SECURITIES AND EXCHANGE COMMISSION

                                    Washington, D.C. 20549

                                           FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES  EXCHANGE ACT OF
1934.

For the fiscal year ended June 30, 1997


Commission file number: 0-21006

                                        INFU-TECH, INC.
                    (Exact name of registrant as specified in its charter)

                                           Delaware
                               (State or other jurisdiction of
                                incorporation or organization)
                                          22-3127689
                                       (I.R.S. Employer
                                     Identification No.)
                                      910 Sylvan Avenue
                                    Englewood Cliffs, N.J.
                           (Address of principal executive offices)

                                            07632
                                          (Zip Code)


Registrant's telephone number, including area code:  (201) 567-4600

Securities registered pursuant to Section 12(b) of the Act:  NONE

Securities  registered  pursuant to Section 12(g) of the Act: Common Stock,  par
value $.01

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

As of September 22, 1997 the aggregate  market value of the voting stock held by
non-affiliates of the registrant was $4,318,436.

As of September 22,1997,  3,249,692 shares of the registrant's common stock were
outstanding.

                             DOCUMENTS INCORPORATED BY REFERENCE:

      Portions of definitive  proxy statement to be filed not later than October
29, 1997.


                                            PART I


Item 1.  Business.

General

        Infu-Tech,   Inc.  (the  "Company")  provides  infusion  therapy  (i.e.,
administration   of  nutrients,   antibiotics  and  other   medications   either
intravenously  or through feeding tubes) and other medical  products to patients
in their homes,  Infu-Tech's  ambulatory  IV suites,  nursing homes and subacute
care  facilities.  It was incorporated in 1988 as the continuation of a business
begun by Continental Health Affiliates, Inc. ("CHA") in 1982. CHA was one of the
early  marketers of equipment and nutrients for infusion  therapy and was one of
the first to market  equipment  and  formulations  for  intravenous  infusion of
nutrients and medication  outside  hospitals.  On December 31, 1992, the Company
completed the initial public offering of its common stock.

        In November 1995, the Company  changed its fiscal year to end on June 30
of each year from December 31. Therefore,  unless otherwise noted, references to
a year are to the fiscal year-ending June 30.

        The  Company  is  organized  into two  service  units.  The  Intravenous
Infusion unit provides a broad range of home,  ambulatory and subacute  infusion
therapy  services,  including  intravenous total parenteral  nutrition  therapy,
antibiotic  therapy,  enteral  nutrition  therapy,  chemotherapy,  chronic  pain
management  therapy,  hydration  therapy and a variety of other  therapies.  The
Contract Services unit provides medical products and services, including enteral
nutrition therapy,  intravenous infusion therapy,  urological products and wound
care products, to residents in long term care facilities.

        The Company's sales and marketing efforts are primarily directed towards
Managed Care. The Company has over 58 agreements with Managed Care covering over
17 million members to provide  infusion  therapy and other home health services.
The agreements with Managed Care vary from preferred  provider  relationships to
being one of several providers. Reimbursement is generally on a per diem basis.

        In June 1997,  the Company  established  a Disease  Management  Services
Division,  which will focus on  developing  comprehensive  preventive  treatment
programs for  patients  with chronic  conditions,  such as asthma,  diabetes and
congestive heart failure.

        The  Company's  continued  marketing  efforts  directed at managed  care
companies  bring  significant  opportunity  to drive new  programs  like Disease
Management through existing relationships.

        In 1997, the Company renewed its  non-exclusive  distribution  agreement
with Genzyme Corporation for Ceredase(R) enzyme and Cerezyme(TM),  which are the
only  products  approved  by the FDA as  therapy  for  patients  with  Gaucher's
disease.  Genzyme  estimates  that  there are  between  2,000 and 2,500  Gaucher
patients in the United States who require  treatment  with those drugs.  Cost of
the therapy normally ranges from approximately $150,000 to $250,000 per year per
patient.  Because  of this  high  cost,  the  Company's  percentage  mark-up  is
relatively small.

        The  following  table  sets  forth  the  percentages  of  the  Company's
revenues, by service unit, from the various therapies, products and services.
<PAGE>

<TABLE>
<CAPTION>

                       Six months ended              Year ended                 Year ended
                         June 30, 1995              June 30, 1996              June 30, 1997
                  --------------------------------------------------------------------------
                  IntravenouContract  Total  IntravenouContract  Total  IntravenouContract  Total
                   Infusion ServicesRevenues  Infusion ServicesRevenues  Infusion ServicesRevenues

<S>                     <C>     <C>      <C>       <C>     <C>    <C>         <C>      <C>     <C>                
Enteral Nutrition         4%     68%      24%        3%     72%      20%        3%     71%      20%
Antibiotic               32%       -      22%       30%       -      23%       27%       -      20%
TPN                       7%       -       5%        7%       -       5%        5%       -       4%
Orthotics                  -      3%       1%         -      1%        -         -       -        -
Immune Globulin           9%       -       6%        8%       -       6%       10%       -       7%
Ceredase/Cerezyme        26%       -      18%       27%       -      20%       32%       -      24%
Wound Care                 -      8%       2%         -      2%       1%         -      1%        -
Other                    22%     21%      22%       25%     25%      25%       23%     28%      25%

                        100%    100%     100%      100%    100%     100%      100%    100%     100%
                       ====    ====     ====      ====     ====    ====      ====     ====    ====
</TABLE>


Overview of the Home Health Care Industry

        One of the major factors contributing to the rapid growth of home health
care has been the use of alternate  site health care to contain the rising costs
of health care. Consumers of all types,  including  governmental bodies, managed
care  organizations,  insurance companies and private payors are recognizing the
savings  that  can be  realized  by  offering  care in the  home as  opposed  to
institutional   settings.   In  addition,  an  aging  population  and  patients'
preferences for receiving  health care in the comfort of the home,  combine with
advances in medical  technology making the delivery of sophisticated  treatments
in the home a reality,  are all contributing to the continued growth of the home
health care industry.

        Managed care  organizations  are becoming  important players in the home
health market and have exerted pricing  pressure on the providers of home health
care services.  Such pressure has negatively impacted the profit margins of home
health care producers.  In addition, as the managed care organizations  continue
to grow,  they may show a  preference  to deal only with those home  health care
service  providers who can offer a  comprehensive  range of services  throughout
such managed care organization's area of operations.  In response, what once was
a very fragmented industry is undergoing a wave of consolidation.

        With  the  development  of  additional   oral   medications  to  replace
medications  that are administered  intravenously,  there has been a decrease in
the demand for home infusion  therapies.  Providers of oral  pharmaceuticals are
servicing an  increasing  number of patients who  previously  required  infusion
therapies.

Intravenous Infusion Therapy

        Intravenous   infusion  therapy  principally  involves  the  intravenous
administration  of nutrients,  antibiotics  or other  medications to patients in
their  homes,  in Infu-Tech  ambulatory  suites,  or in  Infu-Tech  credentialed
subacute  facilities,  often as a  continuation  of  treatment  initiated in the
hospital. The national non-hospital infusion therapy market has grown to over $4
billion since its inception approximately 17 years ago. The Company believes the
primary factors  contributing to the rapid growth of the  non-hospital  infusion
therapy market have been health care cost containment  pressures,  incentives by
third party payors to use home care, rapid growth of the elderly  population and
increased  acceptance  of home  infusion  therapy by the medical  community  and
patients.  Additionally, the number of therapies that can be administered safely
outside the  hospital has  increased  significantly  in recent years  because of
technological  innovations such as more sophisticated  portable infusion control
devices,  implantable  injection ports, new vascular access devices and advances
in drug therapy. Consequently, more infections and diseases that would otherwise
have required  patients to be hospitalized are now considered  treatable without
hospitalization.

        Before  accepting a patient for infusion  therapy,  the Company consults
with the  physician  or  clinician  and  hospital  personnel  in  assessing  the
patient's specific medical needs and suitability for home infusion therapy. This
assessment  process includes an analysis of the patient's  physical condition as
well as social  factors such as the stability of the patient's home life and the
availability of family members or others who can assist in the administration of
the patient's infusion therapy. Once the patient is accepted


<PAGE>



for therapy,  the Company provides training and education to the patient and his
family  or  others  relating  to  proper  infusion  techniques,  care and use of
equipment,  care of infusion sites, and other aspects of the patient's  infusion
therapy. Infusion therapy equipment, consisting primarily of poles and pumps, is
owned or leased by the  Company  and  provided  to  patients  along  with  other
services.

        Throughout the course of treatment,  all prescribed  drugs and solutions
are  delivered  directly to the patient's  home or to an Infu-Tech  credentialed
subacute care facility.  In  approximately  90% of the cases,  the Company's own
pharmacies  provide  the  prescribed  drugs,  solutions  and  supplies.  Due  to
geography,  patients who cannot be adequately  serviced  through a Company-owned
pharmacy are covered by one of six satellite  pharmacies.  The Company maintains
contact  with the patient and the  patient's  physician in order to monitor and,
when directed by the physician, refine the patient's plan of care. The Company's
nursing  and  pharmacy  services  are  available  on-call  24  hours  a day  for
consultation, home visits and special prescription needs.

        A registered nurse  clinical-coordinator  follows each case and monitors
the therapy with the patient,  the nurses assigned to the case and the patient's
physician.  Billing  information is coordinated at a central billing  department
which bills the appropriate payor and tracks payments.

        During 1994, the Company began also to provide infusion therapy services
in ambulatory  infusion  suites attached to Company  pharmacies,  where patients
receive infusion therapy on an out-patient basis. In addition, the Company began
arranging  with nursing  homes and other  subacute  facilities  to have patients
admitted on a short term basis to receive infusion and other subacute therapies.

Contract Services

        Since late 1990,  the Contract  Services unit has expanded the number of
products it offers to nursing homes and other health care  institutions,  and it
expects  to  offer  additional  products,  embodying  advances  in  health  care
technology,  in  the  future.  On  the  other  hand,  changes  in  reimbursement
regulations  or  interpretations  have led the Contract  Services unit to reduce
sales of products in the past and may do so in the future.

        The Company's contract services involve the distribution of products and
services to  residents in long term care  facilities.  Products and services are
provided  through  arrangements  with the long term care facilities for specific
residents' use.  Generally,  the Company bills a third party payor,  principally
Medicare, on behalf of the individual resident.  However, starting July 1, 1998,
suppliers will not be directly  reimbursed by Medicare for providing services to
residents of skilled nursing facilities ("SNF's"). Rather, the Company will bill
the SNF's for services provided and the SNF's themselves will bill Medicare.

        Until late 1990,  a large  majority of the  products  and  services  the
Company  provided to residents  of long term care  facilities  involved  enteral
nutrition  therapy.  Beginning in late 1990, the Company began  marketing  other
products to residents of long term care  facilities  in  circumstances  in which
these products are eligible for reimbursement under Medicare and other programs.
Because  of this  shift,  and a  recent  willingness  of  some  long  term  care
facilities  to  permit  residents  to  receive  intravenous   therapies  in  the
facilities (which increases the facilities' revenues),  rather than transferring
the residents to hospitals for these  treatments,  the products and services the
Company provides through its contract services unit now include,  in addition to
enteral  feeding,  parenteral  feeding,  medical/surgical  products,  wound care
products, urological products and other supplies.

        As part of providing its products and services to residents in long term
care facilities,  the Company handles the procedures for obtaining reimbursement
from Medicare and other third party payors for these products and services.  The
Company believes that in a number of instances the Company's ability to manage 
billing of third party payors is a significant  factor in long term care
facilities'  decisions to retain the Company to provide products and services to
their residents.

        The Company's sales  representatives call upon long term care facilities
within their respective geographical territories to review the medical status of
the facilities' residents in order to determine the needs of individuals for the
products  and  services  provided by the  Company.  Since most of the  residents
participate  in the  Medicare  program,  the  representatives  review  insurance
coverage and the  appropriateness  of the products and services  under  Medicare
reimbursement  regulations.   The  sales  representatives  are  responsible  for
processing the paperwork for billing by the central billing department.

        Orders for  products and  services  are  processed  through the customer
service  department at the Company's  corporate  offices in Englewood Cliffs and
shipped  from  the  Company's  Moonachie,  New  Jersey  warehouse.  The  Company
primarily  uses its own trucks for local (New York-New  Jersey)  deliveries  and
common carriers for deliveries outside the local area.

Reimbursement for Services

        The Company is  reimbursed  for its  products  and services by Medicare,
Medicaid,  private payors (private insurance companies,  self-insured employers,
health maintenance  organizations,  other managed care systems and patients) and
other  third  party  sources.  Prior  to  accepting  a  patient,  the  Company's
reimbursement  specialists  determine the availability and amount of third party
coverage and, thereafter,  the Company processes all payment claims on behalf of
the patient.

        Most of the Company's  contract  services  revenues result from Medicare
reimbursement.  The Company has more than fourteen years'  experience in billing
Medicare. It believes this experience provides it with an advantage over some of
its competitors. Medicare provides reimbursement for 80% of the amounts shown on
fee schedules it has developed.  The remaining 20%  co-insurance  portion is not
paid by Medicare,  although in most cases, Medicaid reimburses the remaining 20%
for "medically indigent" patients; in other cases, the Company bills other third
party payors or patients responsible for co-insurance reimbursement. The Company
often has  difficulty  collecting  the 20%  co-insurance  portion of charges for
Medicare-eligible items, particularly when there is no third party reimbursement
and these sums must be collected  directly from residents.  Inability to collect
the 20% co-insurance  portion of bills is the principal reason for the Company's
provision for uncollectible accounts.

        Starting  July 1, 1998  suppliers  will not be  directly  reimbursed  by
Medicare for providing  services to residents in skilled nursing facilities (see
Government Regulation).

        The Company  also bills  private  payors  (primarily  private  insurance
companies,  self-insured employers, health maintenance organizations and managed
care  systems),  which  generally  pay for  services  and  products  based  upon
contracted rates or "reasonable and customary"  charges.  The Company's  billing
specialists  also work  closely  with these  payors to  maximize  reimbursement.
Private payors have been increasingly concerned about cost containment and often
seek to negotiate  lower rates directly with  providers,  including the Company.
While these efforts tend to reduce profit  margins,  the Company has for several
years been able to operate in this environment.

        The  following  table  details  the  sources of  payments to the Company
during the twelve months ended June 30, 1997:


<TABLE>
<CAPTION>



                                             Home             Contract            Total
                                           Infusion           Services          Revenues

        <S>                                   <C>               <C>              <C>
        Medicare............................     4%               87%              25%
        Private Pay.........................    93%               13%              73%
        Medicaid............................     3%               -                 2%
                                               ----              ----             ----
                                               100%              100%             100%
                                               ====              ====             ====
</TABLE>

Sales and Marketing

        The  Company's   principal  sources  of  patient  referrals  are  health
maintenance  organizations,   physicians,  hospital  discharge  planners,  other
hospital  officials,  nursing homes,  insurance companies and other managed care
systems.  The  Company's  products and  services are marketed  through its sales
force and clinicians.  The Company's sales force is responsible for establishing
and maintaining  referral sources. As of June 30, 1997, the sales force included
approximately 13 full time sales employees and approximately 6 sales and service
representatives,  who  report  to  their  respective  regional  managers.  Sales
employees receive a base salary plus commissions based on revenues.  The Company
conducts regular sales training programs,  intended to enable its sales force to
generate  more revenue from current and new sources of patient  referrals and to
assist sales employees in targeting and developing new revenue sources.

        The "Infu-Tech"  trademark is registered and is established in the areas
in which the Company does business.

Suppliers

        The Company  purchases  drugs and other  materials and leases  equipment
from many suppliers.  The Company has not  experienced  difficulty in purchasing
supplies  or leasing  equipment.  The  Company  believes  there are  alternative
sources for  virtually  all the supplies and  equipment it requires,  other than
Ceredase(R) enzyme and Cerezyme(TM), which are only available from one supplier,
Genzyme  Corp.  The Company has a  distribution  agreement  with  Genzyme  which
automatically renews for one year terms unless cancelled at the end of a term on
90 days prior  notice.  The  agreement  may also be terminated at any time on 60
days notice.

Potential Liability and Insurance

        Participants  in the health care  market are  subject to lawsuits  based
upon alleged  negligence or similar legal theories,  many of which involve large
claims and  significant  defense  costs.  The  Company  could be subject to such
suits.  However,  to date the  Company  has not been  subject  to a  significant
lawsuit by a purchaser  of its  products  or  services.  The  Company  maintains
general  liability  insurance,  including  insurance  against  professional  and
products liability, with coverage limits of $10 million. The Company's insurance
policy  provides  coverage  on an  "occurrence"  basis and is  subject to annual
renewal.  A  successful  claim  against the Company in excess of the  applicable
insurance  coverage  could have a material  adverse  effect  upon the  Company's
business and results of operations.  Claims  against the Company,  regardless of
their merit or eventual  outcome,  also may have a material  adverse effect upon
the Company's reputation.  There can be no assurance that the coverage limits of
the Company's  insurance  policies will be adequate.  While the Company has been
able to obtain  liability  insurance in the past, such insurance varies in cost,
is  difficult  to obtain and may not be  available  in the future on  acceptable
terms or at all.

Competition

        The segments of the health care market in which the Company operates are
highly  competitive.  In each of its lines of business  there are relatively few
barriers to entry, a limited number of national providers,  as many of the large
national  providers  have  recently  merged,  and  numerous  regional  and local
providers.  The principal  competitors  for sales to residents in long term care
facilities are local  providers of health care products and the operators of the
facilities themselves.

        The  competitive  factors  most  important  in the  Company's  lines  of
business  are quality of care and service,  on-time  delivery,  reputation  with
referring health care  professionals,  ease of doing business with the provider,
ability to develop and maintain the  confidence of potential  sources of patient
referrals  and price of service.  Some  competitors  in the  Company's  lines of
business have also attempted to enhance sales by entering into joint ventures or
other financial  relationships  with potential  referral  sources.  Increasingly
stringent,  and increasingly  enforced,  laws prohibiting  remuneration  between
health care providers have reduced these  arrangements as a competitive  factor.
The Company  believes that it competes  effectively in each of its service areas
with  respect to all of the above  factors.  Some of the  Company's  current and
potential  competitors have or may obtain  significantly  greater  financial and
marketing  resources  than the  Company.  It is  likely  that the  Company  will
encounter increased  competition in the future,  which could limit the Company's
ability to maintain or increase its market share and could adversely  affect the
Company's  operating  results.  Other types of health care providers,  including
hospitals,  physician  groups and home health  agencies,  have entered,  and may
continue to enter, the Company's lines of business.

Government Regulation

        Health care is an industry subject to extensive  regulation and frequent
regulatory change. Changes in the law or new interpretations of existing law can
have a dramatic effect on permissible  activities,  the relative cost associated
with doing  business and the amount of  reimbursement  by  government  and third
party payors,  such as Medicare and Medicaid.  Charges under government programs
are also  subject to audit.  A reduction  in coverage or payment  rates by third
party payors,  or significant audit  adjustments,  could have a material adverse
effect on the Company's business and results of operations.

        The  Federal  government  and each of the  states in which  the  Company
currently  operates  regulate  some  aspects  of  the  Company's  business.   In
particular,  the  operations  of the Company's  branch  locations are subject to
Federal and state laws. The Company's  operations also are subject to state laws
governing  pharmacies,  nursing services and certain types of home health agency
activities.  Certain of the  Company's  employees  are subject to state laws and
regulations  governing the ethics and professional  practice of people providing
various  therapies,  pharmacy  and  nursing.  Certificates  of need,  permits or
licenses may be required for certain  business  activities and may be restricted
or otherwise difficult to obtain. The Company believes it and its employees have
all  certificates  of need,  permits and  licenses  which are  required  for the
business currently being conducted by the Company.  The failure to obtain, renew
or maintain any of the required regulatory approvals or licenses could adversely
affect the Company's business.

        There are Federal  laws which  generally  prohibit any  remuneration  in
return for the  referral  of Medicare or Medicaid  patients,  and  prohibit  the
referral of any Medicare or Medicaid patient by a health care  practitioner to a
provider with which the practitioner has an ownership or financial interest.  In
addition,  the  Federal  government  and  several  states in which  the  Company
operates  have laws that  prohibit  financial  arrangements,  certain  direct or
indirect payments or fee-splitting  arrangements  between health care providers.
The Company maintains an internal regulatory  compliance review program and uses
in-house  counsel  to  monitor  compliance  with all such laws and  regulations.
Increased  attention  has been paid  recently to  enforcement  of these laws and
regulations.  Possible  sanctions  for  failure  to comply  with  these laws and
regulations  include  exclusion from  government  programs,  loss of license and
civil and criminal penalties.

        The Balanced Budget Act, passed into law in August 1997, will impact the
billing process for the Company's contract services division. Commencing July 1,
1998  suppliers  will not be  directly  reimbursed  by  Medicare  for  providing
services to residents in skilled nursing facilities ("SNF's").  The Act provides
that  Medicare  Part B items like  parenteral  and enteral  nutrition  are to be
provided by the SNF's for residents  whose SNF care is covered by Medicare,  and
further  provides  that payment by Medicare  for Part B items  supplied to SNF's
residents is to be made only to the SNF's.  The Company,  in turn,  will have to
contract  with the SNF's to  provide,  and be paid for,  the  products  services
provided.

Executive Officers of the Company

        The following is a list of executive  officers of the Company as of June
30, 1997,  together with a brief description of the business  experience for the
last five years of the officers who are not  directors.  A brief  description of
the business  experience  of officers who are  directors is included in Item 10,
"Directors".

        Name                          Office                              Age

  Jack Rosen           Chairman of the Board of Directors,                51
                       President, Chief Executive Officer

  Joseph Rosen         Vice President, Assistant Secretary                46
                       and Director

  S. Colin Neill       Vice President, Chief Financial Officer            51

  Michael Elfenbein    Vice President and Chief Operating Officer         52

  Pritpal Virdee       Executive Vice President; President Intrx          38
                       Medical, Inc.

  Benjamin Geizhals    Vice President, Assistant Secretary and            48
                       General Counsel

  Israel Ingberman     Secretary, Director                                51


        S. Colin Neill has been Vice  President and Chief  Financial  Officer of
the  Company  and CHA since July 1996.  Prior to that Mr.  Neill was Acting Vice
President/Finance,  Secretary,  Treasurer and Chief Financial Officer of Pharmos
Corporation, a publicly traded biopharmaceutical company from March 1995 to July
1996. Prior to joining Pharmos, Mr. Neill worked as a financial consultant. From
October 1992 until December 1993, Mr. Neill was Vice President - Finance of BTR,
Inc., a British publicly traded diversified  manufacturing company. From January
1991 to October  1992,  he worked as a financial  consultant.  From 1986 through
January  1991,  Mr. Neill served as Vice  President - Financial  Services of BOC
Group, Inc., a British publicly traded industrial gases and health care company.
He is a certified public accountant and worked at Arthur Andersen & Co. for four
years followed by eight years with Price Waterhouse.

        Michael  Elfenbein  joined the  Company in June 1997 as Vice  President,
Chief Operating Officer. From 1996-1997,  he was Vice Chairman of Hemo Biologics
International,  Inc., a specialty blood products company.  From 1993-1996 he was
President and principal of J.M. Investments, a private medical services and real
estate investment company.  From 1990 he was Senior Executive Vice President and
Chief Operating Officer of Home Intensive Care, Inc. a national infusion therapy
and dialysis services provider, until its acquisition by National Medical Care,
a subsidiary of W.R. Grace in 1993.

        Pritpal Virdee has served as Executive Vice President of the Company and
as President of Intrx Medical, Inc., a subsidiary of the Company, since February
1993.  From 1989 to 1992,  he served as  President  of  Fresenius  Pharma USA, a
leading  medical  products and  pharmaceutical  company.  Prior to that,  he had
worked as General Manager of Fresenius Pharma U.K.

        Benjamin Geizhals has been employed by CHA as Vice President,  Assistant
Secretary and General  Counsel  since 1987. He has served as General  Counsel to
the Company since its  inception.  In June 1994, he became a Vice  President and
Assistant Secretary of the Company.

Employees

        As of June 30, 1997, the Company had  approximately  112  employees.  Of
these employees,  three were in executive  capacities (in addition to executives
of CHA who rendered services to the Company),  approximately 19 were in sales or
service  capacities,   approximately  46  were  in  clinical  or  pharmaceutical
capacities and the remainder were administrative or distribution personnel.  The
Company's  employees  are not  currently  represented  by a labor union or other
labor organization. The Company believes that its employee relations are good.

Item 2.        Properties.

        The Company maintains  corporate offices in Englewood Cliffs, New Jersey
and it leases five branch offices for its branch  operations.  Offices provide a
home  base  for  salespeople,   clinicians  and   administrative  and  technical
personnel,  as well as storage for excess  equipment and supplies.  In addition,
the Company  maintains a central  pharmacy  and a warehouse  in  Moonachie,  New
Jersey and  pharmacies  and ambulatory  infusion  suites in Memphis,  Tennessee,
Boston, Massachusetts,  Philadelphia, Pennsylvania and Fort Lauderdale, Florida.
Lease  payments  for the  corporate  office,  five branch  offices,  the central
pharmacy,  the  Memphis,  Boston,  Philadelphia  and  Fort  Lauderdale,  Florida
pharmacies,  the infusion  suites and the warehouse  total $34,026 per month. In
communities  which  cannot be  serviced  from a  Company  office,  staffing  and
administration is handled by a representative  residing in the area. The Company
believes its facilities are adequate for its current needs.

Item 3.        Legal Proceedings.

        The Company is subject to legal  proceedings  and claims  which arise in
the ordinary course of its business. The Company does not believe any litigation
to which it is a party is  likely to have a  material  adverse  effect  upon its
financial condition or results of operations.

        The  Company  has  fully  paid and  satisfied  its  previously-announced
settlement with the Office of Inspector General of the U.S. Department of Health
and Human Services.

Item 4.        Submission of Matters to a Vote of Security Holders.

        No matters  were  submitted to the vote of security  holders  during the
year ended June 30,  1997,  except a proposal  for the  adoption of the 1996 Key
Employees and Key Personnel Stock Option Plan which proposal was approved at the
Shareholder's meeting on January 15, 1997.


                                            PART II

Item 5. Market for the Registrant's Common Stock and Related Security Matters.

        The high and low last sale prices of the Company  Stock  reported on the
NASDAQ National  Market System with regard to each calendar  quarter during 1995
and 1996 and through June 30, 1997 were as follows:

                                               High                Low

                      1995:
                      First Quarter..........2                     1 5/8
                      Second Quarter.........2 5/16                1 5/16
                      Third Quarter..........4 5/8                 2 1/4
                      Fourth Quarter.........3 1/2                 2 7/8

                      1996:
                      First Quarter..........3 3/4                 3
                      Second Quarter.........5 1/4                 4 1/4
                      Third Quarter..........5 1/4                 3 5/8
                      Fourth Quarter.........4 3/8                 3 3/8

                      1997:
                      First Quarter..........5 3/4                 3 1/2
                      Second Quarter.........4 5/8                 3 1/4


        The Company has not paid any  dividends on its Common Stock since shares
were sold to the  public in  December  1992.  Prior to that,  all the  Company's
available  cash was retained by CHA, which was its sole  stockholder.  From 1989
through 1992,  the Company paid CHA dividends  totaling  $9,866,000,  as well as
management fees totalling $1,258,000 and tax payments totalling $1,555,000.  Any
decision by the  Company's  Board of  Directors  to pay  dividends on its Common
Stock in the  future  will be based  upon the  Company's  earnings,  cash  flow,
capital needs and available funds, and any other factors the Company's directors
deem  relevant.  Because CHA owns 58% of the stock of the  Company,  and all the
Company's  directors are also  directors of CHA, the Company's  directors may be
influenced by CHA's cash needs in deciding  whether the Company  should  declare
dividends.  Under  Delaware law, the Company is only  permitted to pay dividends
out of accumulated surplus or the current or prior year's net profits.

        As of  September  22,  1997,  there  were 54  holders  of  record of the
Company's Common Stock.

Item 6.        Selected Financial Data.

        The following  table sets forth  selected  financial data of the Company
and should be read in conjunction with the consolidated  financial statements as
of June 30, 1997 and 1996, the six months ended June 30, 1995 and the year ended
December 31, 1994 and the related notes, included elsewhere in this Report.

<TABLE>
<CAPTION>

                                Year Ended    Year Ended  Six Months        Year Ended
                                 June 30,      June 30, Ended June 30,     December 31,
                                   1997          1996        1995        1994         1993
                                   ----          ----        ----        ----         ----
                                                   (In thousands, except per share)

<S>                              <C>         <C>          <C>          <C>         <C>      
Revenues ........................$  26,003   $  24,638    $  10,601    $  16,289   $  17,011
                                 -  ------   -  ------    -  ------    -  ------   -  ------
Income (loss) before income taxes
  and cumulative effect of
  accounting change..............    1,615       1,465         (849)      (1,123)        775
Provision (benefit) for income taxes   662         270          --          (220)        310
                                       ---         ---          ---         ----         ---
Income (loss) before cumulative effect
  of accounting change...........      953       1,195         (849)        (903)        465
Cumulative effect of change in
  accounting for income taxes....      --          --           --           --        1,071
                                       ---         ---          ---          ---       -----
Net income (loss)................ $    953   $   1,195    $    (849)   $    (903)  $   1,536
                                       ===   =   =====    =    =====   =    ====   =   =====
Income (loss) per share (1)
  Income (loss) before cumulative
    effect of accounting change..$     .30   $     .38    $    (.27)   $    (.28)  $     .15
Cumulative effect of change in
  accounting for income taxes....      --          --           --           --          .33
                                       ---         ---          ---          ---         ---
Net income (loss)................$        .30$        .38 $    (.27)   $    (.28)  $     .48
                                 =        ====       ==== =    ====    =    ====   =     ===
</TABLE>

<TABLE>
<CAPTION>

                                 June 30,     June 30,     June 30,        December 31,
                                   1997         1996         1995        1994         1993
                                                      Balance Sheet Data
                                                        (In thousands)

<S>                              <C>         <C>          <C>          <C>         <C>      
Accounts receivable .............$   7,302   $   5,669    $   3,608    $   3,552   $   2,507
Total assets.....................   11,618       9,484        7,414        7,586       8,124
Working capital..................    5,044       4,696        3,571        4,454       5,695
Total stockholders' equity.......    6,101       4,976        3,770        4,619       5,595

-------------------------
(1)  Based on 3,192,797,  3,168,037 and 3,160,974 shares outstanding at June 30, 1997, 1996 and 1995, 3,181,509
     shares outstanding in 1994 and 3,200,000 shares outstanding in 1993.
</TABLE>

Item 7.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations.


Results of Operations

Twelve Months Ended June 30, 1997 Compared with Twelve Months Ended June 30,
1996.

     Total revenues  increased by $1,365,000,  or 6% from $24,638,000 in 1996 to
$26,003,000  in  1997,  primarily  due to a  $913,000,  or 4%  increase  in home
infusion  division  revenues.  This  increase is  primarily  attributed  to a 3%
increase in the number of patients serviced, although these patients experienced
shorter terms of therapy and pricing  negotiated with managed care companies was
discounted.

     Costs of  medical  and  nutritional  products  sold to  patients  and other
customers increased by $1,594,000 or 13% from $11,920,000 in 1996 to $13,514,000
in 1997.  As a percentage of total  revenues,  medical and  nutritional  product
costs increased from 48% in 1996 to 52% in 1997. The increase in the nutritional
product  costs  as a  percentage  of  sales  is  partially  attributable  to the
increased pricing pressures from certain vendors.

     Total personnel costs increased by $387,000,  or 6% from $6,818,000 in 1996
to  7,205,000 in 1997,  primarily  attributable  to higher  nursing and pharmacy
costs  incurred to support the 3% increase in home infusion  patients  serviced,
increasing geographical coverage through sales force expansion,  and the opening
of a Florida pharmacy.

     Selling,  general and administrative expenses increased by $709,000, or 26%
from  $2,779,000  in 1996  to  $3,488,000  in  1997.  The  increase  is  largely
attributable to investment  banking  retainer fees in connection with a proposed
acquisition,  engagement of an investor relations firm, costs connected with the
development of a disease  state  management  program and  distribution  cost
increases.  In addition,  the opening of a Florida  pharmacy and start up costs
associated with the Humana Health Plans capitation contract in Illinois added to
the increase in selling, general and administrative expenses.

     Beginning in the quarter  ending March 31, 1997,  the Company  reviewed its
allowance for  uncollectible  accounts in light of the  Company's  changed payor
mix. The Company's  business  focus is on managed care  relationships  which now
account for 73% of its payor mix. The managed care  relationships  are generally
governed by  contracts  which  provide for payment  within  defined  terms.  The
Company's  collection  experience for these  contracts has been good and greatly
improved from the historical  collection experience upon which the allowance for
uncollectible accounts had been established. As a result of this review, a total
of  $1,366,000  before  taxes was  released  from the reserve for  uncollectible
accounts during the year, resulting in a credit to the provision for the year of
$196,000  compared to a charge of  $1,269,000  in the prior year.  Based on this
analysis the Company  expects a lower provision rate to be charged against sales
going forward.

     Management fees to Continental Health Affiliates, Inc. and subsidiaries
("CHA") of $416,000 in 1997 and $394,000 in 1996 were 1.6% of revenues in both
periods.

     Depreciation  and amortization  expense  increased from $108,000 in 1996 to
$139,000 in 1997 due to property and equipment additions involving infusion pump
purchases, as well as amortization recognized during the current year.


     Other income, net of $178,000 in 1997 and $115,000 in 1996 consisted of and
$72,000 in 1997 and  $126,000  of  amortization  in 1996 of a  $628,000  payment
received by the Company in 1992 as consideration for the Company's releasing the
buyer of CHA's  former  Home  Nursing  Division  from an  agreement  not to sell
infusion  therapy services and CHA's agreeing not to provide nursing services in
California, Arizona or Tennessee for a period of five years. The amortization of
this  non-compete  agreement  was  completed in the period ended March 31, 1997.
Accounts  payable of $126,000 was also  written off during the year  relating to
prior periods. Interest expense offsets the other income in both years.

The net income in 1997 was $953,000,  or $.30 per share compared to a net income
in 1996 of  $1,195,000,  or $.38 per share.  Income  before taxes for the twelve
months  ending  June 30, 1997 was  $1,615,000  compared  to  $1,465,000  for the
comparable  prior  period.  As the  Company  utilized  its  net  operating  loss
carryforwards  in the prior year,  a full tax charge in the current year results
in net income of $953,000  compared to $1,195,000 for the comparable period last
year.

Twelve Months Ended June 30, 1996 Compared  with  Unaudited  Twelve Months Ended
June 30, 1995.

     Total revenues increased by $4,784,000, or 24%, from $19,854,000 in 1995 to
$24,638,000  in 1996,  primarily due to a $5,482,000,  or 42%,  increase in home
infusion  division  revenues which was caused by a 38% increase in the number of
patients serviced and an improved therapy pricing mix.

     Costs of  medical  and  nutritional  products  sold to  patients  and other
customers  increased  by  $2,300,000,   or  24%,  from  $9,620,000  in  1995  to
$11,920,000 in 1996. As a percentage of total revenues,  medical and nutritional
product costs were 48% in both years.

     Total personnel costs decreased by $172,000, or 2%, from $6,990,000 in 1995
to  $6,818,000  in  1996,  primarily  attributed  to  reductions  in  sales  and
administrative  personnel.  These  decreases  were  partially  offset  by higher
nursing and pharmacy costs incurred to support the 38% increase in home infusion
patients serviced.

     Selling, general and administrative expenses decreased by $293,000, or 10%,
from  $3,072,000  in 1995 to  $2,779,000  in  1996,  primarily  as a  result  of
reductions  in  professional  fees  and  selling-related  travel,  which  offset
increases  in  distribution  costs  incurred to support the 38% increase in home
infusion patients serviced.

     The provision for uncollectible accounts was 5% of revenues in both years.

     Management fees to Continental  Health  Affiliates,  Inc. and  subsidiaries
("CHA") of $394,000  in 1996 and  $318,000 in 1995 were 1.6% of revenues in both
years.

     Depreciation  expense  increased  from  $98,000 in 1995 to $108,000  due to
property and equipment additions partially offset by retirements.

     Other income of $115,000 in 1996 and $140,000 in 1995 consisted of $126,000
of amortization in both years of a $628,000  payment  received by the Company in
1992 as consideration for the Company's releasing the buyer of CHA's former Home
Nursing  Division from an agreement not to sell  infusion  therapy  services and
CHA's  agreeing  not to  provide  nursing  services  in  California,  Arizona or
Tennessee  for a period of five  years.  Other  income was  reduced by  interest
expense of $11,000 in 1996 and increased net interest income of $15,000 in 1995.

     The  provision  for income  taxes in 1995 was an offset to a prior  benefit
taken in the  beginning  of the year.  The  provision  for income  taxes in 1996
reflects use of a portion of the Company's net operating loss carryforwards.

     The net income in 1996 was $1,195,000,  or $.38 per share,  compared with a
net loss in 1995 of $1,296,000, or $.41 per share. The improvement in net income
was primarily attributable to the 24% increase in revenues.

Six Months Ended June 30, 1995 Compared with Unaudited Six Months Ended June 30,
1994

     Total revenues during the first six months of 1995 increased by $3,565,000,
or 51%,  from  $7,036,000  in 1994 to  $10,601,000  in 1995,  primarily due to a
$3,800,000,  or 110%, increase in home infusion division revenues. This increase
is partially  attributed  to a 75% increase in the number of patients  serviced.
Most of the additional home infusion  patients were obtained  through  marketing
efforts directed at managed care companies. These patients are normally serviced
under  agreements with significant  price discounts or under other  arrangements
which  substantially  reduce prices.  The increase in home infusion revenues was
also  affected by the Company's  beginning to provide in early 1994  Ceredase(R)
enzyme and  Cerezyme(TM)  infusion  therapy  ("Ceredase(R)")  to  patients  with
Gaucher's  disease.  Sales of  Ceredase(R)  in the 1995 period were  $1,945,000,
compared  to $175,000  in the same  period of 1994.  Ceredase(R)  is a very high
priced drug therapy  (approximately  $20,000 per month per patient),  but due to
its high product cost per revenue dollar,  it has a very low gross profit margin
percentage.

     Costs of  medical  and  nutritional  products  sold to  patients  and other
customers increased by $2,548,000, or 84%, from $3,018,000 in 1994 to $5,566,000
in 1995.  As a percentage of total  revenues,  medical and  nutritional  product
costs  increased  from 43% in 1994 to 53% in 1995.  The  increase  is  primarily
attributed  to the  lower  home  infusion  pricing  and  the  Ceredase(R)  sales
discussed above.

     Total  personnel  costs  increased by $722,000,  or 25%, from $2,862,000 in
1994 to $3,584,000 in 1995,  primarily due to higher  nursing costs  incurred to
support the 75% increase in home infusion patients serviced and pharmacy payroll
costs increased due to new pharmacy operations and the increase in home infusion
patients serviced.

     Selling,  general and administrative  expenses increased by $74,000, or 5%,
from  $1,392,000  in  1994  to  $1,466,000  in  1995,  primarily  due to  higher
distribution  costs  incurred  to  support  the 75%  increase  in home  infusion
patients serviced.

     The provision for uncollectible  accounts was 6% of revenues in 1995 and 7%
of revenues in 1994.

     Management  fees to CHA of $170,000 in 1995 and  $113,000 in 1994 were 1.6%
of revenues in both years.

     Depreciation  expense increased from $26,000 in 1994 to $66,000 in 1995 due
to property and equipment additions.

     Other income of $66,000 in 1995 and $88,000 in 1994 consisted in both years
of $63,000 of amortization of a $628,000 payment received by the Company in 1992
as  consideration  for the  Company's  releasing  the buyer of CHA's former Home
Nursing  Division from an agreement not to sell  infusion  therapy  services and
CHA's  agreeing  not to  provide  nursing  services  in  California,  Arizona or
Tennessee for a period of five years,  as well as net interest  income of $3,000
in 1995 and $25,000 in 1994.

     The  benefit  for income  taxes in 1994 was 41% of the loss  before  income
taxes. No tax benefit was recorded in 1995 related to 1995 operating  losses due
to the uncertainty of recognizing the benefit of these operating  losses. In the
opinion of management,  the Company  anticipates taxable income in the future to
the extent  necessary to recover the  deferred  tax assets  recorded at June 30,
1995.

     The net loss in the six months  ended June 30, 1995 was  $849,000,  or $.27
per share, compared to the net loss in the first six months of 1994 of $456,000,
or $.14 per share.  Even though  revenues  increased by 51% in 1995  compared to
1994, the net loss  increased,  primarily due to the 84% increase in medical and
nutritional  product costs and the 25% increase in personnel costs. In addition,
1994 included a $316,000 benefit for income taxes.

Liquidity and Capital Resources

     As of June 30, 1997, the Company had total assets of $11.6 million, working
capital  of $5.0  million  and a net  worth  of $6.1  million.  Its  liabilities
consisted almost entirely of accounts  payable and other operating  obligations.
The Company had no borrowings and its primary capital requirements have been for
investment in working capital, principally accounts receivable and inventories.

     At June 30, 1997, the balance in net accounts  receivable for Infu-Tech was
31%  higher  than the  balance  at June  30,  1996.  Net  third  party  accounts
receivable increased by $1,444,000 during the year, mostly due to a reduction of
the allowance account. Infu-Tech's net accounts receivable has increased from 84
days sales at June 30, 1996 to 102 days sales at June 30, 1997  largely  because
of the  reduction  in the  allowance  for  uncollectible  accounts.  The  DSO is
calculated on net accounts  receivable.  While Medicare  payments continue to be
slow due to changes in reimbursement  policies, and while managed care companies
have  experienced  delays in processing  payments due to higher volume of claims
and/or systems conversions, the Company's collection rates have been strong.

     Among the nursing  homes with which the  Company did  business in 1997 were
seven  facilities  which were owned or managed by CHA. Through June 30, 1997 the
Company's  sales from those nursing homes totaled  $564,000 for the twelve month
period.  At June 30, 1997,  the  company's  net accounts  receivable  from those
nursing homes totaled $1,214,000.  During the twelve months ended June 30, 1997,
the  Company  realized  revenues  of  $428,000  or 7.1% of the  Company's  total
contract services revenues,  from the sale of products and services to residents
of those nursing homes.

     Since the Company has no borrowings,  management  believes that the Company
is  in  a  favorable  position  to  secure  financing,  if  needed.  Based  upon
preliminary  informal  discussions with potential lenders,  the Company believes
that  it  would  be  able  to  secure  adequate  financing  to  cover  its  cash
requirements for the foreseeable future.

Recently Issued Accounting Standards

     In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, Earnings Per Share ("EPS"),  which is
effective as of December  31,  1997.  This  standard  changes the way  companies
compute EPS to require all companies to show "basic" and  "dilutive"  EPS and is
to be retroactively applied,  including each 1997 interim quarter. The statement
is not expected to have a material effect on the calculation of EPS.

     In July 1996,  the Emerging  Issues Task Force of the Financial  Accounting
Standards  Board  reached a consensus on Issue 96-14,  Accounting  for the Costs
Associated with Modifying  Computer  Software for the year 2000,  which provides
that costs  associated  with  modifying  computer  software for the year 2000 be
expensed as  incurred.  The  Company is  assessing  the extent of the  necessary
modifications to its computer software.

Item 8.    Consolidated Financial Statements and Supplementary Data.

     The consolidated  financial  statements and supplementary  data required by
this item appear beginning at page F-1.


Item 9.Changes in and Disagreements with Accountants on Accounting and Financial
       Disclosures

     None.

                                           PART III


     Part III Items 10  through 13 to be filed by  October  29,  1997 as part of
definitive proxy statement.


                                            PART IV


Item 14.    Exhibits, Financial Statements, Schedule, and Reports on Form 8-K.

(a)  Documents filed as part of this Report.

     1.  Financial Statements

         Listed on Index to Consolidated Financial Statements and Financial
         Statement Schedule.

     2.  Financial Statement Schedules

         Listed on Index to Consolidated Financial Statements and Financial
         Statement Schedule.

     3.  Exhibits

         The following  exhibits are filed with this Report or  incorporated  by
reference:

         3(a)  Certificate of Incorporation (1)
         3(b) Certificate of Amendment of Certificate of Incorporation  (1) 3(c)
         By-laws (1) 4(a) Specimen of Common Stock  Certificate (2) 4(b) Form of
         Representative's  Warrant  (1)  10(a)  Joint  Venture  Agreement  dated
         January 1992 between Medline Industries, Inc. and Intrx
               Medical, Inc. (1)
         10(b) Management and Non-Competition Agreement between Infu-Tech, Inc.
               and CHA. (1)
         10(c) Infu-Tech 1992 Stock Option Plan. (1)
         10(d) Distribution Agreement between Infu-Tech, Inc. and Genzyme
               Corporation dated November
               11, 1994. (3)
         10(e) Infu-Tech 1996 Key Employees and Key Personnel Stock Option Plan.
         21    List of Subsidiaries.


(1)  Incorporated by reference to Registration Statement File No. 33-50122.
(2)  Incorporated by reference to Report on Form 10-K for the year ended
     December 31, 1992.
(3)  Incorporated by reference to Report on Form 10-K for the year ended
     December 31, 1994.

(b)  Reports on Form 8-K filed during the six months ended June 30, 1995: None.

(c)  The exhibits to this Report are listed in Item 14(a)(3).

(d)  The  financial  statement  schedule  required  by  Regulation  S-K which is
     excluded  from the Annual Report to  Stockholders  by Rule  14a-3(b)(1)  is
     listed in Item 14(a)(2).

<PAGE>


                                        Infu-Tech Inc.
                        Index to Consolidated Financial Statements and
                                 Financial Statement Schedule



1.   Consolidated Financial Statements:

     Independent Auditors' Report

     Balance Sheets
         June 30, 1997 and 1996

     Statements of Operations:

         Years Ended June 30, 1997, 1996 and Six Month Period Ended
           June 30, 1995 and Year Ended December 31, 1994

         Years Ended June 30, 1997, 1996 and Unaudited 1995

     Statements of Stockholders' Equity:
         Years Ended June 30, 1997, 1996 and Six Month Period Ended
           June 30, 1995 and Year Ended December 31, 1994

     Statements of Cash Flows:
         Years Ended June 30, 1997, 1996 and Six Months En
           June 30, 1995 and Year Ended December 31, 1994

     Notes to Consolidated Financial Statements

2.   Financial Statement Schedule:

     Valuation and Qualifying Accounts


Other  schedules are omitted  because of the absence of  conditions  under which
they  are  required  or  because  the  required  information  is  given  in  the
consolidated financial statements or notes thereto.







                                 Independent Auditors' Report




The Board of Directors and Stockholders
Infu-Tech, Inc.


We have audited the  consolidated  financial  statements of Infu-Tech,  Inc. and
subsidiaries as listed in the accompanying  index. In connection with our audits
of  consolidated  financial  statements,  we also  have  audited  the  financial
statement  schedule  as listed in the  accompanying  index.  These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements and financial statement schedule based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of Infu-Tech,  Inc. and
subsidiaries  as of June 30, 1997 and 1996 and the  results of their  operations
and their cash flows for the years ended June 30, 1997 and 1996,  the  six-month
period ended June 30, 1995 and the year ended  December 31, 1994 in  conformity
with generally accepted accounting principles. Also, in our opinion, the related
financial  statement  schedule,   when  considered  in  relation  to  the  basic
consolidated  financial  statements taken as a whole,  presents  fairly,  in all
material respects, the information set forth therein.



September 26, 1997
New York, New York



<PAGE>
<TABLE>
<CAPTION>


                                        INFU-TECH, INC.
                                  Consolidated Balance Sheets
                                    (Dollars in thousands)


                                                                     Years Ended June 30,
                                                                1997             1996
                                                                ----             ----
                        ASSETS
<S>                                                         <C>               <C>        
Cash and cash equivalents...................................$       512       $       691
Accounts receivable, net of allowances for uncollectible
     accounts of $1,995 and $2,456..........................      6,088             4,644
Accounts receivable from affiliates ........................      1,214             1,025
Inventories.................................................      1,654             1,646
Deferred income taxes.......................................        702               822
Prepaid expenses and other current assets...................        365               205
                                                                    ---               ---
         Total current assets...............................     10,535             9,033
Property and equipment, at cost, net of accumulated
     depreciation of $450 and $320..........................        244               307
Deferred income taxes.......................................          0                52
Goodwill, net...............................................        139             - 0 -
Other assets................................................        700                92
                                                                    ---                --
         Total assets.......................................$    11,618       $     9,484
                                                            =    ======       =     =====

       LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable............................................$     4,288       $     2,779
Accrued payroll and related expenses........................        499               403
Income taxes payable........................................        449                75
Other current liabilities...................................        255             1,080
                                                                    ---             -----
         Total current liabilities..........................      5,491             4,337

Capital lease obligation....................................         26                99
Deferred income.............................................      - 0 -                72
                                                                  -----                --
         Total liabilities..................................      5,517             4,508

Stockholders' Equity:
     Common stock, $.01 par value; 5,000,000 shares authorized;
         3,192,797 issued...................................         32                32
     Additional paid-in capital.............................      3,100             2,928
     Retained earnings......................................      3,042             2,089
     Treasury stock, at cost; 39,300 shares.................        (73)              (73)
                                                                    ---               ---
         Total stockholders' equity.........................      6,101             4,976
                                                                  -----             -----

Commitments and Contingencies

     Total liabilities and stockholders' equity.............$    11,618       $     9,484
                                                            =    ======       =     =====


                 See accompanying notes to consolidated financial statements.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>


                                        INFU-TECH, INC.
                             Consolidated Statements of Operations
                                    (Dollars in thousands)


                                                                      Six Month
                                                        Years Ended Period Ended  Year Ended
                                             June 30,      June 30,   June 30,    December 31,
                                               1997          1996      1995          1994

<S>                                         <C>           <C>          <C>         <C>        
Revenues....................................$   26,003    $  24,638    $  10,601   $  16,289
                                            -   ------    ---------    ---------   ------
Costs and Expenses:
     Medical and nutritional product........    13,514       11,920        5,566       7,072
     Personnel..............................     7,205        6,818        3,584       6,268
     Selling, general and administrative....     3,488        2,779        1,466       2,998
     Provision for uncollectible accounts...      (196)       1,269          664         917
     Management fees to majority shareholder       416          394          170         261
     Depreciation and amortization..........       139          108           66          58
     Other income, net                            (178)        (115)         (66)       (162)
                                             ---------     --------     --------    --------
                                                24,388       23,173       11,450      17,412
                                             ---------     --------     --------    --------
Income (loss) before income taxes...........     1,615        1,465         (849)     (1,123)

Provision (benefit) for income taxes........       662          270          --         (220)
                                             ---------     --------     --------    -------- 


     Net income (loss)...................... $     953     $  1,195     $  (849)    $ (903)
                                             =========     ========     ========    =======

Earnings (loss) per share..................  $    0.30     $   0.38     $ (0.27)      (0.28)
                                             ==========    ========     =======     ========   

Weighted average number of shares........... 3,192,797    3,168,037    3,160,974   3,181,509





                 See accompanying notes to consolidated financial statements.
</TABLE>




<PAGE>
<TABLE>
<CAPTION>


                                        INFU-TECH, INC.
                             Consolidated Statements of Operations
                                    (Dollars in thousands)


                                                             Years Ended June 30,
                                                     1997             1996              1995
                                                     ----             ----              ----
                                                                                    (Unaudited)

<S>                                              <C>               <C>              <C>       
Revenues.........................................  $  26,003        $   24,638        $ 19,854
                                                   ---------         ---------        --------

Costs and Expenses:
     Medical and nutritional product.............     13,514            11,920           9,620
     Personnel...................................      7,205             6,818           6,990
     Selling, general and administrative.........      3,488             2,779           3,072
     Provision for uncollectible accounts........       (196)            1,269           1,096
     Management fees to majority shareholder.....        416               394             318
     Depreciation and amortization...............        139               108              98
     Other income, net...........................       (178)             (115)           (140)
                                                    --------         ---------         -------
                                                      24,388            23,173          21,054
                                                    --------         ---------         -------
Income before income taxes.......................      1,615             1,465          (1,200)

Provision for income taxes.......................        662               270              96
                                                    --------         ---------         -------

         Net income (loss).......................   $   953          $   1,195          $ (1,296)
                                                        ===          =========          ========

Income (loss) per share..........................   $   0.30         $    0.38          $   (0.41)
                                                    ========         =========          =========
Weighted average number of shares................  3,192,797         3,168,037          3,162,783






                  See accompanying notes to consolidated financial statements.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                         INFU-TECH, INC.
                         Consolidated Statements of Stockholders' Equity
                    Years Ended June 30, 1997, 1996 and the Six Month Period
                      ended June 30, 1995 and Year ended December 31, 1994
                                     (Dollars in thousands)

                                               Additional                               Total
                                   Common        Paid-in   Retained     Treasury    Stockholders'
                                    Stock        Capital   Earnings       Stock        Equity

<S>                                 <C>         <C>          <C>           <C>        <C>  
Balance, January 1, 1994.......    $    32   $   2,917    $   2,646        $ --     $  5,595

Net loss ......................        --          --          (903)         --         (903)

Purchase of 39,300 shares of
     treasury stock............        --          --           --           (73)        (73)
                                       ---         ---          ---          ---         ---

Balance, December 31, 1994.....    $   32     $ 2,917     $   1,743        $ (73)    $ 4,619

Net loss ......................        --          --          (849)         --         (849)
                                       ---         ---         ----          ---        ----

Balance, June 30, 1995.........    $    32    $  2,917    $     894        $ (73)    $ 3,770

Net income ....................        --          --         1,195          --        1,195

Exercise of options............        --           11          --           --           11
                                       ---          --          ---          ---          --

Balance, June 30, 1996.........    $    32    $  2,928     $  2,089        $ (73)    $ 4,976

Net income.....................        --          --           953          --          953

Warrants issued................        --           44          --           --           44

Stock issued...................        --          100          --           --          100

Exercise of options............        --           28          --           --           28
                                       ---          --          ---          ---          --

Balance, June 30, 1997.........    $    32    $  3,100      $ 3,042         $(73)    $ 6,101
                                        ==       =====        =====          ===       =====





                  See accompanying notes to consolidated financial statements.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                         INFU-TECH, INC.
                              Consolidated Statements of Cash Flows
                                     (Dollars in thousands)
                                                                          Six Month
                                              Year End      Year End    Period Ended     Year End
                                            June 30, 1997 June 30, 1996 June 30, 1995December 31, 1994
<S>                                         <C>           <C>            <C>            <C>             
Operating activities:
 Net income (loss)..........................$      953    $     1,195    $      (849)   $      (903)

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

     Amortization expense...................         7            --             --             --
     Depreciation expense...................       132            108             66             58
     Warrants issued........................        44            --             --             --
     Provision for uncollectible accounts...      (196)         1,269            664            917
     Amortization of deferred income........       (72)          (126)           (63)          (126)
     Provision for deferred income taxes....       172            195            --             --

     Increase (decrease) from changes in:

     Accounts receivable....................    (1,104)        (2,835)          (574)        (1,735)
     Accounts receivable from affiliates ...      (189)          (495)          (146)          (227)
     Inventories............................        (8)          (192)          (279)          (115)
     Prepaid expenses and other current assets    (160)           307            (53)          (330)
     Other assets...........................      (608)           (40)           --              (9)
     Taxes payable..........................       374            --             --             --
     Accounts payable.......................     1,509            437            660            613
     Accrued payroll and related............        96             (4)             5              6
     Other current liabilities..............      (802)           404             42            (96)
                                                  ----            ---             --            ---

 Net cash provided by (used in) operating
     activities.............................       148            223           (527)        (1,947)
                                                   ---            ---           ----         ------

Investing activities:

 Expenditures for property and equipment....       (69)           (19)           (14)           (98)
 Acquisition of Universal Home Infusion.....      (190)           --             --             --
                                                  ----            ---            ---            --

 Net cash used in investing activities......      (259)           (19)           (14)           (98)

Financing activities:

 Purchase of treasury stock.................       --             --              -             (73)
 Payment of capital lease obligation........       (96)           (70)            (9)            (1)
 Exercise of options........................        28             11            --             --
                                                    --             --            ---            --

     Net cash used in financing activities..       (68)           (59)            (9)           (74)
                                                   ---            ---             --            ---

Net increase (decrease) in cash and cash
 equivalents................................      (179)           145           (550)        (2,119)

Cash and cash equivalents, beginning of
 the period.................................       691            546          1,096          3,215
                                                   ---            ---          -----          -----

Cash and cash equivalents, end of the period$      512    $       691    $       546    $     1,096

Supplemental disclosures of cash flow data:

 Income taxes paid..........................$      110    $         7    $         3    $        55
                                            =      ===    =         =    =         =    =        ==

Non cash investing and financing activity:

 Property and equipment obtained under
     capital lease obligation...............$      --     $       223    $       --     $       --

Stock issued................................$      100    $       --     $       --     $       --
                                            =      ===    =       ===    =       ===    =       ==



                    See accompanying notes to consolidated financial statements.

</TABLE>

                                INFU-TECH, INC.
       Notes to Consolidated Financial Statements (Dollars in thousands)
               June 30, 1997 and 1996, 1995 and December 31, 1994


1.   The Company

     Infu-Tech,  Inc.  (the  "Company")  is a provider of clinical  services and
     products to the  non-hospital  based  health care market.  This  includes a
     broad range of complete  home infusion  therapy  services  including  total
     parenteral  nutrition  therapy,  antibiotic  therapy and other therapies to
     patients at home and enteral  nutrition  infusion therapy and other medical
     services and  products  provided  primarily to residents in long-term  care
     facilities. The Company is 58% owned by Continental Health Affiliates, Inc.
     ("CHA"), a public company.
     The minority 42% of the Company's equity is publicly traded.

     The Company is subject to certain  risks and  uncertainties  as a result of
     changes that could occur in the healthcare industry, including Medicare and
     Medicaid reimbursement rates.

2.   Significant Accounting Policies

     Basis of Consolidation
     The   accompanying   financial   statements   include   all  wholly   owned
     subsidiaries. Intercompany transactions are eliminated in consolidation.

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

     Cash and Cash Equivalents
     The Company  classifies all highly liquid  investments  with  maturities of
     three months or less when purchased as cash equivalents.

     Revenue Recognition
     Revenue is  reported  at the net  amounts  estimated  to be  realized  from
     patients,  third party payors and others for services rendered. The Company
     receives  payments for  services to eligible  patients  under  Medicare and
     various state Medicaid programs.  Approximately 12% (1997), 25% (1996), 32%
     (June 1995) and 44% (1994) of total revenues were derived from such medical
     assistance   programs.   Revenues  under  these  programs  are  based  upon
     government  approved  rates which are  subject to audit.  In the opinion of
     management, retroactive adjustments, if any, would not be material to the 
     Company's financial position or results of operations.

     Inventories
     Inventories,  which consist of medical and nutritional products, are valued
     at the lower of cost (first-in, first-out method) or market.

     Property and Equipment
     Property and equipment,  which consists  primarily of equipment,  furniture
     and  fixtures,  and  leasehold  improvements,   is  depreciated  using  the
     straight-line  method at rates that  charge the cost of the assets over the
     periods of expected  use. The range of useful  lives is primarily  three to
     five years.

     Income Taxes
     Income taxes are provided for on a liability  method  whereby  deferred tax
     assets are recognized for deductible  temporary  differences  and operating
     loss carry forwards and deferred tax liabilities are recognized for taxable
     temporary  differences.  Temporary  differences are the differences between
     the  reported  amounts  of assets  and  liabilities  and  their tax  bases.
     Deferred  tax assets are  reduced by a  valuation  allowance  when,  in the
     opinion of management,  it is more likely than not that some portion or all
     of the deferred  tax assets will not be  realized.  Deferred tax assets and
     liabilities  are  adjusted for the effects of changes in tax laws and rates
     on the date of enactment.

     Earnings Per Share
     Earnings per share is computed  based upon the weighted  average  number of
     common shares and common share  equivalents  outstanding  during each year.
     Common share  equivalents  reflect the dilutive effect of stock options and
     warrants.Earnings per common share assuming dilution were not materially 
     different from the primary accounts.

     Employee Stock Option
     The Company  accounts  for its stock option  plans in  accordance  with the
     provisions of the  accounting  Pirnciples  Boards  Opinion No. 25 (APB 25),
     "Accounting  for Stock  Issued to  Employees."  Effective  July 1, 1996 the
     company adopted the Financial  Accounting  Standards  Board's  Statement of
     Financial  Accounting  Standards  No. 123 (SFAS13),  "Accounting  for Stock
     Based  Compensation."  accordingly,  the company has elected to provide pro
     forma disclosures as required by SFAS 123.

     Treasury Stock
     Shares of common stock held in treasury are accounted for at par value with
     any difference  between cost and par included in paid-in  capital in excess
     of par value.

     Reclassifications
     Certain  amounts  in  the  prior  years  financial   statements  have  been
     reclassified to conform to the 1997 presentation.

3.   Deferred Income

     In  February  1992,  the  Company  received  $628 in  consideration  of its
     agreement not to compete with Hospital Staffing Services,  Inc. ("HSSI") in
     providing  nursing  services in  California,  Arizona and  Tennessee  for a
     period of five years and the  termination  of a  non-competition  provision
     which had barred HSSI from providing  infusion therapy  services.  The $628
     was recorded as deferred income and was amortized to other income over five
     years.

4.   Stockholders' Equity

     On December 31, 1992, the Company  completed an initial public  offering of
     its common stock. The Company sold 600,000 newly issued shares and received
     net proceeds of $2,923.  The excess of net proceeds  received  over the par
     value of the  newly  issued  shares  was  credited  to  additional  paid-in
     capital.  CHA,  which  owned 100% of the  outstanding  common  stock of the
     Company  prior to the  offering,  sold  730,000  shares  which  reduced its
     ownership  of the Company to 59%.  In  connection  with the initial  public
     offering,  the  representative  of the  underwriters was issued warrants to
     purchase up to 60,000 shares of the  Company's  common stock at 125% of the
     initial public offering price, for a period of five years.

     In June 1994, the Board of Directors  authorized the Company to repurchase
     up to 200,000 shares of its common stock in the open market.  Through June
     30,  1997,  the Company had  purchased  39,300 of its common  shares at an
     aggregate cost of $73.

     During the year,  125,000  warrants were issued to non exclusive  finanical
     consultants to the Company. The cost of the warrants has been claculated at
     $44 and charged to expense.  100,000 of the warrants are two year warrants,
     with 33,334  share at our  exercise  price of $3.50,  33,333  shares at our
     exercise  price of $4.50,  and 33,333  shares  with our  exercise  price of
     $5.00.  The  remaining  25,000 two year  warrants  have our exercise  price
     $6.96.

     In connection with the acquisition of Universal Home Infusion,  the company
     issued 24,000 shares.

     In July 1992,  the  Company  adopted a stock  option  plan (the  "Infu-Tech
     Plan") under which it is  authorized  to grant stock  options to designated
     employees, officers and directors of the Company. The Plan authorized grant
     of stock  options  up to a maximum of 150,000  shares of common  stock.  In
     1994,  the maximum number of shares which may be granted under the Plan was
     increased to 300,000 shares of common stock.  Options may not be granted at
     a price  that is less  than  100% of fair  market  value on the date of the
     grant  (110%  of  fair  market  value  for  persons  owning  10% or more of
     Infu-Tech  common stock).  Options  become  exercisable 12 months after the
     date of the grant  and are  exercisable  until  ten years  from the date of
     grant.

     In  January  1997,  the  Company  adopted  the 1996 Key  Employees  and Key
     Personnel  Stock  Option  Plan  which  replaced  the  1992  Plan.  The Plan
     authorized  500,000 shares and the conditions are  essentially  the same as
     the 1992 Plan.

     Stock option  transactions  for the years ended June 30, 1997 and 1996, six
     months  ended June 30,  1995 and of the year ended  December  31,  1994 are
     summarized as follows:
<TABLE>
<CAPTION>


                                                                             Weighted average
                                                            Number             Option Price
                                                            of shares    Per Share

               <S>                                            <C>                 <C> 
               Outstanding, December 31, 1993...............  122,200              $5.92
               Granted .....................................   49,750              $1.89
               Cancelled....................................   (7,200)             $3.89
               Exercised ...................................     (100)             $1.00
                                                            ---------
               Outstanding, December 31, 1994                 164,650              $4.79

               Granted .....................................   22,000              $1.71
               Cancelled....................................   (8,400)             $1.75
               Exercised....................................       -               $0.00
                                                                   --
               Outstanding, June 30, 1995...................  178,250              $4.57

               Granted .....................................   60,100              $2.60
               Cancelled....................................  (30,050)             $2.64
               Exercised....................................  (12,750)             $1.21
                                                              -------
               Outstanding, June 30, 1996...................  208,300              $4.37

               Granted......................................  336,242              $4.16
               Cancelled....................................  (52,150)             $4.25
               Exercised....................................       -               $0.00
                                                                   --
               Outstanding, June 30, 1997...................  492,392              $4.24
                                                              =======

     Options to purchase  362,656  shares were  available  for grant at June 30,
     1997 under the 1996 Plan.

</TABLE>

      The following table summarizes information about stock options outstanding
at June 30, 1997:
<TABLE>
<CAPTION>

                           Number         Weighted       Weighted      Number         Weighted
          Range of       Outstanding  Average Remaining   Average  Exercisable at      Average
       Exercise Prices   at 6/30/97   Contractual LifeExercise Price   6/30/97     Exercise Price
                                           (Years)  
        <S>                <C>                 <C>          <C>        <C>               <C>  
        $1.00 - $2.25        41,700             7.9          $1.96      41,700            $1.96
        $2.875 - $4.19      158,242             9.2          $3.86      86,500            $5.10
             $4.25          200,000             9.4          $4.25     200,000            $4.25
        $4.44 - $6.13        92,450             5.8          $5.89      92,450            $5.89
                             ------             ---          -----      ------            -----
                            492,392             8.5          $4.24     420,650            $4.96
                            =======             ===          =====     =======            =====
</TABLE>


     The Company has computed,  pro forma disclosure purposes,  the value of all
     options  granted under the stock option plan to be $3.41 and $2.10 for 1997
     and 1996. The computations  were made using the CPA model, as prescribed by
     SFAS No. 123, with the following weighted average assumptions for grants in
     1997 and 1996:

                                                       1997         1996
                                                       ----         ----

             Risk-free interest rate.................  4.9%         5.1%
             Expected dividend yield.................   0%           0%
             Expected life term until exercise (years)  8.5          5.4
             Expected volatility.....................  68.61%      84.68%

     If the Company had accounted  for these plans in  accordance  with SFAS No.
     123, the Company's net income and net income per share would have decreased
     as reflected in the following pro forma amounts:

                                           Year Ended June 30,
                                          1997           1996
                                          ----           ----

           Net income:
               As reported............$      953    $     1,195
               Pro forma..............       277          1,121

           Net income per share:
               As reported............$      .30    $       .38
               Pro forma..............       .09            .35

     The pro forma  effects on net income  may not be  representative  of future
     years since  compensation  costs are  primarily  attributed  to the year of
     grant as vesting is within one year.
 
 
5.    Commitments and Contingencies

      Operating Lease Commitments

      The Company is obligated under various operating leases for facilities and
      equipment  with initial terms  expiring at various dates through 2001. The
      leases  generally  require the Company to pay all costs of maintaining the
      leased properties.

      The  following  is a schedule of future  minimum  annual  rental  payments
      required under operating leases as of June 30, 1997:

        Year ending
           June 30,               Facilities      Equipment         Total

        1998   .....................     375              9            384
        1999   .....................     208              6            214
        2000   .....................      45              5             50
        2001   .....................      24              1             25
        2002   .....................     --             --             --
                                         ---        -------        ------
               .....................$    652         $   21          $ 673
                                     =   ===          =====           ====

       Rent expense was $550, $441, $201, and $385 in 1997, 1996, June 1995 and
       1994, respectively.

      Capital Lease Obligation
      The Company has entered  into a capital  lease for  infusion  equipment at
      implicit  interest  rates ranging  between 9 3/4% and 18 1/2%. At June 30,
      1997,  the Company  had a capital  lease  obligation  of $131 of which the
      current portion of $105 was included in other current liabilities.

      Future  minimum  lease  payments due under these  obligations  are for the
      years ending June 30, are $115 (1998) and $28 (1999).

      Employment Commitments
      The Company  extended an  employment  agreement  with its  Chairman of the
      Board,  who is also  Chairman of the Board and President of CHA, for three
      years through July 2000. He renders part-time  services to the Company for
      a salary of $150 per year.

      Contingencies
      There is no significant litigation pending against the Company, nor is the
      Company  aware of any  threatened  litigation,  which may have a  material
      adverse affect upon the Company.

     Participants  in the health care market are subject to lawsuits  based upon
     alleged negligence or similar legal theories.  The Company currently has in
     force  general  liability  insurance,  including  professional  and product
     liability,  with coverage limits of $10 million, which is subject to annual
     renewal. The Company has not recorded any related loss liabilities as of
     June 30, 1997.

6.    Transactions with Affiliates

      The Company  provides  nutritional and other supplies and infusion therapy
      services to nursing  homes  owned or managed by CHA and  derived  revenues
      from sales to those nursing homes of $564 in 1997, $524 in 1996, $266 from
      January  1995  to June  1995  and  $358  in  1994.  Included  in  accounts
      receivable  are  amounts  from  nursing  homes  owned or managed by CHA of
      $1,214, $1,025, $530 and $384 at June 30, 1997, 1996 and 1995 and December
      31, 1994, respectively.

      Included in personnel costs in 1997,  1996,  1995 and 1994,  respectively,
      are  charges of $746,  $867,  $453 and $550 from  subsidiaries  of CHA for
      contracted nursing services.

      Included in selling,  general and administrative  expenses is rent expense
      to CHA of $39 in 1994 and $72 in 1993.

      The Company  paid cash  dividends  to CHA of $2,405 in 1992.  From July 1,
      1992 through  December 31, 1992, cash dividends paid by the Company to CHA
      were limited to the Company's  net income during that period.  Any amounts
      paid to CHA during this period in excess of the  Company's net income were
      treated as a  noninterest-bearing  advance to CHA (which totaled $569), of
      which all but $110 was  repaid on  December  31,  1992.  The  balance  was
      settled in early 1993. A management  and  non-competition  agreement  (the
      "Agreement")  between the Company and CHA extended to  September  30, 2000
      prohibits the Company from lending money to (or borrowing  money from) CHA
      subsequent to December 31, 1992.

      Pursuant to the  Agreement,  CHA provides  services to the Company,  which
      includes, among others, the services of CHA's senior executive management.
      A  management  fee  equal to 1.6% of  revenues  is  charged  by CHA to the
      Company for these  services.  The Company  estimates  that had it provided
      such services for itself,  its costs would have been at least that amount.
      In 1997,  1996,  1995 and 1994 the Company was charged  $27,  $14, $17 and
      $37, respectively, by a corporation owned by the Company's Chairman of the
      Board  for use of an  airplane  owned  by that  corporation.  The  Company
      believes the rates it was charged for use of that airplane were lower than
      those which would have been available from an independent  charter company
      for use of a similar airplane.

      Included in selling,  general and administrative  expenses in 1996 is rent
      expense  of $116 for  office  space  leased  from an entity  then owned by
      principal  stockholders  of CHA, one of whom is the Company's  Chairman of
      the Board.

      In January  1992,  the Company and Medline  Industries,  Inc.  ("Medline")
      entered into a joint venture, MedTech Uro Services ("MedTech"). This joint
      venture was established as part of the settlement of a lawsuit against CHA
      by Medline. In accordance with the joint venture agreement, the Company is
      paid to provide sales and marketing services to MedTech. In addition,  the
      Company will share in the net profits of MedTech to the extent they exceed
      approximately  $200  per  year  over  each of four  years.  The  Company's
      participation in MedTech allows it to market urological,  tracheostomy and
      other services in conjunction  with its marketing of contract  services to
      residents of long-term care facilities This venture has terminated.  There
      were no such  activities in 1997.  During 1996,  1995,  1994 and 1993, the
      Company recorded  revenues under this agreement of $9, $45, $139 and $204,
      respectively,  which  included  $9 in 1996 and $45 in 1995 as its share of
      net profits. Included in accounts receivable at June 30, 1996 and 1995 and
      December 31, 1994 were $0, $7, $6, respectively, due from MedTech.

     Included in other assets is $587,000 due from  affiliates that arose in the
     course of business transactions between the entities.

7.    Income Taxes

     Through  December  31, 1992,  the Company was included in the  consolidated
     Federal income tax return of CHA.  Income taxes were computed on a separate
     return basis. Pursuant to a tax sharing arrangement between the Company and
     CHA, the Company's income tax provision payable to CHA was calculated as if
     the  Company  filed its own  Federal  income  tax  return,  except  that in
     computing  the  Company's  tax  liability,  the  Company  did not take into
     account the effects of timing differences.

     Commencing  in 1993,  the Company  began filing its own Federal  income tax
     return.

 
     The provision (benefit) for income taxes consists of the following:
<TABLE>
<CAPTION>


                                                   Year       Year       Six Months     Year
                                                   Ended      Ended         Ended       Ended
                                                 June 30,   June 30,      June 30,  December 31,
                                                   1997       1996          1995        1994
        <S>                                    <C>          <C>         <C>         <C>   
        Current
               Federal ........................$     400    $      70   $     --     $    (225)
               State   ........................       90            5         --             5
                                                      --            -         ---            -
        Deferred:
               Federal ........................      143          165         --           --
               State   ........................       29           30         --           --
               Other   ........................      --           --
                                                     ---          --
                                                     172          195         --           --
                                                     ---          ---         ---          --
                                               $     662    $     270   $     --     $    (220)
                                               =     ===    =     ===   =     ===    =    ====
</TABLE>

      The Company had recorded a Federal and state income tax payable of $621 at
      June 30, 1997 and taxes payable of $75 in June 30, 1996.

      The following table  reconciles the Federal income tax provision  computed
      at statutory Federal income tax rates to the total provision (benefit) for
      income taxes shown above:

<TABLE>
<CAPTION>
                                                   Year       Year       Six Months     Year
                                                   Ended      Ended         Ended       Ended
                                                 June 30,   June 30,      June 30,  December 31,
                                                   1997       1996          1995        1994
        <S>                                    <C>         <C>           <C>        <C>
        Federal income tax provision
           (benefit) at statutory rate.........      550    $     498    $    (297)  $    (393)
        State income tax provision,
           net of Federal income tax
           benefit     ........................      112           88          (51)        (67)
        Increase (decrease) in valuation
           allowance   ........................      --          (316)         339         242
        Other - net    ........................      --           --             9          (2)
                                                     ---          ---          ---         ---
                       ........................$     662    $     270    $     --    $    (220)
                                               =     ===    =     ===    =     ===   =    ====

      The tax effects of  temporary  differences  that give rise to  significant
      portions of the deferred income tax assets are as follows:
</TABLE>

<TABLE>
<CAPTION>

                                                         Year         Year    Six Months     Year
                                                         Ended        Ended      Ended       Ended
                                                       June 30,     June 30,   June 30,  December 31,
                                                         1997         1996       1995        1994
        <S>                                          <C>          <C>          <C>       <C>  
        Net deferred income tax assets:
           Allowances for uncollectible accounts
             receivable...............................$    818     $ 1,007      $  876    $    780
           Net operating tax loss carryforwards.......     --          --          603         340
           Compensated absences, principally due......
             to accrual for financial purposes........      46          35          41          51
           Deferred income............................     --           30          81         107
           Other - net ...............................     103          67          49          33
                                                           ---          --          --          --
           Sub-total   ...............................     967       1,397       1,650       1,311

           Valuation allowance........................    (265)       (265)       (581)       (242)
                                                          ----        ----        ----        ----

           Net deferred income tax assets.............$    702     $   874      $1,069    $  1,069
                                                      =    ===     =   ===      ======    =  =====

</TABLE>

      The Company has utilized all of its net  operating  tax loss 
      carryforwards for Federal income tax purposes.

8.    Distribution Agreement

      In November 1994, the Company entered into a distribution agreement with a
      drug  manufacturer  under  which the  Company  provides  a  specific  home
      infusion  therapy  utilizing the  manufacturer's  drug. This agreement was
      renewed in January 1997 for another year.  Under this agreement,  accounts
      payable to the drug manufacturer  ($1,649 at June 30, 1997) are secured by
      the Company's  inventories of the drug ($471 at June 30, 1997) and related
      accounts receivable ($1,113 at June 30, 1997).

9.    Business and  Credit Concentrations

      The Company  generally  does not require  collateral or other  security in
      extending credit to patients,  however, it routinely obtains assignment of
      (or is otherwise  entitled to receive)  patients'  benefits  payable under
      their  health  insurance  programs,  plans  or  policies  (e.g.  Medicare,
      Medicaid,  Blue Cross,  health maintenance  organizations,  and commercial
      insurance policies).

      At June 30,  1997,  the  Company  had gross  receivables  from the Federal
      Government (Medicare) of approximately $2,524.

10.   Estimated Fair Value of Financial Instruments

      The  estimated  fair value of financial  instruments  has been  determined
      based  upon  available  market   information  and  appropriate   valuation
      methodologies.  However, considerable judgement is necessarily required in
      interpreting   market  data  to  develop  the  estimates  of  fair  value.
      Accordingly, the estimates presented herein are not necessarily indicative
      of the  amounts  that  the  Company  might  realize  in a  current  market
      exchange.  The  use of  different  market  assumptions  and or  estimation
      methodologies may have a material effect on the estimated fair value.

      The carrying  amounts of cash and cash  equivalents,  accounts payable and
      accrued expenses are reasonable estimates of their fair values.

11.   Fourth Quarter Adjustments

      Inventory

      The Company recorded an inventory  adjustment during the fourth quarter of
      fiscal  1997.  A gross  amount  of $450  before  taxes was  recorded  as a
      decrease  to  inventory  with a  corresponding  increase  to  medical  and
      nutritional  product costs. The adjustment arose as a result of a physical
      inventory  conducted on June 30,  1997.  The Company  conducted  quarterly
      physical  inventory  counts  during the year. No  significant  differences
      arose during these quarterly physical counts.

      Reserve for Uncollectible Accounts

     Beginning in the quarter  ending March 31, 1997,  the company  reviewed its
     allowance  for  uncollectible  accounts in light of the  company's  changed
     payor mix. The Company's  business  focus is on managed care  relationships
     which now account for 73% of its payor mix. The managed care  relationships
     are  generally  governed by  contracts  which  provide  for payment  within
     defined terms. The Company's collection  experience for these contracts has
     been good and greatly  improved from the historical  collection  experience
     upon which the allowance for  uncollectible  accounts had been established.
     As a result of this review, a total of $1,366 before taxes was ($348 in the
     quarter  ending March 31, 1997,  and a further $1,018 in the fourth quarter
     of fiscal 1997) was released  from the reserve for  uncollectible  accounts
     during the year,  resulting  in a credit to the  provision  for the year of
     $196  compared  to a charge  of $1,269  in the  prior  year.  Based on this
     analysis the Company  expects a lower  provision rate to be charged against
     sales going forward.


<PAGE>

<TABLE>
<CAPTION>

                                           INFU-TECH, INC.
                                  Valuation and Qualifying Accounts
                                        (Dollars in thousands)

<S>                    <C>            <C>                          <C>                    <C> 
Column A               Column B                Column C                 Column D           Column E
--------               --------                --------                 --------           --------
                                                Additions
                       Balance at      Charged to                                            Balance
                       beginning       cost and                                               at end
Description            of period       expenses       Other          Deductions (a)         of period

Allowance for
  uncollectible
  accounts:

  1997 (June).............$ 2,456      $    (196)    $    513          $     778          $   1,995
                            =====         ======      =======             ======              =====

  1996 (June).............$ 2,136      $   1,269     $     ---         $     949          $   2,456
                            =====          =====      =========           ======              =====

  1995 (June).............$ 1,903      $     664     $     ---         $     431          $   2,136
                            =====         ======      =========           ======              =====

  1994 (December..........$ 2,090      $     917     $     ---         $   1,104          $   1,903
                            =====         ======      =========            =====              =====



   (a)  Uncollectible accounts charged off during the year, net of recoveries.

</TABLE>

<PAGE>


                                             SIGNATURES


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

                                              INFU-TECH, INC.


Date:  September 29, 1997            By:/s/ JACK ROSEN
                                     ------------------------
                                        Jack Rosen
                                        Chairman of the Board


       Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the  following  persons on behalf of the Company
in the capacities and on the dates indicated.


                 Name                                  Title
            /s/ JACK ROSEN                    Chairman of the Board,
              Jack Rosen                        Director (Principal
                                                 Executive Officer)
           /s/ JOSEPH ROSEN                          Director
             Joseph Rosen
            /s/ COLIN NEILL                     Vice President and
            S. Colin Neill                    Chief Financial Officer

         /s/ ISRAEL INGBERMAN                        Director
           Israel Ingberman
         /s/ JOSEPH M. GIGLIO                        Director
           Joseph M. Giglio
         /s/ CARL D. GLICKMAN                        Director
           Carl D. Glickman
           /s/ BRUCE SLOVIN                          Director
             Bruce Slovin

<PAGE>
ITEM 14
                                                                Exhibit 10(e)

                                 INFU-TECH, INC.
             1996 KEY EMPLOYEES AND KEY PERSONNEL STOCK OPTION PLAN
                                December 16, 1996


1.   Purpose of the Plan

     The purpose of this 1996 Stock  Option Plan (the  "Plan") is to further the
growth  of  Infu-Tech,  Inc.  (the  "Company")  by  offering  directors  and key
employees  of the  Company  upon  whom  the  Company  largely  depends  for  the
successful conduct of its business an incentive to continue in the employ, or to
be directors,  of the Company,  and to increase the interest of those  directors
and employees in the Company's success through ownership of its common stock.

2.       Definitions.

     Whenever used in this Plan,  the following  terms will have the meaning set
forth below:

     (a) "Code" means the Internal Revenue Code of 1986, as amended.

     (b) "Committee" means the committee referred to in Sections 4 and 5.

     (c) "Employee" means any person employed by the Company (including, without
limitation, directors).

     (d) "Fair Market  Value" means the mean of the high and low prices at which
the  Stock is  reported  to have  traded in the  principal  market  (whether  an
interdealer  quotation  system or  consolidated  trading on a stock exchange) in
which the Stock is traded,  or if there is no trade on a  particular  date,  the
Fair  Market  Value  will mean the mean of the low asked and high bid  prices in
that market on that date.

     (e) "Granting Date" means the date on which the Option is made effective by
the Committee.

     (f) "Incentive Stock Option" means any Option that at the time of the grant
is an  incentive  stock  option as that term is defined  in Section  422A of the
Code.

     (g)  "Involuntary   Termination  of  Employment"  means  a  Termination  of
Employment  for  a  reason  other  than  death,  Retirement,  Total  Disability,
voluntary  resignation with the written consent of the Company or Termination of
Employment for Cause.

     (h) "Non-Qualified  Option" means any Option that is not an Incentive Stock
Option.

     (i) "Option" means any option granted by the Committee under the Plan.

     (j)  "Retirement"  means  a  Termination  of  Employment  by  reason  of an
Employee's retirement,  other than by reason of Total Disability, at a time when
the  Employee's  years of service  with the Company plus his  chronological  age
equals sixty-five or more.

     (k) "Stock" means the common stock, par value $.01 per share, of Infu-Tech.

     (l) "Subsidiary" means any "subsidiary corporation" of Infu-Tech,  Inc., as
that term is defined in Section 425(f) of the Code.

     (m) "Termination of Employment" means (i) as to an employee,  the time when
the  employee-employer  relationship between the employee and the Company ceases
to exist  for any  reason,  including,  but not  limited  to, a  termination  by
resignation,  discharge, death, Total Disability or Retirement, and (ii) as to a
director, the time the person ceases to be a director of the Company.

     (n) "Termination of Employment for Cause" means an Involuntary  Termination
of  Employment  by reason of an  Employee's  (i) repeated  failure or refusal to
perform  the  duties  and  responsibilities  of his  position;  (ii)  dishonesty
affecting  the  Company;  (iii)  drunkenness  or  use  of  illegal  drugs  which
interferes with his  performance  and continues after warning,  or (iv) material
breach of  loyalty  to the  Company.  All  determinations  of  whether  or not a
Termination  of  Employment  is "For Cause" will be made by the Committee on the
basis of such evidence as the Committee deems necessary or desirable.

     (o)  "Total  Disability"  means  inability  of an  Employee,  by  reason of
physical condition or mental illness or accident,  to perform  substantially all
the duties of the  position at which the  Employee  was  employed by the Company
when the disability  commenced.  All determinations as to the date and extent of
disability  of any Employee  will be made by the  Committee on the basis of such
evidence as the Committee deems necessary or desirable.

3.       Effective Date of the Plan.

         The effective date of the Plan will be December 16, 1996.

4.       Administration of the Plan.

     The Board of  Directors  of  Infu-Tech  or such  committee as the Board may
designate  will  implement the  provisions of the Plan, be  responsible  for the
administration of the Plan and grant Options under the Plan.  However,  only the
Board of  Directors  may grant  options to officers or  directors.  The Board of
Directors or the committee  which performs the functions  described in the first
sentence  of this  Paragraph  is  referred  to in this Plan as the  "Committee."
Subject to the express provisions of the Plan, the Committee will also have full
authority to  interpret  the Plan,  to  prescribe,  amend and rescind  rules and
regulations  relating  to it and to  make  all  other  determinations  it  deems
necessary  or  advisable  in  administering  the  Plan.  All  actions  taken and
decisions made by the Committee under the Plan will be binding and conclusive on
all  Employees  eligible  to  participate  in  this  Plan  and  on  their  legal
representatives  and  beneficiaries.  Unless  the  Board  of  Directors  is  the
Committee, the Committee may not amend the Plan. No member of the Committee will
be liable for any act or omission in connection with the  administration  of the
Plan unless it is attributable to that member's willful misconduct.

5.       The Committee.


     The  Committee  will consist of not less than three members of the Board of
Directors of the Company.  If the Committee is not the Board of  Directors,  (i)
the  Committee  will hold its meetings at such times and places as it determines
and will  maintain  written  minutes of its  meetings,  (ii) a  majority  of the
Committee's members present in person will constitute a quorum of the Committee,
(iii) all  determinations  of the Committee will be made by the majority vote of
its members,  (iv) the members of the Committee may  participate in a meeting of
the Committee by  conference  telephone or similar  communications  equipment by
means of which all members participating in the meeting can hear each other, and
participation in a meeting in that manner will constitute  presence in person at
the meeting, and (v) any decision or determination reduced to writing and signed
by all the members of the Committee  will be as effective as if it had been made
by a majority vote if its members at a meeting which is duly called and held.

6.       Stock Subject to the Plan.

     The  maximum  number of shares of Stock  may be  issued  upon  exercise  of
Options  granted  under the Plan is 500,000  shares,  subject to  adjustment  as
provided in Section 8 of this Plan.  The maximum number of shares of Stock which
may be issued to  directors  of the  Company  (whether  or not  Employees)  upon
exercise  of  Options  granted  under the Plan is  250,000  shares,  subject  to
adjustment  as  provided  in Section 8. Upon the  exercise  of any  Option,  the
Company  will be deemed to have  issued the number of shares to which the Option
relates.  If any  Option  expires,  terminates  or is  cancelled  for any reason
without  having been  exercised in full,  the number of shares of Stock to which
the Option  related which were not issued upon exercise of the Option will again
be available for issuance under the Plan.

7.       Stock Options.

     (a) Time of  Granting  of Options.  The  effective  date of the grant of an
Option will be the date  specified  by the  Committee  in its  determination  or
designation relating to the award of that Option.

     (b)  Eligibility/Grant  Options.  No Option will be exercisable  unless the
optionee has (i) been in the employ of the Company for twelve full  months,  and
(ii) been in the employ of the Company  for six full  months  from the  Granting
Date to the time of  exercise  of an Option  (except  for such  exercises  of an
Option after  termination of employment as are permitted under  Paragraphs 7(f),
7(g) and 7(h)). Except as provided in the preceding sentence, the Committee will
have full  authority to determine the  individuals to whom and the time or times
at which Options will be granted,  the number of shares of Stock subject to each
Option,  the term of the,  Option,  the  terms  under  which the  Option  may be
exercised  (which may include  provisions  regarding  the earliest time or times
when  the  Option  may be  exercised  as to some or all the  Stock  to  which it
relates),  the Option  exercise  price per share,  whether the Option will be an
Incentive  Stock  Option or a  Non-Qualified  Option,  and the  other  terms and
provisions of the Option.  Options  granted under this Plan may have  dissimilar
terms and conditions.

     (c) Exercise  Price/Payment.  Except as provided in Section 8, the exercise
price of each Option will be determined by the  Committee,  but will not be less
than 100% of the Fair  Market  Value of the Stock on the  Granting  Date of that
Option.  At the time of exercise of an Option,  the person exercising the Option
will tender payment to Infu-Tech of the entire exercise price with regard to the
shares  of Stock to be  purchased  by  certified  check  or,  alternatively,  by
tendering stock of Infu-Tech with a Fair Market Value equal to the amount of the
exercise  price on the date of tender.  The  Company may not extend  credit,  or
guarantee  the  extension  of credit,  to any person for the purpose of enabling
that person to exercise an Option.


     (d) Term of  Options;  Terms of  Exercise.  The term of each Option will be
determined  by the  Committee,  but will not be longer  than ten years  from the
Granting  Date,  and, in the case of an Employee  who, at the time the Option is
granted, owns more than 10% of the total combined voting power of all classes of
stock of Infu-Tech, will not be longer than five years from the Granting Date.

     An Employee will exercise an Option by giving written notice of exercise to
Infu-Tech at its principal  executive office, to the attention of the Secretary,
accompanied by full payment of the exercise price or tender of Stock as provided
in Section  7(c).  The date  Infu-Tech  receives the written  notice of exercise
accompanied  by payment of the  exercise  price of this Plan will be the date on
which the Option is exercised. As soon as practicable after the date on which an
Option is exercised,  Infu-Tech  will deliver to the Employee a  certificate  or
certificates  for the  number  of  shares of Stock  purchased  by the  exercise,
registered in the name of the Employee.

     (e) Nontransferability of Options.  During the lifetime of the holder of an
Option,  the  Option  by its terms may be  exercised  only by the  holder or his
guardian  or legal  representative.  An Option may not be  assigned,  pledged or
hypothecated  in any  way,  may  not be  subject  to  execution,  and may not be
transferred otherwise than by will or the laws of descent and distribution.  Any
attempt at assignment,  transfer, pledge,  hypothecation or other disposition of
an Option  contrary to the  provisions of the Plan, and a levy of any attachment
or similar process upon any Option, will be null and void.

     (f)  Retirement/Involuntary  Termination of Employment of Holder of Option.
In the event of  Termination  of Employment of an Employee to whom an Option has
been granted by reason of his Retirement (other than for Total  Disability),  or
Involuntary Termination of Employment,  the Option will expire at the end of the
three-month  period  immediately  following  the  date  of  the  Termination  of
Employment,  or on such earlier date as is the  expiration of the term specified
in the Option.

     (g) Total  Disability of Holder of Option.  In the event of  Termination of
Employment  of an Employee  to whom an Option has been  granted by reason of the
Employee's Total Disability,  the Employees Option will expire at the end of the
twelve-month period following the date of the Termination of Employment, or such
earlier date as is the expiration of the term specified in the Option.

     (h) Death of Holder of Option. In the event of Termination of Employment of
an Employee to whom an Option has been  granted by reason of his death,  or if a
former  Employee dies before all the Options granted to the former Employee have
expired,  that  person's  outstanding  Options may be  exercised by the person's
personal  representatives,  or by the persons to whom the right to exercise  the
Options  has passed by will or through  the laws of  descent  and  distribution,
during the twelve-month period immediately following the date of death, or until
such earlier date as is the expiration of the term specified in the Option.

     (i)  Termination  of  employment  of  Holder  of  Option.  In the  event of
Termination  of Employment of an Employee to whom an Option has been granted for
any reason other than his  Retirement,  Involuntary  Termination  of Employment,
Total Disability or death,  all that Employee's  Options will terminate when the
Termination of Employment occurs.

     (j) Liquidation.  If the Company is to be liquidated or dissolved, then the
time at which all Options then  outstanding may be exercised will be accelerated
and all those  Options  will  become  exercisable  in full ten days  before  the
effective time (the "Effective  Time") of the liquidation or dissolution or such
earlier time as may be fixed by the Board  ("Effective  Time"),  and Options not
exercised by the  Effective  Time will  automatically  be cancelled and be of no
further force or effect.  Nothing in this Subsection (j),  however,  will extend
the term specified in an Option.

     (k) Incentive Stock Options.  No Incentive Stock Option may be granted to a
director who is not an Employee.  No Incentive Stock Option may be granted after
ten years from the earlier of the date the Plan is adopted by the Board,  or the
date the Plan is approved by the  stockholders  of the Company.  Incentive Stock
Options  may not be  granted  to any  Employee  who,  at the time the  Option is
granted,  owns more than ten percent of the total  combined  voting power of all
classes of stock of Infu-Tech,  unless (i) the purchase price of the Stock under
the  Incentive  Stock Option is at least 110 percent of the Fair Market Value of
the Stock on the Granting Date and (ii) the Incentive  Stock Option by its terms
is not  exercisable  after the  expiration of five years from the Granting Date.
The  aggregate  Fair Market Value  (determined  at the time an  Incentive  Stock
Option is granted) of the Stock with respect to which  Incentive  Stock  Options
are first  exercisable by an Employee  during any calendar year (under this Plan
and any other  incentive  stock  option  plan of the  Company)  will not  exceed
$100,000.

     (l)  Option  Grant  Agreement.  Promptly  after an Option is  granted to an
Employee  or a  director,  the  Company  will send the  Employee  or director an
agreement  setting  forth the terms and  conditions  of the grant.  Each  Option
granted  must be  clearly  identified  as  either a  Non-Qualified  Option or an
Incentive Stock Option. In the case of an Incentive Stock Option,  the agreement
will contain such terms and  provisions  as the  Committee  may  determine to be
necessary  or  desirable  in order to qualify the Option as an  incentive  stock
option in  accordance  with  Section  422A of the Code or any  successor to that
Section.

8.       Recapitalization, Reorganization or Other Corporate Event.

     If  Infu-Tech,  through  a  stock  dividend,  a  stock  split  or  a  share
combination,  changes its issued  stock into a number of shares  which is 10% or
more greater or less than it was prior to the change, then immediately after the
record  date for the  change,  the  number of shares  of Stock  subject  to each
outstanding  Option,  and the  maximum  number of  shares of Stock  which may be
issued in  total,  and which may be  issued  to  directors  of the  Company,  on
exercise of Options issued under the Plan will be increased  proportionately  in
the case of a stock dividend or stock split, or decreased proportionately in the
case of a combination  of shares to prevent  dilution or  enlargement  of rights
(but without any obligation to issue fractional shares),  and the purchase price
of each share of Stock subject to each immediately  after the change will be the
same  as the  total  purchase  price  of all the  Stock  subject  to the  Option
immediately before the change.

     If  because  of one or more  recapitalizations,  reorganizations  or  other
corporate  events,  the holders of the outstanding Stock receive something other
than shares of Stock,  upon  exercise of an Option the holder of the Option will
receive what the holder would have owned if the holder had  exercised the Option
immediately  before the first such corporate  event and not disposed of anything
the holder received as a result of the corporate event.

9.       Rights of Employee.

     (a) Stockholder. An Employee will have no rights as a stockholder by reason
of having been granted an Option.  Upon the exercise of an Option,  the Employee
will have no rights as a stockholder until the issuance of Stock to the Employee
has been recorded in the books of Infu-Tech.

     (b)  Employment.  Nothing  in the Plan or in the  grant of an  Option  will
confer upon any  Employee  the right to continue in the employ of the Company or
will  interfere  with or  restrict  in any  way the  rights  of the  Company  to
discharge  any Employee at any time for any reason  whatsoever,  with or without
cause.

10.      Laws and Regulations.

     The  obligation  of the Company to issue  shares of Stock upon  exercise of
Options will be subject to:

     (a) the condition  that counsel for the Company is satisfied  that the sale
and delivery will be in compliance  with the Securities Act of 1933, as amended,
and all other applicable laws, rules or regulations; and

     (b) the condition  that the shares of Stock reserved for issuance under the
Plan have been authorized for listing on any securities exchange or exchanges on
which the Stock is listed.

11.      Withholding of Taxes.

     In order to satisfy the withholding tax obligations imposed by any level of
government,  the  Company may in its  discretion  (i)  withhold  shares of Stock
purchased by exercise of an Option,  (ii)  require  payment by the Employee of a
sum  equal to any sum which  must be  withheld  (and,  if the Stock has not been
issued,  refuse to issue Stock on exercise of an Option until the Employee  pays
that  sum),  or (iii)  deduct the sum which  must be  withheld  from one or more
installments  of compensation  payable to the Employee.  If an Employee makes an
election  under Section 83(b) of the Code in connection  with the exercise of an
Option,  the Employee will immediately  notify the Company of that election.  In
the case of an  Incentive  Stock  Option,  an Employee who disposes of shares of
Stock acquired  through  exercise of an Option either (a) within two years after
the Granting Date of the Incentive Stock Option or (b) within one year after the
issuance  of  the  Stock  to  the  Employee,  will  notify  the  Company  of the
disposition and the amount realized upon the disposition.

12.      Amendment of the Plan.

     The  Board of  Directors  may at any time and from  time to time  modify or
amend the Plan in any respect to be effective as of the date  determined  by the
Board;  provided,  however,  that  without the approval of the  stockholders  of
Infu-Tech  the Board will not (i) except as  provided in Section 8 of this Plan,
increase  the maximum  number of shares of Stock  which may be issued  under the
Plan in total or which may be issued to directors  of the  Company;  (ii) change
the categories of Employees eligible to receive Options; (iii) extend the period
during which Options may be  exercised;  (iv) change the  provisions  fixing the
minimum option price; or (v) change the provisions as to termination of Options.
No  modification  or amendment of the Plan may adversely  affect the rights of a
holder of an outstanding Option without the holder's consent.

13.      Termination of the Plan.

     The Board of  Director's  may at any time  suspend or  terminate  the Plan,
provided that no such action may  adversely  affect the rights of a holder of an
outstanding Option without the holder's consent.

     The  Plan  will  automatically  terminate  if it is  not  approved  by  the
stockholders  of Infu-Tech  within one year after its effective date. Any Option
granted before this Plan is approved by the  stockholders  of Infu-Tech will (i)
be subject to the stockholders of Infu-Tech  approving this Plan within one year
after  its  effective  date,  and (ii) not be  exercisable  until  this  Plan is
approved by the stockholders of Infu-Tech.


                                                                    EXHIBIT 21

                        INFU-TECH, INC. AND SUBSIDIARIES

                              List of Subsidiaries


The following are the subsidiaries of Infu-Tech, Inc. ("Infu-Tech" or the
"Company").

A)       Infu-Tech, Inc. (a Delaware corporation).
         1)      Infu-Tech, Inc. (a New Jersey corporation) (formerly Temporary
                 Nursing Services, Inc.).
         2)      Infu-Tech of Florida, Inc. (a Florida corporation).
         3)      Infu-Tech of Illinois, Inc. (a Illinois corporation).
         4)      Infu-Tech of Massachusetts, Inc. (a Massachusetts corporation).
         5)      Infu-Tech of New York, Inc. (a New York corporation).
         6)      Infu-Tech of Tennessee, Inc. (a Tennessee corporation).
         7)      Intrx Medical, Inc. (a New Jersey corporation).



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