<PAGE>

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-KA

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

For the fiscal year ended June 30, 2000

Commission file number: 0-21006

                                INFU-TECH, INC.

             (Exact name of registrant as specified in its charter)

                Delaware                                  22-3127689
     State or other jurisdiction of                    (I.R.S. Employer
     incorporation or organization)                   Identification No.)

            374 Starke Road
            Carlstadt, N.J.                                  07072
(Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code: (201) 896-0100

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     NO /X/
                                       ---    ---

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. [X]

As of September 28, 2000 the aggregate market value of the voting stock held by
non-affiliates of the registrant was $10.3 million.

As of September 28, 2000, 3,364,021 shares of the registrant's common stock were
outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE:

Portions of definitive proxy statement to be filed not later than November 8,
2000.

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<PAGE>

                               TABLE OF CONTENTS

Part I
------

<TABLE>
<CAPTION>

                                                                                                                                Page
                                                                                                                                ----
<S>                                                                                                                          <C>
         Item 1.    Business................................................................................................    3-12
         Item 2.    Properties..............................................................................................      12
         Item 3.    Legal Proceedings.......................................................................................      12
         Item 4.    Submission of Matters to a Vote of Security Holders.....................................................      12


Part II
-------

         Item 5.    Market Information......................................................................................      13
         Item 6.    Selected Consolidated Financial Data....................................................................      14
         Item 7.    Management's Discussion and Analysis of Consolidated Financial Condition and Results of
                       Operations...........................................................................................   15-17
         Item 7A.   Quantitative and Qualitative Disclosures About Market Risk..............................................      17
         Item 8.    Consolidated Financial Statements and Supplementary Data................................................      18
         Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosures...................      18


Part III....................................................................................................................      19
--------


Part IV
-------

         Item 14.   Exhibits, Consolidated Financial Statements, Financial Statement Schedules, and Reports on
                       Form 8-K.............................................................................................      20


Signatures................................................................................................................ Last Page

</TABLE>


<PAGE>

                                     PART I

Item 1.   Business.
-------   ---------

General

Infu-Tech, Inc. (the "Company") provides specialty pharmaceuticals, 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, nursing homes and subacute care facilities. In March
the Company formed a subsidiary, Smartmeds.com, Inc. ("Smartmeds"). It has
recently launched an Internet website, Smartmeds.com, through which it plans to
offer health management applications.

Smartmeds.com

In March 2000 the Company launched Smartmeds.com through which it intends to
provide health management applications through wireless devices such as cellular
phones, PDA's and pagers. These applications may include medication reminders,
targeted news, and prescription refills for people with chronic diseases.
Smartmeds will pursue contracts with managed care organizations, clinical
research organizations and other healthcare providers. Smartmeds.com, Inc may
generate revenue from advertising, subscriber fees, wireless fees and increased
Infu-Tech sales of specialty pharmaceuticals. Due to the evolving wireless
market, the type of transactions in which Smartmeds.com, Inc. engages and the
way they are structured is likely to vary significantly. The Company launched
its Internet health commerce site via its website Smartmeds.com.

Medical Services

The Company's traditional services are organized into two units. The specialty
pharmaceutical unit provides specialty pharmaceutical and related services for
patients with certain chronic diseases. It provides services that address the
needs of patients with the following diseases: Gaucher Disease, a hereditary
liver enzyme deficiency; hemophilia, a hereditary bleeding disorder; cardiac
diseases; sickle cell disorders; respiratory diseases in pediatric patients; and
growth hormone disorders. The Company also 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, injectable
products and a variety of other therapies.

Key elements of the Company's strategy include: (i) expanding the number of
chronic diseases served, and (ii) increasing its number of payor contracts.
Further, through SmartMeds.com, it will create wireless applications for disease
management.

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 70 agreements with managed care companies, which have
over 20 million members, to provide infusion therapy and specialty
pharmaceuticals. The agreements with managed care companies vary from preferred
provider relationships to being one of several providers. Reimbursement is
generally on a per diem basis.

The Company's continued marketing efforts directed at managed care companies
bring significant opportunity to promote new programs like disease management
through existing relationships. The Company is now expanding its marketing of
specialty pharmaceuticals to its customer base. Specialty pharmaceuticals
include Cerezyme for Gauchers patients, Synagis for prevention of serious
respiratory diseases in pediatric patients, growth hormone drugs and other
injectable drugs.

                                        3


<PAGE>

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

<TABLE>
<CAPTION>

                                   Year ended                        Year ended                        Year ended
                                  June 30, 1998                     June 30, 1999                     June 30, 2000
                                  -------------                     -------------                     -------------

                       Intravenous   Contract   Total     Intravenous  Contract   Total     Intravenous Contract     Total
                        Infusion     Services  Revenues    Infusion    Services  Revenues    Infusion   Services    Revenues
                        --------     --------  --------    --------    --------  --------    --------   ---------   --------
<S>                      <C>           <C>      <C>          <C>         <C>       <C>         <C>        <C>        <C>
Enteral Nutrition           4%           77%      19%           5%         75%       21%          6%        81%        16%
Antibiotic                 19%          --        15%          17%        --         13%         10%       --           8%
TPN                         6%          --         4%           4%        --          3%          3%       --           3%
Immune Globulin             9%          --         7%          13%        --         10%         18%       --          15%
Ceredase/Cerezyme          41%          --        33%          45%        --         35%         36%       --          31%
Wound Care                --            --       --           --          --        --          --         --         --
*Other                     21%           23%      22%          16%         25%       18%         27%        19%        27%
                          ---           ---      ---          ---         ---       ---         ---        ---        ---

                          100%          100%     100%         100%        100%      100%        100%       100%       100%
                          ===           ===      ===          ===         ===       ===         ===        ===        ===

</TABLE>

*Includes the following: Hydration, Pain Management, Epogen, and Chemotherapy.
                                                                 ============


Overview of the Home Health Care Industry

One of the major factors contributing to the 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, combined with
advances in medical technology making the delivery of sophisticated treatments
in the home a reality, are contributing to the continued growth of the home
health care industry.

Managed care organizations have become important factors 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 the
managed care organizations' areas of operations. In response, what once was a
very fragmented health care industry is undergoing a wave of consolidation.

During recent years, a number of companies have been offering on-line access to
pharmaceutical products. On-line pharmacies are particularly useful in providing
medications for chronic diseases both intravenous, as well as orals, which will
help grow the market opportunity.

Specialty Pharmaceuticals

Specialty pharmaceuticals are drugs that are used on a recurring basis to treat
certain chronic and potentially life threatening diseases, are administered
through intravenous and injection; and require temperature control or other
specialized handling as part of their distribution process. The Company provides
services that address the needs of patients with the following diseases,
Gaucher's disease, Hemophilia, Multiple Sclerosis, Crohn's disease, respiratory
diseases in pediatric patients; and growth hormone disorders.

Intravenous Infusion Therapy

The Company's infusion therapy principally involves the intravenous
administration of nutrients, antibiotics or other medications to patients in
their homes, often as a continuation of treatment initiated in the hospital. The
Company believes the primary factors contributing to the 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
treated without hospitalization.

                                        4


<PAGE>

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 process
includes an assessment 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 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 two 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.

The Company arranges with nursing homes and other subacute facilities to supply
infusion and other subacute therapies to patients admitted on a short-term
basis.

Contract Services

Since 1990, the Contract Services unit has offered an expanding number of
products to patients in 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 some products in the past and may do so in the future.

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. The
resident is responsible for any charges that are not paid by third party payors.

A majority of the products and services the Company provided to residents of
long term care facilities involved enteral nutrition therapy. The Company
markets a variety of products when they are eligible for reimbursement under
Medicare and other programs. These 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'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 Carlstadt, New Jersey and
shipped from the Company's Carlstadt 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.

                                        5


<PAGE>

Most of the Company's contract services revenues result from Medicare
reimbursement. The Company has more than fifteen years' experience in billing
Medicare. 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. The Company actively
pursues the residents or guarantors for this payment, and where necessary, uses
legal action. Inability to collect the 20% co-insurance portion of bills
contributes to the Company's provision for uncollectible accounts.

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.

The following table details the sources of payments to the Company during the
twelve months ended June 30, 2000:

<TABLE>
<CAPTION>

                                                 Home
                                               Infusion/
                                               Specialty       Contract     Total
                                            Pharmaceuticals    Services    Revenues
                                            ---------------    --------    --------

<S>                                             <C>              <C>        <C>
Medicare..................................         1%              95%        15%
Private Pay...............................        86%             -- %        73%
Medicaid..................................        13%               5%        12%
                                                 ---              ---        ---

                                                 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, 2000, the sales force included one
sales representative, who reports to a regional manager, and five employees who
have both sales and clinical responsibilities. 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 Company has also begun
marketing its products and services online through its subsidiary Smartmeds.com,
Inc. at URL www.Smartmeds.com. The site features specialty pharmaceuticals,
medical products, health care and disease management information and patient
interaction with medical professionals.

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 believes there are alternative sources for virtually all
the supplies and equipment it requires except Cerezyme. Although the Company's
agreement with Genzyme has expired, the Company continues to purchase product
from Genzyme under the same terms. The Company is attempting to negotiate new
terms which will enable it to distribute those products at an adequate profit
level. If it cannot do that, the Company may have to discontinue selling
Cerezyme.

We focus on a limited number of complex and expensive drugs that serve small
patient populations.

Our agreements with these suppliers are short-term and cancelable by either
party without cause.

                                        6


<PAGE>

Competition

The segments of the health care market in which the Company operates are highly
competitive and are becoming more 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. All of the drugs,
supplies and services that we provide are also available from our competitors.
Our current competitors include other specialty pharmacy distributors; specialty
pharmacy divisions of wholesale drug distributors; pharmacy benefit management
companies; home infusion therapy companies; and other alternative site
healthcare providers.

Many of our competitors have substantially greater resources and more
established operations and infrastructure than we have. We are particularly at
risk from any of our significant suppliers deciding to pursue its own
distribution and services and not outsource these needs to companies like us. A
significant factor in effective competition will be an ability to maintain and
expand relationships with managed care companies, pharmacy benefit managers and
other payors who can effectively determine the pharmacy source for their
enrollees.

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. Infusion therapy is being affected by increasing availability of
oral medications which were previously only available as intravenous infusion
drugs. 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.

Potential Liability and Insurance

Participants in the health care market are subject to lawsuits based upon
alleged malpractice, product liability, 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 excess coverage limits of $10 million.
The Company's general 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.

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.

                                        7


<PAGE>

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 practices 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.

Pharmacies and pharmacists must obtain state licenses to operate or dispense
drugs. Pharmacies must also obtain licenses in some states to operate and
provide goods and services to residents of those states. If we are unable to
maintain our licenses or states place burdensome restrictions or limitations on
non-resident pharmacies, this could limit or affect our ability to operate in
some states which could adversely impact our business and results of operations.

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 in
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 arrangement, certain direct or indirect payments or
fee-splitting arrangements between health care providers. 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 Department of Health and Human Services recently proposed regulations
implementing the Administrative Simplification provision of the Health Insurance
Portability Accountability Act concerning maintenance, transmission and security
of electronic health information, particularly individually identifiable
information. The new regulations, when enacted will require development and
implementation of security and transaction standards for all electronic health
information and impose significant use and disclosure obligations on entities
that send or receive individually identifiable electronic health information.
Failure to comply with these regulations, or wrongful disclosure of confidential
patient information could result in the imposition of administrative or criminal
sanctions, including exclusion from the Medicare and state Medicaid programs.

Prospective payment which was introduced January 1, 1999 and redefined
reimbursement for nursing homes from Medicare may have an effect on the
Company's potential to gain new business for its Contract Services division.
However, to date it has not had an impact on our business.

Risk Factors

We and our businesses are subject to a number of very substantial risks,
including the following:

o        Reliance on development of biopharmaceutical products.

         Our business is highly dependent on biopharmaceutical companies'
         development of drugs of the type we provide and their ability to
         educate doctors and others about the benefits of those drugs. We cold
         be hurt by anything, including changes in the Federal Drug
         Administration approval process or governmental restrictions on prices
         of drugs, which would reduce or delay biopharmaceutical companies
         development or marketing of drugs we can provide.

o        Reliance on relationships with Genzyme.

         Although there are multiple sources for most of the supplies and
         equipment we require, we obtain a significant portion of our revenues
         by distributing Cerezyme, a treatment for Gaucher's disease
         manufactured by Genzyme Corporation, under a distribution agreement
         with Genzyme. We have for some time been attempting to negotiate new
         terms with Genzyme including a higher distribution fee. If we cannot do
         that, we may have to discontinue selling Cerezyme. That would
         materially reduce our revenues, but would not necessarily adversely
         affect our net operating results.

                                        8


<PAGE>

o        Relationship conflict with affiliate.

         Kuala Healthcare, Inc. ("KUAL") owns 50% of the stock of the Company,
         and the Company's directors excluding Mr. Glickman are also directors
         of KUAL. The Company's directors may be influenced by KUAL'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.

o        Competition

         The segments of the health care market in which we operate are highly
         competitive and are becoming more competitive. In each of our lines of
         business, there are relatively few barriers to entry. Our competitors
         include some national providers, which have been acquiring regional and
         local providers. However, our principal competitors, particularly for
         sales to residents in long term care facilities, are local providers of
         health care products and the operators of the facilities themselves. We
         would face a particular problem if our suppliers decided to pursue
         their own distribution, rather than outsourcing their needs to
         companies like us. Also, Infusion Therapy is being affected by
         increasing availability in oral form of medications which previously
         were available only by intravenous infusion.

o        We could be substantially harmed by health care cost containment
         efforts.

         A substantial portion of our revenues come from governmental and
         non-governmental third-party payors. They have been under great
         pressure to contain costs. We have been, and may continue to be,
         materially and adversely affected by cost containment trends within the
         health care industry. We also have been, and may continue to be,
         substantially affected by financial difficulties suffered by
         non-governmental payors, such as managed care organizations and private
         physician practices.

o        Our cash flows are substantially affected by payment delays.

         Even at instances in which we are able to charge what we believe are
         adequate prices, we have encountered substantial delays in receiving
         payments from third party payors. Our gross outstanding accounts
         receivable have increased from 136 days' sales at June 30, 1999 to 178
         days' sales at June 30, 2000. The long time it takes us to get paid
         imposes severe strains on our cash resources and has required us to
         delay payments to our suppliers. This has, among other things, impaired
         our relationships with some of our suppliers.

o        Our business will suffer if we lose relationships with managed care
         organizations and other third party payors.

         We are highly dependent on reimbursement from managed care
         organizations and other non-governmental payors. Many organizations
         seek to limit the number of providers that supply drugs to their
         members. They sometimes require that we and our competitors bid for
         contracts. Failure to maintain our relationships with significant
         managed care organizations or similar third party payors could
         seriously impair our business and results of operations.

o        Possible Liability.

         Participants in the health care market are subject to lawsuits based
         upon alleged malpractice, product liability, negligence or similar
         legal theories, many of which involve large claims and significant
         defense costs. To date we have not been subject to a significant
         lawsuit by a purchaser of our products or services, but we could be. We
         maintain insurance against professional and product liability with
         excess coverage limits of $10,000,000. However, a successful claim
         substantially in excess of that amount could have a materially adverse
         effect upon us. Further, our insurance policy is subject to annual
         renewal, and it may not be possible to obtain liability insurance in
         the future on acceptable terms or at all. Also, claims against us,
         regardless of their merit or eventual outcome, may have a material
         adverse effect upon our reputation.

o        Impacts of government regulation.

         The health care industry is subject to extensive regulation and
         frequent regulatory changes. Changes in the law or new interpretations
         of existing law can have a dramatic effect on what we can do, our cost
         of doing business and the amount of reimbursement we receive from
         governmental third party payors, such as Medicare and Medicaid. Also,
         we could be affected by interpretations of what the appropriate charges
         are under government programs which affect audits of what we charge.

                                       9


<PAGE>

         We may need certificates of need, permits or licenses for some of our
         activities, and they may be restricted or otherwise difficult to
         obtain. We believe we have all the certificates of need, permits and
         licenses which are required for our current business. However, failure
         to obtain, renew or maintain required regulatory approvals or licenses
         could adversely affect us.

         Federal laws prohibit remuneration in return for the referral of
         Medicare or Medicaid patients. In addition, the Federal government and
         several states have laws that prohibit fee splitting arrangements
         between health care providers. Increased attention has been paid
         recently to enforcement of these laws and regulations. Possible
         sanctions for failure to comply with them include exclusion from
         government programs, loss of license and civil and criminal penalties.
         Because we try hard to comply with these laws and regulations, we
         believe we benefit from them, rather than being hurt by them.
         Nonetheless, we could be materially injured if we unintentionally
         violate them.

         Our Smartmeds activities could be significantly affected by recently
         proposed regulations implementing the Administrative Simplification
         provision of The Health Insurance Portability and Accountability Act
         concerning maintenance, transmission and security of electronic health
         information, particularly about identifiable individuals. Failure to
         comply with these regulations could result in administrative or
         criminal sanctions, including exclusion from the Medicare and Medicaid
         programs.

         The prospective payment system, which was introduced in January 1999
         and redefined reimbursement for nursing homes under Medicare, could
         affect our ability to gain new business for our Contract Services
         Division, although it does not seem to have done so to date.

o        A number of factors could affect the development of Smartmeds.com, Inc.

                  +        Our ability to develop Smartmeds and its wireless
                           applications will be affected by a number of factors,
                           including:

                  +        The acceptance of the Internet and wireless devices
                           as means for accessing health services.

                  +        The ability of our business development and sales
                           personnel effectively to sell our electronic
                           services.

                  +        The willingness of managed care organizations,
                           clinical research organizations and other health care
                           providers to use our Internet and wireless services.

                  +        The willingness of users to provide personal health
                           information for us to use in rendering Internet or
                           wireless health care services.

                  +        Changes in government regulations regarding privacy
                           of health information.

                  +        Our need to rely on technology companies to develop
                           and maintain the applications we will be offering.

                  +        The ability of wireless carriers to provide coverage
                           that allows information to be received any time and
                           any place.

                  +        The ability of the Company to develop a new line of
                           business despite potential capital constraints.

o        Possible liability resulting from our Smartmeds.com, Inc. activities.

         We will be obtaining content, commerce information and personal health
         information from third parties. When we integrate and distribute this
         information over the Internet and wireless devices, we may become
         liable for the data that is transmitted as well as the timely delivery
         of the data. Smartmeds expects to require users to sign a disclaimer
         which acknowledges that Smartmeds services will be only a supplement to
         their health routine and that we will not be responsible for users'
         compliance with medication programs and other health requirements.
         Nonetheless, we may be subject to claims if information we provide is
         inaccurate (whether or not that is our fault) or if information does
         not reach users in a timely manner.

                                       10


<PAGE>

o        We have very limited access to capital.

         The Company experienced a $3,809,000 loss in 2000 and is experiencing a
         slowdown in payments from several managed care organizations which have
         affected its ability to pay its suppliers on a timely basis. The
         Company has extended its payment terms with some of its suppliers while
         also executing a plan to pursue collection of its accounts receivable,
         consolidate its operations, and reduce its operating costs. As of June
         30, 2000 the Company's current liabilities exceeded its current costs
         by $1,252.000.

         In order to implement our growth strategy, we will need substantial
         capital resources, including access to short-term and long-term
         indebtedness. Currently, we have only a $1.5 million working capital
         line. As of June 30, 2000, the Company had $962,000 outstanding on this
         working capital line. Our operating results during the past several
         years may make it difficult for us to raise additional financing
         through banks, in public markets or otherwise. These factors combined
         with current liabilities exceeding current assets raise substantial
         doubt about the Company's ability to continue as a going concern as
         indicated in the independent auditors' opinion.

o        Relationships with Affiliates.

         At June 30, 1999 the Company was owed $2.0 million by five subsidiaries
         of KUAL, the Company's 50% stockholder which owns or operates nursing
         homes. No business was conducted by the Company in 2000 with any of the
         five facilities owned or managed by KUAL. At June 30, 2000, the
         Company's net receivable from those nursing homes increased to $2.2
         million due to accrued interest. In addition, KUAL owes $1.4 million to
         the Company for KUAL's share of common expenses paid on behalf of KUAL
         by the Company.

KUAL and certain of its subsidiaries have agreed to pay back the June 30, 1999
$3.4 million total receivable balance, plus interest at 7% in twenty quarterly
installments beginning in January, 2000. KUAL guarantees the amount due to the
Company by the KUAL subsidiaries. KUAL has given the Company a mortgage on land
owned by a wholly owned subsidiary of KUAL and a security interest in 1,500,000
shares of the Company's common stock that it owns to secure that obligation.
Under certain circumstances KUAL may substitute the collateral as defined in the
agreement or may reduce the Infu-Tech shares pledged as security. However, in no
event may the remaining Infu-Tech shares be valued at less than 150% of the
outstanding receivable balance at the date of the reduction. Payments may be in
cash or with Infu-Tech's common stock owned by KUAL. If cash payments are not
made when due, KUAL may sell company stock to satisfy the debt. As of June 30,
2000 the Company had received $75,000 of the $431,000 from KUAL required under
the agreement. The balance of the amount due in the fiscal year ended June 30,
2000 was paid in September 2000 and the July 2000 payment ($217,000) was made in
October 2000. KUAL and its subsidiaries are experiencing significant financial
difficulties. In September 2000 three of KUAL's five nursing home subsidiaries
commenced proceedings under Chapter 11 of the Bankruptcy Code. However, the
Chapter 11 proceedings do not affect KUAL's obligations under the agreement. The
Company no longer sells products to KUAL's nursing homes (but does sell products
and services to residents in them).

Executive Officers of the Company

The following is a list of executive officers of the Company, 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,          54
                                 Chief Executive Officer

         Daniel Rosen            President                                    26

         Joseph Rosen            Vice President, Assistant Secretary          49
                                 and Director

         Frederick Schmidt       Chief Financial Officer                      54

         Israel Ingberman        Secretary, Director                          54

Daniel Rosen joined the company as President in August of 2000. Prior to that he
had served as the Director of Business Development and Commerce at the Walt
Disney Internet Group. While at The Walt Disney Internet Group, Rosen created
and implemented business plans and online strategies, negotiating distribution,
commerce and content partnerships for properties including ABCNEWS.com,
ESPN.com, Disney.com, Family.com and Go.com. Rosen is a graduate of Harvard
University. His father, Jack Rosen, is the Chairman of the Board of Infu-Tech.

                                       11


<PAGE>

Frederick Schmidt joined the company as Chief Financial Officer in October 1999.
Prior to that he held positions as Chief Financial Officer of Programmers
Paradise, Kroll Associates, Hark Environmental, and Controller of McKinsey & Co.
Schmidt has an MBA in Finance from Seton Hall University and a BS and MS in
Chemical Engineering from Newark College of Engineering.

Employees

As of June 30, 2000, the Company had approximately 98 employees. Of these
employees, four were in executive capacities (in addition to executives of KUAL
who render services to the Company), 6 were in sales or service capacities, five
of which also had clinical responsibilities, approximately 48 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 Carlstadt, New Jersey and it leases
three branch offices for its branch operations. Offices provide a home base for
salespeople, clinicians and administrative and technical personnel, as well as
storage for the Company's inventory of equipment and supplies. In addition, the
Company maintains pharmacies in Memphis, Tennessee, and Woburn, Massachusetts
and a warehouse in Carlstadt, New Jersey. The Company's pharmacy previously
located in Moonachie, New Jersey is in the process of being relocated to
Carlstadt, New Jersey. Lease payments for the corporate office, three branch
offices, the central pharmacy, the Memphis and Woburn pharmacies, and the
warehouses total $27,520 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.

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, 2000.

                                       12


<PAGE>

                                    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 1999 and
through June 30, 2000 were as follows:

                                                 High                 Low
                                                 ----                 ---

         1999:
         -----
         First Quarter                           4.25                 1.312
         Second Quarter                          1.50                  .562
         Third Quarter                           1.68                  .75
         Fourth Quarter                          2.125                1.00

         2000:
         -----
         First Quarter                          20.25                 2.75
         Second Quarter                          8.00                 2.00

The Company has not paid any dividends on its Common Stock since shares were
sold to the public in December 1992. 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 KUAL owns 50% of
the stock of the Company, and the Company's directors excluding Mr. Glickman are
also directors of KUAL, the Company's directors may be influenced by KUAL'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 30, 2000, there were 40 holders of record of the Company's
Common Stock.

                                       13


<PAGE>

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,
2000 and 1999 and for each of the years in the three year period ended June 30,
2000 and the related notes, included elsewhere in this Report.

<TABLE>
<CAPTION>

                                                            Years Ended June 30,
                                                            --------------------

                                            2000         1999         1998        1997        1996
                                        --------     --------     --------    --------    --------
<S>                                    <C>          <C>          <C>         <C>         <C>
Revenues ...........................    $ 18,653     $ 25,486     $ 26,466    $ 26,003    $ 24,638
(Loss) income before income taxes ..      (3,266)      (1,162)         345       1,615       1,465

Provision (benefit) for income taxes         543          (34)         149         662         270
Net (loss) income ..................    $ (3,809)    $ (1,128)    $    196    $    953    $  1,195
(Loss) income per share
      Basic (1) ....................    $  (1.14)    $   (.35)    $    .06    $    .30    $    .38
      Diluted (2) ..................    $  (1.14)    $   (.35)    $    .06    $    .29    $    .38

</TABLE>

<TABLE>
<CAPTION>

                                                                  June 30,
                                                                  --------

                                          2000         1999         1998        1997        1996
                                        --------     --------     --------    --------    --------
<S>                                    <C>          <C>          <C>         <C>         <C>
Accounts receivable (net) ..........    $  6,415     $  7,799     $  6,530    $  7,302    $  5,669
Total assets .......................      11,284       13,798       12,122      11,618       9,484
Working capital (deficit) ..........      (1,252)       1,258        3,502       5,044       4,696
Total stockholders' equity .........       1,781        5,198        6,326       6,101       4,976

</TABLE>

-----------------------
(1) Based on 3,355,221, 3,262,571, 3,125,666, 3,192,797, and 3,168,037 shares
outstanding in the years ended in June 30, 2000, 1999, 1998, 1997 and 1996.

(2) Based on 3,355,221, 3,262,571, 3,328,213, 3,231,706, 3,210,407 diluted
shares outstanding in the years ended in June 30, 2000, 1999, 1998, 1997 and
1996.

                                       14


<PAGE>

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

Results of Operations

Twelve Months Ended June 30, 2000 Compared with Twelve Months Ended June 30,
1999.

Total revenues decreased by $6,833,000, or 26.8% from $25,486,000 in 1999 to
$18,653,000 in 2000, primarily due to a decrease in Cerezyme revenues. In
addition, the Company exited from contractual arrangements that were not meeting
profitability standards. The Company is currently in the process of attempting
to negotiate revised terms for its contract with Genzyme, including a higher
distribution fee. If it cannot accomplish this, the Company may have to
discontinue selling Cerezyme.

Costs of medical and nutritional products sold to patients and other customers
decreased by $4,156,000 or 26.2% from $15,855,000 in 1999 to $11,699,000 in
2000. As a percentage of total revenues, medical and nutritional product costs
remained relatively consistent from 1999 to 2000.

Total personnel costs decreased by $1,166,000 or 19.4% from $6,008,000 in 1999
to $4,842,000 in 2000, primarily due to a change in the business mix to include
more sales of specialty pharmaceuticals which require less nursing and pharmacy
time and to the closing of the Philadelphia pharmacy operations.

Selling, general and administrative expenses in 2000 decreased by $386,000, or
11.5% from $3,355,000 in 1999 to $2,969,000 in 2000. The main reasons for the
reduction were the closing of a facility and a reduction in general and
administrative costs associated with lower personnel.

Management fees to KUAL of $288,000 in 2000 and $390,000 in 1999 were
approximately 1.6% of revenues in both years.

After in-depth management reviews of the aging of its accounts receivable, the
Company increased its allowance for uncollectible accounts by $1,514,000 due to
a slow down in collections in the home health care industry.

Depreciation and amortization expense increased from $84,000 in 1999 to $221,000
in 2000 due to the purchase of computer equipment.

Interest expense of $608,000 in 2000 consisted of interest related to the
Company's outstanding line of credit, interest accrued from an accounts payable
supplier and accrued interest related to late tax filings. Expenses in 1999
related to the Company's line of credit.

Other (income) of ($222,000) in 2000 and ($99,000) in 1999 consisted of interest
income from the outstanding KUAL receivable balance.

The net loss in 2000 was $3,809,000 or $1.14 (diluted) per share compared to a
net loss in 1999 of $1,128,000, or $.35 (diluted) per share. The loss before
taxes for the twelve months ended June 30, 2000 was $3,266,000 compared to
$1,162,000 for the comparable prior period. The change was due primarily to a
lower volume of business and the increase in the allowance for uncollectable
accounts.

A number of Federal and State income tax returns for previous years were not
filed when due. The Company has completed and filed a portion of those
outstanding returns and the remainder are expected to be filed shortly. The
Company believes no Federal taxes are due. There are several claims for
penalties and interest associated with late filings which are being appealed.
Interest associated with these late filings has been accrued by the company.

Twelve Months Ended June 30, 1999 Compared with Twelve Months Ended June 30,
1998.

Total revenues decreased by $980,000, or 3.7%, from $26,466,000 in 1998 to
$25,486,000 in 1999, primarily due to a decrease in contract services division
revenues. The decrease in infusion revenues is due to the decrease in Cerezyme
revenues. The Company is currently in the process of negotiating revised terms
for its contract with Genzyme, which will allow the Company to distribute
Cerezyme at more acceptable profit levels. If it cannot accomplish this, the
Company may have to discontinue selling Cerezyme. However, the Company owes
Genzyme approximately $4.7 million for Cerezyme which the Company has sold in
past years.

                                       15


<PAGE>

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

Costs of medical and nutritional products sold to patients and other customers
increased by $994,000 or 6.7% from $14,861,000 in 1998 to $15,855,000 in 1999.
As a percentage of total revenues, medical and nutritional product costs
increased from 56% in 1998 to 62% in 1999. The business mix of the Company has
changed to reflect more sales of specialty pharmaceuticals like Cerezyme and
Synagis. These products have a higher cost of sales compared to other company
products.

Total personnel costs decreased by $1,150,000, or 16% from $7,158,000 in 1998 to
$6,008,000 in 1999, primarily due to the realization of efficiencies within the
nursing and pharmacy operations due to the change in the business mix reflecting
more sales of the specialty pharmaceuticals which require less nursing and
pharmacy time and the closing of the Florida Pharmacy operations.

Selling, general and administrative expenses in 1999 increased by $29,000, or 1%
from $3,326,000 in 1998 to $3,356,000 in 1999.

Management fees to KUAL of $390,000 in 1999 and $423,000 in 1998 were 1.6% of
revenues in both years.

After a management review of its existing policies and procedures for estimating
collectability of its accounts receivable, the Company increased its provision
for uncollectable accounts by $610,000. The Company did this because of
difficulties experienced in collecting payments from managed care organizations.

Depreciation and amortization expense decreased from $152,000 in 1998 to $84,000
in 1999 due to retirement of property and equipment.

Other (income) of ($99,000) in 1999 and ($152,000) in 1998 consisted of interest
on the outstanding KUAL receivable balance in 1999 and write offs of accounts
payable in 1998.

The net loss in 1999 was $1,129,000, or $.35 (basic) per share compared to net
income in 1998 of $196,000, or $.06 (basic) per share. The loss before taxes for
the twelve months ended June 30, 1999 was $1,163,000 compared to income before
taxes of $345,000 for the comparable prior period. The change was due to a
decrease in revenue, an increase in the cost of medical and nutritional products
and higher provision for uncollectable accounts.

Liquidity and Capital Resources

As of June 30, 2000, the Company had total assets of $11.3 million, a working
capital deficit of $(1.3) million and a net worth of $1.8 million. The Company's
current liabilities exceeds the Company's current assets by $1,252,000. The
Company has a $1.5 million line of credit with Heller Healthcare Financial
("Heller") secured by certain accounts receivable. As of June 30, 2000, the
outstanding loan was $972,000. The Company's stockholder equity was $1.8 million
versus the $4.0 million requirement from Heller. In addition, the Company had
accounts payable greater than 120 days old. The Company has obtained a waiver
from Heller to alleviate these events of default. On November 3, 2000 the
Company renewed the agreement with Heller which expires on December 31, 2001.
The Company is exploring additional borrowing alternatives. The continuation of
the Company as a going concern is dependent upon its ability to obtain
additional financing and generate revenues with gross margins sufficient to
produce an operating profit. Additionally, the Company's independent auditors
have indicated there is substantial doubt about the Company's ability to
continue as a going concern in their report on the June 30, 2000 financial
statements.

Management has taken action and is formulating plans to strengthen the Company's
working capital position and generate sufficient cash to meet its operating
needs through June 30, 2001 and beyond. The Company is attempting to increase
revenue by providing wireless services through the use of its recently launched
web-site. Also, negotiations are in process with it's primary vendor Genzyme to
convert the amounts owed them ($4,700,000) to a long term payment schedule and
increase the margins resulting from future Genzyme sales. Further, the Company
is negotiating for additional financing with several lenders. No assurance can
be made that the management will be successful in achieving its plan.

At June 30, 2000, the Company's net accounts receivable were $6.4 million
compared to $7.8 million, at June 30, 1999. This reflected an increase in the
Company's gross accounts receivable from 136 days sales outstanding ("DSO") at
June 30, 1999 to 178 DSO at year end. The 178 DSO is a result of slowed payments
from managed care companies.

                                       16


<PAGE>

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

At June 30, 1999 the Company was owed $2.0 million by five subsidiaries of KUAL,
the Company's 50% stockholder which owns or operates nursing homes. No business
was conducted by the Company in 2000 with any of the five facilities owned or
managed by KUAL. At June 30, 2000, the Company's net receivable from those
nursing homes increased to $2.2 million due to accrued interest. In addition,
KUAL owes $1.4 million to the Company for KUAL's share of common expenses paid
on behalf of KUAL by the Company.

KUAL and certain of its subsidiaries have agreed to pay back the June 30, 1999
$3.4 million total receivable balance, plus interest at 7% in twenty quarterly
installments beginning in January, 2000. KUAL guarantees the amount due to the
Company by the KUAL subsidiaries. KUAL has given the company a mortgage on land
owned by a wholly owned subsidiary of KUAL and a security interest in 1,500,000
shares of the Company's common stock that it owns to secure that obligation.
Under certain circumstances KUAL may substitute the collateral as defined in the
agreement or may reduce the Infu-Tech shares pledged as security. However, in no
event may the remaining Infu-Tech shares be valued at less than 150% of the
outstanding receivable balance at the date of the reduction. Payments may be in
cash or with Infu-Tech's common stock owned by KUAL. If cash payments are not
made when due, KUAL may sell company stock to satisfy the debt. As of June 30,
2000 the Company had received $75,000 of the $431,000 from KUAL required under
the agreement. The balance of the amount due in the fiscal year ended June 30,
2000 was paid in September 2000 and the July 2000 payment ($217,000) was made in
October 2000. KUAL and its subsidiaries are experiencing significant financial
difficulties. In September 2000 three of KUAL's five nursing home subsidiaries
commenced proceedings under Chapter 11 of the Bankruptcy Code. However, the
Chapter 11 proceedings do not affect KUAL's obligations under the agreement. The
Company no longer sells products to KUAL's nursing homes (but does sell products
and services to residents in them).

The Company incurred a $3.8 million loss for the year ended June 30, 2000 and is
experiencing a slowdown in payments from several managed care organizations
which have affected its ability to pay its suppliers on a timely basis. The
Company had a net working capital deficit of $(1.3) million at June 30, 2000.
The company has extended its payment terms with some of its suppliers and is on
COD terms with some suppliers. It is executing a plan to pursue collection of
its accounts receivable, consolidate its operations, and reduce operating costs.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.
--------  -----------------------------------------------------------

In the normal course of business, the Company is exposed to market risks
relating to fluctuations in interest rates.

Interest Rate Risk

As the Company seeks asset based lending financing to maintain its ongoing
operations and sustain its growth, it is exposed to interest rate risk.
Borrowings under the Company's $1.5 million loan and security facility with
Heller Healthcare Financial are sensitive to changes in interest rates as such
borrowings bear interest that adjusts with changes in the "Prime Rate of
Interest."

                                       17


<PAGE>

Item 8.   Consolidated Financial Statements and Supplementary Data.
-------   ---------------------------------------------------------

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

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

Not applicable.

Item 10f. Exhibits
--------- --------

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)    Management and Non-Competition Agreement between Infu-Tech,
                  Inc. and C.H.A. (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. (4)
         10(f)    Heller Healthcare Financial Loan And Security Agreement. To be
                  filed by amendment.
         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.
(4)      Incorporated by reference to definitive proxy statement dated June
         1996.
(b)      Reports on Form 8-K filed during the year ended June 30, 1999.
(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).

                                       18


<PAGE>

                                    PART III

Part III Items 10 through 13 are incorporated by reference to a definitive
statement to be filed not later than October 28, 2000.

                                       19


<PAGE>

                                    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)    Management and Non-Competition Agreement between Infu-Tech,
                  Inc. and C.H.A. (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. (4)
         10(f)    Heller Healthcare Financial Loan And Security Agreement. To be
                  filed by amendment.
         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.
(4)      Incorporated by reference to definitive proxy statement dated June
         1996.
(b)      Reports on Form 8-K filed during the year ended June 30, 1999.
(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).

                                       20


<PAGE>






                                INFU-TECH, INC.

                       CONSOLIDATED FINANCIAL STATEMENTS

                          June 30, 2000, 1999 and 1998

                  (With Independent Auditors' Report Thereon)


<PAGE>

                                 INFU-TECH INC.

                 Index to Consolidated Financial Statements and

                          Financial Statement Schedule

                                                                            Page
                                                                            ----

1.     Consolidated Financial Statements:

       Independent Auditors' Report..............................         F - 3

       Balance Sheets

             June 30, 2000 and 1999..............................         F - 4

       Statements of Operations:

             Years Ended June 30, 2000, 1999 and 1998............         F - 5

       Statements of Stockholders' Equity:

             Years Ended June 30, 2000, 1999 and 1998............         F - 6

       Statements of Cash Flows:

             Years Ended June 30, 2000, 1999 and 1998............ F - 7 - F - 8

       Notes to Consolidated Financial Statements................ F - 9 - F - 19

2.     Financial Statement Schedule:

       Valuation and Qualifying Accounts..........................         S - 1

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.


<PAGE>

                          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 the consolidated financial statements, we also have audited the financial
statement schedule as listed in the accompanying index. These consolidated
financial statements and financial statement schedule 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 auditing standards generally accepted
in the United States of America. 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, 2000 and 1999 and the results of their operations
and their cash flows for each of the years in the three-year period ended June
30, 2000, in conformity with accounting principles generally accepted in the
United States of America. 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.

The accompanying consolidated financial statements and financial statement
schedule have been prepared assuming that the Company will continue as a going
concern. As discussed in Note 1 to the consolidated financial statements, the
Company has incurred net losses of $3,809,000, and $1,128,000 for the years
ended June 30, 2000 and June 30, 1999 respectively, and as of June 30, 2000
current liabilities exceeded current assets by $1,252,000. These conditions
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 1. The consolidated financial statements and financial statement schedule
do not include any adjustments that might result from the outcome of this
uncertainty.

October 20, 2000, except as to
Note 4 which is as of
November 3, 2000

                                     F - 3


<PAGE>

                                 INFU-TECH, INC.
                           Consolidated Balance Sheets
                             (Dollars in thousands)
                             (Except Per Share Data)

<TABLE>
<CAPTION>

                                                                           June 30,
                                                                           --------

                                                                       2000         1999
                                                                     --------     --------

                                     ASSETS
<S>                                                                 <C>          <C>
Cash ............................................................    $    128     $    258
Accounts receivable, net of allowances for uncollectible
       accounts of $2,746 and $1,845 ............................       6,415        7,799
Accounts receivable from affiliates .............................       1,077          340
Inventories .....................................................         310          541
Deferred income taxes ...........................................        --            539
Prepaid expenses and other current assets .......................         146          381
                                                                     --------     --------
             Total current assets ...............................       8,076        9,858

Property and equipment, at cost, net of accumulated
       depreciation of $843 and $636 ............................         508          317
Goodwill, net ...................................................          96          110
Accounts receivables from affiliates, non-current ...............       2,493        3,063

Other assets ....................................................         111          450
                                                                     --------     --------
             Total assets .......................................    $ 11,284     $ 13,798
                                                                     ========     ========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Short-term debt .................................................    $    972     $    746
Accounts payable ................................................       7,482        7,192
Accrued payroll and related expenses ............................         368          222
Short-term obligation under capital lease .......................         121         --
Other current liabilities .......................................         385          440
                                                                     --------     --------
             Total current liabilities ..........................       9,328        8,600

Long-term obligation under capital lease ........................         175         --

             Total liabilities ..................................       9,503        8,600

Stockholders' Equity:

       Common stock, $.01 par value; 5,000,000 shares authorized;
             3,355,221 (2000) and 3,262,571 (1999) issued .......          34           33
       Additional paid-in capital ...............................       3,519        3,128
       (Accumulated deficit) retained earnings ..................      (1,699)       2,110
       Treasury stock, at cost; 39,300 shares ...................         (73)         (73)
                                                                     --------     --------
             Total stockholders' equity .........................       1,781        5,198
                                                                     --------     --------

Commitments and contingencies

       Total liabilities and stockholders' equity ...............    $ 11,284     $ 13,798
                                                                     ========     ========

</TABLE>

          See accompanying notes to consolidated financial statements.


                                     F - 4

<PAGE>

                                INFU-TECH, INC.
                     Consolidated Statements of Operations
                             (Dollars in thousands)
                       (Except Share and Per Share Data)

<TABLE>
<CAPTION>

                                                              Years Ended June 30,
                                                              --------------------
                                                      2000            1999            1998
                                                   -----------     -----------     -----------
<S>                                               <C>             <C>             <C>
Revenues ......................................    $    18,653     $    25,486     $    26,466
                                                   -----------     -----------     -----------

Costs and Expenses:
        Medical and nutritional product .......         11,699          15,855          14,861
        Personnel .............................          4,842           6,008           7,158
        Selling, general and administrative ...          2,969           3,355           3,326
        Provision for uncollectible accounts ..          1,514             963             353
        Management fees to majority shareholder            288             390             423
        Depreciation and amortization .........            221              84             152
        Interest expense ......................            608              92            --
        Other (income) ........................           (222)            (99)           (152)
                                                   -----------     -----------     -----------

                                                        21,919          26,648          26,121
                                                   -----------     -----------     -----------

(Loss) income before income taxes .............         (3,266)         (1,162)            345

Income tax provision (benefit) ................            543             (34)            149
                                                   -----------     -----------     -----------

        Net (loss) income .....................    $    (3,809)    $    (1,128)    $       196
                                                   ===========     ===========     ===========

(Loss) earnings per share
        Basic .................................    $     (1.14)    $     (0.35)    $      0.06
                                                   -----------     -----------     -----------

        Diluted ...............................    $     (1.14)    $     (0.35)    $      0.06
                                                   -----------     -----------     -----------

Basic weighted average number of common
         shares ...............................      3,355,221       3,262,571       3,215,666
                                                   -----------     -----------     -----------

Diluted weighted average number of common
        shares ................................      3,355,221       3,262,571       3,328,213
                                                   ===========     ===========     ===========

</TABLE>


          See accompanying notes to consolidated financial statements.


                                     F - 5

<PAGE>

                                INFU-TECH, INC.
                Consolidated Statements of Stockholders' Equity
                    Years Ended June 30, 2000, 1999 and 1998
                             (Dollars in thousands)

<TABLE>
<CAPTION>

                                                  Additional                                        Total
                                                   Paid-in        Retained        Treasury      Stockholders'
                                      Common       Capital        Earnings          Stock           Equity
                                      ------       -------        --------          -----           ------
                                                              (accumulated deficit)
<S>                                 <C>            <C>            <C>             <C>             <C>
Balance, June 30, 1997 ......        $    32        $ 3,100        $ 3,042         $   (73)        $ 6,101

Net income ..................           --             --              196            --               196

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

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

Exercise of options .........              1             28           --              --                29
                                     -------        -------        -------         -------         -------

Balance, June 30, 1998 ......        $    33        $ 3,128        $ 3,238         $   (73)        $ 6,326
                                     =======        =======        =======         =======         =======


Net loss ....................           --             --           (1,128)           --            (1,128)

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

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

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

Balance, June 30, 1999 ......        $    33        $ 3,128        $ 2,110         $   (73)        $ 5,198
                                     =======        =======        =======         =======         =======


Net loss ....................           --             --           (3,809)           --            (3,809)

Grant and exercise of options              1            391           --              --               392
                                     -------        -------        -------         -------         -------

Balance, June 30, 2000 ......        $    34        $ 3,519        $(1,699)        $   (73)        $ 1,781
                                     =======        =======        =======         =======         =======

</TABLE>


          See accompanying notes to consolidated financial statements.


                                     F - 6

<PAGE>

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

<TABLE>
<CAPTION>

                                                                                    Years Ended June 30,
                                                                                    --------------------

                                                                                2000        1999        1998
                                                                               -------     -------     -------
<S>                                                                           <C>         <C>         <C>
Operating activities:
Net (loss) income .........................................................    $(3,809)    $(1,128)    $   196

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

         Amortization expense .............................................         14          15          35
         Depreciation expense .............................................        207          69         117
         Provision for uncollectible accounts .............................      1,514         963         353
         Provision (benefit) for deferred income taxes ....................        543          12         151
         Other ............................................................         82        --          --

         Increase (decrease) from changes in:
         Accounts receivable ..............................................       (130)     (2,232)       (809)
         Accounts receivable from affiliates ..............................       (737)         97        (137)
         Inventories ......................................................        231         911         202
         Prepaid expenses and other current assets ........................        235        (216)        200
         Receivables from affiliates, non-current .........................        570        (874)       (698)
         Other assets .....................................................        339        (310)        (17)
         Taxes payable ....................................................       --          (194)       (255)
         Accounts payable .................................................        290       2,135         769
         Accrued payroll and related expenses .............................        143        (213)        (64)
         Other current liabilities ........................................        (55)        358         (75)
                                                                               -------     -------     -------

Net cash provided by (used in) operating
         activities .......................................................       (563)       (607)        (32)
                                                                               -------     -------     -------

Investing activities:

   Expenditures for property and equipment ................................       (183)        (16)       (243)

Financing activities:

   Net proceeds from short-term debt ......................................        226         746        --
   Payment of capital lease obligation ....................................         81         (28)       (103)
   Proceeds from exercise of options ......................................        309        --            29
                                                                               -------     -------     -------

         Net cash provided by (used in)
           financing activities ...........................................        616         718         (74)
                                                                               -------     -------     -------

</TABLE>


                            (Continued on next page)

                                      F-7

<PAGE>

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

                         (Continued from previous page)

<TABLE>
<CAPTION>

                                                                                    Years Ended June 30,
                                                                                    --------------------

                                                                                2000        1999        1998
                                                                               -------     -------     -------
<S>                                                                           <C>         <C>         <C>
Net increase (decrease) in cash and cash
   equivalents ............................................................       (130)         95        (349)
Cash and cash equivalents, beginning of
   the year ...............................................................        258         163         512
                                                                               -------     -------     -------

Cash and cash equivalents, end of the year ................................     $_ 128     $   258     $   163
                                                                               =======     =======     =======

Supplemental disclosures of cash flow data:

   Income tax paid ........................................................    $  --       $  --       $   154
                                                                               =======     =======     =======

   Interest paid ..........................................................    $   182     $    81     $  --
                                                                               =======     =======     =======

   Capital lease ..........................................................    $   377     $  --       $  --
                                                                               =======     =======     =======

</TABLE>


                                      F - 8

<PAGE>

                                 INFU-TECH, INC.

                   Notes to Consolidated Financial Statements

                 (Dollars in thousands except per share amounts)

                          June 30, 2000, 1999 and 1998


1.       The Company

         Infu-Tech, Inc. (the "Company") provides specialty pharmaceuticals,
         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, nursing homes and
         subacute care facilities. The Company recently formed a subsidiary,
         Smartmeds.com, Inc. It has recently launched an Internet website,
         Smartmeds.com, through which it intends to provide health management
         applications through wireless devices such as cellular phones, PDA's
         and pagers. The Company is 50% owned by Kuala Healthcare, Inc. (KUAL)
         formerly Continental Health Affiliates, Inc. The remaining 50% 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.

         Liquidity

         The Company experienced a $3,809 loss and is experiencing a slowdown in
         payments from several managed care organizations which have affected
         its ability to pay its suppliers on a timely basis. The Company has
         extended its payment terms with some of its suppliers while also
         executing a plan to pursue collection of its accounts receivable,
         consolidate its operations, and reduce operating costs. A number of
         factors could contribute to the Company suspending its operations
         including:

         o   Company is put in default by its lender,
         o   Company is not successful in obtaining additional capital,
         o   Company does not receive cash payments from Kuala,
         o   Company continues to incur significant losses.

         As of June 30, 2000 the Company's current liabilities exceeded its
         current assets by $1,252, and the Company was in default of its line of
         credit agreement. The Company has since obtained a waiver to alleviate
         the default. These factors raise substantial doubt about the Company's
         ability to continue as a going concern. The consolidated financial
         statements do not include any adjustments that might result from the
         outcome of this uncertainty. The continuation of the Company as a going
         concern is dependent upon its ability to obtain additional financing
         and generate revenues with gross margins sufficient to produce
         operating profit.

         Management has taken action and is formulating plans to strengthen the
         Company's working capital position and generate sufficient cash to meet
         its operating needs through June 30, 2001 and beyond. The Company is
         attempting to increase revenue by providing wireless services through
         the use of its recently launched web-site. Also, negotiations are in
         process with its primary vendor Genzyme to convert the amounts owed
         them ($4,700) to a long term payment schedule and increase the margins
         resulting from future Genzyme sales. Further, the Company is
         negotiating for additional financing with several lenders. No assurance
         can be made that the management will be successful in achieving its
         plan.

2.       Significant Accounting Policies

         Basis of Consolidation

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

         Website Costs

         Website development costs are expensed as incurred. Website enhancement
         costs are capitalized and depreciated over a 3 year period.

                                       F-9


<PAGE>

                                INFU-TECH, INC.
                   Notes to Consolidated Financial Statements
                (Dollars in thousands except per share amounts)
                          June 30, 2000, 1999 and 1998


         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 25% of
         total revenues were derived from such medical assistance programs in
         each of the three years ended June 30th, 1998, 1999, and 2000. 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. A small portion of the Company's
         revenues are earned based upon fixed monthly payments for each member
         of a particular health plan. The Company monitors its costs for
         services provided under this agreement to insure that they are
         appropriately matched with the revenues earned.

         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, computer equipment 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.

                                     F - 10


<PAGE>

                                INFU-TECH, INC.
                   Notes to Consolidated Financial Statements
                (Dollars in thousands except per share amounts)
                          June 30, 2000, 1999 and 1998


         Earnings Per Share

         Basic and diluted earnings per share is based on the net income for the
         relevant period divided by the weighted average number of shares issued
         and outstanding during the period. For purposes of the diluted earnings
         per share calculation, the exercise or conversion of all dilutive
         potential common shares is included, for the year ended June 30, 1998.
         There is no dilutive effect on common shares due to losses incurred for
         the years ended June 30, 2000, and 1999.

         Employee Stock Options

         The Company accounts for its stock option plans in accordance with the
         provisions of the Accounting Principles Board's Opinion No. 25 (APB
         25), "Accounting for Stock Issued to Employees" and related
         interpretations. Effective July 1, 1996 the Company adopted the
         Financial Accounting Standards Board's Statement of Financial
         Accounting Standard No. 123 (SFAS 123), "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 cost.

3.       Stockholders' Equity

         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, 2000, the Company had purchased 39,300 of its common
         shares at an aggregate cost of $73.

         The Company has a stock option plan (the "Plan") under which it is
         authorized to grant stock options to designated employees, officers and
         directors of the Company. The Plan, as amended, authorizes grant of
         stock options up to a maximum of 1,500,000 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.

         Stock option transactions for the years ended June 30, 2000, 1999 and
         1998 are summarized as follows:

                                                              Weighted average
                                                  Number        Option Price
                                                of shares         Per Share
                                                ---------         ---------

         Outstanding, June 30, 1997              617,894          $   4.24

         Granted                                 213,500          $   5.23
         Canceled                                (77,800)         $   3.92
         Exercised                                (8,900)         $   3.27
                                                --------          --------
         Outstanding, June 30, 1998              744,694          $   4.59

         Granted                                  64,000          $   2.84
         Canceled                               (178,252)         $   4.50
         Exercised                                  --            $   --
                                                --------          --------
         Outstanding, June 30, 1999              630,442          $   4.50

         Granted                                 173,700          $   1.76
         Canceled                               (101,292)         $   4.34
         Exercised                               (92,650)         $   3.34
                                                --------          --------
         Outstanding, June 30, 2000              610,200          $   3.93
                                                 =======          ========

                                      F-11


<PAGE>

                                INFU-TECH, INC.
                   Notes to Consolidated Financial Statements
                (Dollars in thousands except per share amounts)
                          June 30, 2000, 1999 and 1998

Options to purchase 326,506 shares were available for grant at June 30, 2000
under the Plan.

The following table summarizes information about Infu-Tech stock options
outstanding at June 30, 2000:

<TABLE>
<CAPTION>

                            Number             Weighted               Weighted        Number            Weighted
       Range of          Outstanding      Average Remaining           Average      Exercisable at       Average
    Exercise Prices       at 6/30/00    Contractual Life Years     Exercise Price     6/30/00        Exercise Price
    ---------------       ----------    ----------------------     --------------     -------        --------------
<S>                       <C>                   <C>                   <C>             <C>                <C>
     $1.00 - $3.13         201,350               7.2                   $1.89            42,400            $2.19
     $3.38 - $4.13         141,742               9.0                   $3.69            32,750            $3.71
     $4.25                 171,000               6.3                   $4.25           171,000            $4.25
     $4.50 - $5.88         100,100               7.6                   $5.38           100,100            $5.38
     $6.00 - $7.00         105,000               3.9                   $6.00           105,000            $6.00
                           -------               ---                   -----           -------            -----
                           719,192               6.9                   $3.89           451,250            $4.67
                           =======               ===                   =====           =======            =====

</TABLE>


In February, 2000, an advisory board was formed for Smartmeds.com Inc. The
Company authorized up to 200,000 shares of Infu-Tech's common stock to be issued
in the form of Infu-Tech stock options to the Smartmeds.com advisory board. Each
of the twelve members was granted 5,000 options for the purchase of Infu-Tech
stock with the exception of one member who was issued 10,000 options. The
options were granted at an exercise price of $1.13, the fair value of Infu-Tech
stock on the grant date. The Company is recording compensation expense in
accordance with FASB Statement NO. 123 and EITF Issue NO. 96-18 over the one
year vesting period which totaled $97 in the accompanying fiscal 2000 statement
of operations.

In April, 2000 the Company caused Smartmeds.com, Inc. to adopt a stock option
plan under which it may grant employees and directors of Smartmeds, a wholly
owned subsidiary with 5,000,000 shares of common stock outstanding, options to
purchase up to 750,000 shares of Smartmeds.com common stock. The Company issued
250,000 options to purchase Smartmeds.com common stock to the Chairman of
Infu-Tech and options to purchase 30,000 Smartmeds.com common shares to each of
the five board members of Infu-Tech. The terms of the options are for 10 years.
The options may, but need not, be converted into options to purchase shares of
Infu-Tech's common stock beginning not sooner than one year after the grant
date, April 18, 2000. The Smartmeds.com options are exercisable at $1 per share,
which was equal to or greater than the estimated fair value of Smartmeds.com
common stock at the date of grant. The options are convertible into options to
acquire Infu-Tech stock with an exercise price of $3.67 per share, the fair
value of Infu-Tech stock on the same grant date, in accordance with the
specified conversion terms in the stock option plan. The options of Smartmeds
are convertible into 108,992 shares of Infu-Tech stock options.

                                     F - 12


<PAGE>

                                INFU-TECH, INC.
                   Notes to Consolidated Financial Statements
                (Dollars in thousands except per share amounts)
                          June 30, 2000, 1999 and 1998


         The Company has computed, the pro forma weighted average fair value per
         option granted under the Plan to be $1.83, $2.64, and $4.11 for 2000,
         1999 and 1998 respectively. The computations were made using the
         Black-Scholes model, as prescribed by SFAS No. 123, with the following
         weighted average assumptions for grants as follows:

<TABLE>
<CAPTION>

                                                              Years Ended June 30,
                                                              ---------------------

                                                       2000         1999              1998
                                                       ----         ----              ----
<S>                                                    <C>          <C>              <C>
         Risk-free interest rate ..............         5.5%         5.5%               4.2%
         Expected dividend yield ..............           0%           0%                 0%
         Expected term until exercise (years) .          10           10                8.2
         Expected volatility ..................         235%         106%             60.79%

</TABLE>

         If the Company had accounted for these plans in accordance with the
         fair value method of SFAS No. 123, the Company's net income (loss) and
         net income (loss) per share would have changed as reflected in the
         following pro forma amounts:

<TABLE>
<CAPTION>

                                                            Years Ended June 30,
                                                            --------------------

                                                 2000               1999              1998
                                                 ----               ----              ----
<S>                                          <C>                <C>                <C>
         (Loss) Net Income:

               As reported ..........         $  (3,809)         $  (1,128)         $    196
               Pro forma ............            (4,326)            (1,297)             (265)

         Net (Loss) Income per share:

               Basic as reported ....         $   (1.14)         $    (.35)         $    .06
               Basic pro forma ......             (1.29)              (.40)             (.08)

         Net (Loss) Income per share:

               Diluted as reported ..         $   (1.14)         $    (.35)         $    .06
               Diluted pro forma ....             (1.29)              (.40)             (.09)

</TABLE>

         The pro forma effects on net (loss) 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.

4.       Debt

         Infu-Tech has a working capital line of credit available totaling
         $1,500 at June 30, 2000. The amount of credit available from the line
         of credit to the Company is based on the billing and collection
         activity. This line is secured by certain accounts receivable balances
         the Company maintains. At June 30, 2000 the balance on this credit
         facility was $972, the maximum available based on billing and
         collection activity.

         On November 3, 2000, the Company renewed the agreement with Heller
         which now expires on December 31, 2001. During the year the company
         experienced a weighted average interest rate of 13.5%. As of June 30,
         2000 the Company was in default of certain financial covenants
         contained within its loan agreement. The Company's stockholders' equity
         was $1,781 versus the $4,000 requirement. In addition, the Company had
         accounts payable greater than 120 days old. The Company has obtained a
         waiver from Heller to alleviate the default. The waiver requires that
         stockholder's equity be no less than $1,700 through June 30, 2001. The
         Company is exploring additional borrowing alternatives.

                                      F-13


<PAGE>

                                INFU-TECH, INC.
                   Notes to Consolidated Financial Statements
                (Dollars in thousands except per share amounts)
                          June 30, 2000, 1999 and 1998


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
         2003. 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, 2000:

              Year ending
                June 30,                       Facilities    Equipment    Total
                --------                       ----------    ---------    -----

                  2001.....................        314           20        334
                  2002.....................        279            6        285
                  2003.....................         56            1         57
                                                  ----          ---       ----
                                                  $649          $27       $676
                                                  ====          ===       ====


         Rent expense was $392, $394 and $425 in 2000, 1999 and 1998,
respectively.

         Capital Lease Commitments

         The Company entered into a capital lease that commenced in October
         1999. The lease was for computer equipment and software at an interest
         rate of 16.75%. At June 30, 2000, the Company had a capital lease
         obligation of $296, of which $121 is the current portion shown in
         current liabilities.

              Year ending
                June 30,                        Equipment
                --------                        ---------
                  2001.....................        162
                  2002.....................        162
                  2003.....................         40
                                                  ----
                                                  $364
                                                  ====

         The above payments include interest of $68.

         Employment Commitments

         The Company has an employment agreement with its Chairman of the Board,
         who is also Chairman of the Board and President of KUAL, which expired
         in July 2000. Although the employment agreement has not been formally
         extended, he continues to provide services as Chairman of the Board. He
         renders part-time services to the Company for a salary of $150 per
         year. Pursuant to this employment agreement, a bonus provision exists
         which is based upon an increase in the market capitalization of the
         Company exceeding the 1995 base year. As of June 30, 1998 a bonus
         payable of $108 was accrued relating to this provision. No bonus was
         earned in 1999 or 2000.

                                      F-14


<PAGE>

                                INFU-TECH, INC.
                   Notes to Consolidated Financial Statements
                (Dollars in thousands except per share amounts)
                          June 30, 2000, 1999 and 1998


         An offer was made by the Company to Daniel Rosen to join the Company as
         President. An employment agreement was extended to Mr. Rosen. The terms
         of the agreement include the title of President and Chief Operating
         Officer of the Company and Smartmeds for a period of two years at a
         salary of $150,000 per year. Mr. Rosen was given options to purchase
         25,000 shares of the Company's stock at an exercise price of $2.88 per
         share and 250,000 shares of Smartmeds common stock at a exercise price
         of $1.00. The options of Smartmeds are convertible into 86.806
         Infu-Tech stock options at an exercise price of $2.88. Mr. Rosen joined
         the Company in August.

         Contingencies

         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.

         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 $10,000
         which is subject to annual renewal. The Company has not recorded any
         related loss liabilities as of June 30, 2000.

6.       Transactions with Affiliates

         The Company provides nutritional and other supplies to patients who are
         insured by third parties and prior to June 30, 1999, provided infusion
         therapy services to nursing homes owned or managed by KUAL and derived
         revenues from sales to those nursing homes, plus interest charged on
         their outstanding balances, of $226 (interest only) in 2000, $477 in
         1999 and $437 in 1998. There were no sales recorded in 2000.

         Included in personnel costs in 1998 are charges of $332 from
         subsidiaries of KUAL for contracted nursing services. There were no
         costs incurred in 1999 and 2000.

                                      F-15


<PAGE>

                                INFU-TECH, INC.
                   Notes to Consolidated Financial Statements
                (Dollars in thousands except per share amounts)
                          June 30, 2000, 1999 and 1998


         A management and non-competition agreement (the "Agreement") between
         the Company and KUAL expired on September 30, 2000. The companies are
         continuing to operate under the terms of the Agreement.

         Pursuant to the Agreement, KUAL provides services to the Company, which
         includes, among others, the services of KUAL's senior executive
         management. A management fee equal to 1.6% of revenues is charged by
         KUAL to the Company for these services.

         Receivables from affiliates non-current and current are $3,570 and
         $3,403, in 2000 and 1999, respectively, that arose from the sales of
         nutritional and other products and services to wholly owned
         subsidiaries of KUAL, interest on the outstanding balance, and KUAL's
         share of common expenses paid on behalf of KUAL by the company.

KUAL and certain of its subsidiaries have agreed to pay back the June 30, 1999
$3,400 total receivable balance, plus interest at 7% in twenty quarterly
installments beginning in January, 2000. KUAL guarantees the amount due to the
Company by the KUAL subsidiaries. KUAL has given the company a mortgage on land
owned by a wholly owned subsidiary of KUAL and a security interest in 1,500,000
shares of the Company's common stock that it owns to secure that obligation.
Under certain circumstances KUAL may substitute the collateral as defined in the
agreement or may reduce the Infu-Tech shares pledged as security. However in no
event may the remaining Infu-Tech shares be valued at less than 150% of the
outstanding receivable balance at the date of the reduction. Payments may be in
cash or with Infu-Tech's common stock owned by KUAL. If cash payments are not
made when due, KUAL may sell company stock to satisfy the debt. As of June 30,
2000 the Company had received $75 of the $431 from KUAL required under the
agreement. The balance of the amount due in the fiscal year ended June 30, 2000
was paid in September 2000 and the July 2000 payment ($217) was made in October
2000. KUAL and its subsidiaries are experiencing significant financial
difficulties. In September 2000 three of KUAL's five nursing home subsidiaries
commenced proceedings under Chapter 11 of the Bankruptcy Code. However, the
Chapter 11 proceedings do not affect KUAL's obligations under the agreement. The
Company no longer sells products to KUAL's nursing homes (but does sell products
and services to residents in them).

                                      F-16


<PAGE>

                                INFU-TECH, INC.
                   Notes to Consolidated Financial Statements
                (Dollars in thousands except per share amounts)
                          June 30, 2000, 1999 and 1998


7.       Income Taxes

         The (benefit) provision for income taxes consists of the following:

<TABLE>
<CAPTION>

                                                             Years Ended June 30,
                                                             --------------------
                                                    2000             1999          1998
                                                    ----             ----          ----
<S>                                               <C>              <C>            <C>
         Current

                      Federal ............         $     3          $ (38)         $ --
                      State ..............               1             (8)           --
                                                   -------          -----          ----
                                                   $     4          $ (46)         $ --

         Deferred:

                      Federal ............             447             11           124
                      State ..............              92              1            25
                                                   -------          -----          ----
                                                   $   539          $  12          $149
                                                   -------          -----          ----
                                                   $   543          $ (34)         $149
                                                   =======          =====          ====

</TABLE>

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

<TABLE>
<CAPTION>

                                                             Years Ended June 30,
                                                             --------------------
                                                    2000             1999          1998
                                                    ----             ----          ----
<S>                                               <C>              <C>            <C>
Federal income tax (benefit)

               provision at statutory rate         $(1,110)         $(395)         $117
         State income tax provision,
               net of Federal income tax
               benefit ...................            --              (81)           25
         Increase (decrease) in valuation
               allowance .................           1,289             10           --
         Other nondeductible expenses ....              10              9           --
         Other - net .....................             354            423             7
                                                   -------          -----          ----
                                                   $   543          $ (34)         $149
                                                   =======          =====          ====

</TABLE>

                                     F - 17


<PAGE>

                                INFU-TECH, INC.
                   Notes to Consolidated Financial Statements
                (Dollars in thousands except per share amounts)
                          June 30, 2000, 1999 and 1998


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

<TABLE>
<CAPTION>

                                                                      June 30,
                                                                      --------

                                                                 2000           1999
                                                               -------          -----
<S>                                                           <C>              <C>
         Net deferred income tax assets:
               Allowances for uncollectible accounts
                 receivable ..........................         $ 1,126          $ 756
               Net operating tax loss carry forwards .             467           --
               Compensated absences, principally due
                 to accrual for financial purposes ...              21             30
               Other - net ...........................             (50)            28
                                                               -------          -----
               Sub-total .............................           1,564            814

               Valuation allowance ...................          (1,564)          (275)
                                                               -------          -----
               Net deferred income tax assets ........         $  --            $ 539
                                                               =======          =====

</TABLE>

         A number of Federal and State income tax returns for previous years
         were not filed when due. The Company has completed and filed a portion
         of those outstanding returns and the remainder are expected to be filed
         shortly. The Company believes no Federal taxes are due. There are
         several claims for penalties and interest associated with late filings
         which are being appealed. The estimated interest due was accrued by the
         Company.

         A valuation allowance is provided when it is more likely than not that
         some portion or all of the deferred tax assets will not be realized.
         The net change in the total valuation allowance for the years ended
         June 30, 2000 and 1999 was an increase of $1,289 and $10, respectively.
         The Company has recognized a full valuation allowance against the
         deferred tax asset because of its losses in the current and prior year
         and the uncertainty of future operations. The tax benefit assumed using
         the Federal statutory rate of 34% has been reduced to an expense of
         $543 for the year ended June 30, 2000 due to the increase in the
         valuation allowance.

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. Under this
         agreement, accounts payable to the drug manufacturer ($4,700 at June
         30, 2000) are secured by the Company's inventories of the drug (none at
         June 30, 2000) and related Accounts Receivable ($1,138 at June 30,
         2000). In addition, the agreement provides for interest on the unpaid
         balance. Interest was accrued by the Company.

         Although the Company's agreement with Genzyme has expired, the Company
         continues to purchase products under the same terms.

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, 2000, and June 30, 1999 the Company had gross receivables
         from the Federal Government (Medicare) of approximately $2,970, and
         $3,349 respectively.

                                      F-18


<PAGE>

                                 INFU-TECH, INC.

                   Notes to Consolidated Financial Statements

                 (Dollars in thousands except per share amounts)

                          June 30, 2000, 1999 and 1998

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.

         Assuming the Company is able to continue to operate as a going concern,
         the carrying amounts of accounts receivable, amounts due from
         affiliates, short term debt, accounts payable and accrued expenses are
         reasonable estimates of their fair values.

11.      Fourth Quarter Adjustments

         As a result of an in-depth review of the Company's accounts receivable,
         an additional reserve for bad debts of $650 was established in the
         fourth quarter of the year ended June 30, 2000. Also, at June 30, 2000
         the Company determined that it needed to provide an additional
         valuation allowance of $539 to fully reserve its net deferred tax
         asset.

                                      F-19


<PAGE>

                                                                     Schedule II
                                                                     -----------

                                INFU-TECH, INC.
                       Valuation and Qualifying Accounts
                             (Dollars in thousands)
                          June 30, 2000, 1999 and 1998

<TABLE>
<CAPTION>

    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
   -----------                 ---------     --------         -----     -------------   ---------
<S>                            <C>            <C>            <C>            <C>          <C>
Allowance for
   uncollectible
   accounts:

2000                            $1,845         $1,514         $ --           $613         $2,746
                                ======         ======         ======         ====         ======
1999                            $1,578         $  963         $ --           $696         $1,845
                                ======         ======         ======         ====         ======
1998                            $1,995         $  353         $ --           $770         $1,578
                                ======         ======         ======         ====         ======

</TABLE>

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

                                     S - 1


<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:    November   , 2000                   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.

/s/ Jack Rosen                      Chairman of the Board, Director (Principal
-----------------------------       Executive Officer)
    Jack Rosen


/s/ Frederick Schmidt               Principal Financial Officer
-----------------------------
    Frederick Schmidt


/s/ Stephen Saposnik                Principal Accounting Officer
-----------------------------
    Stephen Saposnik


/s/ Joseph Rosen                    Director
-----------------------------
    Joseph Rosen

/s/  Israel Ingberman               Director
-----------------------------
     Israel Ingberman

/s/  Joseph M. Giglio               Director
-----------------------------
     Joseph M. Giglio

/s/  Bruce Slovin                   Director
-----------------------------
     Bruce Slovin


<PAGE>

                                INFU-TECH, INC.
                                AND 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)

                  8)       Smartmeds.com, Inc. (a Delaware Corporation)