<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                              --------------------

                                   FORM 10-QSB

(Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For The Quarter Ended April 30, 2000 or

[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For The Transition Period from _______to_______

Commission File Number 1-14503




                           DECTRON INTERNATIONALE INC.
                           ---------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Quebec, Canada                                                              N/A
--------------                                                              ---
(State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization)                              Identification No.)

4300 Poirier Blvd., Montreal                                            H4R 2C5
----------------------------                                            -------
(Address of principal executive offices)                             (Zip Code)

Registrant's telephone number, including area code: 514-334 9609

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



                      APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: April 26, 2000, 2,795,000
Common Shares outstanding

         Transitional Small Business Disclosure (check One):

 Yes    [_]         No [X]


<PAGE>








                           DECTRON INTERNATIONALE INC.

                                      INDEX
                                      -----

<TABLE>
<CAPTION>
                                                                                                PAGE
                                                                                                ----
<S>                                                                                             <C>
PART I - FINANCIAL INFORMATION

ITEM 1- FINANCIAL STATEMENTS

Interim Consolidated Balance Sheet - April 30, 2000..............................................2-3

Interim Consolidated Statements of Earnings - For the three months ended April
30, 2000
and the three months ended April 30, 1999 .......................................................4-5

Interim Consolidated Statements of Cash Flows - For the three months ended April
30, 2000
and three months ended April 30, 1999............................................................6-8

Interim Consolidated Statements of Stockholders' Equity............................................9

Interim Notes to Financial Statements..........................................................10-26

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITIONS AND RESULTS OF OPERATIONS...................................................27


PART II - OTHER INFORMATION

ITEM 2 - CHANGES IN SECURITIES....................................................................28

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.........................................................28

SIGNATURES....................................................................................... 29
</TABLE>



<PAGE>













                           DECTRON INTERNATIONALE INC.
                    INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                              AS AT APRIL 30, 2000













<PAGE>

















                           DECTRON INTERNATIONALE INC.
                    INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                              AS AT APRIL 30, 2000











<TABLE>
<CAPTION>
                                TABLE OF CONTENTS


<S>                                                             <C>
Interim Consolidated Balance Sheets                             2 - 3

Interim Consolidated Statements of Earnings                       4-5

Interim Consolidated Statements of Cash Flows                   6 - 8

Interim Consolidated Statements of Stockholders' Equity             9

Interim Notes to Consolidated Financial Statements            10 - 26
</TABLE>





<PAGE>


DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED BALANCE SHEETS
AS AT APRIL 30, 2000 AND JANUARY 31, 2000
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)


<TABLE>
<CAPTION>
                                                             APRIL 30,          JANUARY 31,
                                                               2000                2000
                                                                 $                   $
                                                          ---------------     ----------------
                                   A S S E T S

CURRENT

<S>                                                           <C>                 <C>
     Cash                                                        359,199             220,562
     Accounts receivable (note 3)                              8,010,173           7,626,840
     Inventory (note 4)                                        8,817,174           8,169,607
     Prepaid expenses and sundry assets                        1,193,065           1,062,973
     Deferred income taxes                                        63,682              85,699
                                                          ---------------     ----------------

                                                              18,443,293          17,165,681

LOANS RECEIVABLE (note 5)                                        126,777             179,939

PROPERTY, PLANT AND EQUIPMENT (note 6)                        10,483,674           7,673,802

DEPOSIT ON BUILDING                                                    -           1,000,000

INTANGIBLES (note 7)                                              95,616              99,218

GOODWILL (note 8)                                              1,674,226           1,759,297

DEFERRED INCOME TAXES                                            126,635             107,152
                                                          ---------------     ----------------

                                                              30,950,221          27,985,089
                                                          ===============     ================
</TABLE>










        The accompanying notes are an integral part of these consolidated
                              financial statement



<PAGE>

DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED BALANCE SHEETS
AS AT APRIL 30, 2000 AND JANUARY 31, 2000
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)

<TABLE>
<CAPTION>
                                                                APRIL 30,          JANUARY 31,
                                                                  2000                2000
                                                                    $                   $
                                                             --------------      ---------------
                              L I A B I L I T I E S
<S>                                                              <C>                 <C>
CURRENT

     Bank loans (note 9)                                          5,834,368           5,616,167
     Accounts payable and accrued expenses (note 10)              5,906,351           5,096,977
     Income taxes payable                                            86,070             140,361
     Current portion of long-term debt (note 11)                  1,611,055           1,263,073
     Current portion of deferred revenue (note 14)                  233,232             228,079
                                                             --------------      ---------------

                                                                 13,671,076          12,344,657

LONG-TERM DEBT (note 11)                                          6,614,608           4,657,838

DUE TO DIRECTOR (note 12)                                            34,286              51,905

LOAN PAYABLE (note 13)                                              258,112             275,057

                                                             --------------      ---------------
DEFERRED REVENUE (note 14)                                          752,983             732,158
                                                             --------------      ---------------


                                                                 21,331,065          18,061,615
                                                             --------------      ---------------

                              STOCKHOLDERS' EQUITY

CAPITAL STOCK (note 15)                                           6,849,609           6,849,609

TREASURY STOCK                                                      (88,780)            (88,780)

ACCUMULATED OTHER COMPREHENSIVE INCOME                             (261,099)            289,121

RETAINED EARNINGS                                                 3,119,426           2,873,524
                                                             ---------------     ---------------

                                                                  9,619,156           9,923,474
                                                             ---------------     ---------------

                                                                 30,950,221          27,985,089
                                                             ===============     ===============
</TABLE>

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


<PAGE>

DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED APRIL 30, 2000 AND APRIL 30, 1999
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)


<TABLE>
<CAPTION>
                                                            THREE             THREE
                                                            MONTHS            MONTHS
                                                            ENDED             ENDED
                                                          APRIL 30,          APRIL 30,
                                                             2000              1999
                                                     ---------------      ---------------
                                                               $                 $

<S>                                                      <C>                  <C>
        Net sales                                         8,626,887            7,316,795

        Cost of sales                                     5,736,210            5,156,786
                                                     ---------------      ---------------

        Gross profit                                      2,890,677            2,160,009
                                                     ---------------      ---------------

        Operating expenses

               Selling                                    1,317,161              858,608
               General and administrative                   586,036              406,402
               Depreciation and amortization                340,661              253,184
               Interest expense                             297,208               88,412
                                                     ---------------      ---------------

                                                          2,541,066            1,606,606
                                                     ---------------      ---------------

        Income before income taxes                          349,611              553,403

               Income taxes                                 103,709              184,855
                                                     ---------------      ---------------

        Net Income                                          245,902              368,548
                                                     ===============      ===============
</TABLE>















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


<PAGE>

DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED APRIL 30, 2000 AND YEAR ENDED JANUARY 31, 2000
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)


<TABLE>
<CAPTION>
                                                                            THREE MONTHS               YEAR
                                                                                ENDED                  ENDED
                                                                              APRIL 30,             JANUARY 31,
                                                                                2000                   2000
                                                                           ---------------      ----------------
                                                                                 $                       $

<S>                                                                            <C>                  <C>
        Net sales                                                               8,626,887            31,402,954

        Cost of sales                                                           5,736,210            20,168,656
                                                                           ---------------      ----------------

        Gross profit                                                            2,890,677            11,234,298
                                                                           ---------------      ----------------

        Operating expenses

               Selling                                                          1,317,161             5,270,656
               General and administrative                                         586,036             2,065,155
               Depreciation and amortization                                      340,661             1,187,662
               Interest expense                                                   297,208               674,287
                                                                           ---------------      ----------------

                                                                                2,541,066             9,197,760
                                                                           ---------------      ----------------

        Income before income taxes                                                349,611             2,036,538

               Income taxes                                                       103,709               909,775
                                                                           ---------------      ----------------

        Net Income                                                                245,902             1,126,763
                                                                           ===============      ================


        Net income per common stock
                                                                                     0.09                  0.40
                                                                           ===============      ================


        Number of common stock outstanding                                      2,795,000             2,795,000
                                                                           ===============      ================
</TABLE>




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


<PAGE>

DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE  THREE MONTHS PERIOD  ENDING APRIL 30, 2000 AND APRIL 30, 1999
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)

<TABLE>
<CAPTION>
                                                                            THREE MONTHS         THREE MONTHS
                                                                               ENDED            ENDED APRIL 30,
                                                                             APRIL 30,               1999
                                                                               2000
                                                                      ---------------------    ------------------
                                                                                $                      $

<S>                                                                                <C>                   <C>
     Cash flows from operating activities:
          Net income                                                               245,902               368,548

     Adjustments to reconcile net income to net cash
     (used in) provided by operating activities:

          Depreciation and amortization                                            340,661               253,184
          Increase in accounts receivable                                        (383,333)           (1,144,121)
          Increase in inventory                                                  (647,567)             (453,337)
          Increase in prepaid expenses and sundry assets                         (130,092)             (522,141)
          Increase in accounts payable and accrued expenses                        809,374               312,325
          Increase (decrease) in income taxes payable                             (54,291)                70,683
          Increase in deferred revenue                                              25,978                66.881
          Increase (decrease) in deferred income taxes                             (2,534)                15,800
                                                                      ---------------------    ------------------

     Net cash (used in) provided by operating activities                           204,098           (1,032,178)
                                                                      ---------------------    ------------------
</TABLE>



















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

<PAGE>

DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE  THREE MONTHS PERIOD  ENDING APRIL 30, 2000 AND APRIL 30, 1999
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)


<TABLE>
<CAPTION>
                                                                                    THREE MONTHS            THREE
                                                                                        ENDED               MONTHS
                                                                                      APRIL 30,         ENDED APRIL 30,
                                                                                        2000                 1999
                                                                                 -----------------      ---------------
                                                                                         $                    $
<S>                                                                                  <C>                    <C>
      Cash flows from investing activities:

          Acquisition of property, plant and equipment                                (3,056,792)            (389,482)
          Deposit on building                                                           1,000,000                  --

                                                                                 -----------------      ---------------

      Net cash used in investing activities                                           (2,056,792)            (389,482)

      Cash flows from financing activities:

          (Advances to ) repayments from directors                                       (17,619)                   --
          (Advances to) repayments from corporate shareholders                                --                39,310
          (Advances to) repayments from loan receivable                                    53,162                   --
          Advance from (repayments of) bank loans                                         218,201            1,186,829
          Advances from (repayments of) notes payables                                         --            (131,975)
          Advances from (repayments of) other loan payable                                     --             (64,553)
          Advances from (repayments of) long-term debt                                  2,304,752            (153,609)
          Advances from (repayment of) loan payable.                                     (16,945)                   --
                                                                                 -----------------      ---------------

      Net cash provided by financing activities                                         2,541,551              876,002

      Effect of foreign currency exchange rate changes                                  (550,220)              155,956
                                                                                 -----------------      ---------------
</TABLE>








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

<PAGE>

DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE  THREE MONTHS PERIOD  ENDING APRIL 30, 2000 AND APRIL 30, 1999
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)

<TABLE>
<CAPTION>
                                                                             THREE MONTHS              THREE
                                                                            ENDED APRIL 30,            MONTHS
                                                                                 2000              ENDED APRIL  30,
                                                                                                       1999
                                                                           ---------------        ----------------
                                                                                  $                         $

<S>                                                                              <C>                   <C>
       NET INCREASE (DECREASE IN CASH AND
       CASH EQUIVALENTS                                                           138,637               (389,702)

            Cash and cash equivalents,  beginning of year                         220,562                 389,702
                                                                           ---------------        ----------------

       CASH AND CASH EQUIVALENTS, END OF YEAR                                     359,199                     --
                                                                           ===============        ================



       SUPPLEMENTAL DISCLOSURE OF CASH FLOW
            INFORMATION

            Interest paid                                                         241,902                  85,808
                                                                           ===============        ================

            Income taxes paid                                                     164,512                 244,646

                                                                           ===============        ================
</TABLE>










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


<PAGE>

DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS PERIOD ENDING APRIL 30, 2000
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)

<TABLE>
<CAPTION>
                                                               Cumulative    Other
                                                                Retained  Comprehensive  Treasury
                                      Number       Amount       Earnings     Income       Stock
                                   ----------   -----------   ----------- -------------  --------
                                                      $             $           $

<S>                                <C>          <C>            <C>             <C>       <C>
Balance January 31, 1998               91,267     1,934,695       617,580       (94,777)       --

Redemption of shares                  (91,267)   (1,934,695)           --            --        --
Issuance of common shares           2,795,000     8,421,450            --            --        --
Cost of issuance                           --    (1,553,921)           --            --        --
Foreign currency translation               --            --            --        27,110        --
Net income for the year                    --            --     1,129,181            --        --
                                   ----------   -----------   ----------- -------------  --------

Balance January 31, 1999            2,795,000     6,867,529     1,746,761       (67,667)       --

Purchase of 20,000 common shares           --            --            --            --   (88,780)
Share purchase plan receivable             --      (499,946)           --            --        --
Deferred tax benefit                       --       482,026            --            --        --
Foreign currency translation               --            --            --       356,788        --
Net Income for the year                    --            --     1,126,763            --        --
                                   ----------   -----------   ----------- -------------  --------

Balance January 31, 2000            2,795,000     6,849,609     2,873,524       289,121   (88,780)
                                   ==========   ===========   =========== =============  ========

Net income for period ended
April 30, 2000                             --            --       245,902            --        --
Foreign currency translation               --            --            --      (550,220)       --
                                   ----------   -----------   ----------- -------------  --------

Balance April 30, 2000              2,795,000     6,849,609     3,119,426      (261,099)   (88,780)
                                   ==========   ===========   =========== =============  ========
</TABLE>

<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)




1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         a)       Basis of Consolidated Financial Statements Presentation

                  These consolidated financial statements include the accounts
                  of Dectron Internationale Inc., Dectron Inc. Consolidated and
                  Circul-aire Group.

                  Dectron Inc. Consolidated is comprised of Dectron Inc. and of
                  its wholly-owned subsidiaries, Refplus Inc., Thermoplus Air
                  Inc., Fiber Mobile Ltd., Dectron U.S.A. Inc. and IPAC 2000
                  Inc.

                  Circul-aire Group is comprised of 9048-3140 Quebec Inc. and
                  Cascade Technologies Inc., and of its wholly-owned
                  subsidiaries, PM Wright Ltd., Purafil Canada Inc. and 122248
                  Canada Inc.

                  All inter-company profits, transactions and account balances
                  have been eliminated.

         b)       Principal Activities

                  The company Dectron Internationale Inc. was incorporated on
                  March 30, 1998. These companies are principally engaged in the
                  production of dehumidification, refrigeration, indoor air
                  quality (IAQ), ventilation, air conditioning and air
                  purification systems in Canada and its distribution world
                  wide. The activities of Dectron Internationale Inc., Cascade
                  Technologies Inc., 9048-3140 Quebec Inc. are immaterial in the
                  aggregate, as their only activity is to hold the investments
                  in the operating companies.

         c)       Cash and Cash Equivalents

                  Cash and cash equivalents include cash on hand, amounts due
                  from banks and any other highly liquid investments purchased
                  with a maturity of three months or less. The carrying amounts
                  approximate fair value because of the short maturity of these
                  instruments.

         d)       Revenue Recognition

                  Contract revenue is accounted for under the percentage of
                  completion method prorated on units produced. When a terminal
                  loss on a contract can be reasonably estimated, the total
                  estimated amount of the loss is charged to income for the
                  year.

         e)       Inventory

                  Inventory of raw materials is valued at the lower of cost and
                  replacement cost and inventory of work-in-process and finished
                  goods at the lower of cost and net realizable value. Cost is
                  determined on the first-in, first-out basis.



<PAGE>



DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         f)       Property, Plant and Equipment

                  Property, plant and equipment are recorded at cost and are
                  depreciated or amortized on the basis of their estimated
                  useful lives at the undernoted rates and methods:

<TABLE>
<S>                                                                <C>             <C>
                  Building                                         4 or 5%         Straight-line
                  Machinery and equipment                          10%             Straight-line or 20% declining
                  balance
                  Furniture and fixtures                           15 or 20%       Straight-line    or   20%   declining
                  balance
                  Computer equipment                               15 or 30%       Straight-line 0r 30% declining
                  balance
                  Rolling stock                                    30%             Straight-line or 30% declining
                  balance
                  Equipment under capital leases                   20 or 30%       Declining balance
                  Leasehold improvements                                           Straight-line over term of the lease
</TABLE>

                  Depreciation and amortization for assets acquired during the
                  year are recorded at one-half of the indicated rates.

         g)       Intangibles

                  Intangibles represent patents and trademarks costs. These
                  intangibles are being amortized on the straight-line basis
                  over a fifteen year period.

         h)       Goodwill

                  Goodwill is the excess of cost over the value of net assets
                  acquired. It is amortized on the straight-line basis over ten
                  years.

         i)       Deferred Revenue

                  The company has sold extended warranty contracts covering a
                  period of four years beyond the one year basic guarantee. The
                  deferred revenue is recognized as income over the four year
                  period on a straight-line basis commencing one year from the
                  sale of the contracts.

         j)       Income Taxes

                  The company accounts for income taxes under the provisions of
                  statement of FAS No. 109, which requires recognition of
                  deferred tax assets and liabilities for the expected future
                  tax consequences of events that have been included in the
                  financial statements and tax returns. Deferred income taxes
                  are provided using the liability method. Under the liability
                  method, deferred income taxes are recognized for all
                  significant temporary differences between the tax and
                  financial statements basis of assets and liabilities.



<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS



1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         k)       Foreign Currency Translation

                  The company maintains its books and records in Canadian
                  dollars. The operation of the company's subsidiary in the
                  United States is an integrated corporation. As a result,
                  monetary assets and liabilities in foreign currency are
                  translated into Canadian dollars at exchange rates in effect
                  at the balance sheet date, whereas non-monetary assets and
                  liabilities are translated at the average exchange rates in
                  effect at transaction dates. Revenues and expenses in foreign
                  currency are translated at the average rate effective during
                  the year with the exception of depreciation, which is
                  translated at the historical rate. Gains and losses resulting
                  from the translation of foreign currency transactions are
                  included in earnings.

                  The translation of the financial statements from Canadian
                  dollars ("CDN $") into United States dollars is performed for
                  the convenience of the reader. Balance sheet accounts are
                  translated using closing exchange rates in effect at the
                  balance sheet date and income and expense accounts are
                  translated using an average exchange rate prevailing during
                  each reporting period. No representation is made that the
                  Canadian dollar amounts could have been, or could be,
                  converted into United States dollars at the rates on the
                  respective dates and or at any other certain rates.
                  Adjustments resulting from the translation are included in the
                  accumulated other comprehensive income in stockholder's
                  equity.

         l)       Earnings Per Share

                  The company has adopted FAS No. 128, "Earnings per Share"
                  which requires disclosure on the financial statements of
                  "basic" and "diluted" earnings per share. Basic earnings per
                  share is computed by dividing net earnings by the weighted
                  average number of common shares outstanding for the year.
                  Diluted earnings per share is computed by dividing net
                  earnings by the weighted average number of common shares
                  outstanding plus common stock equivalents (if dilutive)
                  related to Warrants for each year. The "basic" and "diluted"
                  earnings per share are the same because the exercise price is
                  greater than the average stock price for the year.

         m)       Use of Estimates

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



<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS



1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         n)       Long-lived Assets

                  The company adopted the provisions of FAS No. 121, Accounting
                  for the Impairment of Long-lived Assets and for Long-lived
                  Assets to be Disposed of. FAS No. 121 requires that long-lived
                  assets held and used by an entity be reviewed for impairment
                  whenever events or changes in circumstances indicate that the
                  carrying amount of an asset may not be recoverable. Management
                  used its best estimate of the undiscounted cash flows to
                  evaluate the carrying amount and have determined that no
                  impairment has occurred.

         o)       Recently Issued Accounting Standard

                  In June 1998, FAS No. 133 was issued with respect to
                  Accounting for Derivative Instruments and Hedging activities.
                  The requirements of FAS No. 133 was extended to fiscal years
                  beginning January 1, 2001 by FAS No. 137. The company
                  anticipates that adoption of FAS No. 137 will initially affect
                  comprehensive income.


2.       COMPREHENSIVE INCOME

         The company has adopted FAS No. 130 "Reporting Comprehensive Income"
         which requires new standards for reporting and display of comprehensive
         income and its components in the financial statements. However, it does
         not affect net earnings or total stockholders' equity. The components
         of comprehensive income are as follows:

<TABLE>
<CAPTION>
                                                APRIL 30,            JANUARY 31,
                                                  2000                  2000
                                                   $                     $
                                             ---------------     ---------------
<S>                                                 <C>               <C>
     NET EARNINGS                                   245,902           1,126,763

     OTHER COMPREHENSIVE INCOME

          Foreign currency translation             (550,220)            356,788
                                             ---------------     ---------------

     COMPREHENSIVE INCOME                          (304,318)          1,483,551
                                             ===============     ===============
</TABLE>



<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS


3.       ACCOUNTS RECEIVABLE

<TABLE>
<CAPTION>
                                                            APRIL 30, 2000      JANUARY 31, 2000
                                                                  $                    $
                                                            ---------------     ----------------
<S>                                                              <C>                 <C>
     Accounts receivable                                         8,118,982           7,786,400
     Less:  Allowance for doubtful accounts                        108,809             159,560
                                                            ---------------     ----------------

     Accounts receivable - net                                   8,010,173           7,626,840
                                                            ===============     ================

4.    INVENTORY

      Inventory is comprised of the following:

                                                            APRIL 30, 2000     JANUARY 31, 2000
                                                                  $                    $
                                                            ---------------     ----------------

      Raw materials                                              6,337,631           4,995,391
     Work-in-process                                             1,170,900           1,676,899
     Finished goods                                              1,308,643           1,497,317
                                                            ---------------     ----------------

                                                                 8,817,174           8,169,607
                                                            ===============     ================

5.    LOANS RECEIVABLE

      The loans receivable consist of the following:

                                                            APRIL 30, 2000     JANUARY 31, 2000
                                                                  $                   $
                                                            ---------------    ----------------

     Loan receivable - private companies                            99,200             151,813
     Loan receivable - corporate shareholder                        27,577              28,126
                                                            ---------------    ----------------

                                                                   126,777             179,939

     Current portion                                                    --                  --
                                                            ---------------     ---------------

                                                                   126,777             179,939
                                                            ===============     ===============
</TABLE>



<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS

6.  PROPERTY, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
                                                                                       APRIL 30, 2000    JANUARY 31, 2000
                                                                                              $                $
                                                                                      ---------------    ----------------
<S>                                                                                       <C>                 <C>
     Land                                                                                    486,065             239,457
     Building                                                                              5,101,141           2,556,424
     Machinery and equipment                                                               7,209,809           7,055,701
     Furniture and fixtures                                                                  639,737             650,993
     Computer equipment                                                                    1,454,844           1,452,354
     Rolling stock                                                                           161,716             106,629
     Equipment under capital leases                                                          531,652             542,239
     Leasehold improvements                                                                  569,167             564,159
                                                                                      ---------------    ----------------

     Cost                                                                                 16,154,131          13,167,956
                                                                                      ---------------    ----------------
     Less accumulated depreciation and amortization:

     Building                                                                                390,808             354,986
     Machinery and equipment                                                               3,112,598           2,997,693
     Furniture and fixtures                                                                  448,344             447,258
     Computer equipment                                                                    1,043,527           1,032,455
     Rolling stock                                                                            54,600              49,967
     Equipment under capital leases                                                          260,850             251,508
     Leasehold improvements                                                                  359,730             360,287
                                                                                      ---------------    ----------------

                                                                                           5,670,457           5,494,154
                                                                                      ---------------    ----------------

     Net                                                                                  10,483,674           7,673,802
                                                                                      ===============    ================

     Depreciation and amortization of property, plant and equipment for the
     Three Months period ended April 30, 2000 amounted to $340,661 ($982,210 in
     2000).

7.   INTANGIBLES
                                                                                      APRIL 30, 2000     JANUARY 31, 2000
                                                                                           $                    $
                                                                                      ---------------    ----------------

     Patents and trademarks costs                                                           101,764             101,764
     Less:  Accumulated amortization                                                          6,148               2,546
                                                                                      ---------------    ----------------

     Net                                                                                     95,616              99,218
                                                                                      ===============    ================
</TABLE>

Amortization of intangibles for the Three Months Period ended April 30, 2000
amounted to $3,602 ($2,546 in 2000).


<PAGE>


DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS


8.   GOODWILL

<TABLE>
<CAPTION>
                                                                                          APRIL 30,         JANUARY 31,
                                                                                            2000               2000
                                                                                             $                  $
                                                                                      ---------------     ---------------
<S>                                                                                        <C>                 <C>
     Cost                                                                                  2,028,787           2,069,190
     Less: Accumulated amortization                                                          354,561             309,893
                                                                                      ---------------     ---------------

     Net                                                                                   1,674,226           1,759,297
                                                                                      ===============     ===============
</TABLE>

     Amortization  of goodwill for the Three Months Period ended April 30, 2000
     amounted to $44,669  ($202,906 in 2000).

9.   BANK LOANS

     The company has an available line of credit of $10,033,190 bearing
     interest between 0.25% and 0.5% per annum over the prime lending rate and
     it is renegotiated annually.

     Bank loans are secured by a moveable hypothec on accounts receivable,
     inventory and commercial equipment, by a $4,053,780 hypothec on all assets
     of the company, including a first ranking hypothec in the amount of
     $4,053,780 on the proceeds of all risks insurance on the property and by a
     solitary guarantee in the amount of $3,378,150 bearing interest between
     0.5% and 1% per annum over the prime lending rate with interest payable on
     a monthly basis. The bank loans are renegotiated annually.

     The company finances its operations mainly through the use of Banker's
     Acceptance bearing an average lending rate of less than prime.

     The average cost of financing for fiscal year 2000 was 8.19% (7.16% in
     1999).


10.  ACCOUNTS PAYABLE AND ACCRUED EXPENSES

<TABLE>
<CAPTION>
                                                                                          APRIL 30,          JANUARY 31,
                                                                                            2000                2000
                                                                                             $                   $
                                                                                      ---------------     ----------------
     Accounts payable and accrued expenses are comprised of the
     following:

<S>                                                                                        <C>                 <C>
         Trade payable                                                                     5,001,420           3,469,390
         Accrued expenses                                                                    904,931           1,627,587
                                                                                      ---------------     ----------------

                                                                                           5,906,351           5,096,977
                                                                                      ===============     ================
</TABLE>

<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)



11.   LONG-TERM DEBT

<TABLE>
<CAPTION>
                                                                                          APRIL 30,          JANUARY 31,
                                                                                            2000                2000
                                                                                             $                   $
                                                                                      ---------------     ---------------
<S>                                                                                        <C>                  <C>
     a)    Government loans, without guarantee nor interest, repayable 15 years
           after their date of receipt, the first portion of $31,079 is
           repayable in August 2002 and the second portion of $31,079 is
           repayable in July 2004.                                                            62,158              63,396

     b)    Immigration loans secured by a first ranking universal hypothec on
           the universality of the property, moveable and immovable, present and
           future, corporeal and incorporeal, bearing interest at variable rates
           from 5.21% to 5.59% per annum, due on different dates between
           November 2002 and May 2004. The loans are net of sinking funds since
           all amounts paid into them must be used to repay the loans.
                                                                                           1,148,407           1,213,966

     c)    Obligation under capital lease for rolling stock subject to blended
           monthly payments of $434, up to August 2003.                                       17,200              18,783

     d)    Bank term loan secured by a first ranking universal hypothec on the
           universality of the property, moveable and immovable, present and
           future and corporeal and incorporeal, bearing interest at 7.99% per
           annum repayable in monthly capital repayments of $564 plus a final
           repayment of $68,060 in December 2002.
                                                                                              85,548              88,978

     e)    Bank term loan bearing interest at 7% per annum, repayable in
           monthly capital repayments of $376, maturing June 2014.                            63,431              65,843
                                                                                      ---------------     ---------------

     Balance carried forward                                                               1,376,744           1,450,966
                                                                                      ---------------     ---------------
</TABLE>



<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)


11.   LONG-TERM DEBT (Continued)

<TABLE>
<CAPTION>
                                                                                            APRIL 30,          JANUARY 31,
                                                                                              2000                2000
                                                                                               $                   $
                                                                                      ---------------     ----------------
<S>                                                                                        <C>                  <C>
           Balance brought forward                                                         1,376,744           1,450,966

     f)    Bank loan, bearing interest at prime plus 1% per annum repayable in
           monthly capital repayments of $1,514, maturing April 2002.
                                                                                              36,328              41,685

     g)    Bank loan, bearing interest at prime rate plus 1% per annum,
           repayable in monthly capital repayments of $5,137 and a final
           repayment of $5,143 plus interest, maturing November 2001.
                                                                                              97,618             115,281

     h)    Loan from Societe Developpement Industriel du Quebec bearing interest
           at a rate of approximately prime plus 1.50% which is deferred and
           capitalized for the minimum of either 12 months or when the
           accumulated interest is greater than 10% of the loan advance,
           repayable in annual payments commencing June 30, 1997 at a rate of
           15% of the prior year's net income to a maximum of $33,781 per annum.
                                                                                              10,752              45,421

     i)    Obligation under capital leases for machinery and equipment with
           carrying value of $285,054 repayable by 2 remaining equal payments of
           $8,012 and 14 remaining equal payments of $5,788 including imputed
           interest of 7.64% and 7.24% respectively plus a purchase option of
           $61,532 and $44,799 maturing April 2000 and April 2001
           respectively.                                                                     130,870             198,536

     j)    Government loan of an original amount of $209,364, without guarantee
           nor interest, repayable in 4 equal annual installments starting at
           the latest on December 1, 1997, maturing in December 2000.
                                                                                              52,341              53,383

     k)    Small business investment loan, secured by machinery and equipment,
           repayable in monthly installments of $2,500 and a final repayment of
           $1,149, bearing interest at prime plus 1.75%, maturing March 2000.                     --               3,721
                                                                                      ---------------     ----------------

     Balance carried forward                                                               1,704,653           1,908,993
                                                                                      ---------------     ----------------
</TABLE>

<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS

11.   LONG-TERM DEBT (Continued)

<TABLE>
<CAPTION>
                                                                                       APRIL 30,           JANUARY 31,
                                                                                         2000                 2000
                                                                                          $                    $
                                                                                    ----------------    -----------------
<S>                                                                                    <C>                 <C>
        Balance brought forward                                                        1,704,653           1,908,993


l)      Bridge loan secured by a first ranking hypothec with delivery of all           4,000,000           4,000,000
        shares of its wholly-owned subsidiaries and an unconditional letter of
        guarantee, bearing interest at the Banker's American base rate plus 3%,
        renegotiated subsequent to year-end.

m)      Mortgage note secured by land and building with a carrying value of $          1,582,351                  --
        1,850,000 bearing interest at prime plus 0.75% per annum repayable in
        monthly capital repayments of $ 9,178, maturing March 1, 2005

n)      Equipment note secured by machinery and equipment bearing interest at            399,233                  --
        prime plus 0.75% per annum repayable in monthly capital repayments of $
        6,767 maturing March 1, 2005

o)      Obligation under capital lease for rolling stock with a carrying value of         66,485                  --
        $55,402 payable by 60 monthly payments of $ 1,100 maturing May 28, 2005

p)      Demand loan secured by company's assets bearing interest at prime plus 1%,       472,941                  --
        Interest is payable monthly, capital on demand

q)      Other                                                                                 --              11,918
                                                                                    ----------------    -----------------

                                                                                       8,225,663           5,920,911
        Less: Current portion                                                          1,611,055           1,263,073
                                                                                    ----------------    -----------------

                                                                                       6,614,608           4,657,838

                                                                                    ================    =================
</TABLE>

<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS


11.  LONG-TERM DEBT (Continued)



<TABLE>
      Future principal payment obligations are as follows:



<S>                                                   <C>
     2001                                             $     1,611,055
     2002                                                     445,346
     2003                                                     877,937
     2004                                                     695,491
     2005 and thereafter                                    4,595,834
                                                      ----------------

                                                      $     8,225,663
                                                      ================
</TABLE>



     On February 23, 2000 the bank loan (see note 11-l) was renegotiated and a
     term loan in the amount of $2,527,000 bearing interest at the Banker's
     American Prime Rate plus 1%, was granted for a term of five years. A
     mezzanine loan in the amount of $1,000,000 bearing interest at the Bank's
     American Prime Rate plus 3% was also granted for a term of three years.
     These loans are secured by a first and second ranking universal hypothec
     in the amount of $4,053,780 on all the moveable and immoveable, present
     and future of two of its wholly-0wned subsidiaries and an unconditional
     letter of guarantee in the amount of $3,527,000.


12.  DUE TO DIRECTOR

     The amount due to director is unsecured, non-interest bearing and is due
     on April 15, 2002.


13.  LOAN PAYABLE

     This loan payable is non-interest bearing and is owed to private
     companies, due on April 15, 2002.


<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS

14.  DEFERRED REVENUE

<TABLE>
<CAPTION>
                                             APRIL 30,          JANUARY 31,
                                               2000                2000
                                                $                   $
                                         ---------------     ---------------
<S>                                             <C>                 <C>
     Deferred revenue                           986,215             960,237
     Current portion                            233,232             228,079
                                         ---------------     ---------------

                                                752,983             732,158
                                         ===============     ===============
</TABLE>

     Deferred revenue will be recognized as income as follows:

<TABLE>
<S>                                                           <C>
     2001                                                     $      233,232
     2002                                                            251,420
     2003                                                            212,751
     2004                                                            169,569
     2005                                                            119,243
                                                              ---------------

                                                              $      986,215
                                                              ===============
</TABLE>


15.  CAPITAL STOCK

     a)  Authorized

         An unlimited number of preferred shares, non-cumulative, voting, no par
         value

         An unlimited number of common shares, voting, no par value

     b)  Issued
<TABLE>
<CAPTION>
                                          APRIL 30,          JANUARY 31,
                                            2000                2000
                                             $                   $
                                       ---------------     ---------------
<S>                                         <C>                 <C>
          2,795,000 common shares           6,849,609           6,849,609
                                       ===============     ===============
</TABLE>


      c)  On October 5, 1998 the company issued 1,000,000 common shares in an
          Initial Public Offering (the "IPO") for gross proceeds of $6,000,000
          and 1,000,000 Warrants for $125,000 less underwriting commission and
          other expenses of $1,516,521 ($866,120 net of income taxes
          recoverable).


<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS


15.      CAPITAL STOCK (Continued)

         On November 15, 1998 the company issued and additional 45,000 common
         shares for gross proceeds of $270,000 and 150,000 Warrants for $18,750
         less underwriting commission and other expenses of $37,400.

         Immediately prior to the "IPO" the company issued 1,750,000 common
         shares for a share for share exchange valued at $1,596,433.

d)       Purchase Warrants

         During the fiscal year 1999, Purchase Warrants ("Warrants") were issued
         pursuant to a Warrant Agreement between the company and J.P. Turner &
         Company, L.L.C. and Klein Maus and Shire Incorporated. Each Warrant
         entitles its holders to purchase, during the four year period
         commencing on October 5, 1999, one share of common stock at an exercise
         price of $9.00 per share, subject to adjustment in accordance with the
         anti-dilution and other provision referred to below.

         The Warrants may be redeemed by the company at any time commencing one
         year from October 5, 1999 (or earlier with the consent of the
         representatives) and prior to their expiration, at a redemption price
         of $0.125 per Warrant, on not less that 30 days prior written notice to
         the holders of such Warrants, provided that the closing bid price of
         the common stock, if traded on the Nasdaq SmallCap Market, or the last
         sale price of the common stock, if listed on the Nasdaq National Market
         or on a national exchange, is at least 133% ($12.00 per share, subject
         to adjustment) of the exercise price of the Warrants for a period of 30
         consecutive trading days ending on the third day prior to the date the
         notice of redemption is given. Holders of Warrants shall have exercise
         rights until the close of the business day preceding the date fixed for
         redemption.

         The exercise price and the number of shares of common stock purchasable
         upon the exercise of the Warrants are subject to adjustment upon the
         occurrence of certain events, including stock dividends, stock splits,
         combinations or classification of the common stock. The Warrants do not
         confer upon holders any voting or any other rights of shareholders of
         the company.

         No Warrant will be exercisable unless at the time of exercise the
         company has filed with the Commission a current prospectus covering the
         issuance of common stock issuable upon the exercise of the Warrant and
         the issuance of shares has been registered or qualified or is deemed to
         be exempt from registration or qualification under the securities laws
         of the state of residence of the holder of the Warrant. The company has
         undertaken to use its best efforts to maintain a current prospectus
         relating to the issuance of shares of common stock upon the exercise of
         the Warrants until the expiration of the Warrants, subject to the terms
         of the Warrant Agreement. While it is the company's intention to
         maintain a current prospectus, there is no assurance that it will be
         able to do so

<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS


15.      CAPITAL STOCK (Continued)


         e)       Employee Stock Option Plan

                  The company has adopted a Stock Option Plan (the "Plan")
                  pursuant to which 650,000 shares of Common Stock are reserved
                  for issuance, 349,000 options are currently issued and
                  outstanding.

                  On September 2, 1999, the Board granted options under a Stock
                  Option Plan to certain members of the Board and certain
                  employees. Subject to certain limitations, the options granted
                  are exercisable one year after issuance. Subsequent to the
                  one-year anniversary date of the grant, the option holders may
                  exercise the option up to 25% of the total options per year
                  for the following four years. Each of the options will be
                  fully exercisable on November 4, 2003, and expire on November
                  4, 2004. The exercise price of the option is $3.00.

                  The Plan is administered by the Board of Directors, who will
                  determine, among other things, those individuals who shall
                  receive options, the time period during which the options may
                  be partially or fully exercised, the number of shares of
                  Common Stock issuable upon the exercise of the options and the
                  option exercise price.

                  The Plan is effective for a period of five years, expiring in
                  2003. Options may be granted to officers, directors,
                  consultants, key employees, advisors and similar parties who
                  provide Dectron with their skills and expertise. Options
                  granted under the Plan may be exercisable for up to five year,
                  and shall be at an exercise price all as determined by the
                  Board. Options are non-transferable except by the laws of
                  descent and distribution or a change in control of Dectron, as
                  defined in the Plan, and are exercisable only by the
                  participant during his or her lifetime. Change in control
                  includes (i) the sale of substantially all of the assets of
                  Dectron and merger or consolidation with another company, or
                  (ii) a majority of the Board changes other than by election by
                  the stockholders pursuant to Board solicitation or by
                  vacancies filled by the Board caused by death or resignation
                  of such person.

                  If a participant ceases affiliation with Dectron by reason of
                  death, permanent disability or retirement at or after age 70,
                  the option remains exercisable for one year from such
                  occurrence but not beyond the option's expiration date. Other
                  types of termination allow the participant three months to
                  exercise, except for termination for cause, which results in
                  immediate termination of the option.

                  Option under the Plan must be issued within five years from
                  the effective date of the Plan.

                  Any unexercised options that expire or that terminate upon an
                  employee's ceasing to be employed by Dectron become available
                  again for issuance under the Plan.






<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS

15.      CAPITAL STOCK (Continued)

                  The Plan may be terminated or amended at any time by the Board
                  of Directors, except that the number of shares of Common Stock
                  reserved for issuance upon the exercise of options granted
                  under the Plan may not be increased without consent of our
                  stockholders.

         f)       Share Purchase Plan Receivable

                  The SEC staff Accounting Bulletins require that accounts or
                  notes receivable arising from transactions involving capital
                  stock should be presented as deductions from shareholders'
                  equity and not as assets. Accordingly, in order to comply with
                  U.S. GAAP shareholders' equity has been reduced by $499,946 at
                  January 31, 2000, to reflect the loans due from certain
                  employees and officers which relate to the purchase of common
                  shares of the company.

         g)       During fiscal 2000, the company purchased 20,000 common shares
                  as treasury stock for $88,780

16.      INCOME TAXES

         Provision for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                                                         APRIL 30,           APRIL 30,
                                                                                           2000                1999
                                                                                            $                   $
                                                                                      --------------      --------------
<S>                                                                                          <C>                 <C>
         a)        Current                                                                   103,709             184,855
                   Deferred (recovered)                                                           --                  --
                                                                                      --------------      --------------

                                                                                             103,709             184,855
                                                                                      ==============      ==============
</TABLE>


         b)       Deferred income taxes represent the tax charges derived from
                  temporary differences between amortization of property, plant
                  and equipment and recognition of deferred revenue, and the
                  actual amounts deducted from or added to the taxable income.

17.      COMMITMENTS

         a)       The company is committed to payments under operating leases
                  for its premises totaling $899,788. Annual payments for the
                  next five years are as follows:

<TABLE>
<S>                                                                                                    <C>
          2001                                                                                         $       317,256
          2002                                                                                                 194,155
          2003                                                                                                 172,905
          2004                                                                                                 138,000
          2005                                                                                                  67,472
                                                                                                       ----------------

                                                                                                       $       889,788
                                                                                                       ================
</TABLE>

<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS

17.      COMMITMENTS (Continued)

         b)       The company is committed to make monthly payments of $13,152
                  into sinking funds which are given as security against the
                  immigration loans. The annual payments for the next five years
                  are as follows:

<TABLE>
<CAPTION>
<S>                                                               <C>
                  2001                                            $      157,830
                  2002                                                   157,830
                  2003                                                    89,477
                  2004                                                    15,810
                  2005                                                     2,635
</TABLE>

         c)       As at April 30, 2000, the company has outstanding letters of
                  credit totaling $101,345.

                  These letters of credit were incurred in the normal course of
                  business.

         d)       The company has signed purchase orders for machinery and
                  equipment totaling $381,731 The equipment is expected to be
                  delivered within the next year. A deposit of $38,173 been
                  paid.

18.      SEGMENTED INFORMATION

<TABLE>
<CAPTION>
                                                                                         APRIL 30,            APRIL 30,
                                                                                           2000                 1999
                                                                                            $                     $
                                                                                      ---------------     ----------------
<S>                                                                                        <C>                 <C>
     a)   The breakdown of sales by geographic area
          is as follows:

          Canada                                                                           2,398,385           2,773,600
          United States of America                                                         5,308,311           3,256,705
          International                                                                      920,191           1,286,490
                                                                                      ---------------     ----------------

                                                                                           8,626,887           7,316,795
                                                                                      ===============     ================

     b)   The breakdown of identifiable assets by
          geographic area is as follows:
                                                                                      APRIL 30, 2000      APRIL 30, 1999
                                                                                             $                   $
                                                                                      ---------------     ----------------

          Canada                                                                          23,483,221          21,765,158
          United States                                                                    7,467,000             -
                                                                                      ---------------     ----------------

                                                                                          30,950,221          21,765,158
                                                                                      ===============     ================
</TABLE>

<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS


19.      ACQUISTIONS

         On September 13, 1999 the company acquired the assets of IPAC, Inc. for
         $3,700,000. The allocation of the purchase price is summarized as
         follows:

<TABLE>

<S>                                                           <C>
         Current assets                                       $     1,000,000
         Property and equipment                                     1,600,000
         Deposit on building                                        1,000,000
         Patents and trademarks                                       100,000
                                                            -----------------

                                                              $     3,700,000
                                                            =================
</TABLE>

         The purchase method was used to account for the acquisition. The
         accompanying financial statements include the operations of the IPAC
         business for the period from September 14, 1999 to January 31, 2000.

         The purchase of the IPAC business was executed in two steps. The
         operating assets were purchased on September 13, 1999 and the building
         was purchased February 29, 2000. In order to properly reflect the
         substance of the two transactions, $1,000,000 of the initial asset
         purchase price has been allocated to the building purchase price based
         on an appraisal of the building at the time of the acquisition.

20.      FINANCIAL INSTRUMENTS

         a)       The fair value of cash, accounts receivable and accounts
                  payable approximately correspond to their book value given
                  their short-term maturity. The carrying amount of long-term
                  debt approximates fair value because interest rates are close
                  to market value.

         b)       The company has borrowed $1,418,823 in order to finance
                  capital acquisitions (see note 11-b). Concurrently with these
                  borrowings the company acquired an additional $1,621,512 of
                  financing, for which it issued commercial paper of $1,621,512
                  with similar maturity and terms, as collateral. Since this
                  commercial paper fully satisfies the required principal
                  repayments of the additional financing, they have been offset
                  and neither the asset nor the liability appears on the
                  company's balance sheet.

21.      Uncertainty due to the Year 2000 Issue

         The Year 2000 Issue arises because many computerized systems use two
         digits rather than four to identify a year. Date-sensitive systems may
         recognize the year 2000 as 1900 or some other date, resulting in errors
         when information using year 2000 dates is processed. In addition,
         similar problems may arise in some systems which use certain dates in
         1999 to represent something other than a date. Although the change in
         date has occurred, it is not possible to conclude that all aspects of
         the Year 2000 Issue that may affect the entity, including those related
         to customers, suppliers, or other third parties, have been fully
         resolved.




<PAGE>

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

RESULTS OF OPERATIONS

THREE-MONTH PERIOD ENDED APRIL 30, 2000 COMPARED TO THREE-MONTH PERIOD ENDED
APRIL 30, 1999.

         Revenues for the three-month period ended April 30, 2000 were
$8,626,888, a 17.9% increase over prior year revenues of $7,316,795. A major
part of this increase is due to the consolidation of the Company`s newly
acquired division, Ipac 2000.

         Gross profit increased by $730,669 to $2,890,678 over the same period.
This represents an increase of 4.0%, expressed in relation to sales. Due to low
manufacturing costs, gross profit increased by 33.8% compared to an increase in
sales of 17.9%.

         Selling and marketing expenses increased $458,553 in the three-month
period ended April 30, 2000. This increase reflects our continued emphasis on
reaching for new markets for Dectron's products. As a percentage of revenues,
selling and marketing expenses increased from 11.7% to 15.2%.

         General and administrative expenses increased by $179,634 from $406,402
to $586,036. As a percentage of revenues, general and administrative increased
from 5.5% to 6.8%. The increases in both dollar and percentage reflect the costs
of integrating Ipac's general and administrative expenses in the Company's
results.

         Amortization expenses increased by $87,477 from $253,184 to $340,661.
As a percentage of revenues, amortization expenses increased from 3.5% to 3.9%

         Financing expenses increased by $208,796 from $88,412 to $297,208. As a
percentage of revenues, financing expenses increased from 1.2% to 3.4%

         Income before income taxes was $349,612 a decrease of $203,791 compared
to the three-month period ended April 30, 1999. Relative to sales, income before
income taxes decreased from 7.5% for the three month period ended April 30, 1999
to 4.1% in the three month period ended April 30, 2000.

         Provisions for income tax expenses as a percentage of taxable income
decreased from 33.4% for the 3 month period ended April 30, 1999 to 29.7% for
2000. Tax expenses decreased by $81,146 mainly because of the decrease in
taxable income.

         As a result of the above factors, the Company`s net income decreased
from $368,548 to $245,902, a decrease of 33.3%.

LIQUIDITY AND CAPITAL RESOURCES

The Company had a positive net change in cash of $138,637 for the three-month
period ended April 30, 2000. The principal sources of cash were an increase of
accounts payable in the amount of $809,374 and advances from long-term debt in
the amount of $2,304,752. The principal uses of cash were increases in inventory
in the amount of $647,567 and acquisition of property, plant and equipment in
the amount of $3,056,792. For the three-month period ended April 30, 1999, the
Company had a negative net change in cash of $389,702. The principal sources of
cash were net income of $368,548 and advances of bank loans in the amount of
$1,186,829. These items were offset by an increase in accounts receivable in the
amount of


<PAGE>

$1,144,121, an increase of $522,141 in prepaid and sundry assets and a $453,338
increase in inventory

PART II   OTHER INFORMATION

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

None

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

      Reports on Form 8-K: None



<PAGE>



                                   SIGNATURES
                                   ----------


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

                                      DECTRON INTERNATIONALE INC.


June  19, 2000                        By: /s/ Mauro Parissi
                                        ------------------------
                                      Mauro Parissi
                                      Chief Financial Officer and Secretary