UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 20-F

    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                    Commission file number _________________

                             CRYOPAK INDUSTRIES INC.
             (Exact name of Registrant as specified in its charter)

                             CRYOPAK INDUSTRIES INC.
                 (Translation of Registrant's name into English)

                            BRITISH COLUMBIA, CANADA
                 (Jurisdiction of incorporation or organization)

               1120-625 HOWE STREET, VANCOUVER, BRITISH COLUMBIA,
             CANADA V6C 2T6 (Address of principal executive offices)

 Securities registered or to be registered pursuant to Section 12(b) of the Act.

          Title of each class      Name of each exchange on which registered
                                      NONE

 Securities registered or to be registered pursuant to Section 12(g) of the Act

                                 Title of Class
                           COMMON STOCK, NO PAR VALUE
                 CLASS A PREFERRED STOCK, SERIES 1, NO PAR VALUE

 Securities for which there is a reporting obligation pursuant to Section 15(d)
                                   of the Act

                                 Title of Class
                                      NONE

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: 17,255,740 common; 530 preferred as of March 31, 1999.

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 registrants
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [   ]   No [ X ]

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 Section 12, 13 or 15(d) of the
Securities  Exchange Act of 1934  subsequent to the  distribution  of securities
under a plan confirmed by a court Yes [ ] No [ ]



<PAGE>

                                     PART I
Item 1. Description of Business

Cryopak Industries Inc.

Company History

         Cryopak Industries Inc. ("Cryopak",  the "Company") was incorporated in
the province of British  Columbia,  Canada,  on February 13, 1981 as 226896 B.C.
Ltd. On March 30, 1981 the Company  changed its name to Consort Energy Corp. The
Company changed its name again, to  International  Consort  Industries  Inc., on
April 30, 1990 and amended its name to Cryopak  Industries  Inc. on November 12,
1993. On January 3, 1996,  Cryopak  increased its authorized stock to a total of
two hundred  million  (200,000,000)  shares,  consisting of one hundred  million
(100,000,000)  shares of common stock with no par value and one hundred  million
(100,000,000)  shares of Class A  Preferred  Stock,  no par value,  of which one
thousand  five  hundred  (1,500)  were  designated  Class A  Convertible  Voting
Preference  Shares,  Series I. Cryopak has two  subsidiaries.  Cryopak  (Canada)
Corporation, a British Columbia, Canada,  corporation,  was incorporated on June
6, 1986 as 310302 B.C. Ltd. and changed its name to Cryopak (Canada) Corporation
on September 22, 1987. Cryopak  (International)  Inc. is a Barbados  corporation
incorporated  on August 29,  1995,  which is currently  inactive.  Additionally,
Cryopak (Canada) Corporation has a wholly-owned subsidiary, Cryopak Corporation,
a Nevada  corporation  formed on March 20,  1987 and has a fifty  percent  (50%)
interest  in  Cryopak  (Alberta)  Corporation,   a  dissolved  Alberta,   Canada
corporation.

         On February 28, 1995,  the Company  signed an agreement in principle to
acquire one hundred percent interest in Rogell  Enterprises  Ltd.  ("Rogell") of
Vancouver,  British Columbia,  Canada. Rogell is a private corporation formed in
1979 that was originally a picture  product  supplier and developed into a trade
showroom  display  center  carrying  design   furniture,   accessories,   framed
decorative art, limited editions and original imagery.  The proposed acquisition
was terminated on July 27, 1995.

         This  acquisition  had required a Cdn$2,000,000  financing  package and
Cryopak had entered into an agreement  with  Discovery  Capital  Corporation  of
Vancouver to arrange this financing via a venture capital  corporation,  Cryopak
Industries (VCC) Inc., ("VCC"). An Investment Agreement was entered into between
the  Company and VCC on March 13,  1995,  which was  approved by the  provincial
government and the Vancouver Stock Exchange.  The Investment Agreement allowed a
120 day period for fund  raising  and  contemplated  five  initial  closings  of
Cdn$100,000  each.  Initially,  VCC  invested  $500,000 in common  shares of the
Company at prices escalating with each $100,000 raised, starting at Cdn$0.40 per
share and going up to  Cdn$0.50,  Cdn$0.60,  Cdn$0.70  and finally  Cdn$0.80 per
share. Each share was accompanied by a non-transferable  warrant  exercisable at
$0.10 per share  premium to the  purchase  prices and expiring one year from the
issuance date. VCC has 105  shareholders  with all being Canadian except for one
being European.  The Investment Agreement also provided that VCC would invest in
Cryopak's  Class A Preferred  Shares at an  offering  price of $1,000 per share.
Douglas  Reid,  a  member  of the  Board of  Directors  of the  Company,  is the
President of VCC and  abstained  from voting when the board voted to accept this
Investment  Agreement.  Of the  Cdn$2,000,000,  $1,100,000  was received and the
financing was closed on February 25, 1997.  After the proposed  acquisition  was
abandoned, the funds from this financing were designated for the construction of
manufacturing facilities for Cryopak products and to finance marketing programs.
Shareholders own VCC.

         John McEwen, President and co-founder of Discovery Capital Corporation,
was appointed to the board of directors on August 17, 1995. The board  consisted
of Harry Bygdnes, Robert Leigh Jeffs, and Douglas Reid.

         In  September  1995,  the  Company  entered  into a joint  distribution
agreement with Unisource  Worldwide,  Inc.  ("Unisource") to introduce Cryopak's
products  regionally to each of ten Unisource  divisions  throughout  the United
States and Canada.  Unisource is a large  marketer and  distributor of paper and
imaging  products and supply  systems,  disposable  paper and plastic  products,
janitorial  supplies  and  packaging  systems  and is  owned  by  Alco  Standard
Corporation,  a distribution  company  headquartered  in Valley Forge,  PA, with
revenues of US$8 billion in 1994.  The focus of this agreement was the marketing
of the Company's ice substitute  product targeting food processors,  shippers of
perishables and wholesale and retail food distribution  companies with Unisource
acting  as  Cryopak's  marketing  partner.  Under  the  terms of the  agreement,
Unisource was to sell,  stock and distribute  all Cryopak  products used in food
processing  and   distribution   within  each  Unisource   marketing  region  as
distribution rights were allocated. Internal problems at Unisource and a lack of
positive  response at the divisional level impeded the rate of growth within the
terms of the distribution  agreement.  As a result,  promised purchases were not
completed and plans for national distribution


<PAGE>



with Unisource were abandoned by the fiscal year end of March 31, 1996. Instead,
the Company's  management  began working with  Unisource  regionally by offering
educational  programs and training in areas that  demonstrate a high interest in
marketing  the Cryopak  products.  This  helped the Company by opening  doors to
recruitment  of  distributors  more  suited to specific  industries  requiring a
better refrigerant for shipping of perishables.

         On July 14, 1995,  the Company also signed an agreement  with Cavanaugh
Communications  Inc.  ("Cavanaugh")  of  Bryn  Mawr,  Pennsylvania,  to  provide
advertising and marketing  expertise to fulfill the obligations of the Unisource
agreement.  The agency's  focus was  positioning  Cryopak ice  substitute as the
preferred  refrigerant  for packaging,  shipping,  storing and displaying a wide
variety of foods,  beverages and other  perishables,  targeting food processors,
direct marketers and wholesale and retail food distribution companies. Cavanaugh
is the exclusive advertising and marketing company for Unisource.  This contract
was terminated when the Unisource deal was abandoned.

         Harley D. Sinclair  joined the Company as its Secretary on November 23,
1995. At this time the officers were Harry Bygdnes,  Robert Leigh Jeffs, Douglas
Reid, and John McEwen.

         On January 1, 1996,  the  Company  extended  its  Financial  Management
Agreement with Strategic Investments Inc. ("Strategic") of Springfield, Ilinois,
to December 1996,  rescindable  by either party with 30 days' notice.  Strategic
had been receiving  US$5,000 per month under the terms of the Agreement but this
was amended to $500 per month plus certain out-of-pocket  expenses, for the last
twelve  months  of the  agreement.  The  agreement  was not  extended  after its
termination in December 1996.

         During the fiscal year ended March 31, 1996,  the Company began working
directly with several pharmaceutical  companies in the United States and Canada.
These companies  provided Cryopak with existing  packaging and protocols used in
present shipping  situations by the Company's  competitors so that Cryopak could
perform comparison  testing.  The graphic comparisons of these independent tests
were then submitted to the pharmaceutical companies.

         Comparison testing similar to that done in the pharmaceutical  industry
was also conducted in the seafood industry.  Several large seafood  distributors
tested the Company's product Cryomat(TM).

         Also during the fiscal  year ended  March 31, 1996 the Company  entered
into a Memorandum of  Understanding  with SCA  Packaging of Sweden,  the largest
packaging supplier in Europe,  which began distributing the Cryomat(TM)  product
into EEC countries in the fall of 1996.  Similar  agreements  were negotiated in
Mexico and Indonesia. These agreements were never finalized.


<PAGE>

         During the fiscal year ended  March 31,  1997,  the Company  focused on
growth in the pharmaceuticals,  seafood,  meat and poultry and airline and hotel
catering  industries.  Cryopak  devoted much of its energies during this time to
providing test data in each of these  industries  which compared Cryopak and its
products to existing  refrigerants  and conducted  onground and inflight testing
with  several  airlines.  The  Company  also sold  small  amounts  of product to
companies  in  Brazil,  Chile,  Taiwan  and  Israel  during  this  year  and was
designated as the exclusive  supplier of packaging systems to a unique marketing
and delivery concept established by Freshnex and Federal Express.

         K. Barry  Sparks  joined the Board of Directors of the Company on April
25, 1996.  The board had the  following  members:  Harry  Bygdnes,  Robert Leigh
Jeffs, Douglas Reid, and John McEwen.

         On April 1, 1997, the Company signed an agreement with Seafish  Systems
of New Zealand  ("Seafish") to purchase a minimum of twelve  40-foot  containers
over a twelve month period,  representing  gross  revenues of $500,000.  Seafish
also agreed to provide exclusive marketing and distribution rights for Cryopak's
products in New Zealand and Australia and did a market study of projected  sales
in Australia for the Company.  It was also agreed that the two  companies  would
cooperate on marketing  expansion in  Southeast  Asia.  This  Agreement is still
active.

         James M. Fletcher was appointed to the Board of Directors on August 12,
1997.  The  board  consisted  of  6 members:  Harry Bygdnes, Robert Leigh Jeffs,
Douglas Reid, John McEwen, K. Barry Sparks, and James Fletcher.

         On August 13, 1997, the Company commenced a placement of 250,000 shares
at Cdn$0.50 per share for a total of Cdn$125,000 per share, plus warrants for up
to 250,000  additional  shares at Cdn$0.60 per share  exercisable  for up to two
years.  The proceeds  from this  offering,  which was approved by the  Vancouver
Stock Exchange, were used to


<PAGE>



reduce payables and for working capital. The offering was sold to two investors:
a Canadian individual and a Canadian corporation  and  was  closed on August 25,
1997 with all shares sold.

         The Company began testing its  refrigerant  systems on all Vancouver to
Los Angeles  flights  operated by Canadian  Airlines on September 10, 1997. This
test was considered as a logistics  trial period to determine the most effective
methods for handling the product.  The test lasted 60 days.  The product  worked
but Canadian Airlines did not purchase any product.

         The requisite  12%  cumulative  dividend on Class A Convertible  Voting
Preferred  Shares,  Series I, was  declared on  September  24, 1997 for the year
ended March 31, 1997.  The dividend was paid in common  shares  totaling  96,908
common shares at a deemed price of Cdn$0.495 per share  ($47,969.84  total).  Of
these  shares,  88,980 were subject to a hold period in British  Columbia  which
expired March 31, 1998.

         On  February  2,  1998 K.  Barry  Sparks  resigned  from  the  Board of
Directors  for personal  reasons and due to other  business  demands.  The board
consisted of 5 members:  Harry Bygdnes,  Robert Leigh Jeffs,  Douglas Reid, John
McEwen, and James Fletcher.


         The Company began a placement of 700,000 common shares at Cdn$0.50 each
for a total of Cdn$350,000  on February 24, 1998.  This offering was approved by
the Vancouver Stock Exchange.  The proceeds were used to repay debt. The private
placement was completed with one Canadian shareholder.

         On  March  27,  1998,  the  Company  agreed  to pay a  bonus  to  David
Patriquin,  the guarantor on the Company's US$167,285 equipment lease on a Model
L-18  Pouch  Machine.  Part of the  bonus  was  paid  in  cash  at 1% per  month
(Cdn$2,392)  over a maximum of 10 months,  ceasing  immediately if the guarantor
was  released  during the 10 month  period.  The  remainder  was paid in 119,608
non-transferable common stock warrants, all issued, exercisable for two years at
Cdn$0.40 in the first year and Cdn$0.46 in the second year. The Vancouver  Stock
Exchange approved this transaction.

         The  manufacturing  facility  funded with the VCC  financing  completed
during the fiscal year ended March 31, 1997 was opened in  Vancouver  during the
fiscal year ended  March 31,  1999.  This  facility  manufactures  product to be
delivered to the United States, Canada and the Pacific Rim. Sugar Foods produced
the product from April, 1987 until April, 1999 under a contractual  arrangement.
With the opening of this second  facility,  the Company does not  anticipate any
material acquisition of facilities or equipment in the foreseeable future.

         The Company  commenced a placement of 1,000,000  shares at Cdn$0.40 per
share  for a total of  Cdn$400,000  on April 23,  1998.  The  offering  included
non-transferable  warrants to purchase up to 1,000,000 additional shares for two
years at Cdn$0.40  per share for the first year and  Cdn$0.46  during the second
year.  The  proceeds  from this  offering  were used to reduce  payables and for
unallocated  working  capital and the  offering was closed on June 26, 1998 with
all shares sold. All shares were sold to Canadian and European  individuals  and
entities.

         On June 9, 1998 the Company  offered 120,000 shares of its common stock
with one two-year warrant per share to a Canadian individual.  These shares were
purchased at Cdn$0.40 per share with warrants exercisable at Cdn$0.40 during the
first year and Cdn$0.46 during the second year.

         On November 1, 1998,  Cryopak  declared the  requisite  12%  cumulative
dividend on its Class "A" Convertible Voting Preference  Shares,  Series I, held
by VCC on the record  date of March 31,  1998.  The  Company  elected to pay the
dividend in common  shares and issued  159,199  common shares at a of Cdn$0.3995
per share for a total of Cdn$63,600. The shares were subject to a hold period in
British Columbia which expired after March 31, 1999.

         Cryopak  finalized  a Cdn$3.6  million  purchase  order from  Northwest
Airlines  on December 1, 1998 for the  refrigerant  products of its  subsidiary,
Cryopak (Canada) Corporation.  This purchase order is for three years. Northwest
Airlines  uses the Cryopak  product in interior  catering and inflight  food and
beverage service.  International launch of the product,  starting with scheduled
flights between the United States and Asia, began on December 4, 1998.

         An offering  was  commenced  on February  3, 1999 of  1,280,000  common
shares at Cdn$0.75 per share for net proceeds of  Cdn$924,900.  The offering was
approved by the Vancouver Stock Exchange and was closed on March 19,


<PAGE>



1999 with all shares sold to European  corporations.  Finder's fees were paid to
two European corporations.

         On February 8, 1999 Cryopak retained the services of European  Investor
Services  ("EIS")  to  coordinate  investor  relations  with a growing  group of
shareholders  across Europe.  EIS is an integrated  investor  relations  company
headquartered  in London and operating in all major financial  centers of Europe
and  specializing  in the high tech, new media and  biotechnology  sectors.  EIS
represents  small and medium North  American  companies  wishing to expand their
European  shareholder  bases  and  will  provide  corporate   information  to  a
developing  shareholder  base and ensure a flow of  information  to industry and
financial analysts advising the European financial  community as to the progress
and key  developments  of the  Company.  The  contract  is for six months at two
thousand pounds per month, subject to review after three months.  Currently, the
contract  has been  extended  to a month  to month  basis  and all  parties  are
complying with its terms..

         Nick Fuller was  appointed  Vice  President of Public  Relations of the
Company on February 11, 1999.

         John Morgan was appointed  President  and CEO of Cryopak's  subsidiary,
Cryopak Corporation,  on March 19, 1999. He was also appointed a director of the
Company  at  this  time.  Mr.  Morgan's  signing   incentive  was  a  forgivable
interest-free  loan  which  was used to  acquire  125,000  common  shares of the
Company at Cdn$0.776 per share, including 125,000 warrants exercisable after six
months'  employment.  The stock  purchase  was approved by the  Vancouver  Stock
Exchange.  Also on March 19, 1999,  Leigh Jeffs, a long-time member of the Board
of Directors, was appointed Chief Financial Officer of the Company.

         On April 1, 1999 the Company  retained the services of CCRI Corporation
("CCRI"), a Phoenix,  Arizona, based corporation,  to provide investor relations
and corporate finance services to the Company,  especially in the United States.
CCRI will provide  corporate  information to a developing  shareholder  base, as
well as ensure a flow of information to industry and financial analysts advising
the American financial  community as to the progress and key developments of the
Company.  The initial agreement is for twelve months at US$6,000 per month, plus
$20,000 for preparation and mailing of a Corporate Profile.

         Cryopak sold 72,000  shares of its common stock to CCRI at Cdn$0.75 per
share for total  proceeds of Cdn$54,000  on April 8, 1999.  Each share came with
one warrant exercisable for up to two years at Cdn$1.00 per share.
The proceeds from this offering were used for working capital.

         On April 22, 1999 Ross G. Morrison  was  elected to the Company's Board
of  Directors.  The  board  is  now  comprised  of  6  members:  Harry  Bygdnes,
Robert Leigh Jeffs, Douglas Reid, John McEwen, John Morgan, and Ross Morrison.

Products

         Cryopak develops,  manufactures and markets Cryomat(TM),  a refrigerant
product that  maintains a  temperature  range of 32-46  degrees  Fahrenheit  for
significantly longer than conventional cooling products such as ice, dry ice and
gel packs. The product keeps foods fresh and cold without  freezing,  unpleasant
odor or watery  mess.  Cryopak can be handled  without  risk of burning skin and
does not  produce  carbon  dioxide.  Cryomat(TM)  was tested  and  independently
evaluated  extensively for over twelve months by the North American  airline and
food catering  industry (eg.  Northwest  Airlines,  Dobbs Catering,  and LSG Sky
Chefs)  and the  results  of  these  tests  showed  that it  possesses  superior
temperature control  capabilities over all competing products,  while meeting or
exceeding the HACCP requirements established by the FDA.

         Cryomat(TM)  consists  of  reusable  sheets of  liquid-filled  laminate
pouches that provide refrigeration and insulation when frozen. The sheets can be
custom cut to various sizes or into individual  cubes for use in a wide range of
applications and has been U.S.D.A approved for use with food products, including
fish,  meat and  poultry.  The Company  markets its  Cryomat(TM)  product to the
airline,  pharmaceutical  and  seafood  shipping  industries  and has  begun  to
investigate   marketing   the   product  to  the   sports/healthcare   industry.
Additionally,  Cryomat(TM) is sold  commercially in Canada under the name Cooler
Mat.

         All of the Company's sales are to third-party  customers.  Sales to the
United  States  for  the  years  1997,  1998,  and  1999  are  73%,  67% and 88%
respectively.  International  sales are 24%, 29% and 7% for 1997,  1998 and 1999
with the majority to one customer,  Seafish Systems. Sales within Canada are 3%,
4% and 5% for 1997, 1998 and 1999.


<PAGE>



         Three customers  accounted for approximately  70%, 76% and 70% of total
sales for the financial  years 1997,  1998 and 1999.  They are Dura*Kold  Corp.,
Polyfoam  Packers,  and Seafish  Systems for 1997 and 1998 and Dura*Kold  Corp.,
Polyfoam Packers, and Wyeth-Ayerst Labs for 1999.

         There is no new product or service being offered.

         The Company conducts  research and development  activities of a minimal
nature at this time but the activities are not separately  accounted for nor are
there allocated funds for these activities.

         The  "perishable"  packaging  industry  is  being  faced  with  several
pressures,  which have forced  corporations  within the  industry to  reevaluate
traditional methods of packing,  transporting and storing temperature  sensitive
goods.  These  pressures  include the market and customer driven need for higher
quality,  more  timely and  fresher  products,  a cost driven need to reduce the
amount of waste and spending on less effective  products and  regulation  driven
requirements of new food safety and health standards and the United States' Food
and  Drug   Administration's   ("FDA")   regulations   for  the   transport   of
pharmaceuticals and general handling and catering of perishable meals for public
consumption.

         In  December  1997,  the FDA  introduced  the HACCP  ("Hazard  Analysis
Critical Control Point") program,  a food handling  guideline system endorsed by
the FDA which was put into effect in December  1998. One portion of this program
requires  that  airline  food  be  stored  at  temperatures   below  41  degrees
Fahrenheit.  Because the  Company's  testing in the airline  industry have shown
that food stored using its products remain below this level, this new regulation
will have a positive impact on the Company's sales.

         The   "perishable"   packaging   industry  must  also  follow  U.S.D.A.
regulations in the United States and Agriculture  Canada  regulations in Canada.
Cryomat(TM) has been U.S.D.A.  approved and Agriculture  Canada accepted for use
with food products, including fish, meat and poultry.

         The Company's  Cryomat(TM)  product has been  registered  with the U.S.
Patent and  Trademark  Office as a "Thermal  Packaging  Assembly"  and  received
patent number 4,931,333 on June 5, 1990. The product was also patented in Canada
on October 22, 1991 with patent number  1,291,073.  The patent expires in Canada
on October 22, 2008 and in the United  States on June 5, 2007.  Both patents are
held by D. Lindley Henry.  Lin Henry is a consultant for the company.  A copy of
the Canadian  patent is attached as an exhibit to this  registration  statement;
the United States patent is available from the U.S. Patent and Trademark Office.
Because these expiration dates are so far in the future,  the Company feels that
the patent  expirations  will not make a  significant  impact upon the Company's
business.

         The Company's  subsidiary Cryopak  Corporation has also trademarked the
words  "Cryomat"  and  "Cryopak"  with the United  States  Patent and  Trademark
Office. The "Cryomat"  trademark is registration number 1,420,052 dated December
9, 1986 and the "Cryopak" trademark is registration number 1,576,371  registered
January 9, 1990. These  trademarks  expire December 9, 2006 and January 9, 2000,
respectively.  Additionally,  Cryopak  Corporation has  trademarked  "Super Cool
System" with the Canadian  Trademark  Office,  registration  number 441, 439 and
registration  date March 31, 1995,  as well as "Cooler  Cube" with  registration
number 441,438 and registration date March 31, 1995.
The Candaian subsidiary registered these trademarks.

<PAGE>

Cryopak (Canada) Corporation

         Cryopak  (Canada)  Corporation,  ("CCC")  a British  Columbia,  Canada,
corporation,  was  incorporated  on June 6, 1986 as 310302 B.C. Ltd. and changed
its name to Cryopak (Canada) Corporation on September 22, 1987. CCC has a wholly
owned subsidiary,  Cryopak Corporation, a Nevada corporation formed on March 20,
1987. Additionally,  CCC had a fifty percent (50%) interest in Cryopak (Alberta)
Corporation,  an Alberta,  Canada corporation formed in November 17, 1992, which
was  dissolved in 1998.  From  inception  until 1998,  CCC has been handling all
sales  activities  up to the point when the  Company  started  manufacturing  in
Vancouver.  From July 1998  onwards,  CCC has been in charge of all sales to the
United  States and  worldwide  while the  Company is  responsible  for all sales
within Canada.

Cryopak (International) Inc.

         Cryopak  (International) Inc. is a Barbados corporation incorporated on
August 29, 1995.  On March 19, 1996


<PAGE>



Cryopak  (International)  Inc.,  reached an  agreement  in  principle  with Erik
Petersson  &  Company,  Inc.  ("EPC")  of Miami,  Florida,  to secure  sales and
distribution  contracts for the Company's products outside North America.  Under
the  terms of this  agreement,  EPC  would be paid  Cdn$2,500  per  month  until
contracts  with  customers  were signed,  plus five percent  commission on total
gross sales generated by EPC and warrants issued to EPC's  principal,  Bertil I.
Petersson, based upon gross sales. These warrants were to be issued at a rate of
60,000  warrants for the first  US$1,000,000  in gross sales and 30,000 warrants
for every additional  US$500,000 in sales to a maximum of 600,000 warrants.  All
warrants were exercisable for one year from the date of issuance.  The agreement
stipulated a maximum of $10,000,000 gross sales,  which must be generated within
five years. EPC has provided Cdn$680,000 in sales and the Company has not issued
any warrants. As part of this agreement, EPC's principal,  Bertil I. Pertersson,
was appointed to the Company's  board of directors.  Bertil  Petersson was never
officially appointed. Cryopak (International) Inc. has not had any activities to
date.

Item 2. Description of Property

         Cryopak's  principal  executive  offices are  located at 1120-625  Howe
Street, Vancouver,  British Columbia, Canada V6C2T6. Cryopak leases office space
for  its  corporate  headquarters  totaling  2,039  square  feet  at a  rate  of
Cdn$2,378.83  per month.  The current  lease  expires on October 31,  2000.  The
Company  is  reaching  maximum  office  capacity  and  will  likely  be  seeking
additional  space  prior to the expiry of the  existing  lease.  The  Company is
considering  negotiating  a purchase  of our  present  manufacturer.  This would
ensure adequate  additional office space product testing  facilities,  and allow
complete  monitoring  and direct  control of all  manufacturing  and  production
functions.

Item 3. Legal Proceedings

         Neither the Company nor any of its subsidiaries is a party to any legal
proceeding at this time.

Item 4. Control of Registrant

         Cryopak is not directly or indirectly  owned or controlled by any other
corporation or by any foreign government.  The following table sets forth, as of
May 31, 1999,  the  beneficial  ownership of the Company's  Common Stock by each
person known by the Company to  beneficially  own more than 5% of the  Company's
Common Stock  outstanding  as of such date and by the officers and  directors of
the  Company as a group.  Except as  otherwise  indicated,  all shares are owned
directly.

<TABLE>
<CAPTION>

(1)                        (2)                                (3)                                (4)
                           Name and address of                Amount and Nature                  Percent of
Title of Class             beneficial owner                   Of Beneficial Ownership            Class
<S>                        <C>                                <C>                                <C>
Common Shares              Exceptional Technologies Funds 3     977,777                          5.7%
                           2011 - 1177 W. Hastings St.
Common Shares              Cryopak Industries (VCC) Inc.      1,043,722                          6.0%
Common Shares              Directors/Officers                 1,461,241                          8.5%
                           Harry Bygdnes
                           Robert Leigh Jeffs
                           Douglas Reid
                           John McEwen
                           John Morgan
                           Ross Morrison

</TABLE>

Item 5. Nature of Trading Market

         The  Company's  common  stock trades in Canada on the  Vancouver  Stock
Exchange.  Non-Canadian  investors are also able to trade the Company's stock on
this  Exchange.  As of March  31,  1999,  the  Company's  stock  was held by 388
American  shareholders,  which consisted of 34% of its total outstanding shares.
The high and low sales prices for the  Company's  common stock on the  Vancouver
Stock Exchange over the past two fiscal years are as follows:


<PAGE>


<TABLE>
<CAPTION>


Fiscal Quarter                     High (Cdn$)                Low(Cdn$)
<S>                                <C>                        <C>
April - June 1999                  $1.15                      $0.98
January - March 1999               $0.84                      $0.74
October - December 1999            $0.89                      $0.55
July - September 1998              $0.62                      $0.39
April - June 1998                  $0.46                      $0.36
January - March 1998               $0.43                      $0.36
October - December 1997            $0.42                      $0.26
July - September 1997              $0.52                      $0.41
April - June 1997                  $0.60                      $0.45

</TABLE>

Item 6. Exchange Controls and Other Limitations Affecting Security Holders

         Except as  discussed  in Item 7 below,  the Company is not aware of any
Canadian federal or provincial laws,  decrees,  or regulations that restrict the
export or import of capital, including foreign exchange controls, or that affect
the remittance of dividends,  interest or other payments to nonCanadian  holders
of Common  Shares.  The Company is not aware of any  limitations on the right of
nonCanadian  owners to hold or vote Common Shares imposed by Canadian federal or
provincial law or by the Company.

         The Investment Canada Act (the "Act") governs  acquisitions of Canadian
business  by a  nonCanadian  person or entity.  The Act  provides,  among  other
things,  for a review of an investment in the event of acquisition of control in
certain Canadian businesses in the following circumstances:

                  (1)      if  the  investor  is a  non-Canadian  and  is  not a
                           resident  of  a  World  Trade  Organization   ("WTO")
                           country, any direct acquisition having an asset value
                           exceeding  $5,000,000  and any  indirect  acquisition
                           having an asset value exceeding $50,000,000;

                  (2)      if the investor is a  non-Canadian  and is a resident
                           of a WTO  member,  any direct  acquisition  having an
                           asset  value   exceeding   $168,000,000   unless  the
                           business is involved in uranium production, financial
                           services,   transportation  services  or  a  cultural
                           business.

         An indirect  acquisition of control by an investor who is a resident of
a WTO country is not  reviewable  unless the value of the assets of the business
located  in  Canada  represents  more  than  50%  of  the  asset  value  of  the
transaction,  or the  business  is  involved  in uranium  production,  financial
services, transportation services or a cultural business.

         The Act provides that a non-Canadian investor can hold up to 1/3 of the
issued and outstanding capital of a Canadian  corporation without being deemed a
"control person", and that a non-Canadian  investor holding greater than 1/3 but
less than 1/2 of the issued and outstanding capital of a Canadian corporation is
deemed  to be a  control  person  subject  to a  rebuttable  presumption  to the
contrary  (i.e.  providing  evidence of another  control person or control group
holding greater number of shares).

         The Act requires  notification  where a non-Canadian  acquires control,
directly or indirectly,  of a Canadian business with assets under the thresholds
for  reviewable  transaction.  The  notification  process  consists  of filing a
notification within 30 days following the implementation of an investment.

Item 7. Taxation

         The Income Tax Act (Canada)  provides  that interest  and/or  dividends
paid to persons who are not resident in Canada are subject to taxation in Canada
at a rate of 25% of the amount so paid.  The tax is withheld by the payor at the
time of payment.  The 25%  withholding  rate may be reduced where Canada and the
country of  residence  of the  recipient  have  enacted a treaty with respect to
taxes on income and on capital.  The Canada United States Income Tax  Convention
of 1980 provides that the withholding rate on dividends and interest will be 15%
of any paid.  There are no other taxes  eligible  for  persons  not  resident in
Canada.

Item 8. Selected Financial Data



<PAGE>


<TABLE>
<CAPTION>

                                    Year          Year          Year         Year           Year
                                    Ended         Ended         Ended        Ended          Ended
                                    March 31,     March 31,     March 31,    March 31,      March 31,
                                    1999          1998          1997         1996           1995

<S>                                 <C>           <C>           <C>          <C>            <C>
Net Sales or Operating Revenues     $1,295,159    $1,161,442    $1,140,242   $   965,912    $1,053,456
Income (Loss) from Continuing
 Operations                         (   912,068)  (    638,553) (    675,133)(    912,390)  (    799,428)
Income (Loss) from Continuing
 Operations per common share        (      0.06)  (       0.05) (        0.0)(       0.09)  (       0.09)
Total Assets                          2,036,700     1,364,297        892,598      969,860        789,332
Long-Term Obligations and
 Redeemable Preferred Stock
     Long-Term Debt                              350,000                   0                            0
     Capital Leases                              249,057             320,015        25,531         31,808

     Redeemable Preferred Stock                        0                                                0
Cash Dividends Declared per
 Common Share                              N/A          N/A             N/A           N/A          N/A

</TABLE>

     For further  discussion of the Company's  financial  statements,  including
factors such as accounting  changes,  business  combinations  or dispositions of
business operations, that materially affect the comparability of the information
reflected in the selected  financial  data,  refer to the  financial  statements
attached hereto.

         As of  September 13, 1999,  the exchange rate between the United
States and Canada was US$1.00 per  Cdn$1.4703.  Over the  Company's  past five
fiscal years, the exchange rate per US$1.00 has varied as follows:

<TABLE>
<CAPTION>

                           Rate at          Average             Low          High
Fiscal Year Ended          Year End         Rate                Rate         Rate
<S>                        <C>              <C>                 <C>          <C>
March 31, 1999             $1.5092          $1.5033             $1.4173      $1.5765
March 31, 1998             $1.4166          $1.4023             $1.3669      $1.4639
March 31, 1997             $1.3843          $1.3609             $1.3306      $1.3843
March 31, 1996             $1.3632          $1.3629             $1.3282      $1.3987
March 31, 1995             $1.3990          $1.3824             $1.3408      $1.4235

</TABLE>

[NEED TO CALL FEDERAL RESERVE BANK AT 212-720-6130 FOR THE RATE OF EXCHANGE ON
MORNING OF FILING TO FILL IN BLANKS ABOVE]

Item 9. Management's   Discussion  and   Analysis  of  Financial  Condition  and
        Results of Operations

         The  following  discussion  should  be read  in  conjunction  with  the
financial  statements and notes thereto included with this Form 20-F. Except for
the historical information contained herein, the discussion in this Registration
Statement  contains  certain  forward-looking  statements  that involve risk and
uncertainties,   such  as  statements  of  the  Company's   plans,   objectives,
expectations  and  intentions.  The cautionary  statements made in this document
should be read as being  applicable  to all related  forward-looking  statements
wherever they appear in this document. The Company's actual results could differ
materially from those discussed here.

Liquidity

         The Company has had the ability to raise  adequate  amounts of capital,
primarily  through the issuance of equity  (private  placements  and exercise of
stock options) to sustain its business operations and meet its debt obligations.
The Company  believes that this type of financing  will continue to provide cash
to meet its requirements until it attains profitable levels of operations.

Capital Resources

         The Company has no long term  commitments  to make any further  capital
expenditures  other than as set out in its  financial  statements.  However,  as
sales increase generally, it will acquire additional manufacturing capacity.


<PAGE>



Results of Operations

         The Company  continues to explore for new  opportunities  to market its
product line. During the year ended March 31, 1999, the Company restructured its
management team to exploit these opportunities. At the same time, it streamlined
its  manufacturing  activities by acquiring  its own equipment and  exercising a
greater degree of control over this activity.

Item 9A. Quantitative and Qualitative Disclosures About Market Risk

Common Stock

         The  Company's  common  stock trades in Canada on the  Vancouver  Stock
Exchange.  Non-Canadian  investors are also able to trade the company's stock on
this  exchange.  The trading  range of this stock over the last two years is set
out in tabular form under Item 5.

Market Risk

         While the stock trades  freely on the  exchange,  there is no assurance
that a buyer or buyers will be  available to acquire any or all of the shares of
a seller or at a price that is favorable. The shares have a large trading volume
and the market is sensitive to large seller purchases.

Currency Risk

         The stock trades on the Vancouver  Stock Exchange in Canadian  dollars.
An investor who trades in a currency  other than Canadian  dollars is subject to
the change in exchange rates between the non-Canadian  currency and the Canadian
dollar. The average rates of exchange between the Canadian and US dollars is set
out under Item 8.

Dividends

         The  Company  has  not  historically,  nor  does it  anticipate  paying
dividends on its common  stock in the  foreseeable  future.  The payment of such
dividends  will be subject  to the  Company  attaining  a  sustainable  level of
profitability.

Preferred Stock

         The  Company has issued 530 Class A  Preferred  Shares,  Series I. This
stock does not trade on a stock  exchange.  All dollar amounts are Canadian.  No
other class of preferred shares has been created or issued.

         Each Class A Preferred Share carries a 12%, cumulative dividend payable
at the company's  fiscal year end, in either cash or common shares at the option
of the Company. Dividends in arrears at March 31, 1999 amounted to $64,039.

         The Preferred  Shares are convertible into common shares at the rate of
one common share for each $3 of paid up capital or the rate provided below:

       $2.00at any time after  December  31,  1998,  provided  that the  Current
            Trading  Price shall never have  exceeded  $2.99 after  December 31,
            1996 or $2.49 after December 31, 1997.

       at   any time after December 1, 1999,  provided that the Current  Trading
            Price shall never have  exceeded  $2.99 after  December  31, 1996 or
            $2.49 after  December 1, 1997 or $1.99 after December 31, 1998, at a
            common  share  price  equal to that  price  which  represents  a 15%
            discount to the then Current Trading Price, which common share price
            in no event shall be less than $0.95;

         But if  not  so  converted prior to May 12, 2000, such Preferred Shares
shall  be  deemed  to  have  been  converted  on  May 12, 2000 at the applicable
conversion price described above.  The Current Trading Price means


<PAGE>



the average  trading  price of the common  shares on a  recognized  public stock
exchange for the preceding 20 business days.

Market Risk

         The number of common shares to be received by an investor at conversion
may vary depending upon the trading price at the date of conversion,  as set out
in the preceding paragraph.

         The common  shares which will be received  upon  conversion  will range
between 333 and 1,053  common per  preferred  share (each of which was issued at
$1,000).

Item 10. Directors and Officers of Registrant

<TABLE>

Cryopak Industries Inc.

<CAPTION>
                                                                             Arrangements Material
Name                       Title(s)         Term of Office                   to Appointment
<S>                        <C>              <C>                              <C>
Harry Bygdnes              President,       1981 to Present                  None
                           Director         1981 to Present                  None
Robert Leigh Jeffs         CFO,             March 1999 to Present            None
                           Director         June 1990 to Present             None
Harley D. Sinclair         Secretary        November 1995 to Present         None
Ross G. Morrison           Director         April 1999 to Present            None
John F. Morgan             Director         March 1999 to Present            None
John A. McEwen             Director         August 1995 to Present           None

</TABLE>

Cryopak (Canada) Corporation

<TABLE>
<CAPTION>
                                                                             Arrangements Material
Name                       Title(s)         Term of Office                   to Appointment
<S>                        <C>              <C>                              <C>
Harry Bygdnes              Secretary,       1987 - Present                   None
                           Director         1987 - Present                   None
Robert Leigh Jeffs         President,       March 1987 to March 1999         None
                           Director         March 1987 to Present            None
John F. Morgan             President,       March 1999 to Present            None
                           CEO, and         March 1999 to Present            None
                           Director         March 1999 to Present            None

</TABLE>

Cryopak (International) Inc.

<TABLE>
<CAPTION>
                                                                             Arrangements Material
Name                       Title(s)         Term of Office                   to Appointment
<S>                        <C>              <C>                              <C>
Harry Bygdnes              Director         August 1995 to Present           None
Robert Leigh Jeffs         Director         August 1995 to Present           None

</TABLE>

Item 11. Compensation of Directors and Officers

         During the Company's last fiscal year ended March 31, 1999, the Company
paid an aggregate of Cdn$151,146 to its officers. The Company's directors do not
receive a salary, but are paid for out-of-pocket  expenses incurred as directors
of the Company.  Both the  Company's  officers and its  directors  have received
options for the Company's common stock at various exercise prices based upon the
average trading price for the ten trading days prior to the grant date.

Item 12. Options to Purchase Securities from Registrant or Subsidiaries

         As of March 31, 1999,  the following  stock options of the Company were
outstanding:

<PAGE>

<TABLE>
<CAPTION>

Group Received                      Number of Shares            Exercise Price          Expiration Date
<S>                                 <C>                         <C>                     <C>
Directors                           170,000                     $0.50                   June 13, 1999
                                    390,000                     $0.52                   August 17, 2000
                                    343,000                     $0.50                   January 7, 2001
                                    75,000                      $0.52                   June 19, 1999
                                    200,000                     $0.50                   September 2, 1999
Officers                            100,000                     $0.40                   June 26, 2000
                                    136,300                     $0.82                   August 17, 2000
Employees                           20,000                      $0.52                   June 16, 1999
                                    100,000                     $0.82                   February 11, 2001
                                    750,000*                    $0.76                   March 19, 2004

</TABLE>

*  These  options  will  vest at a rate of  50,000  at the end of each  calendar
quarter commencing March 31, 1999 and are subject to shareholder approval.

Item 13. Interest of Management in Certain Transactions

         Over the past five fiscal years,  the Company has given  unsecured cash
advances to NCK Holdings,  Inc. ("NCK"),  which is owned by two of the directors
of Cryopak. These advances have included Cdn$56,972 during the fiscal year ended
March 31, 1995,  Cdn$109,339  during the fiscal year ended March 31, 1996,  Cdn$
90,668 during the fiscal year ended March 31, 1997, Cdn$70,572 during the fiscal
year ended March 31, 1998 and Cdn$48,868  during the fiscal year ended March 31,
1999. These amounts were not repaid during the fiscal year ended March 31, 1995;
however,  commencing in the fiscal year ended March 31, 1996 NCK began  repaying
the  advances at a rate of Cdn$2,200  per month,  which  amount  includes  eight
percent annual interest.

         The Company has also paid  management  fees and  royalties  to NCK. The
management fees were paid in exchange for management  services and the royalties
were in exchange for the rights to the patent for the Cryomat product.  Over the
past five fiscal years, these fees and royalties have been paid as follows:

<TABLE>
<CAPTION>

Fiscal Year Ended          Management Fees             Royalties
<S>                        <C>                         <C>
March 31, 1995             Cdn$210,000                 Cdn$17,722
March 31, 1996             Cdn$220,000                 Cdn$20,159
March 31, 1997             Cdn$220,000                 Cdn$22,934
March 31, 1998             Cdn$220,000                 Cdn$26,289
March 31, 1999             Cdn$220,000                 Cdn$26,261

</TABLE>

         During  the  fiscal  year  ended  March  31,  1996,  the  Company  paid
commissions to Discovery Capital Corporation,  the president and non-controlling
shareholder  of  which is a  member  of  Cryopak's  board  of  directors.  These
commissions  were paid in exchange for sales of the  Company's  stock as part of
the Cdn$2,000,000  venture capital Investment Agreement entered into between the
Company and Discovery Capital  Corporation in March 1995 and totaled Cdn$56,560.
The Company paid an additional Cdn$15,540 in professional fees and Cdn$23,500 in
consulting fees to Discovery  Capital  Corporation  during the fiscal year ended
March 31, 1997, also as a part of the terms of the Investment Agreement.

         Other  amounts  paid to  affiliated  corporations  during the past five
fiscal years include  Cdn$10,000 in professional fees paid to a company owned by
a director  during the fiscal  years ended March 31, 1996 and March 31, 1998 and
professional  fees of  Cdn$22,200  paid in the fiscal year ended March 31, 1999.
The fees were paid to Reid & Company for advisory services.

         The Company had accounts  receivable of Cdn$12,446 owed to NCK Holdings
Inc.  and  Cdn$3,278  to  Fulcrum  Development  Ltd.,  a company  related by two
directors in common,  during the fiscal year ended March 31, 1997. In the fiscal
year ended March 31, 1998 the accounts receivable were Cdn$7,658 to NCK Holdings
Inc. and  Cdn$3,278  to Fulcrum  Development  Ltd.,  whose  accounts  receivable
balance was also at Cdn$3,278 during the fiscal year ended March 31, 1999.

                                     PART II

Item 14. Description of Securities to be Registered
<PAGE>

Common Stock

         Holders of the  Common  Stock are  entitled  to one vote for each share
held by them of record on the books of the Company in all matters to be voted on
by the  stockholders.  Holders of Common  Stock are  entitled  to  receive  such
dividends as may be declared  from time to time by the Board of Directors out of
funds legally available, and in the event of liquidation, dissolution or winding
up of the Company,  to share  ratably in all assets  remaining  after payment of
liabilities.  Declaration  of  dividends  on  Common  Stock  is  subject  to the
discretion  of the Board of Directors  and will depend upon a number of factors,
including the future earnings,  capital  requirements and financial condition of
the Company.  The Company has not declared  dividends on its Common Stock in the
past and the management currently anticipates that retained earnings, if any, in
the future  will be applied to the  expansion  and  development  of the  Company
rather than the payment of dividends.

         The holders of Common Stock have no preemptive or conversion rights and
are not subject to further  calls or  assessments  by the Company.  There are no
redemption or sinking fund provisions applicable to the Common Stock. The Common
Stock  currently  outstanding  is, and the Common  Stock  offered by the Company
hereby will, when issued, be validly issued, fully paid and nonassessable.

Class A Preferred Stock, Series 1

         Holders of the Class A Preferred Stock,  Series I, shall be entitled to
receive notice of and attend all meetings of the shareholders of the Company and
shall have the right to vote at any such  meetings  on the basis of one vote for
each Series 1  Preferred  Share held.  The  consideration  for the issue of each
Class A Preferred Share, Series 1, shall be Cdn$1,000.

         Each Class A Preferred Share, Series I, carry a 12% annual,  cumulative
dividend, payable at the end of the Company's most recent fixed fiscal year end,
at the option of the Company,  in either cash or Common Shares, the value of the
Common Shares being  calculated on the basis of the Current  Trading  Price.  No
dividends  shall be  declared  or paid on any other  class of shares  unless and
until all unpaid dividends on the Series 1 Preferred Shares have been paid.

         At any time after  December  31,  1996,  each Class A Preferred  Share,
Series I, shall be convertible into Common Shares on the basis of a Common Share
price of  Cdn$3.00  each,  or at such lower  price as may be  provided  below as
follows:

1.                Cdn$2.50 at any time after  December 31, 1997,  provided  that
                  the Current  Trading Price shall never have exceeded  Cdn$2.99
                  after December 31, 1996;
2.                Cdn$2.00 at any time after  December 31, 1998,  provided  that
                  the Current  Trading Price shall never have exceeded  Cdn$2.99
                  after December 31, 1996 or Cdn$2.49 after December 31, 1997;
3.                At any time after December 31, 1999, provided that the Current
                  Trading  Price  shall  never  have  exceeded   Cdn$2.99  after
                  December  31,  1996 or  Cdn$2.49  after  December  31, 1997 or
                  Cdn$1.99  after  December  31,  1998,  at a Common Share Price
                  equal to that price  which  represents  a 15%  discount to the
                  then  Current  Trading  Price,  which Common Share price in no
                  event shall be less than $0.95.

Any  shares  not  converted  prior to May 12,  2000 shall be deemed to have been
converted on May 12, 2000 at the applicable conversion price described above. If
there is a subdivision or consolidation of the Class A Preferred Shares prior to
conversion  of the  Series I  Preferred  Shares  into  Common  Shares,  then the
applicable conversion formula shall be proportionally adjusted.

         In the event of a dissolution, winding up or other return of capital of
the Company, registered holders of the Class A Preferred Shares, Series I, shall
be  entitled  to  receive  the  amount  paid up on such  shares  and all  unpaid
dividends  before  any  amount  shall  be paid or any  property  or asset of the
Company is distributed to the registered holders of any other classes of shares.
After payment to the registered  holders of the Series I Preferred Shares of the
amount so payable to them as provided above, they shall not be entitled to share
in any future distribution for the property or assets of the Company.

<PAGE>

                                     PART IV

Item 17. Financial Statements

INTERNATIONAL CONSORT INDUSTRIES INC
CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED MARCH 31, 1993
AND AUDITORS' REPORT

Hay & Watson CHARTERED ACCOUNTANTS

AUDITORS'REPORT

To the Shareholders of International Consort Industries Inc.

We have  audited  the  consolidated  balance  sheets  of  International  Consort
Industries Inc. as at March 31, 1993 and 1992 and the consolidated statements of
loss and  deficit,  and of  changes  in cash  flows for each of the years in the
three year period ended March 31, 1993. These consolidated  financial statements
are the  responsibility of the company's  management.  Our  responsibility is to
express an  opinion  on these  consolidated  financial  statements  based on our
audit.

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

In our opinion,  these  consolidated  financial  statements  present fairly, the
financial  position of the company as at March 31, 1993 and 1992 and the results
of its  operations and the changes in its cash flow for each of the years in the
three year period ended March 31, 1993 in accordance with accounting  principles
generally accepted in Canada. As required by the Company Act of British Columbia
we report that, in our opinion,  these  principles  have been applied on a basis
consistent with that of the preceding year.

CHERTERED ACCOUNTANTS

Vancouver, B. C.
August 18, 1993

1822 West 2nd Avenue, Vancouver, B.C. V6J 1H9  (604)732-1466  Fax (604) 732-3133

<PAGE>

                     INTERNATIONAL CONSORT INDUSTRIES INC.
                          CONSOLIDATED BALANCE SHEETS
                            MARCH 31, 1992 AND 1991
                          (Stated in Canadian Dollars)

<TABLE>
ASSETS
<CAPTION>

                                1993                    1992
<S>                             <C>                     <C>
Current
 Cash                           $  10,074                 535,541
 Accounts receivable              172,905                 204,475
 Inventory                         40,636                   9,913
 Marketable securities (Note 3)       100                     100
 Prepaid expenses                   3,609                  33,609
                                  227,324                 783,638
Capital assets (Notes I and 4)      8,429                  14,048
Advance to related company (Note 6)     -                  42,831
Intangibles, (Notes I and 5)      886,765                 945,563
Mineral claims, option and
  working interest                 12,001                  26,695
Deferred exploration costs              1                 297,579
Minority interest                     145                       -
                               $1,134,665               $2,110,354
LIABILITIES
Current
 Accounts payable and accrued
   liabilities                 $  363,472                  184,075
 Loans payable                      8,688                   12,545
                                  372,160                  196,620
Advance from related company
  (Note 6)                         11,331                        -
Deferred income taxes              20,467                   20,467
                                  403,958                  217,087

SHAREHOLDERS' EQUITY

Share capital (Note 7)          4,752,743                4,485,743
  Authorized
      10,000,000 common shares without par value
  Issued and Outstanding
       7,923,242 (1992 - 7,615,242) common shares
Deficit                        (4,022,036)              (2,592,476)
                                  730,707                1,893,267
                              $1,134,665                 2,110,354

</TABLE>

APPROVED BY THE BOARD:

DIRECTOR

DIRECTOR

<PAGE>

                     INTERNATIONAL CONSORT INDUSTRIES INC.
                  CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
                              YEAR ENDED MARCH 31
                          (Stated in Canadian Dollars)

<TABLE>
<CAPTION>

                                                         1993                    1992            1991
<S>                                                      <C>                     <C>             <C>
Sales                                                    $1,035,325              $1,152,222      $  457,731
Cost of sales                                               839,900                 611,114         274,191
Gross profit                                                195,425                 541,108         183,540
Operating expenses, Schedule 1                              774,868                 577,266         411,513
Operating loss                                             (579,443)                (36,158)       (227,973)
Other (income) expenses
  Filing, listing and transfer agent fees                    15,432                  19,114          9,996
  Corporate printing, financial and public relations        516,867                 255,306         60,255
  Royalties                                                  27,248                  37,205         17,838
  Depreciation and amortization                              66,661                  70,520         54,303
  Equity (income) loss                                            -                       -         11,462)
  Write off of abandoned mineral claims
      and related exploration costs                         312,272                 140,840              -
  Minority interest                                            (146)                      -              -
  Gain on disposition of subsidiary                               -                       -        (84,168)
  Loss on write down and sale of marketable securities            -                       -            780
  Miscellaneous income                                      (60,676)                      -              -
  Commission income                                         (27,541)                      -              -
                                                            850,117                 522,985         47,542
Loss before income taxes                                 (1,429,560)               (559,143)      (275,515)
Deferred income tax recovery                                      -                       -          7,363
Net loss for the year
                                                         (1,429,560)               (559,143)       (268,152)
Deficit, beginning of year                               (2,592,476)             (2,033,333)     (1,765,181)
Deficit, end of year
                                                         (4,022,036)             (2,592,476)     (2,033,333)

Loss per share (Note 7)                                      (0.19)                   (0.09)          (0.06)
Weighted average common shares outstanding'               7,622,242               6,116.075       4,752,459


</TABLE>
<PAGE>

                     INTERNATIONAL CONSORT INDUSTRIES INC.
                CONSOLIDATED STATEMENTS OF CHANGES IN CASH FLOWS
                              YEAR ENDED MARCH 31
                          (Stated in Canadian Dollars)

<TABLE>
<CAPTION>

                                                        1993                            1992                 1991
<S>                                                     <C>                             <C>                  <C>
Operating activities
        Net loss                                        $(1,429,560)                    (559,143)           (268,152)
        Items not affecting cash flow
                Equity income                             (     145)                           -              11,462
                Write off of abandoned mineral claims
                        and related exploration costs       312,272                      140,840                   -
                Gain on disposal of subsidiary                    -                            -              84,168
                Depreciation and amortization                66,661                       70,520              54,303
                Loss on write down and sale of
                        marketable securities                     -                            -                 780
                Deferred income tax recovery                                                                  (7,363)
               Write down of inventory                           -                            -                   -
        Shares cancelled by settlement of lawsuit          ( 57.600)
        Shares issued for interest in subsidiary                  -                            -              426,439
        Liabilities settled by issue of company shares                                  (193,272)             404,112
        Shares issued for patent                                  -                            -              150,000
                                                         (1,108,372)                    (541,055)            (855,749)
        Changes in other operating items
                Accounts receivable                          31,570                     (184,080)            ( 12,297)
                Inventory                                   (30,723)                    (  3,225)            (  6,688)
                Prepaid expenses                             30,000                     ( 26,125)            (  4,375)
                Accounts payable                            179,397                     (113,699)             165,702
                Management fees payable                           -                     ( 74,249)              45,038
                Loans payable                               ( 3,857)                       1,422             (108,542)
        Cash used for operating activities               (  901,985)                    (941,011)             934,587
Cash flow from financing activities
        Advance to private company                                -                            -            ( 105,762)
        Issue of shares                                     324,600                    1,553,092               99,580
        Cash provided by financing activities               324,600                    1,553,092            (   6,182)
Cash flows investing activities
        Acquisition of subsidiary                                 -                            -            ( 804,264)
        Acquisition of capital assets                       ( 2,244)                   (   7,853)                   -
        Acquisition of patent license                             -                            -            ( 150,000)
        Advances (to) from related company                   54,162                    (  67,612)              24,781
                                                             51,918                    (  75,465)           ( 929,483)
(Decrease) increase in cash during the year
                                                         (  525,467)                     536,616            (   1,078)
Cash (bank indebtedness), beginning of year
                                                            535,541                    (   1,075)                   3
Cash (bank indebtedness), end of year                $       10,074                      535,541            (   1,075)

</TABLE>
<PAGE>

                     INTERNATIONAL CONSORT INDUSTRIES INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            MARCH 31, 1993 AND 1992
                          (Stated in Canadian Dollars)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These  financial  statements  have been  prepared in accordance  with  generally
accepted accounting principles in Canada and reflect the following policies:

Basis of Presentation
---------------------

The consolidated  financial  statements  include the accounts of the company and
its  wholly-owned  subsidiary,  Cryopak  (Canada)  Corporation its  wholly-owned
subsidiary Cryopak Corporation, a Nevada corporation, and its subsidiary Cryopak
(Alberta) Corporation.

Inventories
-----------

Inventories  are valued at the lower of cost or net  realizable  value.  Cost is
determined by an average cost method.

Marketable Securities
---------------------

Marketable securities are recorded at the lower of cost and market value.

Mineral Claims, Option and Deferred Costs
-----------------------------------------

The  company's  mineral  claims  are in the  exploration  stage  and,  based  on
information  available to date, the company has not yet determined whether these
properties  contain  economically  recoverable   ore reserves.  Costs associated
with these mineral claims,  including  exploration and  development  costs,  are
deferred  until  such  time  as the  properties  are in  commercial  production,
abandoned or sold.

The  recoverability of the amounts shown for mineral claims and related deferred
development costs is dependent upon the confirmation of economically recoverable
reserves,  the ability of the company to obtain the  financing  to  successfully
complete their development and upon future profitable production.

Depreciation
------------

The company  records  depreciation on its capital assets using the straight-line
method over five years.

Investments
-----------

Investments in  companies in which the company exercises  significant  influence
are accounted for using the equity method.

Patent License
--------------

The patent  license  is  recorded at cost and is  amortized  on a  straight-line
basis over seventeen years.

Deferred Development and Research Costs
---------------------------------------

The  deferred  development  and  research  costs  are  recorded  at cost and are
amortized on a  straight-line  basis over twenty  years.

Goodwill
--------

The excess of cost of the purchase of a  subsidiary  company over the fair value
of  assets  acquired  (consolidated  goodwill)  is amortized on a  straight-line
basis over seventeen years.

<PAGE>

2. OPERATIONS

The ability  of  the  company to continue as a going concern, which contemplates
the realization of assets and the satisfaction  of liabilities  and  commitments
in  the  normal course of business, is  dependent  on  obtaining  the  financing
necessary to continue  operations  and, ultimately,  profitable operations.  The
company is engaged in discussions  for these  purposes but no  arrangements  are
in place and there can be no assurances that such arrangements will be made.

3. MARKETABLE SECURITIES

Investment in 2,500 shares (1992 - 2,500) of joint venture partner,  received as
part of the proceeds in exchange  for a 50 % interest in the West claim.  Market
value at March 3 1, 1993 - $300 (1992 - $ 100).

4. CAPITAL ASSETS

<TABLE>
<CAPTION>
                                                         1993
                                         Accumulated     Net Book    Net Book
                               Cost      Depreciation    Value       Value
<S>                            <C>       <C>             <C>         <C>
Furniture and fixtures         $75,002   $66,573         $8,429      $14,048

</TABLE>

5. DEFERRED DEVELOPMENT RESEARCH COSTS, PATENT LICENSE AND GOODWILL

<TABLE>
<CAPTION>

                                      1993            1993          1992
                                      Accumulated     Net Book      Net Book
                          Cost        Amortization    Value         Value
<S>                       <C>         <C>             <C>           <C>
Deferred development
      research costs      $325,983    $  44,822       $ 281,161     $  297,459
Patent license             566,323       91,613         474,710        508,024
Goodwill                   156,155       25,261         130,894        140,080
                         1,048,461      161,696         886,765        945,563

</TABLE>

6. ADVANCE TO/(FROM) RELATED COMPANY

<TABLE>
<CAPTION>
                                              1993         1992
<S>                                           <C>          <C>
Advance to/(from) N.C.K. Holdings Ltd.        $(11,331)    $ 42,831

</TABLE>

The  related  company  is  owned  by two directors.  The  advance  is  unsecured
non-interest bearing, and without terms of repayment.

7. SHARE CAPITAL

<TABLE>
<CAPTION>

Authorized
<S>            <C>
10,000,000     common shares without par value
               Issued and outstanding

</TABLE>

<TABLE>
<CAPTION>
                                             1993                             1992                            1991
                                   Number                          Number                         Number
                                   of                              of                             of
                                   Shares          Amount          Shares          Amount         Shares          Amount
<S>                                <C>             <C>             <C>             <C>            <C>             <C>
Balance, beginning of year         7,615,242       $ 4,485,743     5,370,019       $ 2,932,651     4,737,353      $ 2,045,792
Consolidation of outstanding shares
        on a 1 for 2 basis              -                 -             -                 -       (2,368,677)             -
Cancelled by settlement of lawsuit  (192,000)          (57,600)            -                 -             -              -
Issued during the year
        For cash                     500,000           324,600     1,961,000         1,359,820       288,010           99,580
        For interest in subsidiary        -               -             -                 -        1,421,463          426,439
        For patent                        -               -             -                 -          500,000          150,000
        For settlement of debt            -               -          284,223           193,272       791,870          210,840
                                     500,000           324,600     2,245,223         1,553,092     3,001,343          886,859
                                   7,923,242       $ 4,752,743     7,615,242       $ 4,485,743     5,370,019      $ 2,932,651

</TABLE>
<PAGE>

On March 31, 1993, the following stock options were outstanding:

<TABLE>
<CAPTION>
                Number of        Exercise
                Shares           Price     Expiry Date
<S>             <C>              <C>       <C>
Directors       314,300          $0.80     May 27, 1997
Employees       192,500           0.80     May 27, 1997
Employees       100,000           0.85     February 23, 1995

</TABLE>

8. INCOME TAXES

The company has losses  available for utilization  against future years' taxable
incomes which, if unused, will expire as follows:

<TABLE>
<CAPTION>

<S>       <C>
1994      $ 167,789
1995        359,062
1996        274,933
1997        276,415
1998        296,801
1999      1,089,726

</TABLE>
<PAGE>

                     INTERNATIONAL CONSORT INDUSTRIES INC.
                  CONSOLIDATED SCHEDULES OF OPERATING EXPENSES
                    YEAR ENDED MARCH 31, 1993, 1992 AND 1991
                          (Stated in Canadian Dollars)

<TABLE>
<CAPTION>

                                             1993         1992        1991
<S>                                          <C>          <C>         <C>
Bad debts                                    68,986            -        5,471
Commissions                                  26,581       31,775       12,786
Management fees                             168,000      120,000      120,000
Foreign exchange                             14,214       16,812        6,012
Interest and bank charges                     7,231        7,276       20,590
Media advertising, marketing and promotion   61,607       39,762       20,255
Office supplies and stationery               93,804       50,554       37,051
Professional fees                            46,505      111,360       70,790
Rent                                         51,566       47,300       31,264
Salaries and benefits                        98,188       68,435       46,456
Telephone                                    62,357       45,741       19,452
Travel                                       63,731       26,649       12,192
Vehicle                                      11,098       11,602        9,194
                                            774,868      577,266      411,513

</TABLE>

<PAGE>

                            CRYOPAK INDUSTRIES INC.
                       CONSOLIDATED FINANCIAL STATEMENTS
                            YEAR ENDED MARCH 31,1995
                              AND AUDITORS REPORT


                            CRYOPAK INDUSTRIES INC.
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31,1995 AND 1994

                                Auditors Report

                                 Balance Sheets

                  Consolidated Statements of Loss and Deficit

            Consolidated Statements of Changes in Financial Position

                   Notes to Consolidated Financial Statements

                  Consolidated Schedules of Operating Expenses

Hay & Watson CHARTERED ACCOUNTANTS

AUDITORS' REPORT

To the Shareholders
of Cryopak Industries Inc.

We have audited the consolidated balance sheets of Cryopak Industries Inc. as at
March 31, 1995 and 1994 and the consolidated  statements of loss and deficit and
of changes in financial  position for each of the years in the three year period
ended  March  31,  1995.  These  consolidated   financial   statements  are  the
responsibility of the company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

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

In our opinion,  these  consolidated  financial  statements  present  fairly the
financial  position of the company as at March 31, 1995 and 1994 and the results
of its operations and the changes in its cash flows for each of the years in the
three year period ended March 31, 1995 in accordance with accounting  principles
generally  accepted  in  Canada.  As  required  by the  Company  Act of  British
Columbia, we report that, in our opinion,  these principles have been applied on
a basis consistent with that of the preceding year.


CHARTERED ACCOUNTANTS
Vancouver, B.C.
August 17, 1995

1822 West 2nd Avenue, Vancouver, B.C. V6J IH9 -(604) 732-1466 Fax (604) 732-3133

<PAGE>

Hay & Watson CHARTERED ACCOUNTANTS

COMMENTS BY INDEPENDENT CHARTERED ACCOUNTANTS
FOR UNITED STATES READERS ON DIFFERENCES BETWEEN
REPORTING STANDARDS IN CANADA AND THE UNITED STATES

These  consolidated  financial  statements have been prepared in accordance with
accounting  principles  generally accepted in Canada, which as explained in Note
12 to the consolidated financial  statements,  differ from accounting principles
generally  accepted in the United States.  In addition,  United States reporting
standards  for  auditors  require  the  addition  of  an  explanatory  paragraph
(following  the opinion  paragraph)  when  financial  statements are affected by
significant   uncertainties   such  as  those  described  in  Note  4  to  these
consolidated financial statements under the caption "Operations".  Our report to
the shareholders  dated August 17, 1995 is expressed in accordance with Canadian
reporting standards which do not permit a reference to such uncertainties in the
auditors'  report  when  the  uncertainties  are  adequately  disclosed  in  the
financial statements.

CHARTERED ACCOUNTANTS

Vancouver, B.C.
August 17, 1995

1822 West 2nd Avenue, Vancouver, B.C. V6J 1H9  (604) 732-1466 Fax (604) 732-3133

<PAGE>

                            CRYOPAK INDUSTRIES INC.
                          CONSOLIDATED BALANCE SHEETS
                                    MARCH31
                          (Stated in Canadian Dollars)

<TABLE>
ASSETS
<CAPTION>

                                        1995         1994
<S>                                     <C>          <C>
Current
 Cash                                   $  1,709      $  1,842
 Accounts receivable                      83,204       152,482
 Inventory                                29,913        93,277
 Marketable securities (Note 5)              100           100
 Prepaid expenses                          3,609         3,609
 Due from employees                          -           5,240

                                         118,535       256,550

Capital assets (Notes I and 6)            15,405         8,198
Advance to related company
  (Note 8)                                56,972        62,559
Intangibles (Notes I and 7)              598,420       827,963

                                       $ 789,332    $1,155,270

LIABILITIES
Current
  Bank indebtedness                        6,373             -
  Accounts payable and
     accrued liabilities                 346,635       257,143
  Loans payable                              -          11,295

                                         353,008       268,438
Deferred income taxes                     20,467        20,467
                                         373,475       288,905

SHAREHOLDERS EQUITY

Share capital (Note 9)
   Authorized
    100,000,000 common shares
    without par value
    Issued and outstanding
    9,677,542 (1994-8,966,542)
    common shares                     5,972,928       5,623,668

(Deficit)                            (5,557,071)     (4,757,303)
                                        415,857         866,365

                                        789,332       1,155,270

</TABLE>

APPROVED BY THE BOARD

DIRECTOR

DIRECTOR

<PAGE>

                            CRYOPAK INDUSTRIES INC.
                  CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
                              YEAR ENDED MARCH 31
                          (Stated in Canadian Dollars)

<TABLE>
<CAPTION>

                             1994            1993
                1995         RESTATED        RESTATED
<S>             <C>          <C>             <C>
Sales           $1,053,456   1,0176,266      1,035,325

Cost of sales
  Materials        605,804     620,985         761,085
  Packaging              -           -           2,817
                   605,804     620,985         763,902
Gross profit       447,652     455,281         271,423
Operating expenses,
 Schedule 1      1,094,739     991,886       1,164,966
Operating (loss) ( 647,087)  ( 536,605)       (893,543)

Other (income) expenses
 Filing, listing and
   transfer agent
   fees             21,157      27,599          15,432
 Corporate printing,
   financial and public
   relations       142,617     158,686         266,059
 Write off of abandoned
   mineral claims and
   related exploration
   costs                 -      12,002         312,272
 Minority interest       -           -             146
 Recovery on shares
   cancelled by settlement
   of lawsuit            -           -         (57,600)
 Write off of loans
  payable          (11,295)          -               -
 Other income      (   138)          -               -
                   152,341     198,287         536,017
(Loss) before income
 taxes            (799,428)   (734,892)     (1,429,560)
Income taxes           340         375               -
Net(loss)for
  the year        (799,768)   (735,267)     (1,429,560)
(Deficit),
 beginning of year(4,757,303) (4,022,036)   (2,592,476)
(Deficit),
 end of year      (5,557,071) (4,757,303)   (4,022,036)
(Loss) per share  $   (0.09)  $   (0.09)    $   (0.19)
Weighted average
 common shares
 outstanding       9,280,487   8,479,766     7,622,242

</TABLE>
<PAGE>

                            CRYOPAK INDUSTRIES INC.
            CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
                              YEAR ENDED MARCH 31
                          (Stated in Canadian Dollars)

<TABLE>
<CAPTION>

                                                      1994         1993
                                        1995          RESTATED     RESTATED
<S>                                     <C>           <C>          <C>
Operating activities
 Net (loss)                             $(  799,768)  $(  735,267) $(1,429,560)
 Items not affecung cash flow
  Minority interest                               -             -          145
  Write off of abandoned mineral claims
   and related exploration costs                  -        12,002      312,272
  Depreciation and amortization             236,623        65,840       66,661
  Gain on settlement of lawsuit                   -             -    (  57,600)
 Write off of loans payable               (  11,295)            -            -
                                          ( 574,440)     (657,425)   (1,108,372)
 Changes in other operating items
  Accounts receivable                        69,278        20,568        31,570
  Due from employees                          5,240      (  5,240)            -
  Inventory                                  63,364      ( 52,641)   (   30,723)
  Prepaid expenses                                -             -        30,000
  Accounts payable                           89,492      (106,329)      179,397

Cash (used for) operating activities      ( 347,066)     (801,067)    ( 898,128)
Cash flow from financing activities
  Issue of shares                           315,260       870,925       324,600
  Liabilities settled by issue of
    company shares                           34,000             -             -
  Loans payable                                   -         2,607         3,857
  Cash provided by financing activities     349,260       873,532       320,743
Cash flow from investing activities
  Acquisition of capital assets            ( 14,287)     (  6,807)    (   2,244)
  Advances (to) from related company          5,587      ( 73,890)       54,162
  Cash (used for) provided by investing
    activities                             (  8,700)     ( 80,697)       51,918

(Decrease) in cash during the year         (  6,506)     (  8,232)     (525,467)
Cash, beginning of year                       1,842        10,074       535,541
Cash(bank indebtedness)end of year        $(  4,664)    $   1,842      $ 10,074

</TABLE>
<PAGE>

                            CRYOPAK INDUSTRIES INC.
                  CONSOLIDATED SCHEDULES OF OPERATING EXPENSES
                              YEAR ENDED MARCH 31
                          (Stated in Canadian Dollars)

<TABLE>
<CAPTION>

                                              1994             1993
                                1995          RESTATED         RESTATED
<S>                             <C>           <C>              <C>
Bad debts                       $ 28,731           165          18,369
Commissions                        9,110        13,054          26,581
Depreciation and amortization    236,623        65,840          66,661
Foreign exchange                  33,228       (19,244)         14,214
Freight and duty                  31,741        48,968          75,937
Interest and bank charges         16,178         7,984           7,231
Management fees                  210,000       192,000         168,000
Marketing                         46,222        85,822         202,215
Office supplies and stationery    49,781        97,372          93,804
Professional fees                 75,088        65,487          60,474
Rent                              47,838        54,089          52,566
Royalties                         26,584        25,959          27,248
Salaries and benefits            146,677       136,885          98,188
Storage                           16,751        12,509          20,061
Telephone                         46,662        62,121          62,357
Travel                            64,460       134,005         159,962
Vehicle                            9,065         8,870           11,098
                              $1,094,739      $991,886       $1,164,966

</TABLE>
<PAGE>

                            CRYOPAK INDUSTRIES INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31,1995 AND 1994
                          (Stated in Canadian Dollars)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These  financial  statements  have been  prepared in accordance  with  generally
accepted accounting principles in Canada and reflect the following policies:

Basis of Presentation
---------------------

The consolidated  financial  statements  include the accounts of the company and
its  wholly-owned  subsidiary,  Cryopak  (Canada)  Corporation its  wholly-owned
subsidiary  Cryopak  Corporation,  a Nevada  corporation,  and its proportionate
interest (50%) in a joint venture, Cryopak (Alberta) Corporation.

Inventories
-----------

Inventories  are valued at the lower of cost or net  realizable  value.  Cost is
determined by an average cost method.

Marketable Securities
---------------------

Marketable securities are recorded at the lower of cost and market value.

Depreciation
------------

The company records  depreciation on its capital assets using the  straight-line
method over five years.

Patent License
--------------

The patent license is recorded at cost and is amortized on a straight-line basis
over seventeen years.

Deferred Development Costs
--------------------------

The  deferred  development  costs are  recorded at cost and are  amortized  on a
straight-line basis over ten years.

Foreign Currency
----------------

Foreign  currency  accounts are  translated  using the temporal  method  whereby
current assets and current  liabilities  are  translated to Canadian  dollars at
year end  exchange  rates,  other  assets  and  liabilities  at  exchange  rates
prevailing at the dates of transactions, and revenue and expenses at the average
rate  during  the  year.  Gains  and  losses  from  foreign  exchange   currency
translation  are  included in the  consolidated  statement  of loss and deficit.

Goodwill
--------

The excess of cost of the  purchase of a subsidiary  company over the fair value
of assets  acquired  (consolidated  goodwill)  is  amortized  on a straight-line
basis over seventeen years.

<PAGE>

2. CHANGE IN ACCOUNTING POLICY

Effective  April 1994 the company  changed its method of accounting  for its 50%
interest  in Cryopak  (Alberta)  Corporation.  Up to that date the  company  had
effective  control and  presented the  financial  statements  on a  consolidated
basis.  The current  arrangement  is that of a joint  venture and the  financial
statements have been presented on a proportionate interest basis. The prior year
figures have been restated to reflect the retroactive application of this policy
for comparative purposes. The effect of this change on the net loss for the year
end March 31, 1994 is not  significant.  The sales,  cost of sales and operating
expenses for 1994 have been reduced by $72,344, $64,461 and $7,296 respectively.

3. CHANGE IN ESTEVIATES

Effective  April  1994 the  company  determined  that as a result of a change in
marketing  strategy  deferred  marketing costs included in deferred  development
costs should no longer be deferred.  Deferred  marketing  costs of $211,966 were
being  amortized  on a  straight-line  basis over 20 years.  The net  balance of
$172,223 has been expensed as depreciation in the current year.

Effective April 1994 the estimated useful life for product development costs has
been reduced from 20 years to 10 years.

The above  accounting  changes have been applied on a prospective  basis and the
effect of this change is to increase  depreciation  expense and net loss for the
year by $170,741 and depreciation expense in each of the following five years by
$9,121.

4. OPERATIONS

The ability of the company to continue as a going  concern,  which  contemplates
the realization of assets and the satisfaction of liabilities and commitments in
the normal course of business, is dependent on obtaining the financing necessary
to continue operations and, ultimately,  profitable  operations.  The company is
engaged in discussions for these purposes. (Note 11)

5. MARKETABLE SECURITIES

Investment  in  2,500  shares  (1994 - 2,500)  of Roxwell Gold Mines Ltd. Market
value at March 31, 1995 - $350 (1994 $350).

6. CAPITAL ASSETS

<TABLE>
<CAPTION>

                                                            1995            1994
                                          Accumulated       Net Book        Net Book
                               Cost       Depreciation      Value           Value
<S>                            <C>        <C>               <C>             <C>
Computer hardware and software $18,530    $ 6,269           $12,261         $ 3,936
Furniture and fixtures          77,565     74,421             3,144           4,262

                               $96,095    $80,690           $15,405         $ 8,198

</TABLE>

7. INTANGIBLES

<TABLE>
<CAPTION>
                                                            1995            1994
                                          Accumulated       Net Book        Net Book
                                Cost      Amortization      Value           Value
<S>                             <C>       <C>               <C>             <C>
Deferred development costs      $325,983  $248,167          $ 77,816        $264,861
Patent licence                   566,323   158,241           408,082         441,394
Goodwill                        156,155     43,633           112,522         121,708
                             $1,048,461   $450,041          $598,420        $827,963
</TABLE>

8. ADVANCE TO RELATED COMPANY

<TABLE>
<CAPTION>

                                1995            1994
<S>                             <C>             <C>
Advance to N.C.K. Holdings Ltd. $       56,972  $       62,559

</TABLE>

The  related  company  is  owned by two  directors. The  advance  is  unsecured,
non-interest bearing and without terms of repayment. During the year the company
paid $210,000  (1994 - $192,000)  as  management  fees  to  N.C.K. Holdings Ltd.
During  the  year the company also paid royalties of $17,722 (1994 - $17,306) to
N.C.K. Holdings Ltd.

9. SHARE CAPITAL

<TABLE>
<CAPTION>

Authorized
<S>                 <C>
100,000,000     common shares without par value
                Issued and outstanding
</TABLE>

<TABLE>
<CAPTION>

                                1995                    1994                    1993
                                Number                  Number                  Number
                                of                      of                      of
                                Shares    Amount        Shares    Amount        Shares    Amount
<S>                             <C>       <C>           <C>       <C>          <C>        <C>
Balance, beginning of year      8,966,542 $ 5,623,668   7,923,242 $ 4,752,743  7,615,242  $4,485,743
Cancelled by settlement of lawsuit      -           -           -           -   (192,000) (   57,600)
Issued during the year
        For cash                   661,000    315,260   1,043,300     870,925    500,000     324,600
        For settlement of debt      50,000     34,000           -           -          -           -
                                   711,000    349,260   1,043,300     870,925    500,000     324,600

Balance, end of year             9,677,542 $5,972,928   8,966,542   $5,623,668  7,923,242 $4,752,743

</TABLE>

On March 31, 1995, the following stock options were outstanding:

<TABLE>
<CAPTION>

                      Number of       Exercise        Expiry
                      Shares          Price           Date
<S>                   <C>             <C>             <C>
Directors             104,700         0.45            May 6, 1996
                       82,000         0.45            May 30, 1996
                       50,000         0.55            Aug 23, 1996
                      155,000         0.26            Mar 3, 1997
                       75,000         0.45            May 27, 1997
Employees              20,000         0.45            May 27, 1997
                      145,000         0.45            January 28, 1996
                      150,000         0.30            Oct 6, 1996

</TABLE>

On March 31, 1995 the following  non-transferable  share purchase  warrants were
outstanding:

<TABLE>
<CAPTION>

Number of       Warrant
Shares to       Number of               Exercise                Expiry
Purchase        Warrants                Price                   Date
<S>             <C>                     <C>                     <C>
116,000         116,000                 $0.26                   Up to October 6, 1995
                                         0.30                   from October 7, 1995
                                                                to October 6, 1996

</TABLE>

<PAGE>

10. INCOME TAXES

The company has losses  available for utilization  against future years' taxable
incomes which, if unused, will expire as follows:

<TABLE>
<CAPTION>

<S>     <C>
1995    $167,789
1996     359,062
1997     274,933
1998     276,415
1999     296,801
2000   1,089,726
2001     658,014

</TABLE>

11. SUBSEQUENT EVENTS

The company  entered into an  Investment  Agreement,  April 3, 1995 with Cryopak
Industries (VCC) Inc. for a private placement of up to $2,000,000 as follows:

(a) up  to  $500,000 for  common  shares on the sis of $ 0.40 per  share for the
first $100,000 received, $ 0.50 per for the second $100,000 received, $ 0.60 per
share for the third $100,000 received, $ 0.70 per share for the fourth $ 100,000
received, $ 0.80 per share for the fifth $ 100,000.

(b) up to $1,500,000 for Class A Preferred shares on the basis of one such share
for each $1,000 so invested.

The common shares carry a warrant to purchase one  additional  common share at a
price equal to a $ 0. 10 premium to the price of the corresponding issued common
share. The warrants expire one calendar year from their date of issue.

The Class A Preference shares will have the following rights and restrictions:

(i)  each share shall be entitled to one vote at all shareholders meetings;

(ii) each  share  will  carry a 12% annual, cumulative dividend, payable, at the
option of  the company  in either cash or Common Shares, the value of the Common
Shares  being calculated on the basis of the Current Trading Price as at the end
of the company's most recent fixed fiscal year end;

(iii) at any time  after December 31, 1996,  each share will be convertible into
Common  Shares on  the  basis  of a Common Share price of $3.00 each, or at such
lower price as may be provided below:

(aa)  $2.50 at any time after  December  31,  1997,  provided  that the  Current
Trading Price shall never have exceeded $2.99 after December 3 1, 1996;

(bb)  $2.00 at any time after  December  31,  1998,  provided  that the  Current
Trading Price shall never have exceeded  $2.99 after December 3 1, 1996 or $2.49
after December 3 1, 1997;

(cc)  at any time  after  December 31, 1999,  provided  that the Current Trading
Price  shall  never  have  exceeded $2.99 after December 31, 1996 or $2.49 after
December 31, 1997 or $1.99  after  December  31, 1998,  at  a Common Share price
equal to  that price which represents a 15% discount to the then Current Trading
Price subject, however, to applicable regulatory authority policy;

but if not so  converted  prior to May 12,  2000,  such shares will be deemed to
have been converted on May 12, 2000 at the applicable conversion price described
above;

(iv) each share will have a par value of $ 1,000;

(v)  if  there is a subdivision or consolidation of the Class A Preferred Shares
prior  to  conversion  into Common Shares then the applicable conversion formula
shall be proportionately adjusted;

(vi) no dividends  shall be declared or paid on any other class of shares unless
and until all unpaid dividends on the Class A Preferred Shares have been paid;

(vii)each share shall rank in priority to any other class of shares in the event
of a dissolution, winding up or other return of capital.

As at August 17, 1995 the VCC had raised  $143,000 and had  advanced  $88,000 to
the company.

12. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

a) Generally   accepted   accounting   principles   ("GAAP")  used in the United
States  of  America   differ  in  certain   respects  from  GAAP used in Canada.
Differences  which  materially  affect  these consolidated financial  statements
are: United  States  GAAP  require   deferred  development  costs be expensed as
incurred   whereas  Canadian  GAAP  allows  these   expenses  to be deferred and
amortized. Had  the  consolidated  financial   statements   been   prepared   in
accordance with  United  States  GAAP as described above, the following  changes
would have been made:

<TABLE>
<CAPTION>

                                 1995         1994          1993
<S>                              <C>          <C>           <C>
Total Assets - Canadian GAAP     $789,332     1,155,761     1,134,665
Deferred development costs        ( 77,816)    (264,861)     (276,884)
Total Assets - United States GAAP  711,516      890,900       857,781

</TABLE>

<TABLE>
<CAPTION>

                                        1995          1994           1993
<S>                                     <C>           <C>            <C>
Shareholders' equity - Canadian GAAP    $415,857      $866,365       $730,707
Deferred development costs               (77,816)     (264,861)      (276,884)

Shareholders' equity -
 United States GAAP                       338,041      601,504        453,823

</TABLE>

<TABLE>
<CAPTION>

                                       1995          1994             1993
<S>                                    <C>           <C>              <C>
Net Loss - Canadian GAAP               $(799,768)    $(734,517)       $(1,429,560)
Amortization of deferred development     187,045        16,299             20,575
costs
Net Loss - United States GAAP           (612,723)     (718,218)        (1,408,985)

</TABLE>

b) United  States GAAP require non-cash investing and financing activities to be
excluded from the  Consolidated  Statements  of Changes  in  Financial Position,
whereas  Canadian GAAP require these activities to be included in the Statement.
Had the Consolidated Statement of Changes in Financial Position been prepared in
accordance with U.S. GAAP the following transactions would have been excluded:

<TABLE>
<CAPTION>

                                                1995         1994    1993
<S>                                             <C>          <C>     <C>
Liabilities settled by issue of company shares  $34,000         -    193,272
Shares issued for patent                              -         -    150,000

</TABLE>

c) Loss per share

<TABLE>
<CAPTION>
                                               1995          1994    1993
<S>                                            <C>           <C>     <C>
                                               0.07          0.08    0.18
</TABLE>

<PAGE>

                            CRYOPAK INDUSTRIES INC.

                       CONSOLIDATED FINANCIAL STATEMENTS
                            YEAR ENDED MARCH 31 1996
                              AND AUDITORS REPORT

CRYOPAK INDUSTRIES INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31,1996 AND 1995
                                Auditors Report
                                 Balance Sheets

                  Consolidated Statements of Loss and Deficit

            Consolidated Statements of Changes in Financial Position

                   Notes to Consolidated Financial Statements

                  Consolidated Schedules of Operating Expenses


Hay & Watson CHARTERED ACCOUNTANTS

AUDITORS REPORT

To the Shareholders
of Cryopak Industries Inc.

We have audited the consolidated balance sheets of Cryopak Industries Inc. as at
March 31, 1996 and 1995 and the consolidated  statements of loss and deficit and
of changes in financial  position for each of the years in the three year period
ended  March  31,  1996.  These  consolidated   financial   statements  are  the
responsibility of the company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in Canada.  Those standards  require that we plan and perform an audit to obtain
reasonable assurance whether the consulidated  financial  statements arc free of
material   misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated 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.

In our opinion,  these consolidated  financial statements present fairly, in all
material  respects,  the financial position of the company  as at March 31, 1996
and 1995 and the results of its operations and the changes in its cash flows for
each of the years in the three year period  ended  March 31, 1996 in  accordance
with  accounting  principles  generally  accepted in Canada.  As required by the
Company  Act  of  British  Columbia,  we  report  that,  in our  opinion,  these
principles  have been applied on a basis  consistent  with that of the preceding
year.

CHARTERED ACCOUNTANTS

Vancouver, B.C.
July 5, 1996

1822 West 2nd Avenue, Vancouver, B.C. V6J IH9 -(604) 732-1466 Fax (604) 732-3133
Hay & Watson CHARTERED ACCOUNTANTS

<PAGE>

COMMENTS BY AUDITOR FOR U.S. READERS
ON CANADA - U.S. REPORTING DIFFERENCES

In the United States,  reporting  standards for auditors require the addition of
an explanatory  paragraph  (following the ophuon  paragraph)  when the financial
statements are affected by conditions and events that cast substantial  doubt on
the company's ability to continue as a going concern, such as those described in
Note 2 to the financial statements. Our report to the shareholders dated July 5,
1996 is expressed in accordance with Canadian  reporting  standards which do not
permit a reference to such events and  conditions in the  Auditor's  Report when
these are adequately disclosed in the financial statements.

CHARTERED ACCOUNTANTS

Vancouver, B.C.
July 5, 1996

1822 West 2nd Avenue, Vancouver,  B.C.  V6J 1IH9 (604)732-1466 Fax (604)732-3133

<PAGE>

                            CRYOPAK INDUSTRIES INC.
                          CONSOLIDATED BALANCE SHEETS
                                    March 31
                          (Stated in Canadian Dollars)

<TABLE>
ASSETS
<CAPTION>

                              1996                     1995
<S>                           <C>                      <C>
Current
        Cash                  $331,045                 $  1,709
        Accounts receivable    134,338                   83,204
        Inventory               52,183                   29,913
        Investments
          (Notes I and 3)       25,442                      100
        Prepaid expenses         9,476                    3,609
        Due from employees      10,218                        -
                              ________                 ________
                              $264,702                 $118,535

Capital assets
     (Notes I and -4)           51,610                   15,405
Advance to related company
     (Note 5)                  109,339                   56,972
Intangibles (Notes I and 6)    544,209                  598,420
                              ________                 ________

                              $969,860                 $789,332

LIABILITIES

Current
   Bank indebtedness          $      -                 $  6,373
   Accounts payable and
     accrued liabilitie         416,174                 346,635
   Current portion of
     capital lease obligation     5,874                       -
                               ________                ________
                               $422,048                $353,008
Capital lease obligation
   (Note 7)                      31,808                       -
Deferred income taxes            20,467                  20,467
                               ________                ________
                               $474,323                $373,475

SHAREHOLDERS EQUITY
Share capital (Note 8)
  Issued and outstanding
      11,229,065
 (1995-9,677,542)common shares 6,699,998             5,972,928
         265 class "A"
         preferred shares,
                 Series 1        265,000                     -
(Deficit)                        (6,469,461)           (5,557,07)
                                    495,537               415,857
                                 $  969,860             $ 789,332

</TABLE>

APPROVED BOARD:

DIRECTOR

DIRECTOR

<PAGE>

                            CRYOPAK INDUSTRIES INC.
                  CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
                              YEAR ENDED MARCH 31
                          (Stated in Canadian Dollars)

<TABLE>
<CAPTION>

                                                   1994
                       1996           1995         RESTATED
<S>                    <C>            <C>          <C>
Sales                  $  965,912     1,053,456    1,076,266
Cost of sales             557,611       637,545      669,953
Gross profit              408,301       415,911      406,313
Operating expenses,
    Schedule 1          1,158,036     1,062,998      942.918
Operating (loss)          749,735       647,087      536,605

Other (income) expenses

   Filing, listing and
     transfer agent fees    26,870       21,157       27,599
   Corporate printing,
     financial and public
     relations             129,994      142,617      158,686
   Write off of abandoned
     mineral claims and
     related exploration
     costs                        -            -       12,002
   Loan payment as guarantor  6,518            -            -
   Write off of loans payable     -     ( 11,295)           -
   Other income              (  384)    (    138)           -

                            162,998      152,341      198,287

(Loss) before income taxes (912,733)    (799,428)    (734,892)
Income taxes (recovery)    (    343)         340          375

Net (loss) for the year    (912,390)    (799,768)    (735,267)
(Deficit),
  beginning of year       (5,557,071)  (4,757,303)   (4,022,036)
(Deficit), end of year   $(6,469,461) $(5,557,071)  $(4,757,303)

(Loss) per share         $(     0.09) $(     0.09)  $(     0.09)

Weighted average
 common shares outstanding 10,637,948   9,280,487     8,479,766

</TABLE>
<PAGE>

                            CRYOPAK INDUSTRIES INC.
            CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
                              YEAR ENDED MARCH 31
                          (Stated in Canadian Dollars)

<TABLE>
<CAPTION>

                                                                 1994
                                          1996       1995        RESTATED
<S>                                       <C>        <C>         <C>
Cash flow from operating activities
   Operations
   Net (loss)                             $(912,390) (799,768)   (735,267)
   Items not affecting cash flow
    Write off of abandoned mineral claims
     and related exploration costs                -         -      12,002
   Depreciation and amortization             72,984   236,623      65,840
   Write off of loans payable                     -   (11,295)          -
                                           (839,406) (574,440)    (657,425)

   Changes in other operating items
     Accounts receivable                    (51,134)  (69,278)     (20,568)
     Due from employees                     (10,218)    5,240      ( 5,240)
     Intangibles                            ( 3,113)        -            -
     Inventory                              (22,270)   63,364      (52,641)
     Investments                            (25,342)        -            -
     Prepaid expenses                       ( 5,867)        -            -
     Accounts payable                        69,541    89,492     (106,329)

   Cash (used for) operating activities    (887,809) (347,066)    (801,067)

Cash flow from financing activities
  Issue of shares                           992,070   315,260      870,925
  Liabilities settled by issue of company shares  -    34,000            -
  Loans payable and capital lease obligation 37,682         -        2,607
  Cash provided by financing activities   1,029,752   349,260      873,532

Cash flow from investing activities
  Acquisition of capital assets           ( 51,867)  ( 14,287)     ( 6,807)
  Advances (to) from related company      ( 52,367)     5,587      (73,890)
  Cash (used for) investing activities    (104,234)  (  8,700)     (80,697)

Increase (decrease) in cash during the year 37,709   (  6,506)     ( 8,232)
(Bank indebtedness) cash, beginning of year (4,664)     1,842       10,074

Cash (bank indebtedness), end of year       33,045    ( 4,664)       1,842


</TABLE>
<PAGE>

                            CRYOPAK INDUSTRIES INC.
                  CONSOLIDATED SCHEDULES OF OPERATING EXPENSES
                              YEAR ENDED MARCH 31
                          (Stated in Canadian Dollars)

<TABLE>
<CAPTION>

                                                  1995           1994
                                     1996         RESTATED       RESTATED
<S>                                  <C>          <C>            <C>
Bad debts                            $ 32,668     28,731            165
Commissions                             3,681      9,110         13,054
Depreciation and amortization          72,984    236,623         65,840
Foreign exchange                        2,867     33,228        (19,244)
Interest and bank charges              11,435     16,178          7,984
Interest on capital lease obligation    1,156          -              -
Management fees and commissions       220,000    210,000        192,000
Marketing                             173,157     46,222         85,822
Office supplies and stationery         54,587     49,781         97,372
Professional fees                     155,698     75,088         65,487
Rent                                   48,576     47,838         54,089
Royalties                              30,239     26,584         25,959
Salaries and benefits                 122,610    146,677        136,885
Storage                                 8,362     16,751         12,509
Telephone                              41,899     46,662         62,121
Travel                                167,284     64,460        134,005
Vehicle                                10,833      9,065          8,870

                                   $1,158,036  1,062,998        942,918

</TABLE>
<PAGE>

                             CRYOPAK INDUSTRIES INC
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31,1996 AND 1995
                          (Stated in Canadian Dollars)

1.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These  financial  statements  have been  prepared in accordance  with  generally
accepted accounting principles in Canada and reflect the following policies:

Basis of Presentation

These consolidated  financial statements include the accounts of the Company and
its  wholly-owned   subsidiaries,   Cryopak  (International)  Inc.,  a  Barbados
corporation,  Cryopak  (Canada)  Corporation  and  its  wholly-owned  subsidiary
Cryopak Corporation, a Nevada corporation,  and its proportionate interest (50%)
in a joint venture, Cryopak (Alberta) Corporation.

Inventories
-----------

Inventories  are valued at the lower of cost or net  realizable  value.  Cost is
determined by the first-in first-out (FIFO) method of valuation.

Investments
-----------

Investments are recorded at the lower of cost and market value.

Depreciation
------------

Capital assets are recorded at cost.

The Company records  depreciation on its capital assets using the  straight-line
method  over five years,  except for motor vehicles where the declining  balance
method is used at the rate of 30% per annum.

Patent License
--------------

The  patent  license  is recorded at cost and is  amortized  on a  straight-line
basis over seventeen years.

Deferred Development Costs
--------------------------

The  deferred  development  costs are  recorded at cost and are  amortized  on a
straight-line basis over ten years.

Foreign Currency
----------------

Foreign  currency  accounts are  translated  using the temporal  method  whereby
current assets and current MWties are translated to Canadian dollars at year end
exchange rates, other assets and liabilities at exchange rates prevailing at the
dates of  transactions,  and revenue and expenses at the average rate during the
year. Gains and losses from foreign exchange  currency  translation are included
in the consolidated statement of loss and deficit.

Goodwill
--------

The excess of cost of the purchase of a  subsidiary  company over the fair value
of assets  acquired  (disclosed in these  consolidated  financial  statements as
goodwill) is  amortized on a  straight-line  basis ever  seventeen years.

2.      OPERATIONS

These financial statements have been prepared on the assumption that the Company
is a going concern.

The ability of the Company to continue as a going  concern,  which  contemplates
the realization of assets and the satisfaction of liabilities and commitments in
the normal course of business, is dependent on obtaining the financing necessary
to continue operations and, ultimately, profitable operations (Note 12).

INVESTMENTS
-----------

<TABLE>
<CAPTION>

                                        1996             1995
<S>                                     <C>              <C>
Marketable securities-market value
 at March 31, 1996 - $475 (1995 - $350) $  100           $ 100

Artwork                                  25,342               -
                                        $25,442           $ 100

</TABLE>

4. CAPITAL ASSETS

<TABLE>
<CAPTION>

                                               1996            1995
                              Accumulated      Net Book        Net Book
                Cost          Depreciation     Value           Value
<S>             <C>           <C>              <C>             <C>
Computer        $28,268       $14,131          $14,137         $12,261
Furniture and
  fixtures       79,099        76,131            2,968           3,144
Motor vehicle
   under
   capital lease 40,594         6,089           34,505              -

               $147,961       $96,351          $51,610         $15,405

</TABLE>

5. ADVANCE TO RELATED COMPANY

<TABLE>
<CAPTION>

                                   1996                  1995
<S>                                <C>                   <C>
Advance to N.C.K Holdings Inc.     $109,339              $ 56,972

</TABLE>

The related company is owned by two directors.  The advance is unsecured,  bears
interest at 8% per anum  commencing  April 1, 1996,  and is repayable in monthly
installments of S2,200,  commencing April 30, 1996.  During the year the Company
paid  S220,000  (1995 - S2 10,000) as  management  fees to N.C.K  Holdings  Inc.
During the year, the Company also paid royalties of $20,159 (19,95 - $17,722) to
KUL Holdings Inc.

<PAGE>

6. INTANGIBLES

<TABLE>
<CAPTION>
                                                       1996        1995
                                      Accumulated      Net Book    Net Book
                           Cost       Amortization     Value       Value
<S>                        <C>        <C>              <C>         <C>
Incorporation costs        $  3,111   $      -         $  3,111          -
Deferred development costs  114,017     51,023           62,994      77,816
Patent licence              566,323    191,555          374,768     408,082
Goodwill                    156,155     52,819          103,336     112,522
                           $839,606   $295,397         $544,209    $598,420

</TABLE>

7. CAPITAL LEASE OBLIGATION

<TABLE>
<CAPTION>

<S>                                                    <C>
Capital lease payable, with interest of 10.25%,
   due November 1, 1999.                               $  37,682
Less: current portion                                      5,874
                                                       $  31,808
</TABLE>

The future minimum lease payments required are $46,383 payable as follows:

<TABLE>
<CAPTION>

<S>     <C>
1997    $ 9,240
1998      9,240
1999      9,240
2000     18,663

</TABLE>

Included in these amounts is imputed, interest of $8,701.

<PAGE>

8.  SHARE  CAPITAL

<TABLE>
<CAPTION>
Authorized
<S>          <C>
100,000,000  common  shares  without  par  value
100,000,000  class "A preferred  shares without par value
             of which 1,500 are designated  class "A"
             convertible  voting  preferred  shares,  Series 1.

</TABLE>

The following changes occurred in capital stock:

<TABLE>

Common shares
Issued and outstanding
<CAPTION>

                                        1996                       1995                 1994
                                   Number                   Number               Number
                                   of                       of                   of
                                   Shares      Amount         Shares    Amount     Shares    Amount
<S>                                <C>         <C>            <C>       <C>        <C>       <C>
Balance, beginning of year          9,677,542  $5,972,928     8,966,542 $5,623,668 7,923,242 $4,752,743
Issued during the year
        For cash                    1,551,523     727,070       661,000    315,260 1,043,300    870,925
        For settlement of debt        -             -            50,000     34,000       -          -
                                    1,551,523     727,070       711,000    349,260 1,043,300    870,925
Balance, end of year               11,229,065  $6,699,998     9,677,542 $5,972,928 8,966,542 $5,623,668

</TABLE>

Class A preferred shares, Series I

<TABLE>
<CAPTION>

<S>                                <C>   <C>            <C>               <C>
Balance, beginning of year           -                     -                -

Issued during the year             265   $265,000          -                -
Balance, end of year               265   $265,000          -                -

</TABLE>
<PAGE>

Each  class "A"  preferred  share  Series I carries a 12%~  cumulative  dividend
payable at the company's fiscal year end, in either cash or common shares at the
option of the  Company.  Dividends  in arrears  at March 31,  1996  amounted  to
S3,925.00.

The Series I preferred  shares are convertible into common shares at the rate of
one common share for each S3.00 of paid up capital or the rate provided below:

(i) $2.50 at any time after December 31, 1997, provided that the Current Trading
Price shall never have exceeded $2.99 after December 31, 1996;

(ii) $2.00 at any time after December 31, 1998 provided that the Current Trading
Price shall  never have exceeded  $2.99 after  December  31, 1996 or $2.49 after
December 31, 1997.

(iii) at any time after December 31, 1999  provided  that  the  Current  Trading
Price  shall  never  have  exceeded S2.99 after December 31, 1996 of $2.49 after
December 31, 1997 or $1.99  after  December 31, 1998, at  a common  share  price
equal to that  price which represents a 15% discount to the then Current Trading
Price, which common share price in no event shall be less than $O.95;

but if not so converted  prior to May 12, 2000,  such Series I preferred  shares
shall  be  deemed  to have  been  converted  on May 12,  2000 at the  applicable
conversion price described above.

On March 31, 1996, the following stock options were outstanding:

<TABLE>
<CAPTION>

                Number of       Exercise        Expiry
                Shares          Price           Date
<S>             <C>             <C>             <C>
Directors       104,700         $0.45           May 6, 1996
                 82,000          0.45           May 30, 1996
                 50,000          0.55           August 23, 1996
                160,000          0.30           April 7,1997
                 98,000          0.25           June 20, 1997
                150,000          0.44           November 7, 1997
                 75,000          0.45           May 27, 1997
                255,000          0.55           August 22, 1997
                100,000          0.40           January 12, 1999
Officers         35,000          0.44           November 7, 1997
Employees        20,000          0.45           May 27, 1997
                 30,000          0.25           June 20, 1997
                 50,000          0.40           January 12, 1999
                150,000          0.30           October 6, 199,6
Contractor       50,000          0.40           January 12, 1999

</TABLE>

The  Company  has  agreed to extend the  expiry  date to  October  6,  1998,  in
settlement  of a  financial  obligation to a Company in which the  optionee is a
principal.  The  Company  has also  agreed to issue  another  principal  of this
Company an option to purchase  150,000  shares at $0.60 per share,  expiring two
years from the date of issue.  These  transactions  are  subject  to  regulatory
approval.

On March 31, 1996 the  following  warrants,  each to purchase one  common share,
were outstanding:

<TABLE>
<CAPTION>

Class of        Number of               Purchase        Expiry
Shares          Warrants                Price           Date
<S>             <C>                     <C>             <C>
Common            5,000                 $0.50           August 9, 1996
Common           38,000                  0.60           August 9, 1996
Common          167,750                  0.50           July 24, 1996
Common           28,000                  0.60           September 29, 1996
Common           51,666                  0.70           October 12, 1996

</TABLE>

9. INCOME TAXES

The Company has losses  available for utilization  against future years' taxable
incomes which, if unused, will expire as follows:

<TABLE>
<CAPTION>

<S>     <C>
1995      167,789
1996      359,062
1997      274,933
1999      276,415
1999      296,801
2000    1,089,726
2001      658,014
2002      710,475

</TABLE>

10. LEASES

The minimum annual rental  commitments  for operating  leases in effect at March
31, 1996 are as follows:

<TABLE>
<CAPTION>

<S>     <C>
1997    54,390
1998    32,262
1999    24,447

</TABLE>
<PAGE>

11. RELATED PARTY TRANSACTIONS

Related  party  transactions  not  otherwise  disclosed  in  these  consolidated
financial statements are:

(a) Professional  fees  include  a  commission  of  $56,560 to Discovery Capital
Corporation,  the  president  and non-controlling  shareholder  of  which  is  a
director of the Company. As  of March 31, 1996, $56,560 was payable to Discovery
Capital Corporation. The amount was paid in full after the year end.

(b) Professional  fees  of $10,000 were paid to a company owned by a director of
the Company.


12. SUBSEQUENT EVENTS

The following events occurred subsequent to the year end:

(a) The following common shares were issued pursuant to the exercise by director
of share purchase options:

<TABLE>
<CAPTION>

Date of exercise       Number of      Exercise        Total
                       Shares         Price           Proceeds
<S>                    <C>            <C>             <C>
May 30, 1996            82,000        $0.45           $36,900

May 27, 1996           102,836         0.55            56,560

</TABLE>

(b) The following class "A" convertible voting  preferred   shares Series I were
issued pursuant  to  an Investment  Agreement with Cryopak Industries (VCC) Inc.
dated April 3, 1995, as amended, for a placement of up to S2,000,000.

<TABLE>
<CAPTION>

Date of issue   Number of     Total
                Shares        Proceeds
<S>             <C>           <C>
April 16, 1996  43            $43,000
June 13, 1996   50             50,000

</TABLE>

As  of  July 5, 1996,  the   VCC  had  advanced  S858,000  to the  Company.  The
private  placement  was  approved  to  close  no later than June 27, 1996 by the
Vancouver Stock Exchange. An application for an extension has been filed by  the
Company.

(c) The following share options were issued after the end of the year:

<TABLE>
<CAPTION>

                Number of       Exercise        Expiry
                Shares          Price           Date
<S>             <C>             <C>             <C>
Director        100,000         0.42            April 26, 1998

</TABLE>
<PAGE>

13. CONTRACTUAL OBLIGATIONS

(a) Pursuant to an agreement dated December 20, 1989, with  N.C.K Holdings Inc.,
as part of the consideration for a licence, the Company bas made a commitment to
issue up  to 3,000,000  common  shares of its capital (the "performance shares")
based upon certain performance criteria.

The issue of the shares is subject to regulatory  approval which to date has not
been sought.

(b) Pursuant  to  an  agreement  with Erik Petersson & Company, Inc. (EPC) dated
February 8, 1996, as consideration for consulting  work  on international sales,
the Company has made the following commitment:

 to  pay  EPC $2,500/month until the first sale and/or distribution contract has
 been signed.

 to pay EPC a 5% commission on Total Gross Sales  generated by EPC, on behalf of
 the Company.

 to give EPC a bonus  in the  form of  non-transferable  common  share  purchase
 warrants of the Company as follows:

(a) 60,000 warrants for a minimum of CDN S 1,000,000 in sales.

(b) a total of 60,000  warrants for each additional CDN $1,000,000 in sales to a
maximum of CDN  $9,000,000,  paid in increments of 30,000  warrants for each CDN
$500,000 in sales.  The price of the warrants  shall be set based on the average
price of the ten previous  trading days prior to the signing of this  agreement.
Each  subsequent  issuance of warrants after the first 60,000 shall be priced at
15% above the price of the previous  warrants issued,  and shall  be exercisable
for a period of one (1) year after the date of issuance.

As of July 5, 1996, the Company had paid S.15,000 to EPC.

14. CONTINGENT LIABILITIES

Should sales of racks not meet expectations,  the Company is liable for the cost
of the molds, the balance of which was approximately  $30,000 at March 31, 1996.

15. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

a) Generally accepted  accounting  principles ("GAAP") used in the United States
of America  differ in certain  respects  from GAAP used in Canada.  A difference
which materially affects these consolidated  financial statements is that United
States GAAP require deferred  development  costs be expensed as incurred whereas
Canadian  GAAP  aflows  these  expenses to be deferred  and  amortized.  Had the
consolidated financial statements been prepared in accordance with United States
GAAP as described above, the following changes would have been made:

<TABLE>
<CAPTION>

                                1996       1995       1994
<S>                             <C>        <C>       <C>
Total Assets - Canadian GAAP    $969,860   $789,332  $1,155,761
Deferred development costs      ( 62,994)   (77,816)  (264,861)
Total Assets -United States GAAP 906,866    711,516    890,900

</TABLE>

<TABLE>
<CAPTION>

                               1996        1995       1994
<S>                            <C>         <C>        <C>
Shareholders equity-
 Canadian GAAP                 $495,537    $415,857   $866,365
Deferred development costs      (62,994)    (77,816)   (264,861)
Shareholders' equity-
 United States GAAP             432,543     338,041    601,504

</TABLE>

<TABLE>
<CAPTION>

                                1996       1995       1994
<S>                             <C>        <C>        <C>
Net Loss - Canadian GAAP        $(912,390) $(799,768) $(734,517)
Amortization of deferred
 development costs                 14,822    187,045     16,299

Net Loss - United States GAAP    (897,568)  (612,723)  (718,218)

</TABLE>

b) United States  GAAP require non-cash investing and financing activities to be
excluded  from  the  Consolidated  Statements  of Changes in Financial Position,
whereas  Canadian  GAAP require these activities to be included in the Statement
Had the Consolidated Statement of Changes in Financial Position been prepared in
accordance with U.S. GAAP the following transactions would have been excluded:

<TABLE>
<CAPTION>

                                 1996         1995     1994
<S>                              <C>          <C>      <C>
Liabilities settled by
  issue of company shares        $   -        $34,000  $   -

</TABLE>
<PAGE>

c) Basic loss per share calculated in accordance with U.S. GAAP is:

<TABLE>
<CAPTION>

                                 1996         1995     1994
<S>                              <C>          <C>      <C>
                                 0.09         0.07     0.08
</TABLE>

<PAGE>

Hay & Watson CHARTERED ACCOUNTANTS

26 August 1997

Messrs. Harry Bydgnes and Leigh Jeffs
Cryopak Industries Inc.
1120 - 625 Howe Street
Vancouver, B.C. V6C 2T6

Dear Sirs:

During our  examination  of the  consolidated  financial  statements  of Cryopak
Industries  Inc.  for the year ended March 31,  1997,  we reviewed  the existing
system of accounting  procedures and internal  control and such review indicated
certain areas which we believe should be brought to your attention. We have also
recommended  certain  changes to achieve  consistent  application  of accounting
policies adopted by the company.

1. INVENTORY

During our examination we found that there were no records of the inventory kept
at the various locations.  In addition, no one had arranged for inventory counts
to be done at year-end although  previously  advised by us to do so. The lack of
proper  records has caused the company to run out of  inventory  and to buy back
inventory from customers in order to fill other customers'  orders.  This causes
the company to lose its profit margin on the sale as well as showing the company
at a disadvantage.  On an ongoing basis, sales staff and the receptionist should
call the storage  companies to know if they can fill orders and therefore  avoid
delays and poor customer relations.

The value of inventory at year-end is essential to the  preparation of financial
statements,  and  deficiencies  in that  area may  result in a  qualified  audit
report.  A proper  recording  system  for  inventory  is  essential  and must be
established  immediately.  All  shipments  in and out of the out of the  outside
warehouses must be supported by a written confirmation including the date of the
shipment.

The company's  inventory records should be compared with the quantities reported
by the storage companies periodically. A count at year-end must be performed and
reconciled to your record.

1822 West 2nd Avenue, Vancouver, B.C. V6J 1H9 e(604) 732-1466 Fax (604) 732-3133
The overall responsibility for the inventory should be assigned to a responsible
and  knowledgable  staff  member.  It  should  not be  given  to  staff  with no
accounting training or experience.

During the course of the  audit,  we have  discussed  the  implementation  of an
adequate  temporary  system on a computer  spreadsheet  with Laila.  However the
company would benefit from the full  integration  of its invoicing and inventory
systems with its accounting system. We are available to further discuss and help
with the implementation of such a system.

2. EXPENSE ALLOCATION AND TAX PLANNING

Various expenses such as rent, telephone,  promotion and advertising,  salaries,
office  expenses,  insurance,  and  professional  fees,  are  common to  Cryopak
Industries Inc., Cryopak (Canada)  Corporation and Cryopak  (International) Ltd.
Currently, the majority of the expenses are allocated to Cyropak Industries Inc.
However,   the  operations  of  the  group  are  recorded  in  Cyropak  (Canada)
Corporation  and will eventually  result in taxable income.  To ensure that full
advantage is taken of all expenses and that no losses  carried  forward are lost
due to expiry,  management should start to review the allocation of expenses. In
addition,  we  recommend  that  the  tax  implications  of  U.S.  and  worldwide
operations be reviewed periodically.

3. PRICE LISTING

During our testing of sales  invoices,  except for the agreement with Unisource,
no official price list for the company's  products was kept in the office.  As a
result we were unable to trace  whether  the unit  prices on the sales  invoices
were  accurate.  A current  price  list  should be kept in the  office to ensure
standard  and  accurate  pricing  was given to  customers.  Special  pricing and
discounts should be approved and initialed by an authorized person.

4. EXERCISE OF STOCK OPTIONS

During our review  of  share  capital transactions, it was noted that when stock
options are exercised by members of management cash is not always received prior
to the issue of the shares.  It is a contravention of the Company Act of British
Columbia  to issue shares prior to receiving payment in full. In addition, stock
options exercised  by  employees  were  paid  by  way  of  loans advanced to the
employees. These loans were not  secured  by  promissory  notes  or  other  such
documents.

5. MANAGEMENT FEES

Currently  there are no contracts or invoices  which  indicate  what  management
remuneration   is.  We  recommend  that  management   remuneration  be  properly
documented.

<PAGE>

6. PETTY CASH

Currently,  no control is in place over the petty  cash.  The  company  does not
record  the  detail  expenditure  included  in  each  petty  cash  disbursement.
Therefor,  even though the  company  keeps all its petty cash  receipts,  we are
unable to trace the  receipts  back to the petty cash  expenses  in the  general
ledger.

7. EXPENSES PAID BY CREDIT CARD

During our tests of expenses,  we found that both  personal and business  credit
cards were used to pay for business  expenses and that  personal  expenses  were
charged to the  business  credit  cards as well as  personal  credit  cards.  In
addition,  some of the credit card  payments  made by the company and applied to
the  personal  credit card were not properly  supported  by expense  reports and
invoices.

We recommend that business expenses be paid with business credit card only so as
to be easily distinguished from the personal expenses. If some business expenses
have  to be paid  by  personal  credit  card,  then  those  expenses  should  be
documented on an expense report supported by proper receipts.  We also recommend
that personal expenses be charged to personal credit cards only.

8. GST

In our sales test, we found some invoices to Canadian  customers did not include
GST. Therefore,  the GST collected and payable are understated,  and the company
may be liable for the tax on those sales.  GST is applied to all eligible  goods
sold to  Canadian  companies  even  though  invoices  are  billed  in a  foreign
currency.

9. SUPPORTING DOCUMENTATION

During the course of the audit,  our analyses  sometimes proved difficult due to
the lack of supporting documentation (e.g., invoices).

Management should ensure that supporting  documentation be obtained and retained
for all  company  expenditures.  The  supporting  documentation  is  required to
provide  sufficient  evidence  for the  audit  and  for  future  references.  We
recommend  that  cheques  only be  issued  when  there  is  adequate  supporting
documentation. If invoices are unavailable, then a memo providing details of the
expenditure, approved by management should be used as supporting documentation.

10. SUGAR FOOD CORPORATION INVOICES

It was noted that  Sugar  Food  Corporation  is no longer  providing  a detailed
listing  of goods  shipped  out and  billed  to  customers.  They send a monthly
statement  which only shows the total purchases and  administration  fee for the
month.  As a result,  we are unable to check if the unit cost billed is accurate
and what types of products are being sold.

We strongly  recommend that the company require Sugar Food Corporation to report
in the same detailed manner as in the past.

We have noted improvements  during the year in the recording of transactions and
performing  accounting  routines  raised by us last year.  The most  significant
matter  which we believe  still needs to be  addressed  is the  recording of and
control over inventory.

We would be pleased to discuss any of these  comments and  recommendations  with
you in  greater  detail.  We would  like to thank  you and your  staff  for your
assistance and cooperation  extended during the audit. Please do not hesitate to
contact us if we may be of further assistance.

Yours very truly,

HAY & WATSON

Bruce S. Hay

<PAGE>

                            CRYOPAK INDUSTRIES INC.
                       CONSOLIDATED FINANCIAL STATEMENTS
                           YEAR ENDED MARCH 31, 1997
                              AND AUDITORS' REPORT


                            CRYOPAK INDUSTRIES INC.
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31,1997 AND 1996



                                Auditors, Report
                                 Balance Sheets
                  Consolidated Statements of Loss and Deficit
            Consolidated Statements of Changes in Financial Position
                   Notes to Consolidated Financial Statements
                  Consolidated Schedules of Operating Expenses

Hay & Watson CHARTERED ACCOUNTANTS

AUDITORS' REPORT

To the Shareholders of
Cryopak Industries Inc.

We have audited the consolidated balance sheets of Cryopak Industries Inc. as at
March 31, 1997 and 1996 and the consolidated  statements of loss and deficit and
of changes in financial  position for each of the years in the three year period
ended  March  31,  1997.  These  consolidated   financial   statements  are  the
responsibility of the company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

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

In our opinion,  these consolidated  financial statements present fairly, in all
material  respects,  the financial  position of the company as at March 31, 1997
and 1996 and the results of its operations and the changes in its cash flows for
each of the years in the three year period  ended  March 31, 1997 in  accordance
with  accounting  principles  generally  accepted in Canada,  As required by the
Company  Act  of  British  Columbia.  we  report  that,  in our  opinion,  these
principles  have been applied on a basis  consistent  with that of the preceding
year.

CHARTERED ACCOUNTANTS

Vancouver, B.C.
June 27, 1997

1822 West 2nd Avenue, Vancouver, B.C. V6J IH9  (604) 732-1466 Fax (604) 732-3133

<PAGE>

Hay & Watson CHARTERED ACCOUNTANTS

COMMENTS BY AUDITORS FOR U.S. READERS
ON CANADA - U.S. REPORTING DIFFERENCES

In the United States,  reporting  standards for auditors require the addition of
an explanatory  paragraph  (following the opinion  paragraph) when the financial
statements are affected by conditions and events that cast substantial  doubt on
the company's ability to continue as a going concern, such as those described in
Note 2 to the financial  statements.  Our report to the shareholders  dated June
27, 1997 is expressed in accordance with Canadian  reporting  standards which do
not permit a reference to such events and  conditions  in the  Auditors'  Report
when these are adequately disclosed in the financial statements.

CHARTERED ACCOUNTANTS

Vancouver, B.C.
June 27, 1997

1822 West 2nd Avenue, Vancouver, B.C. V6J IH9  (604) 732-1466 Fax (6041 732-3133

<PAGE>

                            CRYOPAK INDUSTRIES INC.

                          CONSOLIDATED BALANCE SHEETS
                     MARCH 31 (Stated in Canadian Dollars)

<TABLE>
<CAPTION>

ASSETS                                       1997               1996
<S>                                          <C>                <C>
Current
     Cash                                    $        -         $     33,045
     Accounts receivable                        146,863              134,338
     Inventory                                   36,779               52,183
     Investments (Notes I and 3)                 25,442               25,442
     Prepaid expenses                            15,662                9,476
     Due from employees                          40,118               10,218
                                             __________         ____________
                                                264,864              264,702

Capital assets (Notes I and 4)                   50,179               51,610
Advance to related company (Note 5)              90,668              109,339
Intangibles (Notes I and 6)                     486,887              544,209
                                             __________          ___________
                                             $  892,598          $   969,860

LIABILITIES

Current
     Bank indebtedness                              834                    -
     Accounts payable and accrued liabilities   375,587              416,174
     Current portion of capital lease obligation  6,345                5,874
                                             __________          ___________
                                             $  382,766          $   422,048

Capital lease obligation (Note 7)                25,531               31,808
Deferred income taxes                            20,467               20,467
                                             ___________         ___________
                                             $  428,764          $   474,323

SHAREHOLDERS' EQUITY

Share capital (Note 8)
     Issued and outstanding
          12,245,156 (1996 - 11,229,065)
            common shares                     7,078,428            6,699,998
          530 (1996 - 265) class "A"
            preferred shares, Series 1          530,000              265,000

(Deficit)                                    (7,144,594)          (6,469,461)

                                                 463,834             495,537
                                              __________           _________
                                              $  892,598           $ 969,860

</TABLE>

APPROVED BY THE BOARD:

DIRECTOR

DIRECTOR

<PAGE>

                            CRYOPAK INDUSTRIES INC.

                  CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
                              YEAR ENDED MARCH 31
                          (Stated in Canadian Dollars)

<TABLE>
<CAPTION>

                              1997           1996               1995
<S>                           <C>            <C>                <C>
Sales                         $1,140,242     $  965,912         $1,053,456
Cost of sales                    675,706        557,611            637,545
Gross profit                     464,536        408,301            415,911
Operating expenses, Schedule 1   992,673      1,158,036          1,062,998
Operating (loss)                 528,137        749,735            647,087
Other (income) expenses
 Filing, listing and transfer
    agent fees                    17,006         26,870             21,157
 Corporate printing, financial
    and public relations         138,150        129,994            142,617
 Loan payment as guarantor             -          6,518                  -
 Write off of loans payable            -              -            (11,295)
 Other income                 (    8,160)      (    384)           (   138)
                              ___________      _________          _________
                              $  146,996       $162,998           $ 152,341

(Loss) before income taxes    (  675,133)      (912,733)           (799,428)
Income taxes (recovery)                -       (    343)           (    340)
Net (loss) for the year       (  675,133)      (912,390)           (799,768)
(Deficit), beginning of year  (6,469,461)     (5,557,071)        (4,757,303)
(Deficit), end of year        (7,144,594)     (6,469,461)        (5,557,071)
(Loss) per share              (     0.06)     (     0.09)        (     0.09)
Weighted average common shares
        outstanding           11,691,097      10,637,948          9,280,487

</TABLE>
<PAGE>

                            CRYOPAK INDUSTRIES INC.
            CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
                              YEAR ENDED MARCH 31
                          (Stated in Canadian Dollars)

<TABLE>
<CAPTION>

                                       1997            1996         1995
<S>                                    <C>             <C>          <C>
Cash flow from operating activities
 Operations
 Net (loss)                            $(   675,133)   $(  912,390) $(  799,768)
 Depreciation and amortization               79,564         72,984      236,623
 Write off of loans payable                                              11,295
                                       _____________   ____________ ____________
                                        (    595,569)   (  839,406)  (  574,440)

Changes in other operating items
 Advances to related companies          (     15,815)            -            -
 Accounts receivable                           3,290    (   51,134)      69,278
 Due from employees                     (     29,900)   (   10,218)       5,240
 Intangibles                                       -    (    3,113)           -
 Inventory                                    15,404    (   22,270)      63,364
 Investments                                       -    (   25,342)           -
 Prepaid expenses                       (      6,186)   (    5,867)           -
 Accounts payable                       (     40,587)       69,541       89,492
Cash used for operating activities      (669,363,887)   (  887,809)    (347,066)

Cash flow from financing activities
  Issue of shares                            586,870       992,070      315,260
  Liabilities settled by issue of company
    shares                                    56,560             -       34,000
  Loans payable and capital lease obligation ( 5,806)       37,682            -
Cash provided by financing activities        637,624     1,029,752      349,260
Cash flow from investing activities
 Acquisition of capital assets               ( 20,811)   (  51,867)    ( 14,287)
 Advances (to) from related company           189,671    (  52,367)       5,587
Cash used for investing activities           (  2,140)   ( 104,234)     ( 8,700)
Increase (decrease) in cash during the year  ( 33,879)      37,709      ( 6,506)
Cash (bank indebtedness), beginning of the year33,045    (   4,664)       1,842
Cash (bank indebtedness), end of year       $(    834)   $  33,045      $(4,664)

</TABLE>
<PAGE>

                            CRYOPAK INDUSTRIES INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31, 1"7 AND 19%
                          (Stated in Canadian Dollars)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These  financial  statements  have been  prepared in accordance  with  generally
accepted accounting principles in Canada and reflect the following policies:

Basis of Presentation
---------------------

These consolidated financial statements  include  the accounts of the Company an
and its wholly-owned  subsidiaries, Cryopak  (International)  Inc.,  a  Barbados
corporation, Cryopak F(Mada) Corporation and its wholly-owned subsidiary Cryopak
Corporation,  a Nevada  corporation,  and its proportionate  interest (50%) in a
joint venture, Cryopak (Alberta) Corporation.

Inventories
-----------

Inventories  are valued at the lower of cost or net  realizable  value.  Cost is
determined by the first-in first-out (FIFO) method of valuation.

Investments
-----------

Investments are recorded at the lower of cost and market value.

Depreciation
------------

Capital assets are recorded at cost.

The Company records  depreciation on its capital assets using the  straight-line
method over five years,  except for motor vehicles  where the declining  balance
method is used at the rate of 30% per anum.

Patent Licence
--------------

The patent4icence is recorded at cost and is amortized on a straight-line  basis
over seventeen years.

Deferred Development Costs
--------------------------

The  deferred  development  costs are  recorded at cost and are  amortized  on a
straight-line basis over ten years.

Foreign Currency
----------------

Foreign  currency  accounts are  translated  using the temporal  method  whereby
current assets and current  liabilities  are  translated to Canadian  dollars at
year end  exchange  rates,  other  assets  and  liabilities  at  exchange  rates
prevailing at the dates of transactions, and revenue and expenses at the average
rate during the year.  Gains and losses from foreign  currency  translation  are
included in the consolidated statement of loss and deficit.

Goodwill
--------

The excess of cost of the purchase of a  subsidiary  company over the fair value
of assets  acquired  (disclosed in these  consolidated  financial  statements as
goodwill) is amortized on a straight-line  basis over seventeen years.

CRYOPAK INDUSTRIES INC.

<PAGE>

2. OPERATIONS

These financial statements have been prepared on the assumption that the Company
is a going concern.

The ability of the Company to continue as a going  concern,  which  contemplates
the realization of assets and the satisfaction of liabilities and commitments in
the normal course of business, is dependent on obtaining the financing necessary
to continue operations and, ultimately, profitable operations.

3. INVESTMENTS

<TABLE>
<CAPTION>
                              1997               1996
<S>                           <C>                <C>
Marketable securities -
 market value at March 31,
 1997 - $325
 1996 - $475                  $   100            $   100
Artwork                        25,342             25,342
                              ________           ________
                              $25,442            $25,442

</TABLE>

4. CAPITAL ASSETS

<TABLE>
<CAPTION>
                                                  1997            1996
                                  Accumulated     Net Book        Net Book
                       Cost       Depreciation    Value           Value
<S>                    <C>        <C>             <C>             <C>
Computer               $ 45,617   $ 19,010        $ 26,607        $ 14,137
Furniture and fixtures   82,562     77,218           5,344           2,968
Motor vehicle under
  capital lease          40,594     22,366          18,228          34,505
                       ________   ________        ________        ________
                       $168,773   $118,594        $ 50,179        $ 51,610

</TABLE>

5. ADVANCE TO RELATED COMPANY

<TABLE>
<CAPTION>

                                1997            1996
<S>                             <C>             <C>
Advance to N.C.K. Holdings Inc. $ 90,668        $109,339

</TABLE>

The related company is owned by two directors. The advance is unsecured, and  is
repayable  in monthly installments of $2,200 including interest of 8% per annum.
During the year the  Company  paid management fees of $220,000 (1996 - $220,000)
and royalties of $22,934 (1996 - $20,159) to N.C.K. Holdings Inc.

6. INTANGIBLES

<TABLE>
<CAPTION>
                                                    1997            1996
                                    Accumulated     Net Book        Net Book
                           Cost     Amortization    Value           Value
<S>                        <C>      <C>            <C>             <C>
Incorporation costs        $  3,111 $      -       $  3,111        $  3,111
Deferred development costs  114,017   65,845         48,172          62,994
Patent licence              566,323  224,869        341,454         374,768
Goodwill                    156,155   62,005         94,150         103,336
                           ________ ________       _________       ________
                           $839,606 $352,719       $486,887        $544,209

</TABLE>

7. CAPITAL LEASE OBLIGATION

<TABLE>
<CAPTION>

<S>                             <C>         <C>
Capital lease payable,
with interest of 10.25%,
due November 1, 1999            $31,876     $37,682

Less: current portion             6,345       5,874
                                _______     _______
                                $25,531     $31,808

</TABLE>

The future minimum lease payments required are $37,143 payable as follows:

<TABLE>
<CAPTION>

<S>     <C>
1998    $  9,240
1999       9,240
2000      18,663

</TABLE>

Included in these amounts is imputed interest of $5,267.

<PAGE>

8. SHARE CAPITAL

<TABLE>
<CAPTION>

Authorized
<S>         <C>
100,000,000 common shares without par value
100,000,000 Class "A" preferred  shares  without  par  value, of which 1,500 are
            designated class "A" convertible voting preferred shares, Series I.

</TABLE>

The following changes occurred in share capital:

<TABLE>

Common shares
Issued and outstanding
<CAPTION>

                            1997                         1996                           1995
                     Number                       Number                        Number
                     of                           of                            of
                     Shares        Amount         Shares         Amount         Shares         Amount
<S>                  <C>           <C>            <C>            <C>            <C>            <C>
Balance, beginning
  year               11,229,065    $6,699,998     9,677,542      $5,972,928     8,966,542      $5,623,668

Issued during the year
 For cash               913,255       321,870     1,551,523         727,070       661,000         315,260
 For settlement
   of debt              102,836        56,560         -                -           50,000          34,000
                      _________       _______     _________        ________       _______         _______
                      1,016,091       378,430     1,551,523         727,070       711,000         349,260
Balance, end
 of year             12,245,156     $7,078,42    11,229,065      $6,699,998     9,677,542      $5,972,928

</TABLE>

Class A preferred shares, Series I

<TABLE>
<CAPTION>

<S>                                <C>       <C>            <C>       <C>
Balance, beginning of year         265       $265,000       -         $    -
Issued during the year for cash    265        265,000       265         265,000
Balance, end of year               530       $530,000       265       $ 265,000

</TABLE>
<PAGE>

Each  class "A"  preferred  share  Series I carries a 12%,  cumulative  dividend
payable at the company's fiscal year end, in either cash or common shares at the
option of the  Company.  Dividends  in arrears  at March 31,  1997  amounted  to
$48,048.

The Series I preferred  shares are convertible into common shares at the rate of
one common share for each $3.00 of paid up capital or the rate provided below:

(1) $2.50 at any time after December 31, 1997, provided that the Current Trading
Price shall never have exceeded $2.99 after December 31, 1996;

(ii) $2.00  at  any  time  after  December 31, 1998,  provided  that the Current
Trading  Price  shall never have exceeded $2.99 after December 31, 1996 or $2.49
after December 31, 1997.

(iii) at any time after  December 31, 1999,  provided  that the Current  Trading
Price shall never have  exceeded  $2.99 after  December  31, 1996 or $2.49 after
Decemb~r  31, 1997 or $1.99 after  December  31,  1998,  at a common share price
equal to that price which  represents a 15% discount to the then Current Trading
Price, which common share price in no event shall be less than $0.95;

but if not so converted  prior to May 12, 2000,  such Series I preferred  shares
shall  be  deemed  to have  been  converted  on May 12,  2000 at the  applicable
conversion  price described  above.  The Current Trading Price means the average
trading price of the common shares on a recognized public stock exchange for the
preceding 20 business days.

On March 31, 1997, the following stock options were outstanding:

<TABLE>
<CAPTION>

                Number of  Exercise  Expiry
                Shares     Price     Date
<S>             <C>        <C>       <C>
Directors       38,000     $0.44     November 7,1997
               490,000      0.50     June 13, 1999
                75,000      0.45     May 27,1997
                96,909      0.55     August 22, 1997
               100,000      0.42     April 26,1998
Officers        35,000      0.44     November 7,1997
Employees       20,000      0.45     May 27, 1997
                80,000      0.40     January 12,1999

</TABLE>

9. INCOME TAXES

The Company has losses  available for utilization  against future years' taxable
incomes which, if unused, will expire as follows:

<TABLE>
<CAPTION>

<S>   <C>
1998  $  274,933
1999     276,415
2000     296,801
2001   1,089,726
2002     658,014
2003     710,475
2004     599,008

</TABLE>

10. LEASES

The minimum annual rental  commitments  for operating  leases in effect at March
31, 1997 are as follows:

<TABLE>
<CAPTION>

<S>     <C>
1998    $17,570
1999     10,570
2000     10,570
2001      1,627
2002      1,627

</TABLE>

11. RELATED PARTY TRANSACTIONS

Related  party  transactions  not  otherwise  disclosed  in  these  consolidated
financial statements are:

(a) Professional and consulting fees include $15,540 and $23,500,  respectively,
paid  to  Discovery  Capital  Corporation,  the  president  and  non-controlling
shareholder of which is a director of the Company. As of March 31, 1997, $14,142
was payable to Discovery Capital Corporation.

(b) As of March 31, 1997,  accounts  receivable  include $12,446 receivable from
N.C.K.  Holdings Inc.,  a  company owned by two directors, and $3,278 receivable
from Fulcrum Developments. Ltd., a company related by two directors in common.

12. SUBSEQUENT EVENTS

The following events occurred subsequent to the year end:

(a) The  following  common  shares  were  issued  pursuant  to the  exercise  by
directors of share purchase options:

<TABLE>
<CAPTION>

Date of exercise        Number of       Exercise        Total
                        Shares          Price           Proceeds
<S>                     <C>             <C>             <C>
April 30, 1997          38,000          $0.44           $ 16,720

June 16, 1997           60,000           0.50             30,000

</TABLE>
<PAGE>

(b) The following share options were issued after the end of the year:

<TABLE>
<CAPTION>

                Number of    Exercise   Expiry
                Shares       Price      Date
<S>             <C>          <C>        <C>
Employee        240,000      $0.50      April 10, 1999
Directors (1)   230,000       0.52      June 16, 1999
Employee (1)    20,000        0.52      June 16, 1999

</TABLE>

(1) subject to regulatory approval

13. CONTRACTUAL OBLIGATIONS

Pursuant to an agreement  dated December 20, 1989 with N.C.K.  Holdings Inc., as
part of the  consideration  for a licence,  the Company has made a commitment to
issue up to 3,000,000  common shares of its capital (the  "performance  shares")
based upon certain performance criteria.

The issue of the shares is subject to regulatory  approval which to date has not
been sought.

14. CONTINGENT LIABILITIES

(a) Should  sales  of racks not meet expectations, the Company is liable for the
 cost of the moulds, the balance of which was approximately $30,000 at March 31,
 1997.

(b) A company has filed a complaint against the Company in respect of the use of
a registered trademark. The outcome of the claim is not determinable.

<PAGE>

15. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Generally accepted  accounting  principles ("GAAP") used in the United States of
America  differ in certain  respects from GAAP used in Canada. A difference that
materially affects these consolidated financial statements is that United States
GAAP require deferred development costs be expensed as incurred whereas Canadian
GAAP allows these  expenses to be deferred and amortized.  Had the  consolidated
financial  statements  been  prepared in  accordance  with United States GAAP as
described above, the following changes would hive been made:

<TABLE>
<CAPTION>

                                  1997      1996      1995
<S>                               <C>       <C>       <C>
Total Assets - Canadian GAAP      $892,598  $969,860  $789,332
Deferred development costs        ( 48,172) ( 62,994) ( 77,816)
Total Assets - United States GAAP $844,426  $906,866  $711,516

</TABLE>

<TABLE>
<CAPTION>

                                  1997       1996      1995
<S>                               <C>        <C>       <C>
Shareholders' equity -
  Canadian GAAP                   $463,834   $495,537  $415,857
Deferred development costs        ( 48,172)  ( 62,994) ( 77,816)

Shareholders' equity -
  United States GAAP              $415,662   $432,543  $338,041

                                  1997       1996      1995

Net Loss - Canadian GAAP          $675,133)  (912,390) (799,768)
Amortization of deferred
  development costs                 14,822     14,822   187,045
Net Loss - United States GAAP     $(660,311)  $(897,568)$(612,723)

</TABLE>

(b)  United States  GAAP  require non-cash investing and financing activities to
be  excluded  from the Consolidated Statements of Changes in Financial Position,
whereas  Canadian GAAP require these activities to be included in the Statement.
Had  the Consolidated Statement of Changes - in Financial Position been prepared
in accordance with U.S.GAAP the following transactions would have been excluded:

<TABLE>
<CAPTION>

                                                1997     1996         1995
<S>                                             <C>      <C>          <C>
Liabilities settled by issue of company shares  $56,560  $   -    $34,000

</TABLE>

(c) Basic loss per share calculated in accordance with U.S. GAAP is:

<TABLE>
<CAPTION>

                          1997     1996         1995
<S>                       <C>      <C>          <C>
                          0.06     0.09         0.07

</TABLE>
<PAGE>

                            CRYOPAK INDUSTRIES INC.
                  CONSOLIDATED SCHEDULES OF OPERATING EXPENSES
                              YEAR ENDED MARCH 31
                          (Stated in Canadian Dollars)

<TABLE>
<CAPTION>
                                   1997         1996           1995
<S>                                <C>          <C>            <C>
Bad debts                          7,245        $ 32,668       $ 28,731
Commissions                          884           3,681          9,110
Depreciation and amortization     79,564          72,984        236,623
Foreign exchange                   1,355           2,867         33,228
Interest and bank charges         16,549          11,435         16,178
Interest on capital lease
  obligation                       3,434           1,156              -
Management fees and commissions  220,000         220,000        210,000
Marketing                         87,337         173,157         46,222
Office supplies and stationery    58,197          54,587         49,781
Professional fees                 74,399         155,698         75,088
Rent                              52,459          48,576         47,838
Royalties                         44,903          30,239         26,584
Salaries and benefits            117,960         122,610        146,677
Storage                            9,899           8,362         16,751
Telephone                         50,748          41,899         46,662
Travel                           155,138         167,284         64,460
Vehicle                           12,602          10,833          9,065
                                ________      __________     __________
                                $992,673      $1,158,036     $1,062,998

</TABLE>

<PAGE>


                            CRYOPAK INDUSTRIES INC.

                       CONSOLIDATED FINANCIAL STATEMENTS
                           YEAR ENDED MARCH 31, 1998
                              AND AUDITORS' REPORT



Hay & Watson CHARTERED ACCOUNTANTS

August 06, 1998

Messrs. Harry Bydgnes and Leigh Jeffs
Cryopak Industries Inc.
1125 - 625 Howe Street
Vancouver, B.C. V6C 2T6

Dear Sirs:

During our  examination  of the  consolidated  financial  statements  of Cryopak
Industries  Inc.  for the year ended March 31,  1998,  we reviewed  the existing
system of accounting  procedures and internal  control and such review indicated
certain areas which we believe should be brought to your attention. We have also
recommended  certain  changes to achieve  consistent  application  of accounting
policies adopted by the company.

1.   INVENTORY

During our  examination  we found that  there were only  limited  records of the
inventory kept at the various  locations.  The lack of proper records has caused
the company to run out of inventory and to buy back  inventory from customers in
order to fill other  customers'  orders.  This  causes  the  company to lose its
profit margin on the sale as well as showing the company at a  disadvantage.  On
an ongoing  basis,  sales  staff and the  receptionist  have to call the storage
companies  to know if they can fill  orders,  causing  delays and poor  customer
relations.

The value of inventory at year-end is essential to the  preparation of financial
statements,  and  deficiencies  in that  area may  result in a  qualified  audit
report. A proper recording system for inventory is essential and must be updated
periodically.  All  shipments  in and  out of the  outside  warehouses  must  be
supported by a written  confirmation from the warehouses  confirming the date of
shipment.

The company's  inventory records should be compared with the quantities reported
by the storage companies periodically. A count at year-end must be performed and
reconciled to your record.

The overall  responsibility for the inventory needs to be given to a responsible
and  knowledgeable  staff  member.  During  the  course  of the  audit,  we have
discussed  the  implementation  of an  adequate  temporary  system on a computer
spreadsheet  with  Laila.  However  the  company  would  benefit  from  the full
integration of its invoicing and inventory  systems with its accounting  system.
We are available to further discuss and help with the  implementation  of such a
system.


2.   SAMPLES

During our testing, we also found there is no system to account for samples sent
to  customers.  Since the  company  is trying to  develop  new  markets  for the
product, the cost for samples may be significant.  In order to prevent customers
from getting  products  without  paying,  to follow up on new  customers  and to
maintain better internal control, samples that are given away should be properly
recorded,  and  periodically  reviewed by  management.  Large  shipments of free
samples should be authorized and approved by management.  Completed records will
also facilitate the reconciliation of inventory on hand between your records and
the records from the warehouses.

3.   EXPENSE ALLOCATION AND TAX PLANNING

Various expenses such as rent, telephone,  promotion and advertising,  salaries,
office  expenses,  insurance,  and  professional  fees,  are  common to  Cryopak
Industry,  Cryopak Canada,  and Cryopak  International.  Currently,  the bulk of
these expenses is carried by Cryopak Industries.  However, the operations of the
group are  recorded  in  Cryopak  Canada and will  eventually  result in taxable
income.  To ensure  that full  advantage  is taken of all  expenses  and that no
losses carried forward are lost due to expiry, management should start to review
the allocation of expenses.  In addition, we recommend that the tax implications
of U.S. and worldwide operations be reviewed periodically.

4.   EXERCISE OF STOCK OPTIONS

During our review of share  capital  transactions,  it was noted that when stock
options are  exercised  by members of  management,  cash is not always  received
prior to the issue of the shares.  It is a contravention of the B.C. Company Act
to issue shares prior to receiving payment in fall.

5.   MANAGEMENT FEES

Currently  there are no contracts or invoices  which  indicate  what  management
remuneration  is..  We  recommend  that  management   remuneration  be  properly
documented.

6.   PETTY CASH

Currently,  no  control  is  in  place over the petty cash. The company does not
record  the  detail  of  expenditures  included in each petty cash disbursement.
Therefore, even  though  the  company  keeps all its petty cash receipts, we are
unable  to  trace  the  receipts  back to the petty cash expenses in the general
ledger.

7.   CREDIT CARD EXPENSES

During our tests of expenses,  we found that both  personal and business  credit
cards were used to pay for business  expenses and that  personal  expenses  were
charged to the  business  credit  cards as well as  personal  credit  cards.  In
addition,  some of the credit card  payments  made by the company and applied to
the personal  credit cards were not  properly  supported by expense  reports and
invoices. We recommend that business expenses be paid with business credit cards
only so as to be  easily  distinguished  from  the  personal  expenses.  If some
business  expenses have to be paid by personal  credit card, then those expenses
should be documented on an expense report supported by proper receipts.  We also
recommend that personal expenses be charged to personal credit cards only.


<PAGE>

8.   SUPPORTING DOCUMENTATION

During  the course of the audit, our analyses  sometimes proved difficult due to
the lack of supporting documentation such as invoices.

Management should ensure that supporting  documentation be obtained and retained
for all  company  expenditures.  The  supporting  documentation  is  required to
provide sufficient audit evidence for the audit and for future reference.

We  recommend  that  cheques  only be issued when there is  adequate  supporting
documentation. If invoices are unavailable, then a memo providing details of the
expenditure, approved by management should be used as supporting documentation.

9.   YEAR 2000

The  Year  2000  date  change  could  have a  significant  impact  on any of the
Company's equipment that operates with some form of micro-processor system. Some
of the  computer  systems and other  systems  such as  telephone  systems may be
susceptible to the Year 2000 issue.

We are taking this  opportunity  to stress the importance of the Year 2000 issue
and the significant  operational and financial risk it poses for the Company. We
encourage  management to consider the Year 2000 issue as  equipment,  facilities
and computer software programs are acquired.  This should also include taking in
consideration  the impact on those  systems that may be critical to the business
but may be managed by third parties such as service bureaus.

We have noted improvements  during the year in the recording of transactions and
performing  accounting  routines. The  most  significant matter which we believe
still needs to be addressed is the recording of and controls over inventory.

We would be pleased to discuss any of these  comments and  recommendations  with
you in greater detail.  We would, at this time, like to thank you and your staff
for their  assistance and cooperation  extended during the audit.  Please do not
hesitate to contact this office if we may be of further assistance.

Yours very truly,

Chartered Accountants


<PAGE>

                            CRYOPAK INDUSTRIES INC.
                          Consolidated Balance Sheets
                                    March 31
                          (Stated in Canadian Dollars)


<TABLE>
<CAPTION>

                                            1998                 1997
<S>                                         <C>                  <C>
ASSETS
Current
        Cash                                $    3,417           $        -
        Accounts receivable                    217,677              146,863
        Inventory                               36,757               36,779
        Term deposit - Restricted (Note 3)     119,609                    -
        Prepaid expenses                        12,196               15,662
        Due from employees                      32,117               40,118
                                            __________            _________
                                               421,773              239,422

Investments (Note 4)                            25,442               25,442
Capital Assets (Note 5)                        416,945               50,179
Advance to Related Company (Note 6)             70,572               90,668
Intangibles (Note 7)                           429,565              486,887
                                            __________           __________
                                            $1,364,297           $  892,598

LIABILITIES
Current
        Bank indebtedness                   $        -           $      834
        Accounts payable and
           accrued liabilities                 532,440              375,587
        Note payable (Note 8)                  350,000                    -
        Current portion of
           capital lease obligation             80,174                6,345
                                            __________           __________
                                               962,614              382,766

Capital Lease Obligation (Note 9)              320,015               25,531
Deferred Income Taxes   20,467                  20,467               20,467
                                            __________           ___________
                                             1,303,096              428,764

SHAREHOLDERS' EQUITY

Share Capital (Note 10)
        Issued and outstanding
        Common shares                        7,362,318             7,078,428
        Class A preferred shares, Series 1     530,000               530,000
Deficit                                     (7,831,117)           (7,144,594)
                                            ___________           ___________
                                                61,201               463,834
                                            $1,364,297            $  892,598

</TABLE>

APPROVED BY THE BOARD:

Director

Director

<PAGE>

                             CRYOPAK INDUSTRIES INC
                  Consolidated Statements of loss and Deficit
                              Year Ended March 31
                          (Stated in Candian Dollars)


<TABLE>
<CAPTION>

                                   1998           1997           1996

<S>                                <C>            <C>            <C>
Sales                              $1,161,442     $1,140,242     $  965,912
Cost of Sales                         763,018        675,706        557,611
Gross Profit                          398,424        464,536        408,301
Operating Expenses
   (Schedule 1)                       938,375        992,673      1,158,036
Operating Loss                     (  539,951)    (  528,137)    (  749,735)
Other (Income) Expenses
 Filing, listing and
     transfer agent fees               20,321         17,006         26,870
 Corporate printing, financial
     and public relations              85,181        138,150        129,994
Loan payment as guarantor                   -              -              -
 Other income                      (    6,900)    (    8,160)    (      384)
                                   ___________    ___________    ___________
                                       98,602        146,996        162,998

Loss before income taxes           (  638,553)    (  675,133)    (  912,390)
Income taxes (recovery)                     -              -     (      343)
Net loss for the year              (  638,553)    (  675,133)    (  912,390)
Dividends                          (   47,970)             -              -
Deficit, beginning of the year     (7,144,594)    (6,469,461)    (5,557,071)
Deficit, end of year              $(7,831,117)   $(7,144,594)   $(6,469,461)

Loss per share                     $     0.05     $     0.06     $     0.09
Weighted average common
  shares outstanding                12,597,083     11,691,097     10,637,948

</TABLE>
<PAGE>

                            CRYOPAK INDUSTRIES INC.
            Consolidated Statements of Changes in Financial Position
                              Year Ended March 31
                          (Stated in Canadian Dollars)


<TABLE>
<CAPTION>

                                        1998          1997           1996
<S>                                     <C>           <C>            <C>
Cash Flow from Operating Activities
Operations
        Net loss                     $( 638,553)     $( 675,133)     $( 912,390)
        Depreciation and amortization    77,783          79,564          72,984
                                      ( 560,770)      ( 595,569)      ( 839,406)

Changes in other operating items
        Advance to related companies      4,789       (  15,815)              -
        Accounts receivable           (  75,603)          3,290        ( 51,134)
        Due from employees                8,001       (  29,900)       ( 10,218)
        Intangibles                           -               -        (  3,113)
        Inventory                            22          15,404        ( 22,270)
        Investments                           -               -        ( 25,342)
        Prepaid expenses                  3,466       (   6,186)       (  5,867)
        Accounts payable                156,853       (  40,587)         69,541
Cash used for operating activities    ( 463,242)      ( 669,363)       (887,809)

Cash Flow from Financing Activities
        Issue of shares                 291,890         586,870         992,070
        Shares returned to treasury   (   8,000)              -               -
        Liabilities settled by issue
          of company shares                   -          56,560               -
        Note payable and capital
          lease obligation               718,313      (   5,806)         37,682
        Payment of dividend            (  47,970)             -               -
Cash provided by financing activities    954,233        637,624       1,029,752

Cash Flow from Investing Activities
        Acquisition of capital assets  ( 387,227)     (  20,811)       ( 51,867)
        Advances(to)from related company  20,096         18,671        ( 52,367)
Cash used for investing activities     ( 367,131)     (   2,140)       (104,234)

Increase (Decrease) in cash during year  123,860      (  33,879)         37,709
Cash (Bank indebtedness),
  beginning of year                    (     834)        33,045        (  4,664)
Cash (Bank indebtedness), end of year $  123,026     $(     834)      $  33,045


Cash is comprised of
        Cash (indebtedness)          $    3,417     $(      834)      $  33,045
        Tenn deposit                    119,609               -               -
                                     $  123,026     $(      834)      $  33,045


</TABLE>
<PAGE>

                            CRYOPAK INDUSTRIES INC.
                   Notes to Consolidated Financial Statements
                            March 31, 1998 amd 1997
                          (Stated in Canadian Dollars)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     These  consolidated  financial  statements have been prepared in accordance
with  generally  accepted  accounting  principles  in Canada  and  reflect   the
following policies:

Basis of Presentation
---------------------

These consolidated financial statements include the accounts of the Company  and
its  wholly-owned  subsidiaries,  CRYOPAK  ( International )  Inc., a   Barbados
corporation,  CRYOPAK ( Canada )  Corporation  and  its  wholly-owned subsidiary
CRYOPAK Corporation, a Nevada corporation, and its proportionate interest  (50%)
in a joint venture, CRYOPAK (Alberta) Corporation.

Inventories
-----------

Inventories are valued at the  lower of cost  or net  realizable value.  Cost is
determined by the first-in first-out (FIFO) method of valuation.

Investments
-----------

Current  investments  are  recorded  at  the  lower  of  cost and  market value.
Long-term investments are recorded as cost unless there has been a loss in value
that is other than a temporary decline, in which case  the investment is written
down to fair market value.

Depreciation
------------

Capital assets are recorded at cost.

The Company records depreciation on its capital assets using  the  straight-line
method over five years, except for motor vehicles  where  the  declining balance
method is used at the rate of 30% per annum.

Patent Licence
--------------

The patent licence is recorded at cost and is amortized on a straight-line basis
over seventeen years.

Deferred Development Costs
--------------------------

The  deferred  development  costs  are  recorded at  cost and are amortized on a
straight-line basis over ten years.

Foreign Currency
----------------

Foreign  currency  accounts are  translated  using the temporal  method  whereby
current assets and current  liabilities  are  translated to Canadian  dollars at
year end  exchange  rates,  other  assets  and  liabilities  at  exchange  rates
prevailing at the dates of transactions, and revenue and expenses at the average
rate during the year.  Gains and losses from foreign  currency  translation  are
included in the consolidated statements of loss and deficit.

Goodwill
--------

The excess of cost of the purchase of a  subsidiary  company over the fair value
of assets  acquired  (disclosed in these  consolidated  financial  statements as
goodwill) is amortized on a straight-line basis over seventeen years.


<PAGE>

Financial Instruments
---------------------

The fair values of the Company's cash, investments, accounts receivable, amounts
due from employees,  advance to related  company,  accounts  payable and accrued
liabilities,  bank indebtedness,  and capital lease obligation were estimated to
approximate their carrying value.

2. OPERATIONS

These financial statements have been prepared on the assumption that the Company
is a going concern.

The ability of the Company to continue as a going  concern,  which  contemplates
the realization of assets and the satisfaction of liabilities and commitments in
the normal course of business, is dependent on obtaining the financing necessary
to continue operations and, ultimately, profitable operations.

3. TERM DEPOSIT

The term  deposit is held by the  Canadian  Western  Bank as  security  on lease
financing for a machine acquired during the year (Note 9).

4. INVESTMENTS

<TABLE>
<CAPTION>

                                   1998                  1997
<S>                                <C>                   <C>
Marketable securities -
market value at March 31,
1998 - $200
1997 - $325                        $   100               $   100
Artwork                             25,342                25,342
                                  ________               _______
                                   $25,442               $25,442
</TABLE>

5.  CAPITAL ASSETS

<TABLE>
<CAPTION>

                           1998                                   1997
               Cost        Accumulated        Net Book            Net Book
                           Depreciation       Value               Value
<S>            <C>         <C>                <C>                 <C>
Computer       $ 48,396    $ 36,586           $ 11,810            $ 26,607
Furniture
  and Fixtures    83,066      78,781              4,285               5,344
Motor Vehicle
  under Capital
Lease           40,594      23,687             16,907              18,228
Machinery under
  Capital Lease 383,943           -            383,943                   -
               ________    ________           ________             ________
               $555,999    $139,054           $416,945             $ 50,179

</TABLE>

6.  ADVANCE TO RELATED COMPANY

<TABLE>
<CAPTION>

                                      1998                 1997
<S>                                   <C>                  <C>
Advance to N.C.K. Holdings Inc.       $70,572              $90,668

</TABLE>

    The related company is owned by two directors.  The advance is unsecured and
    is  repayable in monthly installments of $2,200 including interest of 8% per
    annum.  During the year the Company paid management fees of $220,000 (1997 -
    $220,000) and royalties of $26,289 (1997 - $22,934) to N.C.K. Holdings Inc.

<PAGE>

7.  INTANGIBLES

<TABLE>
<CAPTION>

                                 1998                        1997
                                 Accumulated      NetBook    NetBook
                      Cost       Depreciation     Value      Value

<S>                   <C>        <C>              <C>        <C>
Incorporation Cost    $  3,111   $      -         $  3,111   $  3,111
Deferred Development
  Costs                114,017     80,667           33,350     48,172
Patent Licence         566,323    258,183          308,140    341,454
Goodwill               156,155     71,191           84,964     94,150
                      ________   ________         ________    ________
                      $839,606   $410,041         $429,565    $486,887

</TABLE>

8.  NOTE PAYABLE

<TABLE>
<CAPTION>

                                        1998                  1997
<S>                                     <C>                   <C>
Note payable to a company related
by two directors in common, bearing
interest at the rate of 12% per annum
repayable April 30, 1998, and
secured by a general security agreement
on all the Company's assets.  The loan
was converted to share capital
subsequent to the year end (Note 14(a)).
The interest accrued on the loan was
forgiven.                               $350,000                 -

</TABLE>

<PAGE>

9.  CAPITAL LEASE OBLIGATIONS

<TABLE>
<CAPTION>

                                        1998                  1997
<S>                                     <C>                   <C>
Capital lease obligation with interest
at 10.25%, maturing November 1,
1999                                    $ 25,231               $ 31,876
Capital lease obligation with interest
at 10.6%, maturing July 20, 2002
(Note 3)                                 374,958                      -
                                        ________               ________
                                         400,189                 31,876

Less: current portion                     80,174                  6,345
                                        ________               ________
                                        $320,015               $ 25,531

</TABLE>

The future minimum lease payments required are as follows:

<TABLE>
<CAPTION>

<S>            <C>
1999           $117,064
2000            126,487
2001            107,824
2002            107,824
2003             35,941

</TABLE>

Included in these amounts is imputed interest of $94,951.

<PAGE>

10. SHARE CAPITAL

<TABLE>
<CAPTION>

Authorized
<S>             <C>
100,000,000     common share's without par value
100,000,000     Class A preferred shares without par value, of which 1,500
                are designated Class A convertible voting preferred shares,
                Series I

</TABLE>

The following changes occurred in share capital:

<TABLE>
Common shares
Issued and outstanding
<CAPTION>
                                1998                  1997
                                Number of             Number of
                                Shares     Amount     Shares       Amount
<S>                             <C>        <C>        <C>          <C>
Balance, beginning of year      12,245,156 $7,078,428 11,229,065   $6,699,998
Issued during the year
For cash, pursuant to the
   exercise of stock options       243,000 118,920       647,255      242,070
For cash, pursuant to the
   exercise of warrants                  -       -       116,000       34,800
For cash, pursuant to
   private placement               250,000 125,000       150,000       45,000
For settlement of debt                   -       -       102,836       56,560
For payment of dividend
    on Class A preferred
    shares, Series 1                96,908  47,970             -            -
                                __________ _______     _________      _______
                                   589,908 291,890     1,016,091      378,430

Acquired during the year           (20,000) (8,000)            -            -
Balance, end of year            12,815,064 $7,362,318 12,245,156   $7,078,428

Balance, beginning of year             530 $  530,000        265   $  265,000
Issued during the year for cash          -          -        265      265,000
Balance, end of year                   530    530,000        530      530,000

</TABLE>

<PAGE>

Each class A preferred share Series I carries a 12%, cumulative dividend payable
at  the company's fiscal year end, in either cash or common shares at the option
of the Company.  Dividends in arrears at March 31, 1998 amounted to $64,039.

The Series I  preferred shares are  covertible into common shares at the rate of
one common share for each $3 of paid up capital or the rate provided below:

(i) $2.50 at any time after December 31, 1997, provided that the Current Trading
    Price shall never have exceeded $2.99 after December 31, 1996;

(ii) $2.00 at any  time  after  December 31, 1998,  provided  that  the  Current
     Trading  Price  shall never exceeded $2.99 after December 31, 1996 or $2.49
     after December 31, 1997;

(iii) at any time after December 1, 1999,  provided  that  the  Current  Trading
      Price shall never have exceeded $2.99  after  December 31, 1996  or  $2.49
      after December 1, 1997 or $1.99 after December 31, 1998, at a common share
      price  equal  to  that price  which  represents a 15% discount to the then
      Current  Trading Price, which common share price in no event shall be less
      than $0.95;

But if not so  coverted prior  to  May 12, 2000, such  Series I preferred shares
shall  be  deemed  to  have  been  converted  on  May 12, 2000 at the applicable
conversion  price  described above.  The Current Trading Price means the average
trading price of the common shares on a recognized public stock exchange for the
preceeding 20 business days.

On March 31, 1998, the following stock options were outstanding:

<TABLE>
<CAPTION>

               No. Of Shares            Exercise Price      Expiry Date
<S>            <C>                      <C>                 <C>
Directors      145,000                  $0.50               June 13, 1999
               152,500                   0.52               June 16, 1999
               145,000                   0.50               June 13, 1999
                77,500                   0.52               June 16, 1999
               100,000                   0.50               September 2, 1999
               150,000                   0.50               September 2, 1999

Officers       240,000                   0.50               April 10, 1999

Employees       20,000                   0.52               June 16, 1999

</TABLE>

On  March 31, 1998, 250,000 warrants were outstanding.  The warrants entitle the
holder to purchase 250,000 common shares at an exercise price of $0.60 per share
and expire August 18, 1998.

<PAGE>

11. INCOME TAXES

The Company has losses  available for utilization  against future years' taxable
incomes which, if unused, will expire as follows:
<TABLE>
<CAPTION>

<S>    <C>
1999   $  276,415
2000      296,801
2001    1,089,726
2002      658,014
2003      710,475
2004      599,008
2005      649,840

</TABLE>

12. LEASES

The minimum annual rental commitments for operating leases  in effect  at  March
31, 1998 are as follows:

<TABLE>
<CAPTION>

<S>     <C>
1999    $  47,832
2000       47,832
2001       27,480
2002        1,627

</TABLE>

13. RELATED PARTY TRANSACTIONS

Related  party  transactions  not  otherwise  disclosed  in  these  consolidated
financial statements are:

(a)  Professional fees include $10,000 paid  to a company owned by a director of
     the Company.

(b)  As of March 31, 1998, accounts  receivable  include $7,658  receivable from
     N.C.K.  Holdings  Inc.,  a  company  owned  by  two  directors  and  $3,278
     receivable  from  Fulcrum  Developments Ltd.,  a  company  related  by  two
     directors in common.

14. SUBSEQUENT EVENTS

The following share transactions took place subsequent to the year end:

(a)  Issued 777,777 common shares for gross proceeds of $350,000 pursuant to the
     conversion of debt (Note 8).

(b)  Issued 1,000,000 units  for  gross proceeds of $400,000. Each unit consists
     of one common share and one non-transferable  share purchase warrant.  Each
     warrant entitles  the  holder  to  purchase one common share at $0.40 on or
     before April 23, 1999, or at $0.46 on or before April 23, 2000.

(c)  Issued 119,608  warrants  to the person  acting as  guarantor  on a capital
     lease.  Each  warrant  entitles the  holder to purchase one common share at
     $0.40 on or before March 20, 1999, or at $0.46 on or before March 20, 2000.

15. CONTRACTUAL OBLIGATIONS

(a)  Pursuant  to  an  agreement  dated  March 20, 1998,  which  is  subject  to
     regulatory approval, the Company committed to pay a bonus to a  third party
     for a guarantee of a capital lease. The capital lease is $374,958 (Note 9).
     The bonus is payable in monthly installments of $2,392 commencing April 20,
     1998 up to a maximum of $23,920 and can  be canceled  if  the  Company  can
     obtain a release of the guarantee.  In  addition  the  Company  must  issue
     119,608 share  purchase  warrants  (Note 14(c)).   The warrants will expire
     within 30 days of the Company obtaining a release of the guarantee.

(b)  Pursuant to an agreement dated December 20, 1989 with N.C.K. Holdings Inc.,
     as  part  of  the  consideration  for  a  licence,  the  Company has made a
     commitment to  issue  up  to  3,000,000  common shares  of its capital (the
     "performance shares") based upon certain performance criteria.

<PAGE>

16. CONTINGENT LIABILITIES

Should  sales of racks not meet expectations, the Company is liable for the cost
of the molds, the balance of which was approximately $30,000 at March 31, 1998.

17.  UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

(a)  Generally accepted accounting principles ("GAAP") used in the United States
     of  America  differ  in  certain   respects  from  GAAP  used  in Canada. A
     difference  that materially affects these consolidated financial statements
     is that  United States  GAAP require deferred development costs be expensed
     as incurred  whereas Canadian GAAP allows these expenses to be deferred and
     amoritzed.  Had  the  consolidated  financial  statements  been prepared in
     accordance  with United States  GAAP  as  described  above,  the  following
     changes would have been made:

<TABLE>
<CAPTION>

                                            1998        1997        1996
<S>                                         <C>         <C>         <C>
Total assets-Canadian GAAP                  $1,364,297  $  892,598  $  969,860
Deferred Development costs                      33,350      48,172      62,994
Total assets-United States GAAP              1,330,947     884,426     906,866

Shareholders' equity-Candaian GAAP              61,201     463,834     495,537
Deferred development costs                      33,350      48,172      62,994
Shareholders' equity-United States GAAP         27,851     415,662     432,543

Net loss-Canadian GAAP                         638,553     675,133     912,390
Amortization of deferred development costs      14,822      14,822      14,822
Net loss-United States GAAp                    623,731     660,311     897,568

</TABLE>

<PAGE>

(b) United States GAAP require non-cash investing and financing activities to be
    excluded from the consolidated statements of changes in financial  position,
    whereas  Canadian  GAAP  require  these  activities  to  be  included in the
    statement.   Had   the  consolidated   statement  of  changes  in  financial
    position  been  prepared  in   accordance  with  U.S.  GAAP   the  following
    transactions would have been excluded:

<TABLE>
<CAPTION>

                                                1998     1997    1996
<S>                                             <C>      <C>     <C>
Liabilities settled by issue of company shares  $     -  $56,560 $    -

</TABLE>

<TABLE>
<CAPTION>

                                                1998      1997    1996
<S>                                             <C>       <C>     <C>
Basic loss per share calculated in accordance
with U.S. GAAP is:                              $(0.05)   $(0.06) $(0.09)

</TABLE>
<PAGE>

Hay & Watson Chartered Accountants

                                                                Auditors' Report
To the Shareholders
Cryopak Industries Inc.

We have audited the consolidated balance sheets of Cryopak Industries Inc. as at
March 31, 1998 and 1997 and the consolidated  statements of loss and deficit and
of changes in financial  position for each of the years in the three year period
ended  March  31,  1998.  These  consolidated   financial   statements  are  the
responsibility of the company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion,  these consolidated  financial statements present fairly, in all
material respects,  the financial  positions of the company as at March 31, 1998
and 1997 and the  results of its  operations  and the changes in its cash flows;
for  each of the  years  in the  three  year  period  ended  March  31,  1998 in
accordance with accounting  principles generally accepted in Canada. As required
by the Company Act of British  Columbia,  we report that, in our opinion,  these
principles  have been applied on a consistent  basis with that of the  preceding
year.

Chartered Accountants

Vancouver, BC
June 25, 1998

<PAGE>

                            CRYOPAK INDUSTRIES INC.

                        Consolidated Financial Statements
                            Year Ended March 31, 1999
                              and Auditors' Report


                                AUDITORS' REPORT

To the Shareholders
Cryopak lndustries Inc.

We have audited the consolidated balance sheets of Cryopak industries Inc. as at
March 31, 1999 and 1998 and the consolidated  statements of loss and deficit and
changes in  financial  position  for each of the years in the three year  period
ended  March  31,  1999.  These  consolidated   financial   statements  are  the
responsibility of the company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion,  these consolidated  financial statements present fairly, in all
material respects,  the financial  positions of the company as at March 31, 1999
and 1998 and the  results of its  operations  and the  changes in its  financial
position for each of the years in the three year period ended March 3 1, 1999 in
accordance with accounting  principles generally accepted in Canada. As required
by the Company Act (British  Columbia),  we report that,  in our opinion,  these
principles have been applied on a consistent basis.

Chartered Accountants

Vancouver, BC
June 11, 1999

<PAGE>

                    COMMENTS BY AUDITORS FOR U.S. READERS ON
                        CANADA-U.S. REPORTING DIFFERENCES

In the United States,  reporting  standards for auditors require the addition of
an explanatory  paragraph  (following the opinion  paragraph) when the financial
statements are affected by conditions and events that cast substantial  doubt on
the company's ability to continue as a going concern, such as those described in
Note 2 to the financial  statements.  Our report to the shareholders  dated June
11, 1999 is expressed in accordance with Canadian  reporting  standards which do
not permit a reference to such events and  conditions  in the  Auditors'  Report
when these are adequately disclosed in the financial statements.

Chartered Accountants

Vancouver, BC
June 11, 1999

<TABLE>

                          Consolidated Balance Sheets
                                    March 31
                          (Stated in Candian Dollars)
<CAPTION>
                                           1999                        1998
<S>                                        <C>                         <C>
ASSETS
Current
 Cash                                      $  640,299                  $    3,417
 Accounts receivable                          360,783                     217,677
 Inventory (Note 3)                            20,609                      36,757
 Prepaid expenses                              14,075                      12,196
 Due from employees                            24,448                      32,117
                                            _________                     _______
                                            1,060,213                     421,773

Term deposit - Restricted (Note 4)            125,649                     119,609
Investments (Note 5)                               75                      25,442
Capital Assets (Note 6)                       429,652                     416,945
Advance to Related Company (Note 7)            48,869                      70,572
Intangibles (Note 8)                          372,243                     429,565
                                           __________                  __________
                                           $2,036,700                  $1,364,297
                                           __________                  __________

LIABILITIES

current
 Accounts payable and accrued liabilities  $  276,966                  $  532,440
 Note payable (Note 9)                              -                     350,000
 current capital lease obligation              94,544                      80,174
                                           __________                  __________
                                              361,510                     962,614

Capital Lease Obligation (Note 10)            249,057                     320,015
Deferred Income Taxes                          20,467                      20,467
                                           __________                  __________
                                           $  631,034                  $1,303,096
                                           __________                  __________

SHAREHOLDERS' EQUITY

Share Capital (Note 11)
 Issued and outstanding
 Common shares                              9,682,451                   7,362,318
 Class A preferred shares, Series 1           530,000                     530,000
Deficit                                    (8,806,785)                 (7,831,117)
                                           ___________                 __________
                                            1,405,666                      61,201
                                           ___________                 __________
                                           $2,036,700                  $1,364,297


</TABLE>
<PAGE>

<TABLE>

                  Consolidated Statements of Loss and Deficit
                              Year Ended March 31
                          (Stated in Canadian Dollars)

<CAPTION>
                                  1999          1998          1997

<S>                               <C>           <C>           <C>
Sales                             $ 1,295,159   $ 1,161,442   $ 1,140,242
Cost of goods sold                    746,285       763,018       675,706
Gross profit                          549,874       398,424       464,536
Operating expenses (Schedule        1,331,413       938,375       992,673
Operating loss                       (782,539)     (539,951)     (528,137)
                                  ____________  ____________  ____________

Other (Income) Expenses
Filing, listing and
  transfer agent fees                  25,289        20,321        17,006
Corporate printing, financial
  and public relations                117,043        85,181       138,150
Other income                       (   12,803)    (   6,900)    (   8,160)
                                  ____________  ____________  ____________
                                      129,529        98,602       146,996
                                  ____________  ____________  ____________

Loss before income taxes           (  912,068)    (  638,553)   (  675,133)
Net loss for the year              (  912,068)    (  638,553)   (  675,133)
Dividends                          (   63,600)    (   47,970)            -
Deficit beginning of the year      (7,831,117)    (7,144,594)   (6,469,461)
Deficit, end of year              $(8,806,785)   $(7,831,117)  $(7,144,594)
                                  ____________   ___________   ____________

Less per share                    $      0.06    $      0.05   $     0.06
Weighted average common
 shares outstanding                14,937,561     12,597,083   11,691,097
                                  ___________    ___________   ___________

</TABLE>
<PAGE>

<TABLE>

            Consolidated Statements of Changes in Financial Position
                              Year Ended March 31
                          (Stated in Canadian Dollars)
<CAPTION>

                                  1999           1998          1997
<S>                               <C>            <C>           <C>
Operating Activities
Net loss for the year             $(  912,068)   $(  638,553)  $(  675,133)
Adjustment for,
  Depreciation and amortization       114,730         77,783        79,564
  Loss from short term investment          25              -             -

                                  ____________    ___________   ___________
                                   (  797,313)    (  560,770)   (  595,569)


Changes in non-cash working capital
 Proceeds from (repayment of)
   advances - related companies             -          4,789    (   15,815)
 (Increase)decrease in accounts
    receivable                     (  143,106)    (   75,603)        3,290
 Decrease (increase,) in amount
    due from employees                  7,669          8,001    (   29,900)
 Decrease in inventory                 16,149             22        15,404
 (Increase)decrease in prepaid
    expenses                       (    1,879)         3,466    (    6,186)
 (Decrease)increase in accounts
    payable                        (  255,474)       156,853    (   40,587)
Cash used in operating activities  (1,173,954)    (  463,242)   (  669,363)
                                   ___________    ___________   ___________

Financing Activities
  ISSUES of shares                  2,392,733        291,890       586,870
  Share issue costs                (   72,600)             -             -
  Shares returned to treasury               -     (    8,000)            -
  Liabilities settled by issue
     of company shares                      -              -        56,560
   (Repayment of) proceeds from
       note payable and capital
       lease obligation            (  416,588)       718,313    (    5,806)
  Payment of dividend              (   63,600)    (   47,970)            -
Cash provided by financing
   activities                       1,839,945        954,233       637,624
                                   ___________    ___________   ___________

Investing Activities
  Acquisition of capital assets    (   44,773)    (  387,227)   (   20,811)
  Advances from related company        21,704         20,096        18,671
Cash used in investing activities  (   23,069)    (  367,131)   (    2,140)
                                   ___________    ___________   ___________

Increase (Decrease)in Cash            642,922        123,860    (   33,879)
Cash (Bank indebtedness),
  Beginning of Year                   123,026     (      834)       33,045
Cash (Bank indebtedness),
  End of Year                      $  765,948     $  123,026   $(      834)
                                   __________     ___________  ____________

Cash is Comprised of
  Cash (indebtedness)              $  640,229     $    3,417   $(      834)
  Term deposit                        125,649        119,609             -
                                   __________     __________   ____________
                                   $  765,948     $  123,026   $(      834)

</TABLE>
<PAGE>

                   Notes to Consolidated Financial Statements
                            March 31, 1999 and 1998
                          (Stated in Canadian Dollars)

1. DESCRIPTION OF BUSINESS

Cryopak Industries Inc. (the "Company"), incorporated under the laws  of British
Columbia, is in the business of the manufacturing and sale of  thermal packaging
solutions.  The  Company  produces a  patented,  flexible,  reusable refrigerant
product.

The Company has financed its cash deficiency from operating activities primarily
from share issuances. The ability of the Company to continue as a going concern,
which contemplates the realization of assets and the satisfaction of liabilities
and commitments in the normal course of business,  is dependent upon its ability
to continue  to obtain the  financing  necessary  to  continue  operations  and,
ultimately, profitable operations.

<PAGE>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company  prepares  its accounts in  accordance  with  accounting  principles
generally  accepted   in  Canada.  A  reconciliation  of  amounts  presented  in
accordance with United States accounting principles is detailed in Note 18.

The  following  is a summary of  significant  accounting  policies  used  in the
preparation of these consolidated financial statements:

Basis of Consolidation

These consolidated  financial statements include the accounts of the Company and
its wholly  owned  subsidiaries,  Cryopak  (International)  Inc.  (inactive),  a
Barbados  corporation,  Cryopak  (Canada)  Corporation   and  its  wholly  owned
subsidiary Cryopak  Corporation, a  Nevada  corporation, and  its  proportionate
interest (50%) in  a joint  venture,  Cryopak  (Alberta)  Corporation  (inactive
/active).

Inventories

Inventories  are valued at the lower of cost or net  realizable  value.  Cost is
determined by the first-in first-out (FIFO) method of valuation.

Investments

Current investments  are recorded  at  the  lower  of  cost  and  market  value.
Long-term investments are recorded at cost unless there has been a loss in value
that is other than a temporary decline, in which case the investment is  written
down to fair market value.

Depreciation

Capital assets are recorded at cost and are  depreciated on the following  basis
at the rates indicated:

<TABLE>
<CAPTION>

<S>                                          <C>
Computer Hardware                            3 years straight-line
Computer Software                            2 years straight-line
Furniture & Fixture, Office Equipment        5 years straight-line
Machinery                                    5 years straight-line
Motor Vehicle                                30% declining balance

</TABLE>
<PAGE>

Patent License

The patent licence is recorded at cost and is amortized on a straight-line basis
over seventeen years.

Deferred Development Costs

The  deferred  development  costs are  recorded at cost and are  amortized  on a
straight-line basis over tern years.

Foreign Currency

Foreign  currency  accounts are  translated  using the temporal  method  whereby
current assets and current  liabilities  are  translated to Canadian  dollars at
year end  exchange  rates,  other  assets  and  liabilities  at  exchange  rates
prevailing at the dates of transactions, and revenue and expenses at the average
rate during the year.  Gains and losses from foreign  currency  translation  are
included in the consolidated statements of loss and deficit.

Goodwill

The excess of cost  of  the purchase of a subsidiary company over the fair value
of assets acquired (disclosed in  these  consolidated  financial  statements  as
goodwill) is amortized on a straight-line basis over seventeen years.

Financial Instruments

The fair values of the Company's cash, investments, accounts receivable, amounts
due from employees,  advance to related  company,  accounts  payable and accrued
liabilities,  bank indebtedness,  and capital lease obligation were estimated to
approximate their carrying value.

3. INVENTORIES

<TABLE>
<CAPTION>

                                  1999                1998
<S>                               <C>                 <C>
Raw Materials                     $   5,348           $       -
Finished goods                       15,260              36,757
                                  _________           _________
                                  $  20,608           $  36,757

</TABLE>

4. TERM DEPOSIT

The term  deposit is held by the  Canadian  Western  Bank as  security  on lease
financing for a machine acquired in 1998 (Note 10).

5. INVESTMENTS
<TABLE>
<CAPTION>

                                  1999                1998
<S>                               <C>                 <C>
Marketable securities -
                                  $      75           $     100
Artwork                                   -              25,342
                                  __________          _________
                                  $       75          $  25,442

</TABLE>

During the year the Company  changed its intended use of the artwork and decided
to keep it as office furnishings.  As a result the artwork has been reclassified
to capital assets.

6. CAPITAL ASSETS

<TABLE>
<CAPTION>
                                              1999
                                             Accumulated       Net Book
                                   Cost      Depreciation      Value

<S>                                <C>         <C>             <C>
Artwork                            $ 25,342    $      -        $ 25,342
Computer Hardware                    36,698      27,478           9,220
Computer Software                     2,215       1,084           1,131
Furniture and Fixtures               59,696      56,907           2,789
Motor Vehicle under Capital Lease    40,594      28,759          11,835
Machinery under Capital Lease       399,279      39,928         359,351
Machinery                            18,445       1,844          16,601
Office Equipment                      4,113         730           3,383
                                   ________    ________        ________
                                   $586,382    $156,730        $429,652

</TABLE>
<PAGE>

<TABLE>
<CAPTION>

                                               1998
                                               Accumulated   NetBook
                                   Cost        Depreciation  Value
<S>                                <C>         <C>           <C>
Computer Hardware                  $ 45,852    $ 34,168       $ 11,684
Computer Software                     2,544       2,419            125
Furniture and Fixtures               80,967      78,252          2,715
Motor Vehicle and Capital Lease      40,594      23,686         16,908
Machinery under Capital Lease       383,943           -        383,943
Office Equipment                      2,099         529          1,570
                                   ________    _________      ________
                                   $555,999    $139,054       $416,945

</TABLE>

7. ADVANCE TO RELATED COMPANY

<TABLE>
<CAPTION>

                                     1999                  1998
<S>                                  <C>                   <C>
Advance to N.C.K. Holdings Inc.      $ 48,869              $ 70,572

</TABLE>

The related  company is owned by two directors.  The advance is unsecured and is
repayable in monthly  installments of $2,200 including interest of 8% per annum.
During the year the Company paid  management  fees of $220,000 (1998 - $220,000)
and royalties of $26,261 (1998 $26,289) to N.C.K. Holdings Inc.

8. INTANGIBLES

<TABLE>
<CAPTION>

                                      1999                      1998
                                      Accumulated   NetBook     NetBook
                            Cost      Depreciation  Value       Value
<S>                         <C>       <C>           <C>         <C>
Incorporation Cost          $  3,111         -      $  3,111    $  3,111
Deferred Development Costs   114,017    95,489        18,528      33,350
Patent Licence               566,323   291,497       274,826     308,140
Goodwill                     156,155    80,377        75,778      84,964
                            ________  _________     ________    ________
                            $839,606  $467,363      $372,243    $429,565

</TABLE>

9. NOTE PAYABLE

<TABLE>
<CAPTION>

                                     1999                1998
<S>                                  <C>                 <C>
Note payable to a company
related by two directors in
common, bearing interest at
the rate of 12% per annum,
secured by a general security
agreement on all the Company's
assets, fully repaid during the
year.                                 -                  $350,000

</TABLE>
<PAGE>

10. CAPITAL LEASE OBLIGATIONS

<TABLE>
<CAPTION>


                                     1999                1998
<S>                                  <C>                 <C>
Capital lease obligation with
interest at 10,25%, maturing
November 1, 1999                     $ 17,990            $ 25,231

Capital lease obligation with
interest at 10.6%, maturing
July 20, 2002 (Note 4)                302,689             374,958

Capital lease obligation with
interest at 17%, maturing
October 20, 2001                       12,922                   -
                                     ________            ________
                                      333,601             400,189
Less: current portion                  84,544              80,174
                                     ________            ________
                                     $249,057            $320,015

</TABLE>

The future minimum lease payments required are as follows;

<TABLE>
<CAPTION>

<S>     <C>
2000    $158,775
2001     121,449
2002     118,711
2003      38,293
2004           -

</TABLE>

Included in these amounts is imputed interest of $62,148.

11 SHARE CAPITAL

Authorized
100,000,000     common shares without par value
100,000,000     Class  A preferred shares  without  par  value, of  which  1,500
                are  designated  Class  A  convertible  voting preferred shares,
                Series I


The following changes occurred in share capital:

<TABLE>

Common shares
Issued and outstanding
<CAPTION>

                            1999                   1998
                            Number of              Number of
                            Shares     Amount      Shares      Amount

<S>                        <C>         <C>         <C>         <C>
Balance beginning of year  12,815,064  $7,362,318  12,245,156  $7,078,428
Issued during the year
For cash, pursuant to the
 exercise of stock options  1,173,700     581,633     243,000     118,920
For cash, pursuant to
 private placements         3,057,777   1,710,000     250,000     125,000
For finder's fee               50,000      37,500           -           -
For payment or dividend
  on Class A preferred
  shares, Series 1            159,199      63,600      96,908      47,970
Share issue costs                   -    ( 72,600)          -           -
                           ___________ ___________ __________  __________
                             4,440,676  2,320,133     589,908     291,890
Acquired during the year             -          -     (20,000)     (8,000)
Balance. end of Year        17,255,740 $9,682,451  12,815,064  $7,362,318

</TABLE>

<TABLE>

Class A preferred shares,
  Series 1
<CAPTION>
                            1999                   1998
                            Number                 Number of
                            of Shares  Amount      Shares      Amount

<S>                         <C>        <C>         <C>         <C>
Balance, begining and
  end of year               530        $  530,000  530         $  530,000

</TABLE>

Each Class A preferred share Series I carries a 12%, cumulative dividend payable
at the company's  fiscal year end, in either cash or common shares at the option
of the Company. Dividends in arrears at March 31, 1999 amounted to $64,039.

The Series I preferred  shares are convertible into common shares at the rate of
one common share for each $3 of paid up capital or the rate provided below:

(i)  $2.00 any  time  after December 31, 1998, provided that the Current Trading
     Price shall never have  exceeded  $2.99  after  December 31, 1996  or $2.49
     after December 31, 1997.

(ii) at any time after December 1, 1999, provided that the Current Trading Price
     shall  never have exceeded  $2.99  after  December 31, 1996  or $2.49 after
     December 1, 1997 or $1.99 after  December 31, 1998, at a common share price
     equal to that price  which  represents a 15%  discount  to the then Current
     Trading  Price, which  common  share price  in  no event shall be less than
     $0.95;

But if not so converted  prior to May 12, 2000,  such Series I preferred  shares
shall  be  deemed  to have  been  converted  on May 12,  2000 at the  applicable
conversion  price described  above.  The Current Trading Price means the average
trading price of the common shares on a recognized public stock exchange for the
preceding 20 business days.

On March 31, 1999, the following stock options were outstanding:

<TABLE>
<CAPTION>

               No. of Shares   Exercise Price    Expiry Date
<S>            <C>             <C>               <C>
Directors      170,000         $0.50             June 13, 1999
               390,000          0.52             August 17, 2000
               343,000          0.50             January 7, 2001
                75,000          0.52             June 19,1999
               100,000          0.50             September 2. 1999
               150,000          0.50             September 2, 1999
Officer        100,000          0.40             June 26, 2000
               136,300          0.82             August 17, 2000
Employee        20,000          0.52             June 16,1999
               100,000          0.82             February 11, 2001
              *750,000          0.76             March 19,2004

</TABLE>

*These options will vest at a rate of 50,000 at the end of each calendar quarter
 commencing March 31, 1999 and are subject to shareholder approval.

<PAGE>

On March 31. [999. the following warrants were outstanding,

<TABLE>
<CAPTION>

No. of Warrants     Exercise Price      Expiry Date
<S>                 <C>                 <C>
250,000             $0.60               August 18,1999
250,000              0.46               April 29, 2000
125,000             0.776               September 20, 1999
225,000              0.46               May 13, 2000
135,000              0.46               May 29,2000
265,000              0.46               June 3, 2000
125,000              0.46               June 17,2000
119,608              0.46               March 20, 2000

</TABLE>

12. INCOME TAXES

The Company has estimated losses available for utilization against future years'
taxable incomes which, if unused, will expire as follows:

<TABLE>
<CAPTION>

<S>          <C>
2000         $  296,801
2001          1,089,726
2002            658,014
2003            710,475
2004            599,008
2005            649,840
2006            882,657

</TABLE>

13, LEASES

The  minimum  annual  rental  commitments  for  operating  leases  in  effect at
March 31, 1999 are as follows:

<TABLE>
<CAPTION>

<S>           <C>
2000          47,790
2001          27,456
2002           1,627

</TABLE>

14. RELATED PARTY TRANSACTIONS

Related  party  transactions  not  otherwise  disclosed  in  these  consolidated
financial statements are as follows:

(a)  Professional  fees include $22,200 paid to a company owned by a director of
the Company.

(b) As of March 31, 1999,  accounts  receivable  include $28,316 (1999:  $7,658)
receivable  from N.C.K.  Holdings  Inc., a company owned by two  directors,  and
$3,278  (1998:  $7,658)  receivable  from Fulcrum  Developments  Ltd., a company
related by two directors in common.

<PAGE>

15. SUBSEQUENT EVENTS

The following share transactions took place subsequent to the year end:

(a)     Issued 72,000 units for gross proceeds of $54,000,  Each unit consists
        of one common share and one  non-transferable  share  purchase  warrant.
        Each warrant  entitles the holder to purchase one common share at $ 1.00
        on or before May 4, 2001.

(b)     Issued 125,000 units to a director of the Company for gross  proceeds of
        $97,000.  The  Company  provided an interest-free loan, forgivable under
        certain conditions, for the purchase of these units. Each unit  consists
        of  one common share and one non-transferable  share  purchase  warrant,
        Each warrant entitles the holder to purchas  one  common share at $0.776
        on or before September 20, 1999.

(c)     Granted 290,000 stock options to directors  and officers of the Company,
        exercisable on or before April 21, 2001 at $0.86 per share.

(d)     Issued 326,300 common shares for gross proceeds of $175,166  pursuant to
        the exercise of stock options.

16. CONTRACTUAL OBLIGATIONS

Pursuant to an agreement  dated December 20, 1989 with N.C.K.  Holdings Inc., as
part of the  consideration  for a licence,  the Company has made a commitment to
issue up to 3,000,000  common shares of its capital (the  "performance  shares")
based upon certain performance criteria.

17. CONTINGENT LIABILITIES

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. The effects of the Year 2000 Issue may be experienced before, on, or after
January 1, 2000,  and, if not addressed,  the impact on operations and financial
reporting may range from minor errors to significant systems failure which could
affect an entity's  ability to conduct  normal  business  operations,  It is not
possible  to be certain  that all aspects of the Year 2000 Issue  affecting  the
entity, including those related to the efforts of customers, suppliers, or other
third parties will be fully resolved.

18. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

(a) Generally accepted accounting  principles ("GAAP") used in the United States
of America  differ in certain  respects  from GAAP used in Canada.  A difference
that materially affects these consolidated  financial  statements is that United
States GAAP require deferred  development  costs be expensed as incurred whereas
Canadian  GAAP  allows  these  expenses to be deferred  and  amortized.  Had the
consolidated financial statements been prepared in accordance with United States
GAAP as described above, the following changes would have been made,

<TABLE>
<CAPTION>

                                           1999          1998         1997
<S>                                        <C>           <C>          <C>
Total assets - Canadian GAAP               $2,016,700    $1,364,297   $ 892,508
Deferred development costs                     18,528        33,350      49,172
Total assets - United States GAAP          $2,018,172    $1,330,947   $ 844,426
Shareholders,' equity - Canadian GAAP      $1,405,666    $   61,201   $ 463,834
Deferred development costs                     18,528        33,350      48,172
Shareholder,.' equity - United States GAAP $1,387,138   $   27,851    $ 415,662
Net loss - Canadian GAAP                   $  912,068   $  638,553    $ 675,133
Amortization of deferred development costs     14,822       14,822       14,822
Net loss - United States GAAP              $ 997,246     $ 623,731    $ 660,311

</TABLE>
<PAGE>

(b) United States GAAP require non-cash investing and financing activities to be
excluded  from the  consolidated  statements  of changes in financial  position,
whereas  Canadian GAAP require these activities to be included in the statement.
Had the consolidated statement of changes in financial position been prepared in
accordance with U.S. GAAP the following transactions would have been excluded:

<TABLE>
<CAPTION>

                                           1999          1998        1997
<S>                                        <C>           <C>         <C>
Liabilities settled by issue of
  company shares                           $       -     $       -   $ 56,560
Dividends paid by issue of company shares     63,600        47,970          -
Finder's fee raid by issue of company shares  37,500             -          -
                                           _________     _________   ________
                                           $ 101,100     $  47,970   $ 56,560

</TABLE>

<TABLE>
<CAPTION>

                                           1999          1998        1997
<S>                                        <C>           <C>         <C>
Basic loss per share calculated in
  accordance with U.S., GAAP is:           $(  0.06)     $( 0.05)    $(  0.06)

</TABLE>

<TABLE>
                  Consolidated Schedules of Operating Expenses
                              Year Ended March 31
                          (Stated in Canadian Dollars)
<CAPTION>

                                           1999          1998        1997
<S>                                        <C>           <C>         <C>
Bad debts                                  $ 53,529      $ 29,125    $  7,245
Commissions                                   4,144           520         884
Depreciation and amortization                72,958        77,783      79,564
Foreign exchange                             20,640        10,876       1,355
Interest and bank charges                    41,746        15,301      16,549
Interest on capital lease obligation         38,912         2,595       3,434
Management fees                             220,000       220,000     220,000
Marketing                                   201,347        57,944      87,337
Office supplies and stationery               80,250        68,798      58,197
Professional fees                            98,867        56,291      74,399
Rent                                         53,915        52,861      52,459
Royalties                                    53,328        51,258      44,903
Salaries and benefits                       151,146       126,769     117,960
Storage                                       4,507        10,459       9,899
Telephone                                    37,790        41,994      50,748
Travel and entertainment                    180,770        97,769     155,138
Vehicle                                      17,564        18,032      12,602
                                         __________      _________   ________
                                         $1,331,413      $938,375    $992,673
</TABLE>

<PAGE>

Item 18. Financial Statements

         The Registrant has chosen to file Financial  Statements  under Item 17,
above.

                                                        SIGNATURES

         Pursuant to the  requirements of Section 12 of the Securities  Exchange
Act of 1934, the registrant  certifies that it meets all of the requirements for
filing on Form  20-F and has duly  caused  this  registration  statement  annual
report to be signed on its behalf by the undersigned, thereunto duly authorized.

                                               CRYOPAK INDUSTRIES INC.


                                               /s/ Harry Bygdnes
                                               ---------------------------------
                                               Harry Bygdnes, President


         This offering statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>

<S>                                               <C>
Harry Bygdnes, Director                           September 13, 1999


Robert Leigh Jeffs, Director                      September 13, 1999


Douglas R. Reid, Director                         September 13, 1999


Ross G. Morrison, Director                        September 13, 1999


John F. Morgan, Director                          September 13, 1999


John A. McEwen, Director                          September 13, 1999

</TABLE>