

     A final decision in favor of Mr. Birkett would have a material adverse
affect on the Company's financial position. The Company has accrued CDN$315,000
in advances from related parties in the liabilities section of the Company's
Balance Sheet included in the Consolidated Financial Statements.








                                     Page 20
<PAGE>
GOVERNMENTAL REGULATION

     The Company knows of no governmental license or approval required in
connection with the manufacture or sale of the Company's current products.
There are no extraordinary governmental regulations known to the Company that
affects its ability to sell or produce its products. The Company does not
believe that it will be subject to existing regulations governing traditional
electric utilities.

     The Company anticipates that its products and their installation may be
subject to oversight and regulation related to their safety due to their use of
hydrogen, which is highly flammable and regarded as a hazardous gas. However,
hydrogen is a commonplace industrial gas, which is produced in enormous
quantities every day in numerous industrial facilities around the world.
Regulations have been in place for decades regarding hydrogen, which provide
routine specifications for manufacturers of hydrogen-using equipment.
Therefore, the Company does not anticipate any new regulations regarding
hydrogen, or any difficulties in complying with existing regulations.

ENVIRONMENTAL COMPLIANCE

     There are no environmental laws known to the Company, which may affect any
of its operations as they are currently constituted. The Company is not
involved in a business which involves the use of materials which are likely to
result in a violation of any existing environmental laws, rules or regulations,
nor does it own any real property which would lead to liability as a land
owner.

C.  ORGANIZATIONAL STRUCTURE.

     The Company has two subsidiaries, which are Astris Inc. ("AI") and Astris
s.r.o. The Company owns a 96.3% interest in AI and non-exchanging shareholders
hold the remaining interests. AI was incorporated initially as Astris Science
Inc. on April 8, 1983, in the Province of Ontario, and changed its name to
Astris Inc. in 1986. The Company also owns a 30% minority interest in Astris
s.r.o., which was organized under the laws of the Czech Republic. The remaining
70% interest in Astris s.r.o. is owned by Macnor Corp., an Ontario corporation
that is wholly owned by Jiri K. Nor, an Executive Officer, Director and
principal shareholder of the Company. Unless otherwise indicated or outside the
context of the disclosure, all references to the Company shall include AI and
Astris s.r.o.

D.  PROPERTY, PLANTS AND EQUIPMENT.

     AEI has leased an 1,850 square foot industrial unit located at 2175 Dunwin
Drive, Mississauga, Ontario, Canada for a period of three years ending April
30, 2003, with an option to renew for an additional three years.

     Astris s.r.o. has leased premises in Benesov, Czech Republic. These
facilities include about 325 sq. ft. of office space and about 1,100 sq. ft. of
laboratory space with a chemistry lab, electrode lab, test lab, mechanical shop
and assembly room. The lease is open-ended, requiring a notice of three months
to terminate, and an annual review for cost adjustment.


                                     Page 21
<PAGE>


     The Company believes that these premises are suitable for its present
requirements.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS.

     This discussion and analysis of the operating results and the financial
position of the Company should be read in conjunction with the financial
statements and the notes thereto forming a part of this Annual Report. In
addition to historical information, the following discussion contains forward-
looking statements that reflect the Company's plans, estimates, intentions,
expectations and beliefs. The Company's actual results could differ materially
from those discussed in such forward-looking statements.

     The accountant's report to the Company's audited financial statements
notes that the Company's ability to continue as a going concern is in
substantial doubt.  It is dependent upon the success of the efforts of its
Directors and principal shareholders in providing financial support in the
short term.  It is additionally dependent on the ability of the Company to
raise additional long-term financing, either from their own resources or from
third parties, the successful commercialization of one or more of the Company's
research projects, and attaining profitable operations.

     From the Company's acquisition of Astris Inc. in 1995 and the change of
the business to the development and possible commercialization of certain fuel
cell technology, the Company has been greatly limited by a lack of funds to
pursue fully necessary research and development activities. Most of the
Company's research and development has been conducted in the Czech Republic by
Astris s.r.o., a 30% owned subsidiary. In 1998, the Company obtained limited
funds, which it used to recommence research and development activities in
Canada and to market certain ancillary products. As noted under "Liquidity and
Capital Resources" herein, the future of the Company is dependent upon its
ability to raise additional capital to fund the commencement of the
commercialization of products based upon the Company's fuel cell technology.
Management is of the opinion that the Company should continue to exist and
grow, based upon encouraging results of research and development to date,
recent world-wide interest in fuel cell technology and the completion of the
golf car program. With the advancement of this research and development
program, and the completion of the Company's golf car program, the Company is
in a better position to pursue financing in the form of private placements of
its Common Shares.

A.  OPERATING RESULTS.

     In 1995, the Company acquired AI with the objective to commercialize the
AI AFC technology and to raise US$5 million in financing. Unfortunately, such
financing did not materialize which caused the activities of the Company to be
seriously curtailed. In the interim, research and development on electrode
formulations and other aspects of fuel cell technology has continued through
the work at the Company's minority-owned subsidiary, Astris s.r.o. in
the Czech Republic.  The research and development efforts have been at reduced
levels of activity, since the Company was largely inactive from 1996 until
October 1998. The Company has only recently produced and sold a limited number

                                     Page 22
<PAGE>
of prototype fuel cell products and completed a test model of its golf car
project. Even if such products were to be well received commercially and
additional financing is retained, the realization of significant revenues would
take several years.

     In 1996, CDN$100,000 was received by the Company from three Directors,
Jiri K. Nor (CDN$40,000), Donald Blenkarn (CDN$40,000) and Gerald T. Crawford
(CDN$20,000). See Item 7B "Related Party Transactions."

     During 1997, proceeds on the issuance of 3,394,850 Common Shares of the
Company from the exercise of warrants issued in 1995 amounted to CDN$3,395. A
further 748,706 Common Shares were issued in settlement of outstanding
liabilities of CDN$374,354. There was no funding from related parties during
1997.

     In 1997, the Company had revenue of CDN$5,504. This amount was comprised
of CDN$3,871 of accrued interest paid in 1997 by the Canadian government on
claims made by the Company for investment tax credits in 1994 and CDN$1,633
from the sale of small fuel cells. No one customer accounted for a majority of
the sales of the small fuel cells and related products.

     In 1998, an advance of CDN$2,000 was received from Timagami Financial
Services, a company controlled by a shareholder. See Item 7B "Related Party
Transactions".

     In 1998, because of the non-exclusive license of the Company to EVI, the
Company acquired 200,000 shares of EVI common stock. See "Business Overview" in
Item 4. The sale of more than 85,000 of these EVI shares in the spring of 2000
for a total net proceeds of US$250,217, provided the cash resources necessary
to finance the completion of the Company's golf car project. During the
remainder of the year 2000, the Company sold another 11,200 shares of the EVI
for a total net proceeds of US$42,163.

     There was no financing activity during 1999 or 2000.

     The Company had small, insignificant sales of its small fuel cell products
during 1999 and 2000. The agreement with Macnor has not resulted in any sales
revenue to date.

     The financial statements included in this report are stated in Canadian
dollars.

     During the year ended December 31, 2001, a total of 1,202,435 common
shares of the Company were issued.  During this fiscal year, 524,185 common
shares of the Company were issued in settlement of outstanding liabilities of
CDN$307,722, 325,000 common shares were issued on the exercise of options in
exchange for CDN$121,206, and 353,250 common shares of the Company were sold in
exchange for CDN$195,000.

     During the year ended December 31, 2000, 1,110,078 common shares of the
Company were issued in settlement of outstanding liabilities of CDN$277,519,
and 102,900 common shares were issued upon exercise of warrants at an exercise
price of CDN$.001.


                                     Page 23
<PAGE>
     The Company has incurred operating losses during the last three fiscal
years ended December 31. The net loss for 2001 was CDN$593,984 (after a non-
recurring gain of CDN$38,089 from the sale of shares of EVI held by the
Company) on revenues of CDN$26,787.  The net loss for 2000 was CDN$35,580
(after a non-recurring gain of CDN$376,648 from the sale of shares of EVI held
by the Company) on revenues of CDN$22,824, and in 1999 it was a net loss of
CDN$40,666 on revenues of CDN$21,919.

     Revenue in 2001 was CDN$26,787 and was comprised of a CDN$10,000 royalty
payment receivable from EVI, CDN$NIL from interest on the funds derived from
the sale of the EVI shares, CDN$2,083 from GST (Goods and Service Tax)
compensation, CDN$7,751 from a currency exchange gain, and CDN$6,953 from the
sale of literature and other related products regarding the Company's fuel cell
research.  Revenue in 2000 was CDN$22,824 and was comprised of a CDN$10,000
royalty payment from EVI, CDN$5,521 from interest on the funds derived from the
sale of the EVI shares, CDN$1,594 from GST (Goods and Service Tax)
compensation, CDN$5,525 from a currency exchange gain, and CDN$184 from the
sale of literature regarding the Company's fuel sale research. In 1999, revenue
was comprised of CDN$20,250 from the proceeds of the initial payment on the
license agreement and CDN$1,669 from the sale of small fuel cells and related
products.  No one customer accounted for a majority of the sales of the small
fuel cells and related products. Throughout its history, the Company's expenses
have varied based upon the amount of funds available to the Company.  During
this period Astris s.r.o. has basically self-funded itself through the sale of
ancillary products and government and technical university contracts, none of
which resulted in any license fees to the Company.

     Operating expenses were approximately CDN$658,860 in 2001, CDN$435,052 in
2000, and CDN$62,585 in 1999. Due to the sale of laboratory equipment to EVI,
certain operating expenses relating to rent (CDN$15,000 in 1998) and salaries
(CDN$5,000 in 1998), were no longer required to be paid by the Company in 1999,
2000 or 2001. Also included in operating expenses are costs associated with
subcontracts. These costs were CDN$495,736 in 2001, CDN$180,807 in 2000, and
CDN$32,782 in 1999, most of which was to Astris s.r.o. for performance of
research services for the Company. The amount expended for subcontracts varied
according to the amount of service, which was provided to the Company.

     Pursuant to a written agreement dated March 9, 2000, CDN$28,667 and
21,967 shares of the Company's common stock were owing by the Company to
Molesworth Associates, Inc. for advertising and investor relation services
provided from July 31, 2000 through March 31, 2001. The Company agreed to
settle all amounts outstanding, up to and including April 30, 2001, under the
contract with Molesworth Associates Inc. in exchange for 70,000 shares of the
Company's common stock. Such common stock was transferred to Molesworth
Associates, Inc. in June 2001 and the Company valued the shares at US$.41512.

     The Company owed additional fees to Molesworth Associates, Inc. for
advertising and investor relation services provided from April 30, 2001 through
September 30, 2001.  The Company agreed to settle all amounts outstanding under
the contract with Molesworth Associates Inc. in exchange for 40,400 shares of
the Company's common stock.  The Company transferred the common stock valued at
US $0.50 to Molesworth Associates, Inc. in August 2001



                                     Page 24
<PAGE>
     Josef Soltys agreed to settle his outstanding consulting engineering fees
of US$10,255, for June and July 2001, by accepting 29,300 shares in the
corporation valued at the market price of US $0.35 as of August 2, 2001.

<TABLE>
<CAPTION>
Date            Name of Creditor/Consultant     Price Paid/     Number of
Issued                                          Debt Owed       Common Shares
-----------     --------------------------      -----------     -------------
<S>             <C>                             <C>             <C>
June 2001       Molesworth Associates, Inc.     US $28,875      70,000
August 2001     Molesworth Associates, Inc.     US $20,244      40,400
August 2001     Josef Soltys                    US $10,255      29,300
December 2001   Molesworth Associates, Inc.     US $24,900      83,000
</TABLE>

     The 1998 financial statements were restated to record the value of the EVI
common stock received upon the sale and licensing arrangement at the book value
of the assets transferred to EVI, and not at the market price of the EVI shares
as there were restrictions on the sale of such shares by the regulatory
authorities.

     The Company's net loss was CDN$593,984 for the year ended December 31,
2001 as compared to a net loss of CDN$35,580 for 2000.  The significantly lower
loss for 2000 can be attributed to a gain of CDN$376,648 on the sale of shares
of EVI held by the Company, which were directly utilized for the operating
expenses of the Company.

     Transfers of funds from accounts containing U.S. dollars into Canadian
dollar accounts give rise to gains on U.S. exchange and, conversely, transfers
of funds from accounts containing Canadian dollars into U.S. dollar accounts
gives rise to losses on U.S. exchange.

B.  LIQUIDITY AND CAPITAL RESOURCES.

     The Company has been hindered by a lack of capital. Its recent source of
capital has been the sale of EVI Common Stock. In the year 2000, the Company
sold 97,100 shares of EVI Common Stock and received net proceeds of US$292,380.
In the first quarter of year 2001, the Company sold its remaining 102,900
shares of EVI Common Stock, resulting in net proceeds of US$65,957.

     For tax year 1995, when the Company was a Canadian-controlled private
corporation named Astris Inc., the Company submitted a request on Form T661 to
the Canada Custom and Revenue Agency (the "CRA") for a refund of CDN$157,720
representing a portion of the research and development expenses for that year.
The CRA initially awarded the Company CDN$39,421. The Company challenged that
determination. This matter has been resolved, and the Company received a refund
check in the amount of CDN$61,700 on October 26, 2001. See "Research and
Development."

     In March 2001, three Directors of the Company loaned an aggregate of
CDN$67,500 to the Company.  These loans were subsequently retired by the
Company and the Directors in exchange for options to purchase shares of the
Company's Common Stock. See "Compensation" below.

                                     Page 25
<PAGE>

     The Company will seek further outside capital through a sale of its Common
Stock in a private placement offering. The Company has been approached by major
financial institutions that are active in arranging such financing for the fuel
cell industry. The Company has succeeded in 2001 in posting its Common Stock on
the O.T.C. Bulletin Board in order to facilitate such a financing.

     In addition, the Company also is in the early stages of establishing a
strategic partnership with a manufacturer of related products.

C.  RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.

     See "Research and Development" in Section 4.

D.  TREND INFORMATION.

     As the Company's current development project moves forward through the
year 2002, it is anticipated that the Company's progress will stimulate
interest in the Company that should result in increased market activity and
rising share prices, dependent upon general market conditions. The Company will
seek to enter into private placements, strategic partnerships and joint
ventures in order to raise capital to finance the on-going development and
commercialization of its fuel cell technology. The Company does not have any
present agreement to enter into any private placements, strategic partnerships
or joint ventures. In addition, there is no assurance that the Company will be
able to find or enter into any private placements, strategic partnerships or
joint ventures, on terms acceptable to the Company or not highly dilutive to
shareholders.

     In the future, the Company will seek to obtain the necessary financing to
establish a pilot production facility for the manufacture of a total of 2,000
kilowatt per year of fuel cell systems in various sizes up to three or four
kilowatts each, for testing in a variety of both stationary and mobile
applications. It is estimated this stage will require approximately CDN$10
million over the next three years.

     In anticipation and preparation for these developments, the Company is
attempting to identify potential strategic partners who can be approached.
Factors to be considered in selecting strategic partners are:

-	Natural linking of each other's products (e.g. golf car
     manufacturers, car motor manufacturers, etc.)

     -    adequate funding capabilities;

     -    ability to understand the Company's research and development
          activities; and

     -    compatible business philosophies.






                                     Page 26
<PAGE>
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.

A.	DIRECTORS AND SENIOR MANAGEMENT.
     The following table sets forth the name, age and office held with the
Company as of June 1, 2002 and the period during which such person has served
as a Director and/or Executive Officer.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------
Name                    Age    Office Held                  Director Since
----                    ---    -----------                  --------------
---------------------------------------------------------------------------
<S>                      <C>   <C>                          <C>
Jiri K. Nor              62    President, Chief Executive   1996
                               Officer
---------------------------------------------------------------------------
Gerald A. Crawford (1)   68    Director                     1996
---------------------------------------------------------------------------
Donald A. Blenkarn (1)   71    Secretary and Director       1995
---------------------------------------------------------------------------
Gordon T. Emerson        64    Treasurer, Chief Financial   1999
                               Officer and Director
---------------------------------------------------------------------------
</TABLE>

Notes:

 (1) Members of the Company's Audit Committee.

    Jiri K. Nor has been a Director and the President of the Company since
March 1996. He is a trained engineer, with particular expertise in mechanics,
aeronautics, electronics and electrochemistry. He is the principal developer of
the Company's fuel cell technology. For more than the past five years, Mr. Nor
has also been President and CEO of the Company and Astris s.r.o., and also the
President and sole stockholder of Macnor Corp. For more than five years until
August 1997, he was Vice President of Research for Norvik Technologies and
Norvik Traction, companies in the business of developing fast battery chargers.

     Gerald A. Crawford has been a Director of the Company since March 1996,
and has been associated with Astris Inc. since 1987 in marketing and public
relations areas. He is a trained metallurgical engineer, and was associated
with various companies from 1960 to 1987.  Since 1989, he has been a self-
employed consultant primarily in the area of metallurgical engineering
environmental matters to the nickel industry, providing services to corporate
clients, including Astris, for the past 11 years.

     Donald A. Blenkarn has been a Director and Secretary of the Company since
October 1995. For over five years, he has been Managing Director of Timagami
Financial Services Ltd., located in Mississauga, Canada. From 1972 to 1993, he
was a Progressive Conservative Party Member of Parliament.  From 1984 to 1991,
he was the Chair of the House of Commons Finance Committee, and Vice-Chair from
1991 to 1993. Mr. Blenkarn practiced law from 1952 to 1983 with the firm of
Blenkarn, Kerr and Shadlock, Mississauga, Ontario.

                                     Page 27
<PAGE>
     Gordon T. Emerson has been a Director of the Company since 1999 and its
Treasurer and Chief Financial Officer since April 2000. During his career, Mr.
Emerson has raised capital for a number of Canadian companies, including Spar
Aerospace, Corona Mining and Morgan Hydrocarbons. For more than the past five
years, he has been a consultant to public companies in Canada with respect to
capital structure and financing transactions.

     There are no family relationships between any of the persons named above
nor are there any arrangements or understandings with major shareholders,
customers, suppliers or others, pursuant to which any person referred to above
was selected as a Director or member of senior management.

B.  COMPENSATION

     For the 2000 fiscal year, the Company paid compensation of CDN$76,500 in
cash. Macnor Corp. received CDN$54,000 and Mr. Emerson received CDN$22,500. In
addition, the Company issued Common Shares at market value in lieu of cash to
its Executive Officers for services rendered to the Company. (See below).

     For the 2001 fiscal year, the Company paid compensation of CDN$46,000 in
cash.  Macnor Corp. received CDN$36,000 in cash and Mr. Emerson received
CDN$10,000.  In addition, the Company issued Common Shares at market value in
lieu of cash to its Executive Officers for services rendered to the Company.
(See below.)  Additional compensation of CDN$14,100 was accrued as a payable
for the year 2001.  At year-end 2001, Macnor Corp. was owed CDN$11,600 and
Gordon Emerson was owed CDN$2,500.  The outstanding balance was subsequently
settled in April 2002 by issuance of Common Shares in the Company.

     The Company does not have any employment agreement with any Executive
Officer. There does not currently exist any compensation arrangement for any of
the Directors, nor does the Company have any pension, retirement or similar
plan for its Executive Officers or Directors.

     In fiscal year 2000, the Company's stockholders adopted the 2000 Stock
Option Plan (the "Plan"), pursuant to which options could be granted to
purchase 1,000,000 Common Shares. The purpose of the Plan was to advance the
interests of the Company by affording its Officers, Directors, employees and
consultants the opportunity to acquire equity interests in the Company. These
Options had an exercise price of not less than the market price of the Common
Shares at the time, or if there were not public market price, at the fair
market value as determined by the Board of Directors on the day preceding the
date of grant. The options were exercisable over a number of years specified at
the time of the grant, which term was not to exceed five years from the date of
grant.










                                     Page 28
<PAGE>



     As of April 16, 2001, options for the purchase of an aggregate of
1,000,000 Common Shares had been granted under the Plan to employees of the
Company, including options for 500,000 Common Shares to two Executive Officers
and the five Directors at various exercise prices.

<TABLE>
<CAPTION>
      Name                 Number of Shares     Value Per Share
      ---------------------------------------------------------
      Options exercised:
      -----------------
       <S>                      <C>               <C>
       Gerald Crawford            37,500          US$0.505
       Donald Blenkarn            37,500          US$0.505
       Jiri Nor                  250,000          CDN$0.25
                                 -------
      Total                      325,000

      Options outstanding:
      -------------------
       Jerry Benedik              50,000          US$0.505
       Josef Soltys               50,000          US$0.50
       Josef Benedik              50,000          US$0.50
       Peter Sinkner              50,000          US$0.505
       Derek Bullock              50,000          US$0.51
       Jiri Nor                   50,000          US$0.505
       Gordon Emerson             50,000          US$0.505
       Employees: Astris s.r.o.
                (Czech Republic)  50,000          US$0.50
       Maurice Caissie            25,000          US$0.50
                                 -------
      Total                      425,000

      Option still to be issued:
      -------------------------
       Gordon Emerson            250,000          CDN$0.25
</TABLE>

     Mr. Blenkarn exercised his option to purchase 37,500 shares of the
Company's Common Stock at US$.505. Mr. Blenkarn had previously made two loans
to the Company in March 2001 for the aggregate amount of CDN$22,500. See
"Related Party Transactions" below. In exchange for the options, Mr. Blenkarn
retired the outstanding loan of CDN$22,500 and paid the Company CDN$6,853.

     Mr. Gerald Crawford exercised his options to purchase 37,500 shares of the
Company's Common Stock at US$.505. Mr. Crawford had previously made two loans
to the Company in March 2001 for the aggregate amount of CDN$22,500. See
"Related Party Transactions" below. In exchange for the options, Mr. Crawford
retired the outstanding loan of CDN$22,500 and paid the Company CDN$6,853.




                                     Page 29
<PAGE>

     In recognition of his work on the golf car program for the year April 1,
2000 to March 31, 2001, the Company granted Mr. Nor a bonus of CDN$48,000. Mr.
Nor agreed to receive 51,538 shares of the Common Stock of the Company in lieu
of a cash payment. The Company valued the shares at US$0.53, the mean price for
the year 2000.

     On March 8, 2000, Jiri K. Nor was granted an option to purchase 250,000
Common Shares, exercisable for five years at an exercise price of CDN$0.25 per
share. The option to Mr. Nor was conditional upon his completing the golf car
project by March 31, 2001. Since the golf car project was complete by March 31,
2001, the Directors acknowledged that Mr. Nor had earned his option. Mr. Nor
had previously loaned the Company CDN$22,500 in March 2001. Mr. Nor exercised
his option for 250,000 common shares for CDN$0.25 per share by paying
CDN$40,000 in cash, and by agreeing to retire the entire outstanding loan of
CDN$22,500 to the Company.

     In addition to his duties as a Director of the Company, Mr. Gerald
Crawford provided consulting services to the Company in 2000. Such services
were valued at CDN$10,450. Mr. Crawford agreed to receive 13,397 shares of the
Common Stock of the Company in lieu of a cash payment. The Company valued the
shares at US$0.53, the mean price for the year 2000.

     On September 25, 2001 the Company created a Stock Option Plan, approved at
the Annual Special Meeting of Shareholders, allowing the Directors the right to
allocate up to 1,200,000 (one million two hundred thousand) Common Shares in
the Company to individuals providing services of great benefit to the Company.
These common shares will be issued at market price.

     The Directors approved unanimously the allocation of options to two
Directors. The first option is to be vested to Mr. Jiri Nor at an exercise
price of US$0.24 upon successful completion of the third generation BiPolar
fuel cell engine by May 12, 2003.  The second option is to be vested to Mr.
Gordon Emerson at an exercise price of US$0.24, when he is successful in
raising US$5,000,000 for the corporation by May 12, 2003.

     In October 1998, in connection with the entry into the License Agreement
with EVI, the Company granted an option to EVI for the purchase of 1,000,000
Common Shares at an exercise price of US$.30 per share, expiring in October
2003.

C.  BOARD PRACTICES.

     The Board of Directors may consist of from three to ten members, and is
currently comprised of four members. Each Director is elected by the
shareholders to serve until the next annual meeting or until a successor is
elected or appointed. The date of the next annual meeting has not been set, but
will take place sometime in the fall of 2002.

     For a list of the Directors and the period during which the current
Directors have served in that office, please see Section 6A above.



                                     Page 30
<PAGE>

     The Directors of the Company do not currently have any service contracts
with the Company providing for benefits upon termination of employment. There
does not currently exist any compensation arrangement for any of the Directors.
The Company does not have any pension, retirement or similar plan for its
Directors.

     Gerald A. Crawford and Donald A. Blenkarn are members of the Company's
Audit Committee. There are no additional committees of the Board.

D.  EMPLOYEES.

     AEI and AI presently have four Officers and twelve other employees,
including a full-time Executive Assistant and two part-time technical experts.
The President is also the General Manager of the current project on a full-time
basis. Job descriptions for employees in such small, entrepreneurial companies
as the Company tend to be rather flexible, but clearly the principal role of
the General Manager is to oversee the progress of the current project to ensure
it is completed satisfactorily, on budget and on time. The Executive Assistant
is responsible for reception, bookkeeping, and other details of general office
administration, including assisting the General Manager.  The present employees
are not represented by a labor union. The Company considers its relationship
with its employees to be satisfactory.

E.  SHARE OWNERSHIP.

     The following table lists, as of June 7, 2002, the beneficial share
holdings in the Common Shares, which are the only outstanding voting securities
of the Company, of (i) each of the Company's Executive Officers and Directors
of the Company; and (ii) all of the Company's Executive Officers and Directors
as a group:

<TABLE>
<CAPTION>
                                              Amount and Nature        Percent
    Name                                     of Beneficial Owner       of Class
    ----                                     -------------------       --------
    ---------------------------------------------------------------------------
    <S>                                            <C>                   <C>
    Jiri K. Nor (1)                                2,414,531             18.10%
    ---------------------------------------------------------------------------
    Gerald A. Crawford (2)                         1,048,162              7.86%
    ---------------------------------------------------------------------------
    Donald A. Blenkarn                               944,659              7.08%
    ---------------------------------------------------------------------------
    Gordon Emerson (3)                               292,600              2.19%
                                                     -------              -----
    ---------------------------------------------------------------------------
    All executive Officers and Directors as        4,699,952             35.23%
    a group
    ---------------------------------------------------------------------------
</TABLE>




                                     Page 31
<PAGE>
(1)  Includes (i) 2,205,862 Common Shares held by Jiri K. Nor and (ii) 208,669
     Common Shares held by his wife, Jana Nor.

(2)  Includes (i) 719,076 Common Shares held by Gerald A. Crawford and (ii)
     329,076 Common Shares held by his wife, Gail Crawford.

(3)  Includes (i) 25,000 Common Shares by Gordon T. Emerson, (ii) 196,850
     Common Shares by his wife, Barbara Emerson, and (iii) 70,750 Common Shares
     by Mr. Emerson's children. This amount does not include 250,000 options
     conditioned upon Mr. Emerson arranging certain financing for the Company.

      The Company's stockholders adopted the 2000 Stock Option Plan in June
2000. On September 25, 2001 the Company created a Stock Option Plan.  See Item
6B above for a description of the Plan.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.

A. MAJOR SHAREHOLDERS

     The following table lists, as of June 7, 2002, the beneficial share
holdings in the Common Shares, which are the only outstanding voting securities
of the Company, of all persons who are known to the Company to beneficially
own, directly or indirectly, five percent or more of the issued and outstanding
Common Shares:

<TABLE>
<CAPTION>
                                       Amount and Nature        Percent
     Name                              of Beneficial Owner      of Class
     ----                              -------------------      --------
     --------------------------------------------------------------------
     <S>                                      <C>                 <C>
     Jiri K. Nor (1)                          2,414,531           18.10%
     --------------------------------------------------------------------
     Gerald A. Crawford (2)                   1,048,162            7.86%
     --------------------------------------------------------------------
     Donald A. Blenkarn                         944,659            7.08%
     --------------------------------------------------------------------
</TABLE>

(1)  Includes (i) 2,205,862 Common Shares held by Jiri K. Nor and (ii) 208,669
     Common Shares held by his wife, Jana Nor.

(2)  Includes (i) 719,076 Common Shares held by Gerald A. Crawford and (ii)
     329,076 Common Shares held by his wife, Gail Crawford.

     There has not been any significant change in the percentage ownership held
by any major shareholder during the past three years.

     The Company's major shareholders do not have any different voting rights
than other holders of the Common Shares.

     For a discussion of the number of shares of Common Stock held in Canada,
please see Item 9 below.

                                     Page 32
<PAGE>


     To the Company's knowledge, it is not directly or indirectly owned or
controlled by another corporation(s), by any foreign government or by any other
natural or legal person(s). The Company does not know of any arrangement that
may, at a subsequent date, result in a change in control of the Company.

B.  RELATED PARTY TRANSACTIONS

     Certain Directors of the Company continue to support and fund the
Company's operating expenses by loaning funds to cover its ongoing
requirements. The Directors have agreed to support the Company until a suitable
joint venture or private placement is completed.

     In March 2001, three Directors of the Company loaned an aggregate of
CDN$67,500 to the Company. Subsequently, the Company and the Directors retired
these loans by issuing options to purchase shares of the Company's common
stock. On May 25, 2001 the Directors exercised their options and retired the
entire loans.

     On March 8, 2000, Jiri K. Nor was granted an option to purchase 250,000
common shares exercisable for five years at an exercise price of CDN$0.25 per
share. The option to Mr. Nor was conditional upon his completing the golf car
project by March 31, 2001. Since the golf car project was complete by March 31,
2001, the Directors acknowledged that Mr. Nor had earned his option. Mr. Nor
had previously loaned the Company CDN$22,500 in March 2001. Mr. Nor exercised
his option for 250,000 common shares for CDN$0.25 per share by paying
CDN$40,000 in cash, and by agreeing to retire the entire outstanding loan of
CDN$22,500 to the Company.

     On June 29, 2001 Mr. Nor, Mr. Crawford and Mr. Blenkarn loaned a further
total of CDN$15,000 (or CDN$5,000 each).  On August 2, 2001, the Corporation
agreed to settle obligations owing by the Corporation to certain Directors
and/or Officers of the Corporation.  The Company approved the issuance of the
following shares at a price of US$0.35 per share:

<TABLE>
<CAPTION>
        Name of Officer/Director          Price Paid/        Number of
        Or Former Officer/Director        Debt Owed          Common Shares
        --------------------------        -----------        -------------
        <S>                               <C>                <C>
        Donald Blenkarn                   US$15,225          43,500
        Gerald A. Crawford                US$15,225          43,500
        Macnor Corp.                      US$29,820          85,200
        Gordon Emerson                    US$ 8,100          23,100
</TABLE>

     On September 25, 2001, the Corporation agreed to settle obligations owing
by the Corporation to certain directors and/or officers by approving the
following issuances of common shares at a price of US $0.24 per share:



                                     Page 33
<PAGE>

<TABLE>
<CAPTION>
        Name of Officer/Director          Price Paid/        Number of
        Or Former Officer/Director        Debt Owed          Common Shares
        --------------------------        -----------        -------------
        <S>                               <C>                <C>
        Donald Blenkarn                   US$ 3,180          13,250
        Gerald A. Crawford                US$ 3,180          13,250
        Jiri Nor                          US$ 9,540          39,750
        Gordon Emerson                    US$ 6,180          25,750
</TABLE>

     As of September 13, 1999, the Company entered into a royalty arrangement
with Macnor Corp., an Ontario corporation ("Macnor"), which is wholly-owned by
Jiri K. Nor, President, Chief Executive Officer and Director of the Company.
This arrangement calls for Macnor to sell certain fuel cell products, developed
and manufactured by Astris s.r.o. (small fuel cells), through a website and
mail order opened and operated by Macnor. Macnor is to pay an annual royalty
equal to five percent (5%) from all sales of such goods, based upon gross
revenues. No royalty was paid for fiscal 1999, 2000 or 2001, and the agreement
with Macnor has not resulted in any sales revenue to date.

     Macnor Corp. also owns 70% of Astris s.r.o., which presently conducts a
substantial portion of the research and development of the Company. The Company
owns the remaining 30% of Astris s.r.o.

     As discussed in Item 4, the Company has licensed, on a non-exclusive
basis, its fuel cell technology to Astris s.r.o. and EVI.

     As at December 31, 1999 and 1998, the Company owed CDN$37,204 in principal
and CDN$12,400 in accrued interest only up to December 31, 1998 to Timagami
Financial Services ("Timagami") as per an agreement. This advance was unsecured
and bore interest at twelve percent (12%) per annum until December 31, 1998,
and thereafter, per the term of the party's agreement, has been non-interest
bearing. There were no specific repayment terms. All but CDN$2,000 of the
principal outstanding was paid by the Company to Timagami in fiscal year 2000.
All interest remains outstanding. Donald A. Blenkarn, a Director and Secretary
of the Company, is Managing Director of Timagami.

     At years ended December 31, 2000, 1999 and 1998, the Company owed
CDN$100,000 in principal and CDN$54,000 of accrued interest to Mr. Blenkarn
(CDN$40,000), Mr. Crawford (CDN$20,000) and Mr. Nor (CDN$40,000), as payment
for advances made by them to the Company under the terms of a debenture, dated
September 30, 1996. The amount owed is secured and bears interest at twelve
percent (12%) per annum. Mr. Blenkarn, Mr. Crawford and Mr. Nor have agreed
that they will not demand repayment of the principal and interest until after
July 7, 2002. The amount owed is collateralized by a lien on all of the assets
and business of AI.

     At December 31, 1999 and 1998, CDN$50,637 was owed to Astris s.r.o., a
company in which the Company has a 30% interest, for sub-contracted research
services.  This liability was settled by the payment of cash in the year 2000.



                                     Page 34
<PAGE>
     The management of the Company believes that each of the aforementioned
transactions was on terms as fair to the Company as any which could have been
made with unaffiliated parties.

C. INTERESTS OF EXPERTS AND COUNSEL.

     Not Applicable.

ITEM 8. FINANCIAL INFORMATION.

A.  CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.

     Reference is made to Item 18 for a list of all financial statements and
notes related thereto filed as part of this Annual Report.

B.  SIGNIFICANT CHANGES.

     There have been no significant changes, which have occurred since the date
of the annual financial statements included in this Report.

DIVIDEND POLICY.

     The Company has not paid dividends within the last five fiscal years. For
a description of the ability of the Board of Directors to distribute dividends,
please see Item 10B below.

ITEM 9. THE OFFER AND LISTING.

MARKETS AND PRICE HISTORY OF THE COMPANY'S STOCK.

     As of June 23, 2002, the Company had approximately 152 stockholders of
record for its Common Shares and 14,184,653 Common Shares were issued and
outstanding. The Company believes that there are a considerable number of
beneficial holders of the Common Shares, as a substantial number of Common
Shares are held of record by principal depositories in Canada and the United
States. As at June 23, 2002, the shareholder list showed 29 registered
shareholders in the United States holding a total of 270,336 Common Shares,
plus 4,268,310 Common Shares in the name of Cede & Co. The Company estimates
that the holdings in Cede & Co. represents approximately 700 beneficial
shareholders. Thus, United States residents hold approximately 4,538,646 Common
Shares, or 34.0% of the Company's outstanding Common Shares. Depositories in
Canada held Common Shares for 530 persons.  CDS, the depository in Canada holds
7,575,773 Common Shares.

     The Common Shares were previously traded in Canada on the Canadian Dealing
Network (CDNX), but presently has an inactive listing on the CDNX. The Company
would seek to reactivate such listing once it meets the initial listing
requirements of the CDNX. The Company does not presently meet the following
requirements to qualify to list on the CDNX: net tangible assets of
CDN$750,000, unallocated funds of CDN$100,000 and/or the required amount of
working capital to cover the Company's administrative expenses for 12 months.
The Common Shares have been traded in the United States on the `pink sheets'
dealer network under the symbol ASRF. Since June 20, 2001, the Company's Common


                                     Page 35
<PAGE>
Shares have been posted for traded on the O.T.C. Bulletin Board under the
symbol ASRNF.OB. The quarterly high and low bid prices for the past two fiscal
years are tabulated below:

<TABLE>
<CAPTION>
        -----------------------------------------------------
            Quarter          High, US$/share   Low, US$/share
        -----------------------------------------------------
            <S>                  <C>               <C>
            2000
            -------------------------------------------------
            First                 2.75             0.03
            -------------------------------------------------
            Second                1.05             0.38
            -------------------------------------------------
            Third                 1.25             0.35
            -------------------------------------------------
            Fourth                1.03             0.35
            -------------------------------------------------
            2001
            -------------------------------------------------
            First                  .90              .40
            -------------------------------------------------
            Second                1.00              .44
            -------------------------------------------------
            Third                  .65              .24
            -------------------------------------------------
            Fourth                 .32              .15
            -------------------------------------------------
</TABLE>

     The following table sets forth the high and low market prices for each of
the past six months:
<TABLE>
<CAPTION>
            -------------------------------------------------
            Month           High, US$/share   Low, US$/share
            -------------------------------------------------
            <S>                   <C>              <C>
            2002
            -------------------------------------------------
            January               $.31             $.16
            -------------------------------------------------
            February               .31              .18
            -------------------------------------------------
            March                  .31              .20
            -------------------------------------------------
            April                  .29              .15
            -------------------------------------------------
            May                    .29              .18
            -------------------------------------------------
            June (through
                  June 7)          .18              .16
            -------------------------------------------------
</TABLE>                            Page 36
<PAGE>

ITEM 10. ADDITIONAL INFORMATION.

A.  SHARE CAPITAL.

     Not Applicable.

B.  MEMORANDUM AND ARTICLES OF ASSOCIATION.

ORGANIZATION.

     The Company was incorporated in the Province of Ontario, Canada.

CORPORATE GOVERNANCE.

     The Company's by-laws provide that, subject to any unanimous shareholder
agreement, the Board of Directors shall manage or supervise the management of
the business and affairs of the Corporation. The powers of the board may be
exercised at a meeting at which a quorum is present or by resolution in writing
signed by all the Directors entitled to vote on that resolution at a meeting of
the Board. Where there is a vacancy in the board, the remaining Directors may
exercise all the powers of the Board, so long as a quorum remains in office.

MEETINGS OF THE BOARD OF DIRECTORS.

     The Company's by-laws provide that meetings of the Board of Directors may
be held at any place within or outside Ontario and in any financial year of the
Corporation a majority of the meetings need not be held in Canada. Meetings of
the board shall be held from time to time at such time and at such place as the
Board of Directors, the chair of the board, the managing Director, the
President or any two Directors may determine.

BORROWING POWER.

     The Company's by-laws provide that without limiting the borrowing powers
of the Corporation, as set forth in the Business Corporation Act (Ontario) (the
"Act"), but subject to the articles and any unanimous shareholder agreement,
the Board of Directors may from time to time on behalf of the Corporation,
without authorization of the shareholders:

          borrow money upon the credit of the Corporation;

          issue, reissue, sell or pledge bonds, debentures, notes or other
          evidences of indebtedness or guarantee of the Corporation, whether
          secured or unsecured;

          to the extent permitted by the Act, give directly or indirectly
          financial assistance to any person by means of a loan, a guarantee or
          otherwise on behalf of the Corporation to secure performance of any
          present or future indebtedness, liability or obligation of any
          person;

          and


                                     Page 37
<PAGE>

          mortgage, hypothecate, pledge or otherwise create a security interest
          in all or any currently owned or subsequently acquired real or
          personal, movable or immovable, property of the Corporation including
          book debts, rights, powers, franchises and undertakings, to secure
          any such bonds, debentures, notes or other evidences of indebtedness
          or guarantee or any other present or future indebtedness, liability
          or obligation of the Corporation.

DIVIDENDS.

     The Company's by-laws provide that, subject to the Act, the articles and
any unanimous shareholder agreement, the Board of Directors may from time to
time declare dividends payable to the shareholders according to their
respective rights and interests in the Corporation. Dividends may be paid in
money or property or by issuing fully paid shares of the Corporation or options
or rights to acquire fully paid shares of the Corporation. Any dividend
unclaimed after a period of six years from the date on which the same has been
declared to be payable shall be forfeited and shall revert to the Corporation.

C.  MATERIAL CONTRACTS.

     The Company has not entered into any contracts in the last two years
outside of the ordinary course of business that have had or will have a
material effect on its business.

D.  EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS.

     There are no governmental laws, decrees or regulations in Canada relating
to restrictions on the import/export of capital affecting the remittance of
interest, dividends or other payments to non-residential holders of the
Company's Common Shares. Any such remittances to United States residents,
however, are subject to a 15% withholding tax pursuant to Article X of the
reciprocal tax treaty between Canada and the United States. See Part E below.

     Except as provided in the Investment Canada Act (the "Act"), there are no
limitations under the laws of Canada, the Province of Ontario or in the charter
or any other constituent documents of the Company on the right of foreigners to
hold and/or vote the Common Shares of the Company.

     The Act requires a non-Canadian making an investment to acquire control of
a Canadian business, the gross assets of which exceed certain defined threshold
levels, to file an application for review with Investment Canada, the federal
agency created by the Act.

     As a result of the Canada-U.S. Free Trade Agreement, the Act was amended
in January 1989 to provide distinct threshold levels for Americans who acquire
control of a Canadian business.

     A Canadian business is defined in the Act as a business carried on in
Canada that has a place of business in Canada, an individual or individuals in
Canada who are employed or self-employed in connection with the business, and
assets in Canada used in carrying on the business.


                                     Page 38
<PAGE>
     An American, as defined in the Act, includes: an individual who is an
American national or a lawful permanent resident of the United States; a
government or government agency of the United States; an American-controlled
entity, corporation or limited partnership or trust which is not controlled in
fact through ownership of its voting interests of which two-thirds of its Board
of Directors, general partners or trustees, as the case may be, are any
combination of Canadians or Americans.

     The following investments by a non-Canadian are subject to review by
Investment Canada:

     (a)  all direct acquisitions of control of Canadian businesses with assets
          of CDN$5 million or more;

     (b)  all indirect acquisitions of control of Canadian businesses with
          assets of CDN$50 million or more if such assets represent less
          than 50% of the value of the assets of the entities, the control
          of which is being acquired; and

     (c)  all indirect acquisitions of control of Canadian businesses with
          assets of CDN$5 million or more if such assets represent more
          than 50% of the value of the assets of the entities, the control
          of which is being acquired.

     Review by Investment Canada is required when investments by Americans
exceed CDN$150 million for direct acquisitions of control. For the purposes of
the Act, direct acquisition of control means: a purchase of the voting interest
on a corporation, partnership, joint venture or trust carrying on a Canadian
business, or any purchase of all or substantially all of the assets used in
carrying on a Canadian business; and indirect acquisition of control means a
purchase of the voting interest of a corporation, partnership, joint venture or
trust, whether a Canadian or foreign entity, which controls a corporation,
partnership, joint venture or trust carrying on a Canadian business in Canada.

     The acquisition of certain Canadian businesses is excluded from the higher
thresholds set out for Americans. These excluded businesses include oil, gas,
uranium, financial services (except insurance); transportation services and
cultural services (i.e. the publication, distribution or sale of books,
magazines, periodicals (other than printing or typesetting businesses), music
in print or machine readable form, radio, television, cable and satellite
services; the publication, distribution, sale or exhibitions of film or video
recordings or audio or video music recordings).

     Direct or indirect acquisitions of control of these excluded businesses
are reviewable at the CDN$5 and CDN$50 million thresholds.

     A non-Canadian shall not implement an investment reviewable under the Act
unless the investment has been reviewed and the Minister responsible for
Investment Canada is satisfied or is deemed to be satisfied that the investment
is likely to be of net benefit to Canada. If the Minister is not satisfied that
the investment is likely to be a net benefit to Canada, the non-Canadian shall
not implement the investment or, if the investment has been implemented, shall
divest himself of control of the business that is the subject of the
investment.

                                     Page 39
<PAGE>
     A non-Canadian or American making the following investments:

      (i)  an investment to establish a new Canadian business; and

      (ii) an investment to acquire control of a Canadian business which
           investment is not subject to review under the Act, must notify
           Investment Canada, within prescribed time limits, of such
           investments.

E.  TAXATION.

CANADIAN INCOME TAX CONSEQUENCES

     Management of the Company considers that the following discussion
respecting taxation fairly describes the principal and material Canadian
federal income tax consequences applicable to shareholders of the Company who
are residents of the United States and are not residents of Canada and do not
hold, and are deemed not to hold, Common Shares of the Company in connection
with carrying on a business in Canada (a "non-resident").

     Generally, dividends paid by Canadian corporations to non-resident
shareholders are subject to a withholding tax of 25% of the gross amount of
such dividends. However, Article X of the reciprocal tax treaty between Canada
and the United States reduced to 15% the withholdings tax on the gross amount
of dividends paid to residents of the United States. A further 10% reduction in
1997 in the withholding tax rates on the gross amount of dividends is
applicable when a U.S. corporation owns at least 10% of the voting stock of the
Canadian corporation paying the dividends.

     A non-resident who holds Common Shares of the Company as capital property
will not subject to tax on capital gains realized on the disposition of such
Shares unless such Shares are "taxable Canadian property" within the meaning of
the Income Tax Act (Canada), and no relief is afforded under any applicable tax
treaty. The Common Shares would be taxable Canadian property of a non-resident
if, at any time during the five year period immediately preceding a disposition
by the non-resident of such Shares (a) not less than 25% of the issued shares
of any class of the Company belonged to the non-resident, (b) the person with
whom the non-resident deal did not deal at arm's length, or (c) the non-
resident and any person with whom the non-resident did not deal at arm's
length.

UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

     The following discussion describes the United States federal income tax
consequences of the ownership and disposition of Common Shares of the Company.
The discussion contained in this summary is based on the Internal Revenue Code
of 1986, as amended (the "Code"), existing and proposed Treasury Regulations,
judicial decisions and administrative pronouncements, all of which are subject
to change. Any such changes may be applied retroactively in a manner that could
result in federal income tax consequences different from those discussed below.

     This summary discusses only Common Shares of the Company held by a U.S.
Holder (defined below) as a capital asset within the meaning of Section 1221 of
the Code, and does not deal with special situations, such as those of banks,

                                    Page 40
<PAGE>
thrift institutions, real estate investment trusts, regulated investment
companies, insurance companies, dealers in securities or commodities, tax-
exempt investors, holders whose functional currency is not the U.S. dollar,
persons who hold Common Shares of the Company as a position in a straddle, as
part of a synthetic security or hedge, as part of a conversion transaction or
other integrated investment, or persons who are not U.S. Holders (as defined
below). Further, the summary does not include any description of any
alternative minimum tax consequences or any state, local or foreign tax
consequences that may be applicable. This summary assumes that no U.S. Holder
will own, directly or indirectly, Common Shares of the Company representing 10%
or more of the voting power of the Company.

     HOLDERS OF COMMON SHARES OF THE COMPANY ARE URGED TO CONSULT THEIR TAX
ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND
DISPOSITION OF SUCH SHARES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES,
INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS,
AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR OTHER TAX LAWS.

     As used herein, a "U.S. Holder" means a beneficial owner of Common Shares
of the Company who is (I) a citizen or resident of the United States, (ii) a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any State thereof or the District of Columbia,
(iii) an estate the income of which is subject to United States federal income
taxation regardless of its source, or (iv) a trust the administration of which
is subject to the primary supervision of a court within the United States and
for which one or more U.S. persons have the authority to control all
substantial decisions.

Dividends
---------

     Distributions with respect to the Common Shares (other than liquidating
distributions and certain distributions in redemption of the Common Shares)
which are paid out of current or accumulated earnings and profits, as
calculated for United States federal income tax purposes, generally will
constitute dividends taxable as ordinary income. To the extent the amount of
any such distribution paid with respect to the Common Shares exceeds current
and accumulated earnings and profits, as calculated for United States federal
income tax purposes, such excess distribution will not constitute a dividend
for United States federal income tax purposes, but will be treated first as a
tax-free return of capital to the extent of the holder's adjusted tax basis in
his Common Shares (with a corresponding reduction in such basis) and, to the
extent the distribution exceeds such basis, as a capital gain.

Foreign Tax Credit
------------------

     A U.S. Holder who pays (or has had withheld from distributions) Canadian
income tax with respect to the ownership of Common Shares of the Company may be
entitled, at the option of the U.S. Holder, to either a deduction or a tax
credit for such foreign tax paid or withheld. This election is made on a year-
by-year basis and applies to all foreign taxes paid by (or withheld from) the
U.S. Holder during that year. There are significant and complex limitations

                                     Page 41
<PAGE>

that apply to the credit, among which is the general limitation that the credit
cannot exceed the proportionate share of the U.S. Holder's United States
Federal income tax liability that the U.S. Holder's foreign source income bears
to his worldwide taxable income. The availability of the foreign tax credit and
the application of the limitations on the credit are fact specific and holders
and prospective holders of Common Shares should consult their own tax advisors
regarding their individual circumstances.

Dispositions, Including Redemptions
-----------------------------------

     Any sale, exchange, redemption (except as discussed below) or other
disposition of the Common Shares generally will result in taxable gain or loss
equal to the difference between the amount received upon the sale, exchange,
redemption or other disposition and the holder's adjusted tax basis in the
Common Shares. Such gain or loss generally will be capital gain or loss and
will be long-term capital gain or loss if the holding period for the Shares of
the Company exceeds one year.

     In certain cases, a redemption of Common Shares may be treated as a
dividend, rather than as a payment in exchange for the Shares of the Company.
In such events, the redemption payment will be treated as ordinary dividend
income to the extent that such payment is made out of current or accumulated
earnings and profits, as calculated for United States federal income tax
purposes. The determination of whether the redemption will be treated as a
dividend rather than as payment in exchange for the Common Shares of the
Company will depend upon whether and to what extent the redemption reduces the
holder's percentage stock ownership interest in the Company. A redemption will
be treated as an exchange of stock that produces a capital gain if the
redemption either (1) completely terminates the holder's interest in the
Company under Section 302(b)(3) of the Code, (2) is "substantially
disproportionate" with respect to the holder under Section 302(b)(2) of the
Code, or (3) is "not essentially equivalent to a dividend" under Section
302(b)(1) of the Code.

     A redemption will completely terminate the holder's interest in the
Company as a result of the redemption if, as a result of the redemption, the
holder no longer has any stock interest in the Company, directly or
constructively after application of the attribution rules of Section 302(c) of
the Code. A redemption will be "substantially disproportionate" with respect to
the holder if (1) the ratio of the voting stock owned by the holder (including
stock attributed to the holder under Section 302(c) of the Code) immediately
after the redemption to all the voting stock of the Company is less than 80% of
the same ratio for the voting stock owned by the holder immediately before the
redemption, (2) there is a similar percentage reduction in the ownership by the
holder of Common Shares of the Company, and (3) the holder owns less than 50%
of the voting stock of the Company. Whether a redemption is "not essentially
equivalent to a dividend" with respect to a holder will depend upon the
holder's particular circumstances. The IRS has ruled that a minority
shareholder in a publicly held corporation whose relative stock interest is
minimal and who exercises no control with respect to corporate affairs is
considered to have a "meaningful reduction" if such shareholder has a reduction
in his percentage stock ownership. In determining whether any of the foregoing
tests have been satisfied, the holder is deemed, under the constructive

                                     Page 42
<PAGE>
ownership rules of Section 302(c) of the Code, to own any Common Shares in the
Company owned by certain related persons and entities and any Common Shares
which the holder or certain related persons and entities have an option to
acquire. However, because of the ambiguities in applying the foregoing rules,
holders should consult their tax advisors to determine whether a redemption of
Common Shares will be treated as a dividend or as a payment in exchange for the
Common Shares of the Company.

F.  DIVIDENDS AND PAYING AGENTS.

     Not Applicable.

G.  STATEMENT BY EXPERTS.

     Not Applicable.

H.  DOCUMENTS ON DISPLAY.

     The Company is subject to the informational requirements for foreign
private issuers under the Securities Exchange Act of 1934, as amended. In
accordance with these requirements, the Company files reports on Form 20-F and
6-K with the United States Securities and Exchange Commission. These materials,
including this annual report and the exhibits thereto, may be inspected and
copied at the Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, DC 20549. Copies of the materials may be obtained from the Public
Reference Room at prescribed rates. The public may obtain information on the
operations of the Commission's Public Reference Room by calling the Commission
in the United States at 1-800-SEC-0330. The Commission also maintains
a web site at http://sec.gov that contains reports, proxy statements and other
information regarding registrants that file electronically with the Commission.

I.  SUBSIDIARY INFORMATION.

     Not Applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

INTEREST RATE RISK.

     The Company does not have any outstanding debt with adjustable interest
rates. As a result, the Company will not have any significant exposure to
changes in interest rates.

IMPACT OF CURRENCY FLUCTUATIONS.

     The Company's operating expenses are primarily paid in Canadian dollars.
Fluctuations in the exchange rate between the Canadian dollar and such other
currencies may have a material effect on the Company's results of operations.
In particular, the Company may be adversely affected by a significant
strengthening of the Canadian dollar against the U.S. dollar and the Czech
Republic koruna. The Company has not previously engaged in, and does not now
intend to enter into, any currency hedging or other similar currency hedging
transactions. The Company may enter into such transactions on a non-speculative
basis to the extent that it might in the future have substantial foreign
currency exposure.
                                     Page 43
<PAGE>
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.

     Not Applicable.

PART II.

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.

     None.

ITEM 14. MATERIAL MODIFICATIONS TO RIGHTS OF SECURITY HOLDERS AND USE OF
         PROCEEDS.

     None.

ITEM 15. [RESERVED.]

ITEM 16. [RESERVED.]

PART III.

ITEM 17. FINANCIAL STATEMENTS.

     See Item 18 below for Financial Statements filed as part of this Report.

ITEM 18. FINANCIAL STATEMENTS

     The following documents are filed as Attachment A hereto and are included
as part of this Form 20-F.

ASTRIS ENERGI INC. CONSOLIDATED FINANCIAL STATEMENTS
     Description of Document:
  Auditors' Report for the years ended December 31, 2001 and 2000.
  Consolidated Balance Sheets for the year ended December 31, 2001 and 2000.
  Consolidated Statement of Earning and Loss for the years ended December 31,
    2001 and 2000.
  Consolidated Statement of Cash Flow for the years ended December 31, 2001 and
    2000.
  Notes to Consolidated Financial Statements for the year ended December
    31, 2001 and 2000.

ITEM 19. EXHIBITS.
     None
                                   SIGNATURES

The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.

                                       ASTRIS ENERGI INC.

                                       By: /s/ Jiri K. Nor
                                           ---------------
                                       President and Chief Executive Officer
                                       Date: June 28, 2002
                                    Page 44
<PAGE>





















Astris Energi Inc.
Consolidated Financial Statements
(Canadian Dollars)
December 31, 2001 and 2000






























                                   Page F-1
<PAGE>


Auditors' Report


To the Shareholders of
Astris Energi Inc.

We have audited the consolidated balance sheets of Astris Energi Inc. as at
December 31, 2001 and 2000 and the consolidated statements of loss and
deficit and cash flows for the years then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

The Company's ability to continue as a going concern is in substantial doubt
and is dependent upon the success of the efforts of its directors and
principal shareholders in providing financial support in the short term, the
success of the Company in raising additional long-term financing either from
their own resources or from third parties, the successful commercialization
of one or more of the Company's research projects and the Company attaining
profitable operations.

In our opinion, these consolidated financial statements present fairly, in
all material respects, the financial position of the Company as at December
31, 2001 and 2000 and the results of its operations and cash flows for the
years then ended in accordance with generally accepted accounting
principles.

All figures are in Canadian dollars.


                                                   "Lugowy Associates"
       CHARTERED ACCOUNTANTS

Hamilton, Ontario
April 30, 2002








                                   Page F-2

<PAGE>


Astris Energi Inc.
Consolidated Balance Sheets
(Canadian dollars)

<TABLE>
<CAPTION>
December 31                                      2001          2000
                                              ----------    ----------
<S>                                           <C>           <C>
Assets

Current
    Cash                                      $  10,989     $   16,262
    Receivables                                  37,563         48,692
    Prepaid expenses and deposits                 1,050         34,696
    Marketable security (Note 3)                                51,450
    Investment tax credits refundable                           61,000
    Deferred costs (Note 9)                     122,818         64,303
                                                172,420        276,403

Capital assets (Note 4)                           5,180          5,302

                                              $ 177,600      $ 281,705
Liabilities

Current
    Payables and accruals (Note 5)            $ 260,485      $ 393,102
    Goods and Services Tax payable               23,041         24,473
                                                283,526        417,575

Advances from related parties (Note 5)          417,287        417,287
                                                700,813        834,862

Shareholders' deficiency

Share capital (Note 7)                        2,059,226      1,435,298
Deficit                                      (2,582,439)    (1,988,455)
                                               (523,213)      (553,157)

                                              $ 177,600      $ 281,705
Basis of presentation (Note 1)
Contingency (Note 10)
</TABLE>

Approved on behalf of the Board:


        /s/ Jiri K. Nor                          /s/ Gordon T. Emerson
--------------------------------     -------------------------------------
        President                                   Treasurer

See accompanying notes to consolidated financial statements.

                                   Page F-3
<PAGE>
Astris Energi Inc.
Consolidated Statements of Loss and Deficit
(Canadian dollars)
<TABLE>
<CAPTION>
Years ended December 31                           2001          2000
                                              -----------   -----------
<S>                                           <C>           <C>
Revenue                                       $    26,787   $    22,824

Expenses
    Subcontract (Note 5)                          495,736       180,807
    General and administrative                     65,548       173,155
    Professional fees                              76,643        64,054
    Interest (Note 5)                              19,267        15,455
    Amortization                                    1,666        1,581
                                                  658,860       435,052

Net loss before the following                    (632,073)     (412,228)

    Gain on sale of marketable security            38,089       376,648

Net loss for the year                            (593,984)      (35,580)

Deficit, beginning of year                     (1,988,455)   (1,952,875)

Deficit, end of year                          $(2,582,439)  $(1,988,455)

Loss per common share (Note 7)                $    (0.047)  $    (0.003)


</TABLE>




















See accompanying notes to consolidated financial statements.

                                   Page F-4

<PAGE>



Astris Energi Inc.
Consolidated Statements of Cash Flows
(Canadian dollars)

<TABLE>
<CAPTION>

Years ended December 31                                  2001          2000
                                                      ----------    ----------
<S>                                                   <C>           <C>
Operating

Net loss for the year                                 $(593,984)    $ (35,580)
Items not requiring cash
    - amortization                                        1,666         1,581
    - consulting fees paid in capital stock to
          non-related parties                            99,672        21,000
    - consulting fees and expenses paid in
          capital stock to related parties              208,050        50,000
Gain on sale of marketable security                     (38,089)     (376,648)
Net change in non-cash working capital balances
    related to operations (Note 8)                      (86,789)      (67,361)

                                                       (409,474)     (407,008)
Investing
  Proceeds on sale of marketable security                89,539       425,196
  Purchase of capital assets                             (1,544)       (6,883)
                                                         87,995       418,313
Financing
  Issuance of common shares                             316,206           103
                                                        316,206           103

Net increase (decrease) in cash during the year          (5,273)       11,408

Cash, beginning of year                                  16,262         4,854

Cash, end of year                                     $  10,989     $  16,262

</TABLE>










See accompanying notes to consolidated financial statements

                                   Page F-5

<PAGE>
Astris Energi Inc.
Notes to Consolidated Financial Statements
(Canadian dollars)
December 31, 2001 and 2000

1.  Basis of Presentation

These consolidated financial statements reflect the accounts of Astris Energi
Inc. (the "Company") and its wholly-owned subsidiary, Astris Inc., which was
acquired on December 31, 1995.  The Company is dedicated to the research and
development of alternative energy sources.  The Company has incurred several
years of losses and as at December 31, 2001 has a shareholders' deficiency of
approximately $523,000.

The consolidated 2001 and 2000 financial statements have been prepared in
accordance with accounting principles generally accepted in Canada on a going
concern basis which presumes the realization of assets and the discharge of
liabilities in the normal course of business for the foreseeable future.

The Company's ability to continue as a going concern is in substantial doubt
and is dependent upon the success of the efforts of its directors and
principal shareholders in providing financial support in the short term, the
success of the Company in raising additional long-term financing either from
their own resources or from third parties, the successful commercialization of
one or more of the Company's research projects and the Company achieving
profitable operations.

The outcome of these matters cannot be predicted at this time.  These
consolidated financial statements do not include any adjustments to the
amounts and classifications of assets and liabilities that might be necessary
should the Company be unable to continue in business.

These consolidated financial statements also conform to U.S. generally
accepted accounting principles and no reconciliation between Canadian and U.S.
generally accepted accounting principles is required, except as noted in the
second paragraph of the revenue recognition section of Note 2.

2.  Significant Accounting Policies

Revenue recognition

Revenue is recognized at point of sale when goods are shipped and title
passes.  In cases where consulting services are provided, revenue is recognized
upon completion of the service provision.

A royalty was received in 1998 from the company referred to in Note 3 in the
amount of $25,000.  Originally the amount was accounted for as revenue in
1998.  Subsequently, a change was made to reflect $4,750 as revenue and $20,250
as deferred revenue in 1998 and $20,250 as revenue in 1999.  This change is
based on the fact that the royalty was for the period from October, 1998
through to December 1999 and, therefore, was pro-rated between the years based
on the number of months in each year.



                                   Page F-6
<PAGE>
Astris Energi Inc.
Notes to Consolidated Financial Statements
(Canadian dollars)
December 31, 2001 and 2000

2.  Significant Accounting Policies (cont'd.)

This treatment now complies with Canadian generally accepted accounting
principles.

Revenue recognition in these consolidated financial statements is not
consistent with U.S. GAAP.  Under U.S. GAAP, the initial payment received at
the beginning of a contract, not attributable to any specific provision of
goods or services, must be pro-rated over the life of the contract.
Accordingly, regarding the ten-year license agreement between the Company and
Energy Ventures Inc. (Canada), dated October 22, 1998, wherein an initial
payment of $25,000 was received by the Company on October 22, 1998, annual
allocations of $2,500 would be required to be made to income.

The following is a tabulation of comparative numbers under Canadian and U.S.
GAAP:
<TABLE>
<CAPTION>
                                  Canadian GAAP              U.S. GAAP
                                  2001         2000          2001      2000
                               ---------------------      -------------------
 <S>                           <C>          <C>           <C>        <C>
  Royalty income               $ 10,000     $ 10,000      $ 12,500   $ 12,500

  Shareholders' deficiency     $523,213     $553,157      $540,296   $572,740
</TABLE>

Development costs and scientific research

All costs relating to scientific research, development and product evaluation
are expensed as incurred.  Investment tax credits and government grants
received toward these costs are netted against the related expenses.  As there
has been uncertainty concerning recovery of investment tax credits, they are
recognized upon notification by regulatory bodies.

Taxes payable

The Company follows the liability method of accounting for income taxes.
Under this method, income taxes reflect the future income tax consequences of
differences between the financial statement carrying amounts and income tax
bases of assets, liabilities, loss carryforwards and tax credits.


Goods and Services Tax is an amount payable in respect of federal commodity
tax which was instituted in Canada in 1991.  The amount became payable upon the
sale of the Company's assets (see Note 3).

the reported amounts of revenue and expenses during the year.  Actual amounts
could differ from those estimates.

                                   Page F-7
<PAGE>
Astris Energi Inc.
Notes to Consolidated Financial Statements
(Canadian dollars)
December 31, 2001 and 2000

2.  Significant Accounting Policies (cont'd.)

Financial instruments

The fair value of financial instruments contained in these consolidated
financial statements approximates book value unless otherwise indicated.

Use of estimates

The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and

The financial risk is the risk to the Company's earnings that arises from
fluctuations in interest rates and the degree of volatility of these rates.
The Company does not use derivative instruments to reduce its exposure to
interest risk.

The Company is exposed to credit risk on the accounts receivable from its
customers.  In order to reduce its credit risk, the Company has adopted credit
policies which include the analysis of the financial position of its customers
and the regular review of their credit limit.

Loss per share

Basic loss per share is calculated on the weighted average number of shares
outstanding during the year.

3.  Marketable security

During 1998, all capital assets were sold to a public company (Energy Ventures
Inc. (Canada)) in return for 200,000 shares of that company.  As there was not
an active market for the shares of the public company, the shares were valued
at an amount equivalent to the net book value of the capital assets.  There
was a legend on the share certificates restricting sale of the shares for a
period of one year from October 1998 and one-half of the shares for a further
year from October 1999, by reason of Rule 144 under the Securities Act.  The
share that could be sold were disclosed as a marketable security.  The market
value of these shares at December 31, 2000 was not readily determinable, as the
shares are not regularly traded.

The value of the shares was corrected in 1998 from the original valuation of
$694,485 to $100,000 on the previously issued financial statements.  As a
result, the gain previously recorded at $594,487 was reduced to nil.  The per-
share effect of this writedown was $0.056 per share.  The Company sold 102,900
shares for proceeds of $89,539 during year 2001 and 97,100 shares for proceeds
of $425,196 during year 2000, yielding a gain on sale of $38,089 and $376,648,
respectively.  Number of shares on hand at December 31, 2001 was nil (2000:
102,900).

                                   Page F-8
<PAGE>
Astris Energi Inc.
Notes to Consolidated Financial Statements
(Canadian dollars)
December 31, 2001 and 2000

4.  Capital Assets
<TABLE>
<CAPTION>
                                                      2001          2000
                                       Accumulated    Net Book    Net Book
                                  Cost Amortization   Value       Value
                                ------ ------------  ---------   ---------
<S>                             <C>        <C>       <C>         <C>
Office furniture and equipment  $ 8,427     $ 3,247  $ 5,180     $ 5,302
                                $ 8,427     $ 3,247  $ 5,180     $ 5,302
</TABLE>

5.  Advances from Related Parties

The following amounts have been advanced from related parties:
<TABLE>
<CAPTION>
                                                       2001         2000
                                                   ----------   ----------
<S>                                                <C>          <C>
Due to a shareholder                               $  315,287   $  315,287
Due to Timagami Financial Services, a company
    controlled by a director and officer                2,000        2,000
Debenture due to shareholders                         100,000      100,000
                                                   $  417,287   $  417,287
</TABLE>

Due to a shareholder

With respect to the amount due to a shareholder, the amount has arisen
primarily as a result of the recognition of amounts subject to reimbursement
to the shareholder for expenses incurred on behalf of the Company.  These
amounts are to be reimbursed only if external financing amounting to $5,000,000
(U.S.) has been raised by the shareholder (see Note 10).

Due to Timagami Financial Services

This advance is unsecured and bore interest at 12% per annum only to December
31, 1998.  Unpaid interest is accrued to December 31, 1998, totalling
approximately $12,400 and is included in payables and accruals.  $35,204 was
repaid in the year 2000 by issuance of the Company's capital stock.  (Please
also see Note 7.)  The balance is shown as a long-term liability as there are
no specific terms or repayment and the holder of the debt has indicated that
this amount will not be requested for repayment prior to July 7, 2003.

Debenture due to shareholders

The debenture due to shareholders is secured and bears interest at 12% per
annum.  Unpaid interest, accrued to December 31, 2001, totalling approximately

                                   Page F-9
<PAGE>
Astris Energi Inc.
Notes to Consolidated Financial Statements
(Canadian dollars)
December 31, 2001 and 2000

5.  Advances from Related Parties (cont'd.)

$34,700, is included in payables and accruals.  Although the Company is in
technical default of its debenture agreement as a result of the interest
payments being in arrears, there are no specific terms of repayment and the
debenture holders have indicated that they will not demand repayment until
after July 7, 2003.  Accordingly, the amount payable under the debenture has
been classified as a long-term liability.  The debenture is collateralized by
a fixed and floating charge on all of the assets and business of Astris Inc.

Payables and accruals

The Company has a 30% ownership interest in Astris S.R.O., a Czech company, in
which the remaining 70% is owned by a company owned by a shareholder of the
Company (Macnor Inc.).  The Company's 30% interest in losses of Astris S.R.O.
has been applied to its investment.  This investment is accounted for on the
equity basis.  As the Company's share of losses is in excess of the original
investment, the investment has been written off to nil in a prior year.  The
balance owing to Astris S.R.O. at December 31, 2001 is $ 7,485 (2000: $ Nil).

In addition, payables include the following amounts:
for consulting fees
     $ Nil owing to Crawford Associates, owned by a shareholder(2000-$10,450);
     $20,420 owing to Macnor Inc., owned by a shareholder (2000 - $36,000);
     $ 2,500 owing to a shareholder (2000 - $ Nil); for accrued interest
     $10,574; $18,905; $5,243 owing to each of the three shareholders holding
        the debenture payable (2000 - $5,114; $7,798; $2,543).

During 2001, the following amounts were expensed as consulting fees to
shareholders and other related parties:
<TABLE>

         <S>                     <C>
         Macnor Inc.             $120,000 (2000 - $ 90,000)
         G. Crawford             $ Nil (2000 - $ 10,450)
         G. Emerson              $35,000 (2000 - $ 72,500)
</TABLE>

During 2001, the following amounts were expensed as interest to shareholders:
<TABLE>
         <S>                     <C>
         J. Nor                  $  5,460 (2000 - $5,114)
         D. Blenkarn             $ 11,107(2000 - $7,798)
         G. Crawford             $  2,700 (2000 - $2,543)
</TABLE>

During a previous year the Company signed an agreement with a company owned by
one of the shareholders (Macnor Inc.) under which Macnor would open a website
for Astris and market some of Astris' products.  Astris will receive 5% of any

                                  Page F-10
<PAGE>
Astris Energi Inc.
Notes to Consolidated Financial Statements
(Canadian dollars)
December 31, 2000 and 1999

5.  Advances from Related Parties (cont'd.)

recorded sales.  Such sales occurred in the year ended December 31, 2001 in
the amount of $1,201 (2000: $431) and, accordingly, have been included in the
Company's accounts.

6.  Income Taxes

The Company has tax loss carryforwards of approximately $2,647,000.  If
unused, the tax losses will expire as follows:
<TABLE>
                   <C>           <C>
                   2008          $  594,000
                   2007          $   35,000
                   2006          $   61,000
                   2004          $   34,000
                   2003          $1,856,000
                   2002          $   67,000
</TABLE>

The potential income tax benefit arising from loss carryforwards has not been
reflected in these consolidated financial statements. The Company will
determine its income tax on the liability method when it is in a taxable
position.

During 2001 and 2000, the Company received or received notification of
investment tax credit refunds of $ Nil and $61,000, respectively, which are
netted against subcontract expense.

7.  Share Capital

Share capital consists of the following:
         Authorized:  60,000,000 common shares
                      10,000,000 preferred shares
<TABLE>
<CAPTION>
Issued and Outstanding:                             Common Shares
                                                    #            $
                                               ----------    ---------
<S>                                            <C>           <C>
Issued as at December 31, 1998                 10,188,556    1,049,301
To be issued as at December 31, 1998              455,000       37,375
                                               10,643,556    1,086,676

Issued in 1999                                        Nil          Nil

Issued in 2000                                  1,494,228      348,622

Balance as at December 31, 2000                12,137,784    1,435,298
</TABLE>
                                    Page F-11
<PAGE>
Astris Energi Inc.
Notes to Consolidated Financial Statements
(Canadian dollars)
December 31, 2001 and 2000

7.  Share Capital (cont'd.)

<TABLE>
<CAPTION>
Issued in 2001:
  <S>                                          <C>           <C>
  -  in exchange for consulting fees from
    non-related parties                           182,300       99,672

  -  in exchange for consulting fees and
    expenses from related parties                 341,885      208,050

  -  issued for cash on exercise of options       325,000      121,206

  -  issued for cash                              353,250      195,000
                                                1,202,435      623,928

Balance as at December 31, 2001                13,340,219    2,059,226
</TABLE>

No preferred shares have been issued.

At December 31, 2001, the Company had issued capital stock comprising
12,885,219 common shares (2000: 11,682,784 common shares).  However, 455,000
common shares are to be issued to shareholders of a predecessor company.
These shareholders will be issued common shares in the Company if and when they
present their share certificates in the predecessor company to the registrar.

The loss per share calculations were based on a weighted average of 12,638,160
issued and outstanding common shares for 2001 and 11,446,010 issued and
outstanding common shares for 2000.

During 1998, an option was granted to the public company which purchased the
capital assets (see Note 3), to purchase 1,000,000 common shares of the
Company at $0.30 (U.S.) per share.  The option will expire on October 22, 2003.

On March 8, 2000, the Board of Directors passed a resolution authorizing a
stock option plan.  The plan was adopted by the Company's shareholders at its
annual and special meeting of shareholders in August 2000.  The plan consists
of 1,000,000 common shares for granting to its officers, directors, employees
and consultants. The exercise price shall not be less than the market price
prevailing at date of grant and, if the market price is not available, the
Board will determine a fair market value on the day preceding the date of
grant.  The term of the option will be determined by the Board at time of
grant, but may not exceed five years.

On December 31, 2000, options to purchase 675,000 common shares were granted
under the plan to employees at prices ranging from $0.25 (Canadian) to $0.50
(U.S.) and expiring in March and August, 2005.

                                   Page F-12
<PAGE>
Astris Energi Inc.
Notes to Consolidated Financial Statements
(Canadian dollars)
December 31, 2001 and 2000

7.  Share Capital (cont'd.)

On April 16, 2001, options to purchase the remaining 325,000 common shares
were granted under the plan to directors and consultants at a price of $0.50
(U.S.), expiring on March 5, 2005.

Pursuant to a subscription agreement dated September 21, 2001, with a Canadian
controlled private corporation (the "subscriber"), the Company issued as a
private placement, 250,000 units, comprising one common share and one common
share purchase warrant each, for an aggregate purchase price of
$100,000(U.S.).  Each common share purchase warrant is exercisable up to
September 20, 2004, at $0.50 (U.S.) per share.  The Company agreed with the
subscriber to allocate to it 275,000 common share purchase warrants in this
subscription agreement.

On September 25, 2001, the Board of Directors passed a resolution authorizing
a new stock option plan.  The plan was adopted by the Company's shareholders at
its annual and special meeting of shareholders held in November 2001.  The
Plan consists of 1,200,000 common shares for granting to its officers,
directors, employees and consultants. The exercise price shall not be less than
the market price prevailing on the day prior to the date of grant and, if the
market price is not available, the Board will determine a fair market value in
good faith on the day preceding the date of grant.  The term of the option will
be determined by the Board at time of grant, but may not exceed five years.

On September 25, 2001, options to purchase 600,000 common shares were granted
under this plan to two employees at a price of $0.24 (U.S.) per share,
expiring in September, 2006.  Both grants are conditional upon the employees
achieving their respective targets in areas of technology and finance.

In accordance with the terms of an agreement, dated November 29, 2001, with a
business development consultant (a corporation domiciled in California,
U.S.A.), the Company has granted to the consultant, as compensation, an option
to purchase 125,000 common shares at a price of $0.50 (U.S.) per share,
expiring on October 31, 2006.

As at December 31, 2001, the Company has 475,000 shares under the options plan
to be allocated.

8.  Consolidated Statements of Cash Flows

The net change in non-cash operating working capital balances consists of the
following:







                                   Page F-13
<PAGE>
Astris Energi Inc.
Notes to Consolidated Financial Statements
(Canadian dollars)
December 31, 2001 and 2000

8.  Consolidated Statements of Cash Flows (cont.)

<TABLE>
<CAPTION>
                                                     2001          2000
                                                  ----------    ----------
<S>                                               <C>           <C>
Decrease (increase) in receivables                $  11,129     $  (5,882)
Decrease (increase) in prepaid expenses              33,646       (34,696)
Increase in investment tax credits refundable        61,000       (61,000)
Increase in deferred costs                          (58,515)      (64,303)
Increase in payables and accruals                  (132,617)      116,857
Decrease in Goods and Services Tax payable           (1,432)      (18,337)
                                                   --------      --------
                                                  $ (86,789)    $ (67,361)
</TABLE>

9.  Deferred Costs

In September, 2000, the Company filed a registration statement with the United
States Securities and Exchange Commission in order to become eligible for
trading its shares on the OTC Bulletin Board Service.  Approval therefore was
received on April 17, 2001.

Costs incurred in the filing and subsequent receipt of the approval, are
deferred with a view to applying these costs against funds generated from
future sales of the Company's capital stock.

Such costs accumulated to December 31, 2001, amounted to $122,818 (2000:
$64,303).

To date, there have been no sales of the Company's capital stock in that
regard.

10.  Contingency

During 1999 a shareholder initiated legal claim against the Company for
repayment of advances and expenses in the amount of $315,287.  Management
feels this advance is not repayable unless certain external financing is
raised.  Since this has not been achieved, management feels there is no
requirement to repay the advance.  No further cash payments are anticipated
beyond the possible repayment of these advances and related legal fees.

Subsequently, in February 2001, the shareholder mentioned above had given
notice to the Company of his intention to increase his claim by $1,627,301 to
cover additional expenses he allegedly incurred on behalf of the Company.  The
Company believes that this additional claim is frivolous and without merit.



                                   Page F-14
<PAGE>