Exercise of Warrants and Options in Covalon Technologies Ltd.

March 31, 2005

MISSISSAUGA, ONTARIO--(CCNMatthews - March 31, 2005) - Covalon
Technologies Ltd. ("CTL") (TSX VENTURE:COV) Series 1 Warrants expired on
March 21, 2005. Management is pleased to announce that approximately 84%
of the warrants were exercised. A total of 2,898,590 shares were issued
from treasury at $0.3636 per share for a total $ 1,053,927.32 received.

Management is also pleased to announce that director options to acquire
491,732 common shares were exercised at $0.30 per share by previous
directors of the company for a total of $147,519.60 received.

Biodel Systems Inc. ("Biodel") of Toronto, Ontario exercised warrants
for 41,250 common shares and now beneficially owns 5,159,308 common
shares of CTL (representing, approximately 12.75% of issued and
outstanding common shares of CTL. Smith Vincent & Co. Ltd. of Toronto,
Ontario exercised warrants for 1,353,847 common shares and now
beneficially owns 5,159,849 common shares of CTL (representing
approximately 12.75% of the issued and outstanding common shares of
CTL). Dr. Frank DiCosmo a principal of Biodel and President and CEO of
CTL, exercised warrants for 22,000 common shares of CTL and now
beneficially owns 332,000 common shares of CTL and 562,500 options to
acquire common shares of CTL (representing respectively approximately
0.76% and 1.39% of the issued and outstanding common shares of CTL
assuming no Series II Warrants and no other options are exercised).
William Jackson CFO and COO of CTL exercised warrants for 11,000 common
shares of CTL and now beneficially owns 921,594 common shares of CTL and
270,000 options to acquire common shares of CTL.

Biodel Systems Inc. and Smith, Vincent & Co, Ltd. do not act jointly or
in concert. Each of Biodel Systems Inc. and Smith, Vincent & Co. Ltd.
acquired the securities for investment purposes and reserves the right
to acquire further securities of CTL depending on market conditions and
other relevant factors.

Early warning reports in respect of the acquisitions by Biodel Systems
Inc. and Smith, Vincent & Co. Ltd. will be filed on SEDAR.

The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release. TSX Venture
Exchange in no way passed upon the merits of the transaction and has
neither approved or disapproved of the contents of this release.

For further information please contact: William Jackson
Chief Financial Officer
Covalon Technologies Ltd.
T: (905) 568-8400
F: (905) 568-5200
www.covalon.com