**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**






**FORM
      10-KSB/A**


**Amendment
      No.** **4**




x Annual Report under Section 13 or 15(d) of the Securities Exchange Act of
      1934


For
      the fiscal year ended **December
      31, 2004**




o Transition
      report under Section 13 or 15(d) of the Securities Act of 1934


For
      the
      transition period from _______ to _______




**UNIVEC,
      INC.**


(EXACT
      NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)




**Delaware**
            **0-22413**
            **11-3163455**(State
                or other jurisdiction
            (Commission
                File Number)
            (IRS
                Employerof
                incorporation)
            
            Identification Number)










**822
      Guilford Avenue, Suite 208, Baltimore, MD 21202**


(Address
      of principal executive offices)




**(410)
      347-9959**


(Registrant’s
      telephone number, including area code)







**4810
      Seton Drive, Baltimore, MD 21215**


(Former
      Name or Former Address, if Changed Since Last Report).




Check
      whether the issuer: (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days.


Yes x No o




Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will 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-KSB or any
      amendment to this Form 10-KSB. x




Revenues
      for the issuer's most recent fiscal year were $327,827.






Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes o No x




The
      aggregate market value of the voting stock held by non-affiliates computed
      by
      reference to the closing price at which the stock was sold on August 31, 2005
      was $1,693,933.




-1-







ISSUERS
      INVOLVED IN BANKRUPTCY PROCEEDINGS  DURING THE PAST FIVE YEARS




Check
      whether the issuer has filed all documents and reports required to be filed
      by
      Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
      under a plan confirmed by a court. Yes o No o




APPLICABLE
      ONLY TO CORPORATE REGISTRANTS




As
      of
      August 31, 2005 the issuer had 56,464,432 shares of common stock, $.001 par
      value, outstanding.




DOCUMENTS
      INCORPORATED BY REFERENCE


None




-2-







Part
      I




Item
      1.
      Description of Business.




UNIVEC,
      Inc. ("UNIVEC" or "the Company") is an integrated licensing, manufacturing,
      and
      marketing company dedicated to providing safer health products to patients
      and
      caregivers worldwide. Univec also assists  pharmaceutical companies in
      marketing, fulfillment, and tracking drug samples. Univec produces auto-disable
      and safety syringes. The Company is a Delaware corporation incorporated on
      October 7, 1996, and the successor by merger to UNIVEC, Inc., a New York
      corporation, incorporated on August 18, 1992.




On
      December 31, 2001 Univec, Inc., acquired Physician and Pharmaceutical 
Services, Inc., (PPSI) a company engaged in group purchasing (GPO) and
      promoting  Pharmaceutical company prescription samples to physicians for
      their patients. PPSI reduces the cost in the prescription-sampling channel
      by
      providing efficient fulfillment and tracking of prescription usage. PPSI's
      national network of pharmacies fills the sample prescription on a discounted
      fee
      and the Company's mail service fulfillment complements additional needs. PPSI's
      approach conforms to regulations requiring increased accountability and
      elimination of diversion of prescription  samples, consequently reducing
      the exposure of physicians and pharmaceutical companies to potential liabilities
      and non-compliance penalties. PPSI’s group purchasing programs provide for
      reduces prices on prescription drugs and other products through leveraged
      purchasing and closed system market share. Univec also is a distributor of
      a
      highly regulated pharmaceutical drug, methadone and other prescription drug
      products.




Univec
      during late 2004 established the company as a distributor of specialty and
      highly regulated pharmaceutical products. The company intends to expand the
      product line to take further advantage of its group purchasing and closed
      systems purchasing.




Univec
      extended its product line to include a highly regulated pharmaceutical
      (methadone) and other pharmaceutical products. The company will continue to
      sell
      it products through large United States based wholesalers as well as direct
      in
      large bulk to the larger customers of the company. The company’s group purchase
      programs and closed market purchasing positions the company’s product line
      well.




In
      1997,
      Univec commenced production and sales of its 1cc Auto-Disable Syringes
      (AD-syringes), which are designed to make accidental or deliberate reuse
      difficult. The accidental or deliberate reuse of syringes is a frequent cause
      of
      the spread of the human immunodeficiency ("HIV") and hepatitis viruses, as
      well
      as other blood-borne pathogens. Univec has received 510(k) clearance from the
      U.S. Food and Drug Administration (the "FDA") to market it's AD-Syringes in
      the
      United States.




Univec
      believes that its 1cc difficult-to-reuse syringes are more effective than
      competitive syringes and that they are competitively priced. Univec also
      believes that it is the only company that markets an AD-Syringe with a 1cc
      barrel, which is ideal for dispensing accurate dosages of medicine (e.g.,
      allergy, immunization and insulin medicines). It is more difficult to deliver
      up
      to a .95cc dosage accurately with a syringe barrel that is greater than 1cc.
      Univec does not know of any other company that offers a lcc aspirating syringe
      that can be locked. Healthcare workers need aspirating syringes to mix
      medications in the syringe barrel and inject medications intravenously.
      Furthermore, Univec believes that aspirating syringes are preferred by diabetes
      patients and needle-exchange programs. Pursuant to programs of international
      relief agencies, Univec has shipped its lcc AD-Syringes to over 80
      countries.




Univec
      also manufactures and markets patented Sliding Sheath Syringes designed to
      protect patients and healthcare workers from needle stick injuries, in
      compliance with the Federal Needlestick Safety and Prevention Act of the United
      States government, and requirements of the Occupational Safety and Health
      Administration (OSHA). Univec has FDA approval for an extendible barrel sleeve
      syringe used in the sliding sheath syringes based on technology licensed by
      Univec.




In
      addition, Univec has developed a Bifurcated Needle Safety Syringe specifically
      designed to comply with the Federal Needlestick Safety and Prevention Act of
      the
      United States government. Univec has been granted 510(k) clearance by the FDA.
      The device is intended for use in administering smallpox vaccines in response
      to
      potential bio-terrorist threats. The Needlestick Safety mandate requires all
      U.S. healthcare providers to evaluate and implement safer medical devices under
      their OSHA "Exposure Control Plans". All healthcare providers must now adopt
      safer devices to protect workers and others from needles potentially
      contaminated with blood borne pathogens such as hepatitis B, hepatitis C, and
      HIV.




-3-







In
      general, this "safer device" rule applies in the normal course of operations,
      as
      well as in connection with any mass immunization program authorized by the
      federal government.




Univec
      markets its AD-Syringes and Sliding Sheath Safety Syringes to governments of
      developing countries, provided that such syringes are manufactured in the United
      States, private hospitals and health facilities in the United States, and
      distributors in the United States.




Problems
      Associated With Traditional Disposable Syringes




In
      developing countries, accidental or deliberate reuse of disposable syringes
      poses a serious risk of transmitting HIV-AIDS, hepatitis and other blood-borne
      pathogens. Relief agencies, including UNICEF and WHO, administered almost a
      billion immunizations to women and children through immunization programs in
      developing countries in 1998 and anticipate administering 3.5 billion
      immunizations by 2005. WHO reported that surveys carried out in four of its
      six
      regions indicated that up to a third of immunization injections were unsterile.
      Immunization injections account for less than 10% of injections administered
      within the health sector. The United Nations estimates that more than half
      of
      all non-immunization injections in developing countries are unsafe. According
      to
      WHO, an estimated 40.0 million adults and children worldwide are infected with
      HIV, 90% of who live in developing countries.




Intravenous
      drug users, who share syringes or use syringes discarded by hospitals, medical
      clinics and laboratories, doctors or diabetic patients, are extremely
      susceptible to HIV, hepatitis and other blood-borne pathogens. An article in
      the
      May 1996 American Journal of Public Health for Disease Control written by an
      epidemiologist for the Center for Disease Control and Prevention (the "CDC")
      estimates that nearly half of all new HIV infections are occurring in
      intravenous drug users. In the United States, up to 30% of pregnant mothers
      infected with HIV transmit the virus to their babies, according to the CDC.
      Based on a study of children with HIV, who received care at Children's Hospital
      of Wisconsin, researchers estimated that the mean total lifetime costs of caring
      for a child with HIV was close to $1 million.




As
      a
      result of findings in the United States and developing countries, public health
      officials have encouraged the medical industry to develop safer syringes to
      prevent the spread of blood-borne pathogens, such as HIV and hepatitis. In
      1995,
      the House of Delegates -- American Medical Association requested "manufacturers
      of disposable hypodermic needles and syringes to adopt designs to prevent reuse
      and to include in the packaging clear directions for their correct disposal."
      In
      late 1995, UNICEF and WHO recommended "the use of auto-disable syringes instead
      of disposable, single use syringes in order to avoid the hazards of unsafe
      injection practices."




Needlestick
      Prevention




Needlestick
      prevention devices are designed to prevent accidental puncture injuries to
      health care workers and patients before, during, and after the use of hypodermic
      syringes and needles. Statistics indicate that less than 1% of all reported
      HIV
      infections in the United States are attributed to needlestick injuries. The
      most
      prevalent needle stick prevention device, the extendible barrel sleeve, is
      not a
      substitute for features that render a syringe difficult-to-reuse; however,
      it
      can be combined with devices that make a syringe difficult-to-reuse. Needlestick
      prevention methods include:




Retracting
      Needles retract the needle into the barrel after use. These devices are
      effective needlestick prevention devices; however, operators must manually
      trigger the retraction of needles. Retracting needle devices that automatically
      trigger with a single use of the syringe can render the syringe design difficult
      to reuse. However, such devices are costly to manufacture due to the complexity
      of the mechanics required to retract the needle.




Self-Destruct
      Needles permit the needle to be collapsed or deformed into a shape, which cannot
      result in a needlestick injury. Although self-destruct needle devices are
      mechanically simpler than retracting needle devices, less prone to malfunction
      and less costly to manufacture, such devices are effective only if the operator
      triggers the self-destruct feature.




Extendible
      Barrel Sleeves enclose the barrel of the syringe in a second cylinder. The
      operator extends the sleeve before and after use to cover the tip of the needle.
      The extendible barrel sleeves often lock in the extended position after use.
      In
      virtually all designs, the operator of the syringe must manually extend the
      barrel sleeve after use. The sleeve does not prevent multiple use of the syringe
      before the operator encloses the barrel. However, extendible barrel sleeves
      are
      more cost-effective than the other alternatives and can be combined with a
      device that makes the syringe difficult to reuse.


-4-







UNIVEC
      Syringes




Univec
      has developed a 1cc AD-Syringe for aspirating and non-aspirating applications,
      which are ideally suited for dispensing accurate dosages of allergy,
      immunization and insulin medicines. The Company's 1cc AD-Syringe can deliver
      dosages of up to .95cc. With the aspirating syringe, the UNIVEC locking clip
      does not limit the user's ability to withdraw and depress ("to aspirate") the
      plunger until the user locks the syringe voluntarily. With the non-aspirating
      syringe, the UNIVEC locking clip limits the user's ability to aspirate the
      plunger and locks the syringe passively.




When
      the
      non-aspirating syringes are assembled, the syringe clip is placed on the
      ratcheted plunger in the position needed to limit dosage as desired. When the
      operator depresses the plunger, the clip travels down the barrel by an equal
      distance. Withdrawal of the plunger by any amount embeds the prongs into the
      barrel and the user cannot retract the plunger.




Univec's
      1cc non-aspirating syringe was developed for the needs of immunization programs.
      Using existing components, the Company can limit its non-aspirating syringe
      to
      any dosage between .05cc and .95cc.




Univec's
      1cc aspirating syringe works similarly to the non-aspirating model, except
      that
      the clip prongs do not engage the barrel until the operator withdraws the
      plunger completely. Once the operator does so, the clip catches a


single
      ratchet and travels down the barrel as the plunger is depressed and the operator
      cannot withdraw the plunger.




Univec's
      1cc aspirating syringe was developed for healthcare workers, who need to mix
      medications in the syringe barrel and inject medicines intravenously.
      Furthermore, the Company believes that aspirating syringes are preferred by
      diabetes patients and needle-exchange programs. The Company does not know of
      any
      other company that offers an aspirating syringe that can be locked.




Univec
      has licensed rights to a United States patent for a sliding sheath to function
      on all standard syringes. The Company believes that its licensed design for
      a
      safety syringe will compete successfully with the other safety syringes on
      the
      market. This design can be used on barrels of various sizes.




Marketing
      of Pharmaceutical Company Drug Samples to Physicians




PPSI
      patient StarterScript prescription drug program allows the physician to
      provide  to the patient a cost effective means to support medication
      management from both a clinical and economic perspective. The patient sees
      if
      they may tolerate the medication under both the physician and pharmacist
      oversight.




The
      PPSI
      online network provides better marketing and clinical integration information
      than traditional systems, and enables pharmaceutical companies to maintain
      market share when competing with generic drugs. The PPSI information system
      includes detailed information such as the individual sales representative,
      zip
      codes, DEA number, pharmacy and prescribing physician. The PPSI system provides
      pharmaceutical companies with an easy, safe way to offer free samples through
      physicians and increase their value to patients who benefit through savings
      on
      prescriptions. In addition, the PPSI system provides incentives for chain drug
      stores to stock the pharmaceutical products and for pharmaceutical companies
      to
      keep their products on managed care formularies. Pharmaceutical manufacturers
      spend over $16 billion a year for the marketing of products. PPSI's strategy
      is
      to provide flexible sample programs supported by  technology to assist with
      distribution, dispensing, reporting, and clinical  integration that
      maximizes the intent of appropriate sample model for marketing.




-5-







Sales,
      Marketing and Distribution




Univec
      has entered into several agreements with large United States based wholesalers
      for the support and expansion of distribution channels for nationwide delivery
      of the Univec product line.




Univec
      also markets its StarterScript patient prescription sampling services to 
pharmaceutical companies desiring to maintain or expand market position. The
      company management believes that with the growth of third party payments of
      prescription drug such as Medicare and managed care companies the direct to
      consumer programs will grow. Univec also believes that with more branded
      pharmaceutical products coming off patent will  further enhance direct
      patient sampling or StarterScript programs as an offense to  generic drug
      substitution.




Univec
      has shipped its lcc AD-Syringes to over 80 countries. Univec intends to market
      its Safety-Shield syringes, as well as the Demolizer medical waste disposal
      system to governments of developing countries, private hospitals and health
      facilities in the United States, and distributors in the United States. Univec
      is a licensee of products and proprietary manufacturing processes relating
      to
      1cc AD-Syringes. For manufacturing in our facilities. The Company


markets
      such syringes to governments of developing countries, private hospitals and
      medical facilities. To stimulate demand for its safety syringes, Univec plans
      to
      initiate promotional and educational campaigns directed at (i) public health
      officers and other government officials responsible for public health policies,
      (ii) doctors and administrators of healthcare facilities responsible for
      treatment of HIV-AIDS and hepatitis patients, and (iii) liability insurance
      companies.




Univec
      also markets its drug sampling services to pharmaceutical companies desiring
      to
      maintain or expand market position.




Production




Univec's
      lcc locking syringes are being assembled by contract manufacturers in the United
      States, China and Portugal. (See Item 1, "Description of Business" and Item
      3
      "Legal Proceedings" for the current status of the Company's business. The United
      States manufacturers also mold the Company's proprietary syringe  plungers.
      Univec owns stamping, assembly, and molding equipment at its U.S.  contract
      manufacturer. Univec relocated its clip plunger assembly production facility
      designed to produce 1cc AD-Syringes from Farmingdale, New York to 
Baltimore, Maryland during July 2003. These assemblies are shipped to our
      contract manufacturers to produce Auto-Disable Syringes.







Univec's
      syringes consist of a standard needle, barrel, rubber stopper, a ratcheted
      plunger designed by the Company, and a pronged stainless steel locking clip
      designed by Univec. The locking clip and plunger can be assembled, with minor
      modifications, into barrels manufactured by Becton-Dickinson, Tyco, and other
      syringe manufacturers. Univec has obtained a patent on its stainless steel
      locking clip, and has been granted a patent for the design of a plunger which,
      when combined with the locking clip, results in a narrow-barreled,
      difficult-to-reuse, locking syringe. The stainless steel for the locking clip
      and the plastic for the syringe barrels and plungers is readily available
      from


several
      sources. The syringe barrels for some of the syringes sold by Univec have been
      manufactured by a Portuguese contract manufacturer. Univec has been successful
      through other sources worldwide in purchasing barrels to increase the overall
      production capacity. In addition, Univec continues to send clip plunger
      assemblies produced in the U.S. to syringe manufacturers to also increase
      overall production. Univec continues to pursue alternate sources of supply
      for
      components. Should there be a need for a certain component from an alternate
      supplier, there can be no assurance that the Company will be able to obtain
      it
      on acceptable terms, and there can be no assurance that production of certain
      configurations of its lcc locking syringes will not be delayed. Delays resulting
      from the selection of an alternate supplier to produce certain components could
      have a materially adverse effect on Univec's business.


-6-







Competition




Univec's
      principal competition for syringes is from traditional disposable syringes.
      Becton-Dickinson, Tyco and Terumo control approximately 90% of the worldwide
      syringe market, and are substantially larger, more established and have
      significantly greater financial, sales and marketing, distribution, engineering,
      research and development and other resources than the Company. To Univec's
      knowledge, only Becton-Dickinson and Bader, a German machine tool manufacturer,
      distribute commercially a line of difficult-to-reuse syringes, none of which
      allow for aspiration. The Bader DestroJect syringe and the Becton-Dickinson
      SOLOSHOT syringe were designed to dispense a dosage of .5cc only, whereas the
      UNIVEC 1cc locking clip syringe was designed to dispense dosages up to .95cc.
      Univec believes that UNIVEC syringes are more effective than competitors'
      difficult-to-reuse syringes and that the UNIVEC syringes are competitively
      priced. There can be no assurance that the major syringe manufacturers or others
      will not commence production of 1cc difficult to-reuse-syringes, or locking
      syringes which aspirate, or that Univec will be able to successfully compete
      in
      this market.




PPSI's
      competition comes from traditional sampling providers that include the actual
      drug samples and other pharmaceutical benefit management companies that offer
      similar services such as Caremark and Medco Health.




Patents,
      Licenses and Proprietary Rights




In
      1995,
      Univec was granted a United States patent for a locking clip device not biased
      against the plunger. The patent is broad enough to include several applications
      of the design covering the first series of products to be marketed by Univec.
      Univec was granted a United States patent for a plunger design which, in
      conjunction with its patented locking clip, results in a narrow barrel,
      difficult-to-reuse syringe that allows for aspiration during use.




In
      the
      past, Univec has filed patent applications for its locking clip and aspirating
      plunger in certain foreign countries participating in the Patent Cooperation
      Treaty (Canada, Brazil, Mexico, certain European countries, Japan, South Korea,
      China, Russia and Australia). However, patent applications filed in foreign
      countries and patents granted in such countries are subject to laws, rules
      and
      procedures that differ from those in the United States, and accordingly, patent
      protection in such countries may be different from patent protection provided
      by
      United States laws. In December 2003, to settle an outstanding note with
      Syrinter, Ltd. (Switzerland), the Company assigned certain patents for the
      1cc
      auto-disabled syringe as in full payment of the note and interest thereon.
      The
      Company in turn received relief from restrictive patent payments and a perpetual
      license to exploit these patents provided manufacturing occurs in the United
      States. In addition, the Company will continue to receive 15% of future
      royalties being earned from the licensing of these items. Univec has registered
      trademarks UNIVEC(R), and Rx Ultra(R), Rx Plus, The Univec Crest and the symbol
      representing no second use, (i.e., the number 2 crossed out inside of a circle),
      with the United States Patent and Trademark Office.




In
      March
      2001, Univec exercised an option to acquire a license of a component for a
      period of the later of ten years or the expiration of the last patent relating
      to the component and its improvements, with the right to terminate the agreement
      if the Company fails to produce and ship at least ten million of this component
      within three years. Univec is committed to pay a royalty of $.001, per component
      sold, with an advance royalty fee of $15,000 previously paid. As of December
      31,
      2004, Univec has sold only an insignificant amount subject to royalties under
      this agreement.




In
      July
      2000, Univec received FDA approval of the sliding sheath syringe and began
      to
      manufacture and market this product in 2001.




In
      August
      2000, Univec entered into a licensing agreement providing for the non-exclusive,
      worldwide use of Univec patents for the manufacturing, use and marketing of
      its
      auto-disable syringes through the period any patents are still in effect,
      providing for royalties on sales and for the sale of equipment necessary to
      manufacture the product. In accordance with this agreement, Univec has earned
      royalties of $30,284 and $109,690 for the years ended December 31, 2004 and
      2003, respectively.




-7-









In
      2003
      the Company assigned certain patents to a creditor in payment of an amount
      due
      and also assigned the future royalties under the auto-disable syringe licensing
      agreement. The Company has licensed back the rights under these patents to
      market and manufacture in North America.




In
      2004
      the Company applied for and received a Provisional Patent from the U.S. 
Patent and Trademark Office on September 21, 2004, the Patent #60/611,670 and
      Foreign Filing  License Granted October 15,2004, code US60/611,670.
      However, patent applications filed in foreign countries and patents granted
      in
      such countries are subject to laws, rules and procedures that differ from those
      in the United States, and accordingly, patent protection in such countries
      may
      be different from patent protection provided by United States laws. In brief
      description, a medical device with  a sliding sheath to protect caregivers
      in the dental and the cosmetic market.





Revenue
      Recognition





As
      a
      result of the differing circumstances related to the Company’s manufacture,
      procurement, distribution and physician sampling programs diverse financial
      accounting methods are utilized to recognize revenue from its various revenue
      sources. The Company’s manufacturing and specialty pharmaceutical drug
      distribution programs employ the “gross” method of recognizing revenue. However,
      because of the distinctive type of services provided to customers, the GPO
      and
      physician sampling programs utilize the “net” method of revenue recognition.





Government
      Regulation




The
      manufacture and distribution of medical devices are subject to extensive
      regulation by the FDA in the United States, and in some instances, by foreign
      and state regulatory authorities. Pursuant to the Federal Food, Drug, and
      Cosmetic Act, as amended, and the regulations promulgated there under
      (collectively, the "FDC Act"), the FDA regulates the clinical testing,
      manufacture, labeling, sale, distribution and promotion of medical devices.
      Before a new device can be introduced into the market, a manufacturer must
      obtain FDA permission to market through either the 510(k) pre-market
      notification process or the costlier, lengthier and less certain pre-market
      approval ("PMA") application process. With the 510(k) notification, the Company
      may sell its 1cc locking clip syringe in the United States, subject to
      compliance with other applicable FDA regulatory requirements. As a Class II
      device, performance standards may be developed for the 1cc locking clip syringe
      which the product would then be required to meet. Failure to meet standards
      for
      effectiveness and safety could require the Company to discontinue the
      manufacturing and/or marketing of the product in the United States. Furthermore,
      manufacturers of medical devices are subject to record-keeping requirements
      and
      required to report adverse experiences relating to the use of the device. Device
      manufacturers are also required to register their establishments and list their
      devices with the FDA and with certain state agencies and are subject to
      periodic


inspections
      by the FDA and certain state agencies.




Medical
      devices are subject to strict federal regulations regarding the quality of
      manufacturing ("Good Manufacturing Practices" or "GMP"). GMP regulations impose
      certain procedural and documentation requirements upon the Company with respect
      to manufacturing and quality assurance activities. The FDA conducts periodic
      audits and surveillance of the manufacturing, sterilizing and packaging
      facilities of medical device manufacturers to determine compliance with GMP
      requirements. These procedures may include a product recall or a "cease
      distribution" order which would require the manufacturer to direct its
      distributors and sales agents to stop selling products, as well as other
      enforcement sanctions. Univec's manufacturing facilities have not been certified
      as satisfying GMP requirements. Univec's facilities will be subject to extensive
      audits in the future, pursuant to standard FDA procedure. No assurance can
      be
      given that when the Company is audited that it will be found to be in compliance
      with GMP requirements, or that if it is not found in compliance, what penalties,
      enforcement procedures or compliance effort will be levied on or required of
      the
      Company. To date, Univec has not been audited by the FDA. The FDA also has
      the authority
      to request repair, replacement or refund of the cost of any device manufactured
      or distributed by the Company, and the failure to meet standards for safety
      and
      effectiveness could require the Company to discontinue marketing and/or
      manufacturing its product in the United States.




The
      introduction of Univec's products in foreign markets will also subject Univec
      to
      foreign regulatory clearances which may impose additional substantive costs
      and
      burdens. International sales of medical devices are subject to the regulatory
      requirements of each country. The regulatory review process varies from country
      to country. Many countries also impose product standards, packaging
      requirements, labeling requirements and import restrictions on devices. In
      addition, each country has its own tariff regulations, duties and tax
      requirements. Univec's products are required to satisfy international
      manufacturing standards for sale in certain foreign countries.




The
      approval by the FDA and foreign government authorities is unpredictable and
      uncertain, and no assurance can be given that the necessary approvals or
      clearances for the Company's products will be granted on a timely basis or
      at
      all. Delays in receipt of, or a failure to receive, such approvals or
      clearances, or the loss of any previously received approvals or clearances,
      could have a materially adverse effect on the business, financial condition
      and
      results of operations of the Company. Furthermore, approvals that have been
      or
      may be granted are subject to continual review, and later discovery of
      previously unknown problems may result in product labeling restrictions or
      withdrawal of the product from the market. Moreover, changes in existing
      requirements or adoption of new requirements or policies could adversely affect
      the ability of Univec to comply with regulatory requirements. There can be
      no
      assurance that Univec will not be required to incur significant costs to comply
      with applicable laws and regulations in the future. Failure to comply with
      applicable laws or regulatory requirements could have a materially adverse
      effect on Univec's business, financial position and results of
      operations.


-8-







Research
      and Development




For
      the
      years ended December 31, 2004 and 2003, Univec expended $28,871 and $28,547,
      respectively, on product development expenses.




Employees




As
      of
      July 31, 2005, Univec employed four persons, including two full time in sales
      and marketing, one full time in financial administration, and one full time
      in
      production. None of Univec's employees is covered by a collective bargaining
      agreement.




As
      of
      July 31, 2005, PPSI had no employees, but utilizes outside marketing
      representatives and consultants for marketing and administrative services.




Item
      2.
      Description of Property.




Univec
      occupies a production facility, warehouse, administrative, and executive offices
      in Baltimore, MD (comprised of approximately 22,000 square feet of space)
      pursuant to a lease that expired on July 15, 2004 with ten (10) renewable one
      (1) year option terms which are automatically renewable by Univec. Rental
      expense for the space is $72,000 per annum plus certain common charges,
      maintenance costs and real estate taxes, subject to a maximum increase of 3%
      for
      each three year term.




PPSI
      shares office space with a related company, owned by the Chief Executive Officer
      of Univec. The expenses of the space, together with other expenses, that would
      be allocated to PPSI are insignificant.




Item
      3.
      Legal Proceedings.




In
      February 2000, a former consultant commenced an action against the Company
      and
      its directors, Alleging breach of contract and fiduciary duty, and is seeking
      consulting fees in the amount of: (1) 250,000 shares of common stock, (2)
      $192,000 and (3) costs of this action. The Company and counsel do not believe
      the consulting fees are due and will continue to vigorously defend this
      action.




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




The
      Annual Meeting of Stockholders of Univec, Inc. for the year ended December
      31,
      2003, was held on August 12, 2004, to consider and vote upon a proposal to
      elect
      S. Robert Grass, Dr. David Dalton, John Frank and William Wooldridge as
      directors,




The
      number of votes cast for and against each of the foregoing proposals and the
      number of abstentions are set forth below.




Proposals
      to Elect Directors:




**For**
            
            **Withheld**S.
                Robert Grass
            
            19,641,801
            
            0David
                Dalton
            
            19,620,601
            
            21,200John
                Frank
            
            19,620,601
            
            21,200William
                Wooldridge
            
            19,641,801
            
            0




-9-







Item
      5.
      Market for Common Equity and Related Stockholder Matters.




(a)(1)
      Prior to July 2, 1999, the Company's Common Stock and redeemable Common Stock
      Purchase Warrants (expired April 2002) traded on the Nasdaq SmallCap Market.
      Following that date, the common stock and warrants have been quoted on the
      OTC
      Bulletin Board under the symbols "UNVC" and "UNVCW", respectively.




Set
      forth
      below are the high and low closing sale prices for the Common Stock on the
      over-the-counter bulletin board from January 1, 2003 through December 31, 2004
      and the first quarter of 2005.




**Common
                Stock****("UNVC")****Quarter
                Ended**
            **High**
            
            **Low**March
                31, 2003
            $
            0.070
            
            $
            0.040June
                30, 2003
            $
            0.110
            
            $
            0.100September
                30, 2003
            $
            0.260
            
            $
            0.050December
                31, 2003
            $
            0.140
            
            $
            0.070March
                31, 2004
            $
            0.150
            
            $
            0.090June
                30, 2004
            $
            0.120
            
            $
            0.070September
                30, 2004
            $
            0.090
            
            $
            0.060December
                31, 2004
            $
            0.110
            
            $
            0.040March
                31, 2005
            $
            0.110
            
            $
            0.100




(1)
      As of
      December 31, 2004, there were 120 holders of record of the Common
      Stock.




(2)
      During the fiscal year ended December 31, 2004, Univec sold unregistered
      securities to a limited number of persons in transactions exempt from the
      registration requirements of the Securities Act, as described below. Except
      as
      indicated, there were no underwriters involved in the transactions, and there
      were no underwriting discounts or commissions paid in connection therewith.
      The
      purchasers of securities in each such transaction represented their intention
      to
      acquire the securities for investment only and not with a view to or for sale
      in
      connection with any distribution thereof and appropriate legends were affixed
      to
      the certificates for the securities issued in such transactions. All purchasers
      of securities in each such transaction had adequate access to information about
      Univec, and in the case of transactions exempt from registration under Section
      4(2) of the Securities Act, were sophisticated


investors.




1.
      During
      2004, a Univec officer converted $125,262 of contractual benefits to 1,660,035
      common shares.




2.
      On
      February 5, 2004, Univec converted 50 shares of Series E Preferred Stock to
      799,371 common shares at $.064 per common share.




3.
      On
      February 15, 2004, two Company officers exchanged 500,000 common shares in
      payment of a total of $50,000 compensation options at $.05 per
      share.




4.
      On
      July 3, 2004, Univec issued 500,000 shares at $.02 per common share of
      common stock to a former director as payment of $10,000 of notes
      payable.




5.
      On
      November 12, 2004 Univec issued 6,000,000 shares of common stock to a vendor
      in
      exchange for $240,000 financial consulting services at $.04 per
      share.




6.
      On
      December 8, 2004, Univec converted 30 shares of Series E Preferred Stock to
      990,970 common shares at $.0323 per common share.




-10-







Item
      6.
      Management's Discussion and Analysis




The
      following discussion and analysis should be read in conjunction
      with


Univec,
      Inc's ("Univec", "we" or "our"), consolidated financial statements,


including
      the notes thereto, appearing elsewhere in this report.




Condensed
      Consolidated Results of Operations





2004
            
            2003
            
            Change(Restated)
            
            (Restated)Revenues
            
            $
            327,827
            
            $
            939,747
            
            
            (65
            %)




Cost
                of Revenues
            
            $
            128,933
            
            
            948,490
            
            
            (86
            %)




Gross
                Margin
            
            
            198,894
            
            
            (8,743
            )
            
            (2,375
            %)Expenses:Marketing
                and SellingExpense
            
            
            123,400
            
            
            379,738
            
            
            (68
            %)Product
                Development
            
            
            28,871
            
            
            28,547
            
            
            1
            %General
                andAdministrative
            
            
            1,772,246
            
            
            847,013
            
            
            109
            %Interest
                Expense, Net
            
            
            108,092
            
            
            91,564
            
            
            18
            %Gain
                on Extinguishmentof Debt
            
            
            (144,819
            )
            
            (24,872
            )
            
            482
            %Loss
                on write-off ofGoodwill
            
            
            1,774,119
            
            
            -
            
            
            -Other
                Income
            
            
            (47,795
            )
            
            -
            
            
            -Loss
                on capitalized lease
            
            
            -0-
            
            
            121,366
            
            
            -Total
                Continuous Expenses
            
            
            3,614,114
            
            
            1,443,356
            
            
            150
            %Discontinued
                Operations
            
            
            (8,260
            )
            
            (93,502
            )
            
            (91
            %)Loss
                on sale of Subsidiary
            
            
            (597,056
            )Net
                Loss
            
            $
            (4,020,536
            )
            $
            (1,545,601
            )
            
            (160
            )%






















Sales
      within PPSI’s GPO program utilizing the “net” revenue recognition method
      comprised more than 82% of the total sales for 2004. A breakdown of revenues
      and
      cost of revenues for 2004 between the Company and its wholly-owned subsidiary,
      PPSI, are as follows:





Revenues,
      cost of revenues and gross margin for the year ended December 31, 2004 (as
      restated) are as follows:


Univec
            
            PPSI
            
            TotalRevenue
            
            $
            59,819
            
            $
            268,008
            
            $
            327,827Cost
                of Revenues
            
            
            128,933
            
            
            -
            
            
            128,933Gross
                Margin
            
            $
            (69,114
            )
            $
            268,008
            
            $
            198,894




Revenues,
      cost of revenues and gross margin for the year ended December 31, 2003 are
      as
      follows:


Univec
            
            PPSI
            
            TotalRevenue
            
            $
            910,323
            
            $
            29,424
            
            $
            939,747Cost
                of Revenues
            
            
            948,490
            
            
            
            
            
            948,490Gross
                Margin
            
            $
            (38,167
            )
            $
            29,424
            
            $
            (8,743
            )





The
      Company has corrected an error which occurred during the year ended December
      31,
      2003 in connection with the capitalized lease of equipment. The underlying
      fixed assets were purchased by an affiliated company owned by an officer of
      the company and leased to the Company. In 2003, the Company originally reported
      the payoff of the lease from proceeds of loans.




The
      Company determined that the goodwill with a carrying value of $1,774,119 had
      been fully impaired and has written-off the entire balance.




The
      Company has its focus on the marketing, production, development and distribution
      of its pharmaceutical and proprietary products and licensing of
      the technology of its insulin and tuberculin sliding sheath safety
      syringes.





Gross
      profit for the year ended December 31, 2004 increased to 61% from
      (1)% in 2003. Gross profit based on product sales for 2004 decreased
      increased to $198,894 as compared to $(8,743) in 2003. The increased gross
      profit is primarily due to the increased gross profit from PPSI’s GPO
      revenue and which was offset in part by lower sales volume of our 1cc clip
      syringe. During 2003 the Company encountered a non-recurring $381,949 cost
      adjustment adjustment being paid to a significant GPO customer. The
      reduction of syringe gross profit is largely the result of decreased sales
      volume and fixed overhead costs of $7,290. We anticipate gross profit levels
      to
      remain at current levels, unless we increase our market penetration, our
      prices, product mix and/or realize anticipated production or economic
      benefits that we anticipate as a result of our relocation to Maryland from
      New York during 2003 and recent financings.





As
      a
      result of the acquisitions of PPSI, we have broadened our pharmaceutical product
      distribution base. We anticipate increases in sales on a period by period basis
      from  PPSI if we can increase our market penetration in these
      areas.



















Marketing
      and selling costs in 2004 decreased $256,338 (68%) from 2003. This decrease
      is
      due to decreases in shipping costs, rent and compensation costs, as a result
      of
      limited funds available to conduct marketing activities. As a result of our
      2004
      financing, we anticipate increasing our marketing activities.





Product
      development expense for 2004 increased by $324 (1.1%) as compared to 2003.
      This
      increase was the result of increased expenditures for patent legal costs and
      product testing expense.





General
      and administrative expenses for the year ended December 31, 2004 increased
      $925,233 (109%) as compared to 2003. This increase is due primarily to increases
      in professional fees, insurance and relocation costs offset in part by decreases
      in compensation, GPO cost adjustments, and securities maintenance expenses.
      There was also an $85,088 provision for equipment located at former suppliers,
      which is no longer being used in production activities of the
      Company.




Interest
      expense for the year ended December 31, 2004 increased by $16,528 (18%) as
      compared to 2003 primarily as a result of increased debt during
      2004.




Other
      income for the year ended December 31, 2004 includes $36,349 gain on the sale
      of
      marketable securities plus $11,446 gain on the sale of equipment.




Net
      loss
      for 2004 increased by $(2,474,935) (160%) primarily due to the $1,774,119
      write-off of goodwill and a loss of $597,056 on the sale of a subsidiary. The
      subsidiary was sold during August 2004 in order to reduce fixed costs associated
      with its operation. Without considering the loss on the sale of the subsidiary
      and gain on extinguishment of debt ($144,819), the gain on the sale of
      equipment and marketable securities of $47,795, the increase in the net
      loss before non-recurring items of $(2,044,620) was primarily related
      to the $925,233 increase in general and administrative expenses
      .




The
      Company restated its year-ended December 31, 2003 financial statements to
      properly reflect certain financial transactions which were previously not
      reported in accordance with generally accepted accounting principles (GAAP).
      Although the year-ended December 31, 2003 net loss of $(1,545,601) was not
      changed, several incorrect practices were corrected. These restatements are
      described in the following paragraphs and related table.




The
      Company restated its year ended December 31, 2003 gross profit margin by an
      aggregate $419,510. This restatement includes three distinct reporting factors.
      The Company restated its 2003 sales and related cost of revenues by a net
      $12,439 increase in gross margin to reflect the overall effect of an incorrect
      2003 year-end sales cutoff. The Company incurred $50,000 for the year 2003
      as a
      result of inventory write-downs, which have been reclassified to be reported
      as
      components of cost of revenues..  Finally, 2003 GPO cost
      adjustments of $381,949.00 have been reclassified to be reported as a
      reduction of revenue. For the year-end December 31, 2003, the Company
      recognized $381,949 of cost adjustments provided to the Company’s group
      purchasing customer as general and administrative expenses. However, EITF 01-9
      requires that such cost adjustments be reported as a reduction of revenues.
      This
      reclassification is reported on the enclosed Statement of Operations for
      year-end December 31, 2003. No such cost adjustment payments have been made
      to
      any customer after that time.
















The
      Company has corrected a $121,366 error on the loss on write-off of a capital
      lease less $11,958 related depreciation expense and $5,623 increased related
      interest expense restatement which occurred during the year ended December
      31,
      2003 in connection with the correction of a prior error in reporting capitalized
      lease of equipment. The underlying fixed assets were purchased by a related
      company owned by an officer of the Company and leased to the Company. In 2003,
      the Company originally incorrectly reported the payoff of the lease from
      proceeds of loans. This restatement recorded the reinstatement and
      subsequent write-off of the old capitalized lease and the capitalization of
      the
      new lease, which resulted in a prior period net loss of $115,031, less than
      $0.01, per share. The new lease was for a term of three years and provided
      for
      monthly rent of $3,944 and a purchase option of $100,000 at the end of the
      lease
      term.





The
      Company has corrected the previous reporting of this capitalized the lease.
      The
      capitalized lease obligation and related assets have been recorded at the lower
      of the present value of the minimum lease obligations or the fair value of
      the
      minimum lease obligations or the fair value of the related assets of $250,000.
      In July 2004, the Company purchased the equipment under the lease for $250,000,
      effectively canceling the lease.




The
      general and administrative expenses for 2003 have been reduced by $101,388
      to
      correct certain previously reported costs actually incurred as 2003 GAAP
      expenditures. Certain previously reported fee expenses were established to
      be
      subsequent period costs.




The
      restated Consolidated Statement of Operations for the year-ended December 31,
      2003 is composed of the following accounting corrections to these items. Various
      reclassifications have also been included therein.




Year-end
                December 31, 2003 (net loss) as originally reported
            
            
            ($1,545,601
            )Increase
                in gross margin - year-end cutoff
            
            
            12,439Decrease
                in gross margin - inventory write-down
            
            
            (50,000
            )Decrease
                in gross margin - reduction of revenue
            
            
            (381,949
            )Net
                Decrease in gross margin
            
            
            (419,510
            )Increase
                in net interest expense
            
            
            (5,623
            )Decrease
                in depreciation expense
            
            
            11,958Loss
                on write-off of capital lease
            
            
            (121,366
            )Reclassification
                of General and Administrative expenses
            
            
            431,949General
                and Administrative expense adjustment
            
            
            101,388Miscellaneous
                adjustments
            
            
            1,204Year-end
                December 31, 2003 (net loss) as restated
            
            
            ($1,545,601
            )




Liquidity
      and Capital Resources




Liquidity
      and Capital Resources, Page 11 - “Viable Plan” to generate positive
      cash .




The
      Form
      10-KSB states that the Registrant’s management is currently seeking additional
      investment capital to support its entrance into new business ventures and
      provide the capital needed to operate. Further, in Part I, Item 1 the Registrant
      states that during late 2004 the company was established as a distributor of
      specialty and highly regulated pharmaceutical products. The company intends
      to
      expand the product line to take further advantage of its group purchasing and
      closed systems purchasing. Additionally, In 2004 the Company applied for and
      received a Provisional Patent from the U.S. Patent and Trademark Office on
      September 21, 2004, the Patent #60/611,670 and Foreign Filing License Granted
      October 15, 2004, code US60/611,6700 .... in brief description, a medical device
      with a sliding sheath to protect caregivers in the dental and cosmetic
      markets.




These
      significant new products are anticipated to provide the company with revenue
      sources and gross profits which will adequately support its continued
      operations. Because of their prior discussion in the Description of the Business
      segment of the Form 10-KSB, any revisions to Note 3 of the financial statements
      would be repetitious in these circumstances.




The
      working capital deficit of $2,542,657 at December 31, 2003, increased to a
      deficit of 4,207,570 at December 31, 2004. A significant reason for this
      increase is the classification of $457,377 of formerly long-term debt as current
      debt due which resulted from $79,651 in late payments and $377,726 for
      non-compliance with contractual covenants. Further, net increases in accounts
      payable and accrued expenses, total loans payable and deferred compensation,
      partially offset by an increase in accounts receivable also accounted for the
      decrease in working capital.




he
      accompanying financial statements have been prepared on a going concern basis,
      which contemplates the realization of assets and the satisfaction of liabilities
      in the normal course of business. As of December 31, 2004, the Company had
      negative working capital of $4,207,570 and stockholders' deficit of $3,717,269
       which includes net losses of $(4,020,536) and $(1,646,989) for the years
      ended December 31, 2004 and 2003. The Company is also in default of
      approximately $1,200,000 of loan and notes payable all of which are payable
      on
      demand as a result of such defaults. These factors, among others, indicate
      that
      the Company's continuation as a going concern is dependent upon its ability
      to
      obtain  adequate  financing and/or achieve profitable operations.
      The financial statements do not include any adjustments related to the
      recoverability and classification of recorded asset amounts or the amounts
      and
      classification of liabilities that might be necessary should the Company be
      unable to continue in existence.




Management
      is currently seeking additional investment capital to support its entrance
      into
      new business ventures and provide the capital needed to operate.




Net
      cash
      used in operating activities increased by $ 463,293 (163%)
      to $747,984 for the year ended December 31, 2004 from 2003, primarily due to
      the
      increased net loss.




Net
      cash
      used in investing activities of $743,145 resulted from the purchases of
      restricted cash deposits, fixed assets and cash used in the sale of the
      subsidiary during 2004.




Net
      cash
      provided by financing activities increased by $1,299,498 (620%) to
      $1,508.751 for 2004 from $209,253 provided during 2003. This increase resulted
      from an increase in aggregate borrowings of $1,244,795 and decrease in aggregate
      repayments of borrowings of approximately $27,870. There was also a $50,000
      non-recurring sale of securities during 2004.




Although
      revenue increased as a result of the 2004 PPSI GPO operations for the entire
      year as we continued to market our safety syringes, we suffered from a serious
      shortage of working capital, which resulted in the Company’s limited ability to
      market and sell its products.


-12-









In
      July
      2004, the Company borrowed an aggregate of $1,000,000 from a city development
      agency, a state development agency and a stockholder. These proceeds provided
      us
      with resources to acquire equipment, refinance an equipment capital lease and
      for working capital to enable us to continue implement our business strategy.
      The proceeds from the above loans and our designation as a minority business
      enterprise (MBE) should increase our marketing services to pharmaceutical
      companies, to increase our sales of safety syringes and develop new
      products.





As
      a
      result of these actions, Univec’s management anticipates that operations will
      generate a positive cash flow during our next fiscal year, but there can be
      no
      assurance this will occur.




The
      relatively low trading price and volume of our common shares hampers our ability
      to raise equity capital. There is no assurance that any such equity financing
      will be available to the Company or on terms we deem favorable. Management
      will
      continue its efforts to obtain debt and/or equity financing.




Significant
      Estimates




In
      conformity with interpretive MD&A guidance provided in Release 33-8350, we
      herein provide details of significant estimates and assumptions involved in
      the
      Company’s application of GAAP.








In
      accordance with SFAS 142 - Goodwill and Other Intangible Assets the Company
      wrote-off of the entire $1,774,119 balance of impaired goodwill. This judgment
      was provided in accordance with the GAAP provisions used to evaluate the future
      value of intangible assets such as estimated future discounted cash flow which
      could be reasonably anticipated from the Company’s carrying value of such
      goodwill. The Company’s determination is based primarily on limited gross
      profits which are presently generated by the subsidiary’s primary business
      activity. The Company determined that the excess value of goodwill paid in
      the
      course of the acquisition of its wholly owned subsidiary, Physicians and
      Pharmacy Services, Inc. could no longer be supported by the evaluation of
      potential future profitability of the subsidiary. Management’s appraisal of
      future discounted cash flows and other factors resulted in the complete
      write-off of the wholly impaired asset. Further, the Company applied SFAS 5
      to
      determine its provision for losses on litigation. Finally, the Company, which
      was listed as a public company during 2004 on the OTC Bulletin Board during
      2004, applied SFAS 123 and EITF 96-18 to value equity securities which were
      issued in payment of various corporate obligations. The Company’s previous
      significant financial estimates have resulted in fair presentations of its
      financial statements. Therefore, the Company believes that these goodwill and
      litigation provisions will result in additional future fair presentation of
      its
      financial statements.


New
      Accounting Pronouncements




Management
      does not believe that any recently issued, but not yet effective accounting
      pronouncements, if adopted, would have a material effect on the accompanying
      financial statements. Financial Accounting Standards Board Statement # 123R
      Stock Based Compensation is not expected to have a material effect on the
      Company’s financial statements.




Major
      Customer




For
      the
      year ended December 31, 2004, our largest customer was a company owned by our
      chief executive officer. We intend to reduce our reliance on this customer
      through expanding sales to others.




Forward
      Looking Statements




Except
      for the historical information contained herein, the matters discussed in this
      report are forward-looking statements that involve risks and uncertainties,
      including market acceptance of Univec's products, timely development and
      acceptance of new products, impact of competitive products, development of
      an
      effective organization, interruptions to production, and other risks detailed
      from time to time in Univec's SEC reports and its Prospectus dated April 24,
      1997 (as supplemented by the Prospectus Supplement dated April 29, 1997) forming
      a part of its Registration Statement on Form SB-2 (File No. 333-20187), as
      amended, which was declared effective by the Commission on April 24,
      1997.




Item
      7.
      Financial Statements.




The
      financial statements follow Item 13 of this report.




Item
      8.
      Changes in and Disagreements with Accountants on Accounting and Financial
      Disclosure.




A
      Form
      8-K was filed on June 13, 2005 and amended by a Form 8-K/A filed on August
      1,
      2005, reporting the resignation of the Company’s principal registered
      independent public accounting firm. Further, the Registrant reported that the
      auditor’s report for the previously issued Form 10-KSB for the year ended
      December 31, 2003 could no longer be relied upon. Also, the former principal
      registered independent public accounting  firm has informed the Registrant
      that it may no longer rely upon review reports issued for all Form 10-QSB for
      all quarters starting with the quarter-ended March 31, 2003 through the
      quarter-ended September 30, 2004.


-13-







Item
      8A
      CONTROLS AND PROCEDURES







(a)
      Based
      on their evaluation required by Rule 13a-15(b) or 15d-15(b) under the Securities
      and Exchange Act of 1934 (the “Exchange Act”), management, including the Chief
      Executive Officer and Chief Financial Officer, concluded that our disclosure
      controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under
      the
      Exchange Act) were effective as of the end of the period covered by this report.
      Although the Company did change from the “gross” to the “net” revenue method of
      accounting for the GPO (Group Purchasing) and physician sampling programs use
      the “net” method of revenue recognition, this change to a more appropriate
      accounting method does not reflect on the effectiveness of the controls applied
      in the circumstances.




(b)
      Changes in internal controls. There were no significant changes in the Company's
      internal controls or in other factors that could significantly affect the
      Company's disclosure controls and procedures subsequent to the Evaluation Date,
      nor any significant deficiencies or material weaknesses in such disclosure
      controls and procedures requiring corrective actions. As a result, no corrective
      actions were taken.







Item
      III




Item
      9.
      Directors, Executive Officers, Promoters and Control Persons; Compliance With
      Section 16 (a) of the Exchange Act.




Directors,
      Executive Officers and Key Employees




The
      directors, executive officers and key employees of Univec are as
      follows:




Name
            Age
            PositionDr.
                David Dalton
            56
            Chief
                Executive Officer, President and a DirectorS.
                Robert Grass
            71
            Chairman
                of the Board of DirectorsWilliam
                Wooldridge
            60
            DirectorRaphael
                Langford
            60
            Chief
                Operating Officer and Executive Vice PresidentMichael
                Lesisko
            55
            Treasurer,
                Secretary and Chief Financial
                Officer




Dr.
      David
      Dalton assumed the position of President and Chief Executive Officer of the
      Company on January 1, 2002, concurrent with the acquisition by Univec, Inc.
      of
      Physician and Pharmaceutical Services, Inc. (PPSI), a Baltimore based company
      founded by Dr. Dalton. Dr. Dalton has over 35 years experience in the healthcare
      industry, including 18 years with Rite-Aid where he served as Corporate Vice
      President.




Dr.
      Dalton founded Health Resources, Inc., in 1983, a pharmacy service provider
      having contracts with over 50,000 retail pharmacies for billing and payment
      of
      prescription orders through plan providers. HRI is recognized as one of the
      leading Black Enterprises in the United States. Dr. Dalton also founded Pharmacy
      Services, Inc., a pharmacy fulfillment center for correctional and other
      institutions, with facilities in Maryland, Tennessee and
      Pennsylvania.




On
      March
      15, 2002 S. Robert Grass was elected a director of Univec. He was elected
      Chairman of the Board of Directors in May, 2002. Mr. Grass has been associated
      with the pharmaceutical and medical device industry for over thirty-two years.
      Mr. Grass developed a chain of pharmacies known as White Shield Drugstores
      in
      Pennsylvania, serving as President, Chief Executive Officer and Chairman of
      the
      Board from 1970 to 1996. Mr. Grass also served as Chief Executive Officer and
      Chairman of the Board of Managed Care RX, a drug fulfillment and mail order
      business from 1994 to 1999.




-14-











William
      Wooldridge has been a director since August 5, 2003. Mr. Wooldridge is a
      recognized and respected entrepreneur. He is the founder of MedEcon, Inc. one
      of
      the largest group purchasing organizations in the United States. Over a
      twenty-eight year period he has developed a corporation with medical portfolio
      sales in excess of $3.5 billion. In 1999, Mr. Wooldridge formed OrderButton.Net,
      a new web-based transaction processing service that facilitates the
      establishment of merchant sites on the internet. Since 2002, Mr. Wooldridge
      has
      been developing a franchised, non-traditional based photography
      company.




Raphael
      Langford has been Chief Operating Officer and Executive Vice-President  of
      Univec Corporation since April 2003. Prior to April 2003, Raphael Langford
      was  Vice-President of Physician Pharmaceutical Services, Inc. (PPSI) A
      nationwide PBM with  Over 50,000 pharmacies in its network. Mr. Langford
      managed the design and creation of products/services that serve the PBM market
      for PPSI, he was responsible for operations planning and control; material
      management; total quality management; benchmarking; and performance measurement.
      Mr. Langford career highlights also include as Executive Director of the
      National Foundation of Women Legislators. Mr. Langford served as liaison to
      Federal and State elected officials. He was responsible for implementing
      National Policy Committees for Women Legislators to set guidelines for
      Alternative, Holistic & Complementary Health. Mr. Langford co-chaired
      committees on Alcohol and Substance Abuse and served as chairman for Health,
      Longevity & Long-Term Care Pain Management. He has work on special projects
      with HHS and DEA in Washington, DC. Mr. Langford is a past President & CEO
      of Olympic


International,
      Inc. The company specialized in international brokering, manufacturing and
      the
      network of raw materials to more than 17 countries. Mr. Langford has over
      thirty-five years experience in senior management positions with AT&T, Inc.,
      Norton Simon, Inc. and other telecommunications and pharmaceuticals entities.
      He
      has received credits in business management studies and Industrial psychology
      at
      Case Western Reserve University.




Michael
      Lesisko, a certified public accountant, was named as Chief Financial Officer
      of
      Univec on September 9, 2002. Mr. Lesisko was named Treasurer and Secretary
      of
      Univec on February 11, 2003. From June 1996 to September 2002 Mr. Lesisko was
      a
      CPA in public practice. He served as Vice President of Finance of CarrerCom
      Corporation and Subsidiaries from November 1988 to May 1996. Prior thereto,
      he
      served as a partner with KPMG Peat Marwick from July 1982 to August 1988, where
      he managed financial audits and a diverse tax practice.




All
      directors hold office until the annual meeting of stockholders of the Company
      following their election or until their successors are duly elected and
      qualified. Officers are appointed by the Board of Directors and serve at its
      discretion.




Meetings
      of the Board of Directors and Information Regarding Committees


The
      Board of Directors has two standing committees, an Audit Committee and a
      Compensation Committee. On August 12, 2004, Mr. John Frank and William
      Wooldridge were elected to the Audit Committee. The duties of the Audit
      Committee include recommending the engagement of independent auditors, reviewing
      and considering actions of management in matters relating to audit functions,
      reviewing with independent auditors the scope and results of its audit
      engagement, reviewing reports from various regulatory authorities, reviewing
      the
      system of internal controls and procedures of Univec, and reviewing the
      effectiveness of procedures intended to prevent violations of law and
      regulations. The Audit Committee held two meetings in 2004. On August 12, 2004,
      Mr. S. Robert Grass was elected to the Compensation Committee. There was
      one meeting of the Compensation Committee in 2004.




The
      Board
      of Directors held four meetings in 2004, which included special telephonic
      meetings. All Directors attended at least 75% of the total number of Board
      meetings and meetings of committees on which they served during the period
      they
      served thereon during 2004.




Section
      16(a) Beneficial Ownership Reporting


Section
      16(a) of the Securities Exchange Act of 1934 requires Univec's Officers,
      Directors and persons who own more than ten percent of a registered class of
      Univec's equity securities within specified time periods to file certain reports
      of ownership and changes in ownership with the Securities and Exchange
      Commission (the "Commission"). Officers, Directors and ten percent stockholders
      are required by regulation to furnish Univec with copies of all Section 16(a)
      forms they file. Based solely on a review of Copies of such reports received
      by
      Univec and written representations from such persons concerning the necessity
      to
      file such reports, Univec is not aware of any failures to file reports or report
      transactions in a timely manner during the fiscal year ended December 31,
      2004.


-15-











Item
      10.
      Executive Compensation.




The
      following table sets forth the compensation awarded to, earned by or paid to
      Univec's Chief Executive Officer and each other executive officers of the
      Company whose salary and bonus for the two years ended December 31, 2004
      exceeded $100,000.




Annual
                Compensation
            Long-Term
                CompensationOther
                Annual
            SecuritiesName
                and Principal Position
            Year
            Salary
            Compensation
            Underlying
                OptionsDr.
                David Dalton
            2003
            $
                360,000(1)
            -
            1,000,000(1)Chief
                Executive Officer andPresident2004
            $
                396,000(2)
            -
            -Jonathan
                Bricken
            2003
            $
                129,969
            -
            NoneVice
                President




(1)
      During 2003, Dr. David Dalton earned a salary of $360,000, plus life, health
      and
      disability insurance, as well as an automobile lease and insurance allowance
      equal to $24,000 per year. He was granted an option to purchase 1,000,000 shares
      of common stock on April 21, 2003.




(2)
      During 2004, Dr. David Dalton earned a salary of $396,000, plus life, health
      and
      disability insurance, as well as an automobile lease and insurance allowance
      equal to $24,000 per year.




Employment
      Agreements


Dr.
      David
      Dalton provides the amount of time necessary to perform his corporate duties.
      Dr
      Dalton's salary was $396,000 for 2004, plus a bonus determined by the agreement
      of Dr. Dalton and the Compensation Committee. On each January 1, the base salary
      will be increased by an amount agreed upon by Dr. Dalton and the Compensation
      Committee. The agreement also provides Dr. Dalton with an option to purchase
      2,000,000 shares of Common Stock at an exercise price of $.24 per share, vesting
      500,000 shares on the first anniversary of the agreement, and an additional
      41,667 shares vesting each month following the initial vesting date. The
      unexpired term of the agreement will be extended automatically by one year
      on
      each January 1 following the date of the agreement, such that the unexpired
      term
      of the agreement will at all times not be less than two years following each
      extension. The agreement provides for payment by Univec of annual premiums
      on a
      term life insurance policy with a face amount of $2 million. The agreement
      also
      provides for health and disability benefits, as well as an automobile lease
      and
      insurance allowance equal to $24,000 per year. Under the terms of the agreement,
      Dr. Dalton is entitled to a severance payment equal to his highest annual base
      salary during the term for the remainder of the term if the agreement is
      terminated by Dr. Dalton for good reason, or in the event of a change in control
      of Univec.




Stock
      Options




The
      following table contains information concerning the grant of stock options
      to
      Dr. David Dalton ( the "Named Executive Officer") during the fiscal year ended
      December 31, 2004.




Number
                of Shares
            Percent
                of Total OptionsUnderlying
                Options
            Granted
                to Employees in
            Exercise
                Price
            ExpirationName
            Granted
            Fiscal
                Year
            Per
                Share
            DateDr.
                David Dalton
            -
            0%
            $0.00
            N/A






-16-









AGGREGATED
      OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION/SAR
      VALUES




The
      following table summarizes for Dr. Dalton the total number of shares acquired
      upon exercise of options during the year ended December 31, 2004, and the value
      realized (fair market value at the time of exercise less exercise price), the
      total number of unexercised options, if any, held at December 31, 2004, and
      the
      aggregate dollar value of in-the-money, unexercised options, held at December
      31, 2004. The value of the unexercised, in-the-money


options
      at December 31, 2004, is the difference between their exercise or base price,
      and the fair market value of the underlying Common Stock on December 31, 2004.
      The closing bid price of the Common Stock on December 31, 2004 was
      $0.11.




Shares
                Acquired Upon
            Number
                of Securities
            In-The-MoneyExercise
                of Options
            Underlying
                Unexercised
            Options
                atDuring
                Fiscal 2004
            Options
                at December 31, 2004
            December
                31, 2004Name
            Number
            Value
                Realized
            Exercisable
            Unexercisable
            Exercisable
            UnexercisableDr.
                David Dalton
            None
            None
            2,500,000
            500,000
            $40,000
            $
                -




Certain
      Transactions




At
      December 31, 2004, the following Deferred Payroll was payable to executive
      officers and other employees:





David
                Dalton, Chief Executive Officer and President
            
            $
            856,000Raphael
                Langford, Chief Operating Officer
            
            
            127,585Michael
                Lesisko, Secretary - Treasurer
            
            
            97,3001,080,885Other
                employees
            
            
            190,603$
            1,271,488




On
      July
      3, 2003, the Company authorized the issuance of 500,000 shares of common stock
      to Richard Mintz, a Director of the Company, at $0.02 per share in full
      discharge of a $10,000 note payable.




At
      December 31, 2004, notes payable to companies owned by David Dalton, President,
      amounted to $578,800. These loans are the result of providing working capital
      to
      the Company.




At
      December 31, 2004, notes payable to David Dalton, President amounted to $100,000
      and notes payable to S. Robert Grass, Chairman of the Board of Directors
      amounted to $153,300. These amounts were advanced to the Company at terms and
      rates similar to commercial bank provisions. The funds were provided to the
      Company for working capital operating needs.




On
      February 5, 2004, the Series E preferred stockholder exchanged 50 preferred
      shares plus $1,170 accrued dividends for 799,371 shares of Common Stock at
      $0.064 per share On December 8, 2004 this the Series E preferred stockholder
      exchanged 30 preferred shares plus $2,008 accrued dividends for 990,970 shares
      of Common Stock at $0.0323 per share




On
      February 15, 2004, two executive officers exchanged a combined $50,000 of
      accrued Payroll for 500,000 common shares at $0.10 per share. These exchanges
      were authorized by the Company's Board of Directors on August 5,
      2003.




On
      April
      16, 2004, the Company's Chief Executive Officer exchanged $108,104 of employment
      Contract benefits for 1,403,948 common shares. On August 31, 2004, the Chief
      Executive Officer exchanged an additional $17,158 of


employment
      contract benefits for 256,087 common shares. These exchanges were authorized
      by
      the Company's Board of Directors on August 5, 2003


-17-







Item
      11.
      Security Ownership of Certain Beneficial Owners and Management




The
      following table sets forth certain information concerning the beneficial
      ownership of the Common Stock as of August 31, 2005 by (i) each stockholder
      known by the Company to be a beneficial owner of more than five percent of
      the
      outstanding Common Stock, (ii) each director of the Company and each Named
      Executive Officer and (iii) all directors and officers as a group.




Amount
                and Nature of Beneficial
            Percentage
                of common Stock BeneficiallyName
            Ownership
                (1)
            Owned
                (2)David
                Dalton (4)
            23,396,378
                (5)
            39.40%
                (6)S.
                Robert Grass (4)
            1,065,951
                (9)
            1.87%
                (10)William
                Wooldridge (4)
            250,000
                (13)
            0.44%
                (14)Raphael
                Langford (4)
            3,366,667
                (7)
            5.85%
                (8)Michael
                Lesisko (4)
            2,474,001
                (11)
            4.31%
                (12)All
                directors and executiveofficers
                as a group (5 persons)
            30,552,997
                (3)(16)
            49.02%
                (17)Emerald
                Capital Partners LP
            6,000,000
            10.63%
                (15)




(1)
      Unless otherwise indicated, each person has sole investment and voting power
      with respect to the shares indicated, subject to community property laws, where
      applicable. For purposes of computing the percentage of


outstanding
      shares held by each person or group of persons named above as of August 31,
      2005
      any security which such person or group of persons has the right to acquire
      within 60 days after such date is deemed to be


outstanding
      for the purpose of computing the percentage ownership for such person or
      persons, but is not deemed to be outstanding for the purpose of computing the
      percentage ownership of any other person.




(2)
      Except as otherwise stated, calculated on the basis of 56,464,432 shares of
      Common Stock issued and outstanding on August 31, 2005.




(3)
      For
      purposes of this calculation, shares of Common Stock beneficially owned by
      more
      than one person have only been included once.




(4)
      Address is c/o the Company, 822 Guilford Avenue, Suite 208, Baltimore, Maryland
      21202.




(5)
      Includes 2,916,674 shares issuable upon exercise of presently exercisable
      options.




(6)
      Calculated on the basis of 59,381,106 shares of Common Stock issued and
      outstanding.




(7)
      Includes 1,133,333 shares issuable upon exercise of presently exercisable
      options.




(8)
      Calculated on the basis of 57,597,765 shares of Common Stock issued and
      outstanding.




(9)
      Includes 312,501 shares issuable upon conversion of Series D Preferred Stock
      and
      250,000 issuable upon exercise of presently exercisable options.




(10)
      Calculated on the basis of 57,026,933 shares of Common Stock issued and
      outstanding.




(11)
      Includes 1,000,000 shares issuable upon exercise of presently exercisable
      options.




(12)
      Calculated on the basis of 57,464,432 shares of Common Stock issued and
      outstanding.




(13)
      Includes 250,000 shares issuable upon exercise of presently exercisable
      options.




(14)
      Calculated on the basis of 56,714,432 shares of Common Stock issued and
      outstanding.




(15)
      Calculated on the basis of 56,714,432 shares of Common Stock issued and
      outstanding.




-18-







(16)
      Includes 5,862,508 shares issuable upon exercise of presently exercisable
      options.




(17)
      Calculated on the basis of 56,464,432 shares of Common Stock issued and
      outstanding.






Item
      12.
      Certain Relationships and Related Transactions




During
      2003, Univec received a line of credit from Dr. David Dalton, President and
      Chief Executive Officer, and S. Robert Grass, Chairman of the Board of prime
      plus 2%, per annum. This line of credit was issued under the same


terms
      as
      an underlying line of credit which Dr, Dalton and Mr. Grass received from a
      commercial bank. As of December 31, 2004, the outstanding balance of this loan
      was $200,000.




During
      February 2004, Univec borrowed $50,000 from Mr. S. Robert Grass, Chairman of
      the
      Board of Directors, repayable on demand at prime plus 2%, per
      annum.




During
      the years ended December 31, 2004 and 2003, Univec has borrowed an aggregate
      of
      $388,305 from Pharmacy Services, Inc., Health Resources, Inc. and other
      companies all owned by Dr. David Dalton, President and Chief Executive Officer.
      These loans are repayable on demand at 10%, per annum. At December 31, 2004
      and
      2003, the aggregate balance outstanding was $578,800 and $378,569,
      respectively.




During
      2004, Pharmacy Services, Inc., a company owned by Dr. David Dalton, President
      and Chief Executive Officer, purchased goods totaling $200,897 (such goods
      had a
      cost of $17,679,609) in “net” revenue from PPSI's GPO. This transaction
      represented 61% of total revenue.




PPSI
      shares minimal office space and other administrative expenses with affiliated
      companies owned by Dr. David Dalton, the Chief Executive Officer of Univec.
      These expenses have not been allocated between the companies, but PPSI's portion
      would be insignificant.


Item
      l3.
      Exhibits and Reports on Form 8-K.




(a)
      Exhibits




Exhibit  Description




2.1(1)  
      Stock Purchase Agreement and Plan of Reorganization made and entered into
      as of December 31, 2001, by and among Physician and
      Pharmaceutical Services, Inc. ("PPSI"), the stockholder of PPSI and the
      Registrant.




2.2(2)
      Stock Purchase Agreement made and entered into as of February 28, 2002, by
      and among Thermal Waste Technologies, Inc. ("TWT"), the stockholders of
      TWT and the Registrant.




3.1(4)
      Restated Certificate of Incorporation of the Registrant, as
      amended.




3.2(3)
      By-laws of the Registrant, as amended. 4.1(3) Agreement and Plan of Merger
      dated as of October 7, 1996 between the Registrant and UNIVEC, Inc., a New
      York corporation.




4.3(3)
      Form of warrant between the Registrant and the underwriters of
      the Registrant's initial public offering.




4.4(3)
      Specimen Common Stock Certificate.




4.5(3)
      Specimen Warrant Certificate (included as Exhibit A to Exhibit 4.3 herein).




4.6(3)
      Registration Rights Agreement among Registrant and the holders of bridge
      warrants.




4.7(5)
      Certificate of Designation of Series B Preferred Stock. 4.8(6) Certificate
      of Amendment of Certificate of Designation of Series B Preferred
      Stock.




4.9(5)
      Form of Warrant Agreement dated July 27, 1998, between Company and selling
      security-holder.




4.10(6)
      Form of Amended and Restated Warrant Agreement, amending and restating the
      Warrant Agreement dated July 27, 1998, between the Company and the selling
      security-holder.


-19-









4.11(5)
      Registration Rights Agreement dated July 27, 1998, between the Company' and
      selling security-holder.




4.12(6)
      Registration Rights Agreement, dated February 8, 1999, between the Company
      and the selling security-holder.




4.13(6)
      Certificate of Designation of Series C Preferred Stock. 4.14(6) Form of Warrant
      Agreement dated February 8, 1999. between the Company and selling
      security-holder.




10.1(3)
      Amended 1996 Stock Option Plan of the Registrant.




10.2(7)
      1998 Stock Option Plan of the Registrant.




10.3(8)
      2000 Stock Option Plan of the Registrant.




10.4(7)
      Employment Agreement dated as of September 4, 1998 between the Registrant
      and Joel Schoenfeld.




10.5(9)
      Patent License Agreement dated August 16, 2000 by and between the Company
      and Terumo Europe, NV.




10.6(9)
      Manufacturing Agreement dated August 16, 2000, by and between the Company
      and Terumo, N.V.




10.7(9)
      Equipment Purchase Agreement dated August 16, 2000, by and between the
      Company and Terumo Europe, N.V.




10.10(9)
      Employment Agreement dated as of January 1, 2002, between the Registrant
      and David L. Dalton.




10.11
      Employment Agreement dated as of December 31, 2001, between the Registrant
      and Joel Schoenfeld.




21.1(3)
      List of Subsidiaries.





31.1(10)
      Statement of the Chief Executive Officer pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002.




31.2(10)
      Statement of the Chief Financial Officer pursuant to Section 302 of
      the  Sarbanes-Oxley Act of 2002.




32.1(10)
      Statement of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350,
      as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act
      of 2002.




32.2(10)
      Statement of the Chief Financial Officer pursuant to 18
      U.S.C.  Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002.





(1)
      Incorporated by reference to the Registrant's Form 8K filed January 4,
      2002.





(2)
      Incorporated by reference to the Registrant's Form 8K filed March
      11, 2002.





(3)
      Incorporated by reference from the Registrant's Registration Statement on
      Form SB-2 (File No. 333-20187) declared effective on April 24,
      1997.




(4)
      Incorporated by reference from the Registrant's Periodic Quarterly Report
      on Form 10-QSB for the fiscal quarter ended September 30, 
2000.





(5)
      Incorporated by reference from the Registrant's Registration Statement on
      Form S-3 (File No. 333-62261) declared effective December 11,
      1999.





(6)
      Incorporated by reference from Amendment No. 2 to the
      Registrant's Registration Statement Form 10-S-3 (File
      333-74199).





(7)
      Incorporated by reference to the Registrant's Annual Report on Form 10-KSB
      for the year ended December 31, 1998 (File No. 0-22413).





(8)
      Incorporated by reference from the Registrant's Post-Effective Amendment No
      1 on Form S-2 to Form S-3 (File No. 333-74199) declared effective on
      January 26, 2001.





(9)
      Incorporated by reference to the Registrant's Annual Report on Form 10-KSB
      for the year ended December 31, 2000 (File No. 0-22413).





(10)
      Filed herewith.





(b)
      Reports on Form 8-K filed during the fourth quarter 2003.





No
      Forms
      8-K were filed during the fourth quarter 2003.




-20-











Item
      14.
      Principal Accountant Fees and Services.




The
      following table presents the cost of Univec's principal accountants' fees and
      services for the years ended December 31, 2004 and 2003,
      respectively:





**2004**
            ****
            **2003**Audit
                fees
            
            $
            110,261
            
            $$
            98,794Audit
                related fees
            
            
            -
                -
            
            
            -Tax
                fees
            
            
            18,750
            
            
            14,199All
                other fees
            
            
            -
            
            
            --Total
            
            $
            129,011
            
            $
            112,993





Univec's
      Audit Committee pre-approves the engagement of the principal accountant and
      the
      estimated audit fee, by each category.




**SIGNATURES**




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




**UNIVEC,
                INC.**Date:January
                3, 2007
            By:
            /s/ Dr.
                David DaltonDr.
                David DaltonChief
                Executive Officer
              (Principal
                Executive Officer)





In
        accordance with the Exchange Act, this report has been signed below by the
        following persons on behalf of the Registrant in the capacities and on the
        dates
        indicated.


Signatures
              Title/s/
                  Dr. David Dalton
                Dr.
                  David Dalton
              Chief
                  Executive Officer and a Director Principal Executive
                  Officer)/s/
                  Michael Lesisko
                Michael
                  Lesisko
              Chief
                  Financial Officer, Treasurer, Secretary/s/
                  S. Robert Grass
                S.
                  Robert Grass
              Chairman
                  and a Director/s/
                  William Wooldridge
                William
                  Wooldridge
              Director












-21-







UNIVEC,
      INC. AND SUBSIDIARIES


CONSOLIDATED
      FINANCIAL STATEMENTS


DECEMBER
      31, 2004 AND FOR THE TWO YEARS THEN ENDED





Index
      to
      Consolidated Financial Statements





PageReport
                of Independent Registered Public Accounting Firm
            F--3Consolidated
                Balance Sheet - December 31, 2004
            F--4Consolidated
                Statements of Operations - years endedDecember 31, 2004 and 2003
            F--5Consolidated
                Statements of Stockholders' Equity - yearsended December 31, 2004 and 2003
            F--6Consolidated
                Statements of Cash Flows - years endedDecember 31, 2004 and 2003
            F--7Notes
                to Consolidated Financial Statements
            F--8
















F-1












The
      Registrant’s auditor has amended their opinion of the 2003 financial statements
      as being “restated”.





**Report
      of Independent Registered Public Accounting Firm**




To
      the
      Board of Directors and


Stockholders
      of Univec, Inc.




We
      have
      audited the accompanying consolidated balance sheet of Univec, Inc. and
      Subsidiaries as of December 31, 2004 and the related consolidated statements
      of
      operations, stockholders' equity and cash flows for each of the years in the
      two-year periods ended December 31, 2004 and 2003. These consolidated financial
      statements are the responsibility of the Company's management.  Our
      responsibility is to express an opinion on these consolidated financial
      statements based on our audit.





We
      conducted our audit in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the
      consolidated financial statements are free of material misstatement. The company
      is not required to have, nor were we engaged to perform, an audit of its
      internal control over financial reporting. Our audit included consideration
      of
      internal control over financial reporting as a basis for designing audit
      procedures that are appropriate in the circumstances, but not for the purpose
      of
      expressing an opinion on the effectiveness of the company’s internal control
      over financial reporting. An audit also includes examining, on a test basis,
      evidence supporting the amounts and disclosures in the consolidated financial
      statements, assessing the accounting principles used and significant estimates
      made by management, as well as evaluating the overall consolidated 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 consolidated financial position of Univec, Inc.
      and Subsidiaries as of December 31, 2004 and the consolidated results of their
      operations and their consolidated cash flows for each of the years in the
      two-year period ended December 31, 2004 in conformity with accounting principles
      generally accepted in the United States of America.





As
      discussed in Note 2 to the financial statements, certain errors related to
      accounting for capital leases and year-end cutoffs for the year ended December
      31, 2003 were discovered by management of the Company during the current year.
      In addition, the Company has restated its year ended December 31, 2004 and
      2003
      revenue to reflect the Company’s change to the “net” revenue method for its GPO
      product sales. Accordingly, the 2004 and 2003 financial statements have been
      restated to reflect these changes and corrections.





The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern. As discussed in Note 3 to the
      consolidated financial statements, the Company has suffered from recurring
      losses from operations, has negative working capital, has a total stockholders’
deficit and is in default on certain debt, all of which raise substantial doubt
      about its ability to continue as a going concern. Management’s plans in regard
      to these matters are also discussed in Note 3.  The consolidated financial
      statements do not include any adjustments that might result from the outcome
      of
      this uncertainty.





/s/
      Abrams, Foster, Nole & Williams, P.A


Abrams,
      Foster, Nole & Williams, P.A.





Baltimore,
      Maryland


September
      9,  2005, except for note 2, as to which the date is November 08,
      2006















F-2
















The
      Company has labeled the appropriate 2003 financial statements as being
“restated”. Also, the Company has referred to the footnote which describes the
      restatement.


**Univec,
                Inc. and Subsidiaries****Consolidated
                Balance Sheet****December
                31, 2004****ASSETS**Cash
            
            $
            29,443Marketable
                securities
            
            
            36,349Accounts
                receivable
            
            
            3,123,493Inventories
            
            
            179,878Certificates
                of deposit - restricted
            
            
            340,407Other
                current assets
            
            
            46,630Total
                current assets
            
            
            3,756,200Fixed
                assets, net
            
            
            622,685Other
                assets
            
            
            79,468Total
                assets
            
            $
            4,458,353**LIABILITIES
                AND STOCKHOLDERS' DEFICIT**Accounts
                payable and accrued expenses
            
            $
            4,380,826Deferred
                payroll
            
            
            1,271,488Notes
                and loans payable - current
            
            
            1,472,163Loans
                payable - officers/directors
            
            
            260,493Due
                to affiliated companies
            
            
            578,800Total
                current liabilities
            
            
            7,963,770Notes
                and loans payable - long-term
            
            
            211,852Total
                liabilities
            
            
            8,175,622Commitments
                and contingencies (Notes 3, 4, 12 and 13)STOCKHOLDERS'
                DEFICITPreferred
                stock $.001 par value; 3,743,500 sharesauthorized;
                none issued and outstandingSeries
                D 5% cumulative convertible preferred stock,$.001
                par value; authorized: 1,250,000; issued andoutstanding:
                125,000 shares (aggregate liquidationvalue:
                $336,808)
            
            
            125Series
                E cumulative convertible preferred stock,$.001
                par value; authorized: 2,000 shares; issued andoutstanding:
                412 shares (aggregate liquidationvalue:
                $441,397)
            
            
            1Common
                stock $.001 par value; authorized: 75,000,000 shares;
            
            
            45,619issued:
                45,618,852 and outstanding: 45,214,698 sharesAdditional
                paid-in capital
            
            
            10,977,627Treasury
                stock, 404,154 shares - at cost
            
            
            (28,291
            )Stock
                Subscription Receivable
            
            
            (210,000
            )Accumulated
                deficit
            
            
            (14,502,350
            )Total
                stockholders' deficit
            
            
            (3,717,269
            )Total
                liabilities and stockholders' deficit
            
            **$**
            4,458,353





F-3













**Univec,
                Inc. and Subsidiaries****Consolidated
                Statement of Operations****Years
                ended December 31, 2004 and 2003 (Restated)**





**Year-Ended**
            
            **Year-Ended****Dec.
                31, 2004**
            
            **Dec.
                31, 2003****(Restated)**
            
            **(Restated)**Revenues
                (Note 5)
            
            $
            327,827
            
            $
            939,747Cost
                of revenues
            
            
            128,933
            
            
            948,490Gross
                Margin
            
            
            198,894
            
            
            (8,743
            )Operating
                ExpensesMarketing
                and selling
            
            
            123,400
            
            
            379,738Product
                development
            
            
            28,871
            
            
            28,547General
                and administrative
            
            
            1,772,246
            
            
            847,013Loss
                on write-off of goodwill
            
            
            1,774,119
            
            
            -Loss
                on write-off of capitalized lease
            
            
            -
            
            
            121,3663,698,636
            
            
            1,376,664Loss
                from Operations
            
            
            (3,499,742
            )
            
            (1,385,407
            )Other
                Income (Expense)Interest
                expense, net
            
            
            (108,092
            )
            
            (91,564
            )Gain
                on extinguishments of debt
            
            
            144,819
            
            
            24,872Other
                income (expense)
            
            
            47,795
            
            
            -Total
                other expenses
            
            
            84,522
            
            
            (66,692
            )Loss
                from continuing operations
            
            
            (3,415,220
            )
            
            (1,452,099
            )Loss
                from discontinued operations:Discontinued
                operating losses
            
            
            (8,260
            )
            
            (93,502
            )Loss
                on sale of subsidiary
            
            
            (597,056
            )
            
            -Net
                loss
            
            
            (4,020,536
            )
            
            (1,545,601
            )Dividends
                attributable to preferred stock
            
            
            (35,921
            )
            
            (39,025
            )Loss
                attributable to common stockholders
            
            $
            (4,056,457
            )
            $
            (1,584,626
            )Share
                informationBasic
                net loss per common share
            
            $
            (0.11
            )
            $
            (0.05
            )Basic
                weighted average numberof
                common shares outstanding
            
            
            38,510,467
            
            
            33,751,508





F-4











**Univec,
      Inc. and Subsidiaries**


**Consolidated
      Statement of Stockholders' Equity**


**Years
      ended December 31, 2004 and 2003 (Restated)**





**Series
                A Preferred**
            
            
            **Series
                B Preferred**
            
            
            **Series
                C Preferred**
            
            
            **Series
                D Preferred**
            
            
            **Series
                E Preferrred**
            
            
            **Common
                Stock**
            
            
            **Additional
                Paid-in**
            
            
            **Treasury
                Stock**
            
            
            **Prepaid
                Consulting**
            
            
            **Accumulated**
            
            
            **Total
                Stockholders'****Shares**
            
            
            **Amount**
            
            
            **Shares**
            
            
            **Amount**
            
            
            **Shares**
            
            
            **Amount**
            
            
            **Shares**
            
            
            **Amount**
            
            
            **Shares**
            
            
            **Amount**
            
            
            **Shares**
            
            
            **Amount**
            
            
            **Capital**
            
            
            **Shares**
            
            
            **Amount**
            
            
            **Services**
            
            
            **Deficit**
            
            
            **Equity**Balance,
                January 1, 2003
            
            
            124
            
            $
            1
            
            
            167
            
            $
            1
            
            
            250
            
            $
            1
            
            
            104,167
            
            $
            104
            
            
            
            
            
            
            
            
            31,772,773
            
            $
            31,773
            
            $
            10,296,627
            
            
            
            
            
            
            
            
            
            
            
            ($8,843,338
            )
            $
            1,485,169Exchange
                of Series B and Cfor
                Series E
            
            
            
            
            
            
            
            
            (122
            )
            
            (1
            )
            
            (250
            )
            
            (1
            )
            
            
            
            
            
            
            
            522
            
            $
            1
            
            
            
            
            
            
            
            
            89,708
            
            
            
            
            
            
            
            
            
            
            
            (89,707
            )Common
                stock
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            .issued
                for Cash
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            500,000
            
            
            500
            
            
            19,500
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            20,000Consulting
                fees
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            100,000
            
            
            100
            
            
            9,900
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            10,000Loans
                payable - officers/directors
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            444,805
            
            
            444
            
            
            49,556
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            50,000Adjustment
                to conversion of series A andoptions
            
            
            (124
            )
            
            (1
            )Convert
                Series B
            
            
            
            
            
            
            
            
            (45
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,843,322
            
            
            1,841
            
            
            (1,843
            )Convert
                Series E
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (30
            )
            
            
            
            
            340,909
            
            
            341
            
            
            (341
            )Exercise
                of options by officer
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            166,667
            
            
            167
            
            
            6,500
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            6,667Options
                issued
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            36,400
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            36,400Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,545,601
            )
            
            (1,545,601
            )Balance,
                December 31, 2003
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            104,167
            
            
            104
            
            
            492
            
            
            1
            
            
            35,168,476
            
            
            35,169
            
            
            10,506,007
            
            
            
            
            
            
            
            
            
            
            
            (10,478,646
            )
            
            62,635Sale
                of Series D
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            20,833
            
            
            21
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            49,979
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            50,000Common
                stock issued forCashConsulting
                fees
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            6,000,000
            
            
            6,000
            
            
            234,000
            
            
            
            
            
            
            
            
            ($240,000
            )Deferred
                payroll and accruedexpenses
                - officers
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2,160,035
            
            
            2,160
            
            
            173,102
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            175,262Loans
                payable - officers/directors
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            500,000
            
            
            500
            
            
            9,500
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            10,000Sale
                of subsidiary
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2,829
            
            
            404,154
            
            
            ($28,291
            )
            
            
            
            
            
            
            
            (25,462
            )Convert
                Series E and dividends
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (80
            )
            
            
            
            
            1,790,341
            
            
            1,790
            
            
            (1,790
            )
            
            
            
            
            
            
            
            
            
            
            (3,168
            )
            
            (3,168
            )Amortization
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            30,000
            
            
            
            
            
            30,000Options
                issued
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            4,000
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            4,000Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (4,020,536
            )
            
            (4,020,536
            )Balance,
                December 31, 2004
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            125,000
            
            $
            125
            
            
            412
            
            $
            1
            
            
            45,618,852
            
            $
            45,619
            
            $
            10,977,627
            
            
            404,154
            
            
            ($28,291
            )
            
            ($210,000
            )
            
            ($14,502,350
            )
            
            ($3,717,269
            )




See
      notes
      to consolidated financial statements.





F-5











**Univec,
                Inc. and Subsidiaries****Consolidated
                Statement of Cash Flows****Years
                ended December 31, 2004 and 2003 (Restated)**




**2004**
            
            **2003****(Restated)**Cash
                flows from operating activitiesNet
                loss
            
            $
            (4,020,536
            )
            $
            (1,545,601)
            )Adjustments
                to reconcile net loss to net cashused in operating activitiesLoss on write-off of goodwill
            
            
            1,774,119Loss on sale of subsidiary
            
            
            481,719Depreciation and amortization
            
            
            189,008
            
            
            165,511Write-off of equipment
            
            
            57,295Valuation allowance for inventories
            
            
            75,000
            
            
            45,000Stock based compensation
            
            
            4,000
            
            
            36,400Loss (gain) on cancellation of capital lease
            
            
            (2,894
            )
            
            121,366Gain on extinguishment of debt
            
            
            (98,547
            )
            
            (24,872
            )Gain on receipt of marketable securities
            
            
            (36,349
            )Other
            
            
            (11,435
            )Changes
                in assets and liabilities, net ofeffects from sale of TWTAccounts receivable
            
            
            (506,983
            )
            
            (2,293,183
            )Inventories
            
            
            17,698
            
            
            128,413Other current assets and other assets
            
            
            (3,320
            )
            
            7,727Accounts payable and accrued expenses
            
            
            713,610
            
            
            2,547,614Deferred payroll
            
            
            619,631
            
            
            536,934Escrow deposits
            
            
            
            
            
            (10,000
            )Net cash used in operating activities
            
            
            (747,984
            )
            
            (284,691
            )Cash
                flows from investing activitiesPurchases of fixed assets (net of capitalizedlease obligation of $250,000 in 2003)
            
            
            (397,068
            )
            
            (1
            )Increase in restricted cash
            
            
            (340,407
            )Cash used in sale of subsidiary (net of notes andother payables of $103,600)
            
            
            (5,670
            )Net cash used in investing activities
            
            
            (743,145
            )
            
            (1
            )Cash
                flows from financing activitiesProceeds from notes and loans payable,net of expenses of $80,146 in 2004
            
            
            1,104,343
            
            
            178,453Increase in due from affiliated companies
            
            
            567,194
            
            
            71,870Increase in loans payable - officers/directors
            
            
            54,000
            
            
            230,419Proceeds from sale of stock
            
            
            50,000
            
            
            20,000Payments on notes and loans payable
            
            
            (242,386
            )
            
            (229,363
            )Payments of capitalized lease obligations
            
            
            (21,232
            )
            
            (62,126
            )Dividends converted to preferred stock
            
            
            (3,168
            )Net cash provided by financing activities
            
            
            1,508,751
            
            
            209,253Net increase (decrease) in cash
            
            
            17,622
            
            
            (75,439
            )Cash,
                beginning of period
            
            
            11,821
            
            
            87,260Cash,
                end of period
            
            $
            29,443
            
            $
            11,821Supplemental
                disclosure of cash flow informationCash paid for interest
            
            $
            48,709
            
            $
            102,961Supplemental
                disclosures of non-cash activityCommon stock issued in payment ofloans payable - officers/directors
            
            $
            10,000
            
            $
            20,000Common stock and options issued in payment
            
            $
            179,262of deferred payroll and accrued expensesConversions of Series E to common stock,including dividends
            
            $
            3,168
            
            $
            89,807Treasury stock received, net of options issued,on sale of subsidiary
            
            $
            (125,462
            )






F-6











Univec,
      Inc. and Subsidiaries





Notes
      to
      Consolidated Financial Statements





1.
      Nature
      of Operations





Univec,
      Inc. (Company) produces, licenses and markets medical products, primarily
      syringes, on a global basis. Physician and Pharmaceutical Services, Inc. (PPSI),
      a subsidiary, provides pharmaceutical sample and group purchasing services
      of
      pharmaceutical products. Thermal Waste Technologies, Inc. (TWT), a subsidiary
      until its sale, marketed a medical waste disposal unit.





2.
      Restatement





The
      Company has restated (see Note # 5) its year ended December 31, 2004 and 2003
      revenue by $19,120,561 and $16,038,075, respectively and the related Cost of
      Revenues by $19,120,561 and $16,038,075, respectively to reflect the Company’s
      change to the “net” revenue method for its GPO product sales. The Company
      determined that there was not a satisfactory extent of risk transferred in
      the
      transaction and therefore the provisions of the “net” method of revenue
      recognition are more appropriate in the circumstances. The Company restated
      its
      year ended December 31, 2003 gross profit margin by an aggregate $419,510.
      This
      restatement includes three distinct factors. The Company restated its 2003
      sales
      and related cost of revenues by a net $12,439 increase in gross margin to
      reflect the overall effect of an incorrect 2003 year-end sales cutoff. The
      Company incurred $50,000 for the year 2003 as a result of inventory write-downs,
      which have been reclassified to be reported as components of cost of
      revenues..  Finally, 2003 GPO cost adjustments of  $381,949.00
      have been reclassified to be reported as a reduction of revenue. For the
      year-end December 31, 2003, the Company recognized $381,949 of cost adjustments
      provided to the Company’s group purchasing customer as general and
      administrative expenses. However, EITF 01-9 requires that such cost adjustments
      be reported as a reduction of revenues. This reclassification is reported on
      the
      enclosed Statement of Operations for year-end December 31, 2003. No such cost
      adjustment payments have been made to any customer after that time. All of
      the
      financial information described in this footnote is presented in accordance
      with
      Accounting Principles Board Statement No. 20, paragraph 37 regarding the nature
      of the restatement disclosure.

















The
      Company has corrected a $121,366 error on the loss on write-off of a capital
      lease less $11,958 related depreciation expense and $5,623 increased related
      interest expense restatement which occurred during the year ended December
      31,
      2003 in connection with the correction of a prior error in reporting capitalized
      lease of equipment. The underlying fixed assets were purchased by a related
      company owned by an officer of the Company and leased to the Company. In 2003,
      the Company originally incorrectly reported the payoff of the lease from
      proceeds of loans. This restatement recorded the reinstatement and
      subsequent write-off of the old capitalized lease and the capitalization of
      the
      new lease, which resulted in an additional prior period net loss of $115,031,
      less than $0.01, per share. The new lease was for a term of three years and
      provided for monthly rent of $3,944 and a purchase option of $100,000 at the
      end
      of the lease term.





The
      Company has corrected the reporting of this capitalized the lease. The
      capitalized lease obligation and related assets have been recorded at the lower
      of the present value of the minimum lease obligations or the fair value of
      the
      minimum lease obligations or the fair value of the related assets of $250,000.
      In July 2004, the Company purchased the equipment under the lease for $250,000,
      effectively canceling the lease.




The
      general and administrative expenses for 2003 have been reduced by $101,388
      to
      properly report only costs actually incurred as 2003 expenditures. Certain
      previously reported fee expenses were established to be subsequent period costs.





The
      restated Consolidated Statement of Operations for the Year-ended December 31,
      2003 is composed of the following accounting corrections. Various
      reclassifications have also been included therein.




Year-end
                December 31, 2003 (net loss) as originally reported
            
            
            ($1,545,601
            )Increase
                in gross margin - year-end cutoff
            
            
            12,439Decrease
                in gross margin - inventory write-down
            
            
            (50,000
            )Decrease
                in gross margin - reduction of revenue
            
            
            (381,949
            )Net
                Decrease in gross margin
            
            
            (419,510
            )Increase
                in net interest expense
            
            
            (5,623
            )Decrease
                in depreciation expense
            
            
            11,958Loss
                on write-off of capital lease
            
            
            (121,366
            )Reclassification
                of General and Administrative expenses
            
            
            431,949General
                and Administrative expense adjustment
            
            
            101,388Miscellaneous
                adjustments
            
            
            1,204Year-end
                December 31, 2003 (net loss) as restated
            
            
            ($1,545,601
            )













**Univec,
                Inc and Subsidiaries****Consolidated
                Statement of Operations (Restated)****Year
                ended December 31, 2003****Year-Ended**
            
            
            
            **Year-Ended****Dec.
                31, 2003**
            
            
            
            **Dec.
                31, 2003****(Originally
                reported)**
            
            **Restatements**
            
            **(Restated)**Revenues
                (Note 5)
            
            $
            16,133,652
            
            $
            (15,193.,905
            )
            $
            939,747Cost
                of revenues
            
            
            15,722,885
            
            
            (14,774,395
            )
            
            948,490Gross
                Margin
            
            
            410,767
            
            
            (419,510
            )
            
            (8,743
            )Operating
                ExpensesMarketing
                and selling
            
            
            387,769
            
            
            (8,031
            )
            
            379,738Product
                development
            
            
            28,617
            
            
            (70
            )
            
            28,547General
                and administrative
            
            
            1,478,913
            
            
            (631,900
            )
            
            847,013Loss
                on write-off of capitalized lease
            
            
            
            
            
            121,366
            
            
            121,366Total
                Operating Expenses
            
            
            1,895,299
            
            
            (518,635
            )
            
            1,376,664Loss
                from Operations
            
            
            (1,484,532
            )
            
            99,125
            
            
            (1,385,407
            )Interest
                expense, net
            
            
            (85,941
            )
            
            (5,623
            )
            
            (91,564
            )Gain
                on extinguishments of debt
            
            
            24,872
            
            
            
            
            
            24,872Total
                other expenses
            
            
            (61,069
            )
            
            (5,623
            )
            
            (66,692
            )Income
                (loss) from continuing operations
            
            
            (1,545,601
            )
            
            93,502
            
            
            (1,452,099
            )Loss
                from discontinued operations
            
            
            -
            
            
            (93,502
            )
            
            (93,502
            )Net
                loss
            
            
            (1,545,601
            )
            
            -
            
            
            (1,545,601
            )Dividends
                attributable to preferred stock
            
            
            (39,025
            )
            
            -
            
            
            (39,025
            )Loss
                attributable to common stockholders
            
            $
            (1,584,626
            )
            $
            -
            
            $
            (1,584,626
            )Share
                informationBasic
                net loss per common share
            
            $
            (0.05
            )
            $
            -
            
            $
            (0.05
            )Basic
                weighted average numberof
                common shares outstanding
            
            
            33,751,508
            
            
            -
            
            
            33,751,508




3.
      Going
      Concern





The
      accompanying financial statements have been prepared on a going concern basis,
      which contemplates the realization of assets and the satisfaction of liabilities
      in the normal course of business. As of December 31, 2004, the Company had
      negative working capital of $4,207,570 and stockholders' deficit of $3,717,269
      and had previously incurred net losses of $(4,020,536) and $(1,584,626) for
      the
      years ended December 31, 2004 and 2003. The Company is also in default of
      approximately $1,200,000, of loans and notes payable all of which are payable
      on
      demand as a result of such defaults. These factors, among others, indicate
      that
      the Company's continuation as a going  concern is dependent upon its
      ability to obtain adequate financing and/or achieve profitable operations.
      The
      financial statements do not include any adjustments related to the
      recoverability and classification of recorded asset amounts or the amounts
      and
      classification of liabilities that might be necessary should the Company be
      unable to continue in existence.





Management
      is currently seeking additional investment capital to support its entrance
      into
      new business ventures and provide the capital needed to operate.





4.
      Significant Accounting Policies





Basis
      of
      Presentation





The
      consolidated financial statements include all the accounts of the Company and
      its wholly-owned subsidiaries, Physician and Pharmaceutical Services, Inc.
      (PPSI), Thermal Waste Technologies, Inc. (TWT), until its sale and Rx Ultra,
      Inc. (inactive). All material inter-company balances and transactions have
      been
      eliminated. The consolidated financial statements include all the accounts
      of
      Thermal Waste Technologies, Inc. until its sale





Accounts
      Receivable





Accounts
      receivable consisted of receivables from customers. The Company records a
      provision for doubtful receivables, if necessary, to allow for any amounts
      which
      may be unrecoverable and is based upon an analysis of the Company's prior
      collection experience, customer creditworthiness, and current economic trends.
      As of December 31, 2004, no allowance was necessary.





Inventories





Inventories
      are valued at the lower of cost, determined by the first-in, first-out method,
      or market.





F-7









Fixed
      Assets





Fixed
      assets are stated at cost, less accumulated depreciation, and are depreciated
      on
      a straight-line basis over the estimated useful lives of seven years.
      Maintenance and repairs are charged to expense as incurred; renewals and
      improvements which extend the life of assets are capitalized. Upon retirement
      or
      disposal, the asset cost and related accumulated depreciation and
      amortization are eliminated from the respective accounts and the resulting
      gain
      or loss, if any, is included in the results of operations.





The
      carrying value of fixed assets is evaluated whenever changes in circumstances
      indicate the carrying amount of such assets may not be recoverable. If
      necessary, the Company recognizes an impairment loss for the difference between
      the carrying amount of the assets and their estimated fair value. Fair value
      is
      based on current and anticipated future undiscounted cash flows.





Shipping
      Income and Expense





Shipping
      income is included in product sales. Shipping expenses are included in marketing
      and selling.




Product
      Development





Research
      and development costs have been expensed as incurred.





Basic
      Loss per Share





Basic
      net
      loss per common share was computed based on the weighted average number of
      common shares outstanding during the year. Dilutive net loss per share has
      not
      been presented as they are anti-dilutive.





Revenue
      Recognition





Product
      sales are recognized when products are shipped. Although the Company warrants
      its products, it is unable to estimate the future costs relating to warranty
      expense and, as such, recognizes warranty expenses as incurred. Revenues for
      PPSI's group purchasing service (GPO) are recognized using the “net” sales
      method of  revenue reporting.





Stock
      Based Compensation





Compensation
      cost for stock, stock options, warrants, etc., issued to employees and
      non-employees is based on the fair value method.





Income
      Taxes





Deferred
      income taxes have been provided for temporary differences between financial
      statement and income tax reporting under the liability method , using expected
      tax rates and laws that are expected to be in effect when the differences are
      expected to reverse. A valuation allowance is provided when it is more likely
      than not , that the deferred tax assets will not be realized.




Estimates





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect 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 reporting period.
      Actual results could differ from those estimates.





Fair
      Values





The
      carrying amounts of cash, accounts receivable, accounts payable and accrued
      expenses, notes and loans payable and deferred payroll approximate their fair
      values.




F-8









New
      Accounting Pronouncements





Financial
      Accounting Standards Board Statement # 123R, Stock Based Compensation, effective
      for the year ended December 31, 2006, has not been analyzed to determine if
      it
      will have a material effect on the Company’s financial statements.





Management
      does not believe that any other recently issued, but not yet effective
      accounting pronouncements, if adopted, would have a material effect on the
      accompanying financial statements.





Note
      5. Concentrations





The
      Company purchased 99% of its pharmaceutical drugs for its group purchasing
      service (GPO) from one vendor. This supplier is not a related party as defined
      in SFAS 57. The arrangement requires the Company to pay for the drugs within
      forty five days after the respective period month-end.





The
      Company maintains a corporate group purchasing sales arrangements with an
      affiliated company, Pharmacy Services, Inc. (PSI), which is a related party
      as
      defined in SFAS 57. This related party is a private company wholly owned by
      the
      President of Univec, Inc. The president of Univec, Inc. is also a significant
      shareholder of Univec, Inc. The Company, through its wholly owned subsidiary
      Physicians and Pharmaceutical Services, Inc. (PPSI) operates the GPO. PSI pays
      PPSI at group purchasing prices. PSI paid $19,046,224 for pharmaceutical drugs
      to PPSI during 2004. PSI must pay the Company for such goods within thirty
      days
      of the appropriate month-end. PSI pays the Company a specified price, which
      is
      based on the cost of the drugs as determined by the Company’s market experience
      with its non-related providers.




Revenue
      Recognition





As
      a
      result of the differing circumstances related to the Company’s manufacture,
      procurement, distribution and physician sampling programs, diverse financial
      accounting methods are utilized to recognize the revenue from its various
      financial sources.





The
      Company utilizes the “gross” sales method of recognizing the amount of revenue
      from its syringe manufacturing and specialty pharmaceutical drug product sales.
      This method is influenced by several factors as defined by EITF 99-19, which
      the
      Company’s market agreements indicate to be in accordance with the gross sales
      method. The most significant factor under these agreements include the Company’s
      retention of the inventory’s risk of loss for these products.




The
      GPO
      and physician sampling programs use the “net” method of revenue recognition (see
      Note # 2). However, the Company rather than the supplier is the primary credit
      obligor in these arrangements.




Distributor
      Arrangements





The
      Company markets its syringe products exclusively through distributors and
      various government agencies. Accounts receivable balances are payable within
      thirty days of shipment. Univec provides a product quality warranty on its
      products. The Company has never had any of its products returned due to product
      deficiencies. The products are priced under competitive arrangements with each
      customer. The product revenue recognition is based upon the prices charged
      to
      each customer. The Company has no price concessions which allow payments below
      the agreed prices.





Product
      Warranties





The
      Company provides a product warranty for the products sold. However, the Company
      has never had a product returned due to defective quality. Further, there are
      no
      warranty costs recognized in any of the years ended December 31, 2004 and 2003.
      The Company believes that because no warranty costs were incurred during any
      of
      the periods mentioned, there is no need to disclose any additional warranty
      cost
      policy or amounts.




6.
      Marketable Securities





As
      of
      December 31, 2004, marketable securities consisted of an investment in an equity
      security, with a fair market value of $36,349. Management has classified the
      investment as available-for-sale.


The
      Company received this security in December 2004 upon the conversion from a
      mutual to a stock insurance company in which Univec had owned a policy.





In
      January 2005, the security was sold for $36,101.




7.
      Inventories





Inventories
      consisted of the following:




Raw
                materials
            
            $
            152,252Work-in-process
            
            
            89,740Finished
                goods
            
            
            62,886304,878Less:
                allowance for valuation
            
            
            (125,000
            )$
            179,878





The
      Company provided a $75,000 and $50,000 valuation allowance in 2004 and 2003,
      respectively.





8.
      Fixed
      Assets





Fixed
      assets consisted of the following:






Equipment
            
            $
            1,100,784Less:
                accumulated depreciation
            
            
            478,099$
            622,685








As
      of
      December 31, 2004, the Company wrote-off fixed assets located at former
      suppliers with a cost of $371,764 and a net book value of $85,088.





Depreciation
      expense was $128,901 and $174,541 in 2004 and 2003, respectively. For the year
      ended December 31, 2004, fully depreciated assets were approximately
      $43,000.





F-9







9.
      Notes
      and Loans Payable





As
      of
      December 31, 2004, notes and loans payable consisted of:




Loan
                due to a shareholder through July, 2009,with interest at 4% (1) (3)
            
            $
            500,000Loans
                payable to agencies for economicdevelopment payable at $9,230 per month untilJuly 2009, with interest at 4% per annum (1) (3)
            
            
            470,208Loan
                payable to a vendor without specificpayment terms or interest (2)
            
            
            211,852Loan
                payable to a vendor without, specific interest (3)
            
            
            135,000Loan
                payable to a vendor due April 30, 2007with interest at prime plus 2% per annum (3)
            
            
            105,516Notes
                payable on August 14, 2005, with interest at 8%
            
            
            85,000Note
                payable on to a former officer upon sale ofsubsidiary due June 2005, without specific interest
            
            
            60,000Notes
                payable on June 2005, with interest at 12%,per annum
            
            
            55,000Notes
                payable to a shareholder's trusts, with interestat 12%, per annum (2)
            
            
            27,000Other
            
            
            34,4381,684,014Less:
                Current portion of notes and loans payable
            
            
            1,472,162$
            211,852




(1)
      On
      July 23, 2004, the Company borrowed an aggregate of $500,000 from the City
      of
      Baltimore Development Corporation and the Maryland Department of Business and
      Economic Development payable in aggregate equal monthly installments of $9,230
      over five years, with interest at 4%, per annum. Proceeds are to be used to
      purchase equipment of $450,000, which together with certain other equipment
      of
      the Company, collateralize the borrowings. The borrowings also required deposits
      of $335,000 and an irrevocable standby letter of credit of $200,000. Loans
      from
      certain officers and directors of approximately $180,000 have been subordinated.




As
      required under the borrowings, the Company has obtained a revolving line of
      credit of $500,000 from a stockholder of the Company under which the Company
      may
      borrow for working capital through July 22, 2009. Loans under the line bear
      interest at the prime rate, plus 2%, per annum, and may be converted into common
      stock at $.065, per share, as defined. If the line of credit is terminated
      within one year, there is a penalty of up to 90 days of interest. The Maryland
      Department of Business and Economic Development has guaranteed 80% of the loan
      and interest thereon. In July 2004, the Company borrowed $500,000 under the
      line
      of credit. As of December 31, 2004, interest rate was 7%, per annum.




Financing
      expenses in connection with these borrowings were $80,146 and will be amortized
      over the term of the borrowings.




(2)
      Subject to forgiveness upon the vendor's sale of shares of the Company’s common
      stock.




(3)
      In
      default due to either noncompliance or late payments. As a result of these
      defaults, the Company has reclassified long-term debt of $457,376 to current.





10.
      Due
      to Affiliated Companies





Due
      to
      affiliated companies, owned by the chief executive officer of the Company,
      on
      demand, with interest at 10%, per annum.





11.
      Loans
      Payable - Officer/Directors





As
      of
      December 31, 2004, loans payable - officer / directors consisted
      of:





Note
                payable to the chief executive officerand
                the chairman of the board of theCompany,
                due on demand, with interestat
                prime, plus 2%, per annum (1)
            
            $
            200,000Note
                payable to a director
            
            
            53,300Others
            
            
            7,193$
            260,493




F-10










(1)
      The
      same terms as an underlying borrowing from a bank and collateralized by certain
      equipment. As of December 31, 2004 the interest rate was 7%, per
      annum.





12.
      Income Taxes


The
      Company files consolidated income tax returns with its subsidiaries. Prior
      to
      its acquisition, PPSI was a Subchapter S Corporation.





As
      of
      December 31, 2004, the Company had net operating loss carry forwards of
      approximately $15,250,000 available to reduce future taxable income expiring
      through 2024, which may be limited due to ownership changes.





For
      the
      years ended December 31, 2004 and 2003, the Company's deferred tax benefits
      (expenses) were as follows:





**2004**
            
            **2003**Net
                operating loss carry forwards
            
            $
            615,000
            
            $
            200,000Depreciation
            
            
            191,000
            
            
            184,000Goodwill
            
            
            (19,000
            )
            
            (59,000
            )Compensation
            
            
            132,000
            
            
            200,000Inventory
                and equipment valuationallowances
            
            
            60,000Valuation
                allowance
            
            
            (979,000
            )
            
            (525,000
            )None
            
            
            
            
            
            None





As
      of
      December 31, 2004, the tax effects of the components of deferred tax assets
      and
      liabilities were as follows:





Deferred
                tax assetsNet
                operating loss carry forwards
            
            $
            5,352,000Compensation
            
            
            482,000Depreciation
            
            
            183,000Total
                deferred tax asset
            
            
            6,017,000Deferred
                tax liabilitiesGoodwill
            
            
            (120,000
            )Net
                deferred tax asset
            
            
            5,897,000Valuation
                allowance
            
            
            (5,897,000
            )None





As
      of
      December 31, 2004, realization of the Company's net deferred tax asset of
      approximately $5,425,000 was not considered more likely than not and,
      accordingly, a valuation allowance of $5,425,000 was provided.





The
      following is a reconciliation of expected income tax benefit utilizing the
      Federal statutory tax rate to income tax benefit reported on the statement
      of
      operations.





**2004**
            
            **2003**Expected
                income tax benefit
            
            $
            (437,000
            )
            $
            (303,000
            )Change
                in valuation allowance arising in current year
            
            
            1,164,000
            
            
            504,000State
                income tax benefit, net of federal income tax effect
            
            
            (107,000
            )
            
            (75,000
            )Other
            
            
            (620,000
            )
            
            (126,000
            )None
            
            
            
            
            
            None




F-11










13.
      Commitments and Contingency





Lease





The
      Company is committed under a non-cancelable lease for production, storage and
      office space through July 2005. The lease provides for minimum annual rent
      of
      $72,000, additional rents for the Company's share of normal maintenance plus
      its
      pro-rata share of real estate taxes and eight one year renewals at the Company's
      option.





For
      2004
      and 2003, total rent expense was $73,200 and $77,439, respectively.





Employment
      Agreement





The
      Company is committed under an employment agreement to the chief  executive
      officer, through January 2005, requiring annual compensation to be determined
      annually by the officer and Company. Annually, the agreement shall automatically
      renew for one year, resulting in a new three year term each January 1. For
      the
      years ended December 31, 2004 and 2003, the compensation was $396,000
      and $360,000, respectively, which have been deferred by the chief
      executive officer. The agreement also provides for bonuses, as determined
      by the officer and the Company, an automobile allowance (of $24,000, per
      annum, for 2004) and life,  disability and health insurance. In addition,
      the officer was granted options to  purchase 2,000,000 shares of common
      stock exercisable at $.24, per share, through 2012. The options vest 25% on
      January 1, 2003 and 41,667 during each subsequent month.





14.
      Litigation Reserve





In
      December 2003, the Company assigned certain of their patents, earned royalties
      of $72,125 and 85% of all future royalties being earned from these patents
      in
      payment of a note payable and interest thereon for an aggregate of $99,434,
      in
      settlement to a collection matter. The Company recognized a $24,872 gain upon
      extinguishment of the debt. The Company in turn received relief from the
      restrictive patent payments and a perpetual license to exploit, market and
      manufacture these patents in North America. As the value of the license received
      could not be determined, no value was assigned to them.





In
      March
      2004, the Company settled a collection matter with a former consultant in the
      amount of $165,000, payable in varying amounts through March 2007 and options
      to
      purchase 359,375 shares of common stock of the Company, all of which have been
      accrued as of December 31, 2003.





In
      February 2000, a former consultant commenced an action against the Company
      and
      its directors, alleging breach of contract and fiduciary duty, and is seeking
      consulting fees in the amount of: (1) 250,000 shares of common stock, (2)
      $192,000 and (3) costs of this action. The Company and counsel do not believe
      the consulting fees are due and will continue to vigorously defend this
      action.




15.
      Stockholders' Equity




During
      2004, the Company was listed as a public company on the OTC Bulletin Board.
      All
      of the transactions reported in Note 14 - Stockholders’ Equity had fair market
      valuations based on the publicly listed closing prices of the Company’s common
      stock for the pertinent transaction dates. Such publicly listed valuations
      are
      in accordance with the guidance provided by SFAS 123 and EITF 96-18


Common
      Stock





During
      the year ended December 31, 2003, the Company issued an aggregate of 444,805
      shares of common stock to a stockholder and an officer in payment of notes
      and
      loans and deferred payroll of $20,000 and compensation of $30,000.





In
      August
      2003, the Company sold 500,000 shares of common stock for $20,000.





In
      December 2003, an officer exercised options to purchase 166,667 shares of common
      stock for $6,667.





In
      December 2003, the Company issued 100,000 shares of common stock in exchange
      for
      financial consulting services of $10,000.




During
      the year ended December 31, 2004, the Company issued an aggregate of 2,660,034
      shares of common stock to a stockholder and three officers in payment of notes
      and loans of $10,000, deferred payroll of $$50,000 and benefits of
      $125,262.




F-12










In
      November 2004, the Company exchanged 6,000,000 shares of common stock for
      $240,000 of professional consulting services over a one-year term. As of
      December 31, 2004, the remaining balance of services to be rendered was
      $210,000, which is reflected as Stock Subscription Receivable in the
      Stockholders’ Deficit.





During
      2004, the Company was listed as a public company on the OTC Bulletin Board.
      All
      of the transactions reported in the preceding discussion had fair market
      valuations based on the publicly listed closing prices of the Company’s common
      stock for the pertinent transaction dates. Such publicly listed valuations
      are
      in accordance with the guidance of SFAS 123 and EITF 96-18.





Preferred
      Stock




During
      the year ended December 31, 2002, 31.5 shares of Series B were converted into
      949,464 shares of common stock at prices of $.0525 to $.15, per share. During
      the year ended December 31, 2003, 45 shares of Series B were converted into
      1,843,322 shares of common stock at prices of $.0163 to $.0325, per
      share.





Series
      D





The
      Company has designated 1,250,000 shares of 5% cumulative convertible preferred
      stock (Series D), which are entitled to receive, prior to the payment of
      dividends to the common stock, cumulative dividends of 5%, per share, per annum.
      The Series D stock may be redeemed at the option of the Company, in cash at
      $2.40, per share. In addition, Series D stockholders are entitled to a
      liquidation preference of $2.40, per share, plus unpaid dividends. Each share
      of
      Series D is initially convertible into three shares of common
      stock.





In
      December 2004, the Company sold 20,833 shares of Series D preferred stock to
      a
      customer for $50,000. The Company will also sell similar amounts on March 31,
      June 30,


September
      30 and December 31, 2005.




F-13







Series
      E





In
      August
      2003, the Company designated 2000 shares of 5% cumulative convertible preferred
      stock (Series E), which are entitled to receive, prior to the payment of
      dividends to the Series D and common stock, cumulative dividends of 5%, per
      share, per annum. The Series E stock may be redeemed at the option of the
      Company, in cash, at 135% of the stated value, per share, plus all unpaid
      dividends. In addition, Series E stockholders are entitled to a liquidation
      preference of $1,000, per share, plus all unpaid dividends. Each share of Series
      E is convertible into shares of common stock at the lesser of $1.10 or 80%
      of
      market value, as defined. In August 2006, the Company is required to convert
      all
      the Series E into common stock at the conversion price, unless the holder
      becomes a 5% or greater stockholder. The Company may redeem the Series E in
      cash
      at $1,350, per share, plus all unpaid dividends, as defined.





On
      August
      5, 2003, the Company exchanged 122 shares of Series B and 250 shares of Series
      C, all the outstanding shares, for 522 shares of Series E.





In
      2004
      and 2003, 80 and 30 shares of Series E were converted into 1,790,341 and 340,909
      shares of common stock at prices ranging from $.03 to $.09, per
      share.





Holders
      of preferred shares have no voting rights.





As
      of
      December 31, 2004, cumulative dividends in arrears on preferred stock
      were:




Series
                D
            
            $
            36,736Series
                E
            
            
            30,994$
            67,730




Non
      Plan
      Options





During
      the year ended December 31, 2003, the Company issued options to purchase an
      aggregate of 6,200,000 shares of common stock of the Company to officers,
      directors and others. The options are exercisable at $.04 to $.25, per share,
      through various dates until November 2008 and were valued at $36,400. Certain
      of
      these options to officers and directors vest over three years.





During
      the year ended December 31, 2004, the Company issued options to purchase an
      aggregate of 1,050,000 shares of common stock of the Company to two officers
      and
      an employee. The options are exercisable at $.04, per share, through December
      2009 and were valued at $4,000.





During
      2004 and 2003, options to purchase 4,850,000 and 1,763,941 shares, respectively,
      of common stock expired or were cancelled without being exercised.





Reserved
      Shares





As
      of
      December 31, 2004, the Company has reserved shares of common stock as
      follows:




Non-plan
                options and warrants
            
            
            9,280,172Options
                under the Plans
            
            
            1,335,000Series
                D conversions
            
            
            375,000Series
                E conversions(a)
            
            
            4,027,218Litigation
            
            
            250,00015,267,390




(a)
      assumes conversions as of December 31, 2004 at $.11, per share.





16.
      Stock
      Option Plans





The
      1996
      Stock Option Plan (Plan) is administered by the Board of Directors or a
      committee thereof and options to purchase 4,709,219 shares of common stock
      may
      be granted under the Plan to directors, employees (including officers) and
      consultants to the Company. The Plan authorizes the issuance of incentive stock
      options (ISO's), as defined in Section 422A of the Internal Revenue Code of
      1986, as amended, and non-qualified stock options (NQSO's). Consultants and
      directors who are not also employees of the Company are eligible for grants
      of
      only NQSOs. The exercise price of each ISO may not be less than 100% of the
      fair
      market value of the common stock at the time of grant, except that in the case
      of a grant to an employee who owns 10% or more of the outstanding stock of
      the
      Company or a subsidiary or parent of the Company, the exercise price may not
      be
      less than 110% of the fair market value on the date of grant. The aggregate
      fair
      market value of the shares covered by ISO's granted under the Plan that become
      exercisable by a Plan participant for the first time in any calendar year is
      subject to a $100,000 limitation. The exercise price of each NQSO is determined
      by the Board, or committee thereof, in its discretion; provided that NQSO's
      granted a 10% Stockholder be no less than 110% of the fair market value on
      the
      date of grant.




Under
      the
      1998 Stock Option Plan (98 Plan), the Company may grant options to purchase
      300,000 shares of common stock to employees, directors, independent contractors
      and consultants of the Company. The 98 Plan is similar to the Plan and
      authorizes the issuance of ISO's, NQSO's and Stock Appreciation
      Rights.




Under
      the
      2000 Stock Option Plan (2000 Plan), the Company may grant options to purchase
      2,000,000 shares of common stock to employees, directors, independent
      contractors and consultants of the Company. The Plan includes options to
      purchase an addition 250,000 shares of common stock, reserved for an Industrial
      and Scientific Advisory Committee to be formed as necessitated by
      the


Company.





The
      following table summarizes the activity of the Plans for 2004 and
      2003.




**2004**
            
            **2003****Weighted**
            
            
            
            **Weighted****Average**
            
            
            
            **Average****Exercise**
            
            
            
            **Exercise****Shares**
            
            **Price**
            
            **Shares**
            
            **Price**Options
                outstanding, beginning of year
            
            
            1,335,000
            
            $
            0.70
            
            
            2,569,000
            
            $
            1.20Granted
            
            
            None
            
            
            -
            
            
            NoneCanceled,
                exercised, expired or exchanged
            
            
            None
            
            
            -
            
            
            (1,234,000
            )
            $
            1.74Options
                outstanding, end of year
            
            
            1,335,000
            
            $
            0.70
            
            
            1,335,000
            
            $
            0.70Options
                exercisable, end of year
            
            
            1,335,000
            
            $
            0.70
            
            
            1,335,000
            
            $
            0.70Options
                available for grant, end of year
            
            
            1,050,000
            
            
            
            
            
            1,050,000Weighted-average
                fair value of options grantedduring
                the year
            
            $
            .00
            
            
            
            
            $
            .00







F-14










The
      following table summarizes information about stock options outstanding under
      the
      Plan at December 31, 2004:





**Weighted****Average**
            
            **Weighted****Remaining**
            
            **Average****Range
                of**
            **Outstanding**
            **Contractual**
            **Exercisable**
            **Exercisable****Exercise
                Prices**
            **Options**
            **Life
                (Years)**
            **Options**
            **Price**$3.50
            65,000
            2.50
            65,000
            $3.50$2.00
            70,000
            3.00
            70,000
            $2.00$0.675
            650,000
            .50
            650,000
            $0.675$0.50
            100,000
            6.25
            100,000
            $0.50$0.24
            35,000
            8.00
            35,000
            $0.24$0.20
            60,000
            1.75
            60,000
            $0.20$0.15
            355,000
            5.50
            355,000
            $0.15$0.15
                to $3.50
            1,335,000
            2.70
            1,335,000
            $0.70








17.
      Revenues





Sales
      of
      Technology





Through
      September 1, 2003, the Company licensed the non-exclusive, worldwide use of
      the
      Company's patents for the manufacture, use and marketing of its auto-disable
      syringes providing for royalties on sales. In December 2003, the Company sold
      this license and assigned certain patents to a creditor in payment of
      $99,433 and also assigned certain future royalties under the auto-disable
      syringe licensing agreement. The Company has licensed back the rights under
      these patents to market and manufacture in North America.








F-15











Note
      18, Discontinued Operations





The
      Company recognized a loss of $597,056 on the 2004 sale of Thermal Waste
      Technology Corporation (TWT) a wholly owned subsidiary. This loss included
      a
      $554,542 write-off for the total impairment of goodwill attributable to the
      subsidiary. TWT was sold to an officer of the Company and his related parties,
      all former owners of TWT, in exchange for 404,154 shares of common stock of
      the
      Company, cancellation of deferred compensation to the officer of $221,042 and
      cancellation of the officer’s employment agreement. In addition, the officer
      received options to purchase 97,710 shares of common stock of the Company,
      exercisable at $.01, per share, for 10 years and the other purchasers received
      option to purchase 296,444 shares of common stock of the Company, exercisable
      at
      $.07, per share, for 10 years. The officer also will receive $100,000 in cash,
      payable in monthly installments of $10,000, commencing August 2004 and medical
      insurance payments of $3,600. All of the Univec, Inc. common stock and options
      exchanged in the transaction was valued at publicly listed closing prices of
      the
      Company’s common stock. Such publicly listed valuations are in accordance with
      the guidance of SFAS 123 and EITF 96-18.





During
      the year-ended December 31, 2003 the Company reported that a corporate officer
      had instituted a legal action for approximately $200,000 for wages plus
      approximately $12,000 related to health and dental insurance premiums plus
      interest. All amounts within the claim were previously accrued by the Company
      as
      operating expenses as they were incurred. However, the Company’s defense in the
      matter included a claim that the officer had entered into one or more agreements
      with third parties on behalf of the Company without notifying the Company’s
      President or Board of Directors. The Company asserted that damages to the
      Company in excess of the alleged liability to the officer had been
      incurred.




F-16







19.
      Goodwill





Goodwill
      had represented the excess purchase prices paid by the Company over the fair
      value of the tangible and other intangible assets and liabilities at the dates
      of acquisitions. Goodwill had not been amortized, but instead was subject to
      an
      annual assessment of impairment by applying a fair-value based test. The Company
      evaluated the carrying value of goodwill as of December 31, 2004.


The
      Company determined the carrying value of goodwill has been fully impaired and
      has written-off the carrying value of $1,774,119.




20.
      Subsequent Events





Common
      Stock





In
      January 2005, 30 shares of Series E and unpaid dividends thereon of $2,188
      were
      converted into 804,688 shares of common stock at $.04, per share.





In
      January 2005, the Company issued an aggregate of 1,037,980 shares of common
      stock to three officers of the Company in exchange for deferred compensation
      of
      $60,000 and accrued expenses of $17,158.





In
      February 2005, the Company issued 50,000 shares of common stock to an officer
      in
      payment of deferred compensation of $5,000.





In
      March
      2005, the Company sold 350,000 shares of common stock to two investors for
      an
      aggregate of $35,000.





Due
      to
      Affiliated Companies and Officers





Subsequent
      to December 31, 2004, the Company borrowed an additional $70,000 from the
      affiliated companies.





21. Selected
      Quarterly Financial Data - 2004 and 2003 (Unaudited)




Univec,
                Inc. and SubsidiariesBalance
                Sheets**December
                31, 2004**
            
            **September
                30, 2004**
            
            **June
                30, 2004**
            
            **March
                31, 2004**AssetsCash
            
            $
            29,443
            
            $
            8,024
            
            $
            49,162
            
            $
            852Marketable
                securities
            
            
            36,349Accounts
                receivable
            
            
            3,123,493
            
            
            1,628,446
            
            
            1,508,933
            
            
            1,472,635Inventories
            
            
            179,878
            
            
            269,672
            
            
            301,913
            
            
            295,248CDs
                - restricted
            
            
            340,407
            
            
            335,000
            
            
            335,000Other
                current assets
            
            
            46,630
            
            
            83,341
            
            
            96,297
            
            
            124,888Total
                current assets
            
            
            3,756,200
            
            
            2,324,483
            
            
            2,291,305
            
            
            1,893,623Fixed
                assets - net
            
            
            622,685
            
            
            894,802
            
            
            542,401
            
            
            587,598Goodwill
            
            
            
            
            
            1,774,119
            
            
            2,328,662
            
            
            2,328,662Other
                assets
            
            
            79,468
            
            
            83,475
            
            
            6,000
            
            
            6,000Total
                assets
            
            $
            4,458,353
            
            $
            5,076,879
            
            $
            5,168,368
            
            $
            4,815,883Liabilities
                and Stockholders DeficitAccounts
                payable &accrued
                expenses
            
            $
            4,380,826
            
            $
            2,946,251
            
            $
            2,877,647
            
            $
            2,762,038Deferred
                payroll
            
            
            1,271,488
            
            
            1,092,697
            
            
            1,261,588
            
            
            1,064,292Notes
                and loans pay-
                current
            
            
            1,472,163
            
            
            1,065,795
            
            
            350,872
            
            
            166,376Loans
                payable -officers/directors
            
            
            260,493
            
            
            260,493
            
            
            270,493
            
            
            270,493Due
                to affiliatedcompanies
            
            
            578,800
            
            
            504,643
            
            
            663,452
            
            
            328,017Total
                current liabilities
            
            
            7,963,770
            
            
            5,869,879
            
            
            5,424,052
            
            
            4,591,216Notes
                and loanspayable
                - long-term
            
            
            211,852
            
            
            696,814
            
            
            409,051
            
            
            497,033Total
                liabilities
            
            
            8,175,622
            
            
            6,566,693
            
            
            5,833,103
            
            
            5,088,249Stockholders’
                deficitPreferred
                stock - D
            
            
            125
            
            
            104
            
            
            104
            
            
            104Preferred
                stock - E
            
            
            1
            
            
            1
            
            
            1
            
            
            1Common
                stock
            
            
            45,619
            
            
            38,628
            
            
            37,872
            
            
            37,872Additional
                paid-incapital
            
            
            10,977,627
            
            
            10,690,639
            
            
            10,661,408
            
            
            10,661,408Treasury
                stock
            
            
            (28,291
            )
            
            (28,291
            )Stock
                subscription
            
            
            (210,000
            )Accumulated
                deficit
            
            
            (14,502,350
            )
            
            (12,190,895
            )
            
            (11,364,120
            )
            
            (10,971,751
            )Total
                stockholders'deficit
            
            
            (3,717,269
            )
            
            (1,489,814
            )
            
            (664,735
            )
            
            (272,366
            )Total
                liabilities andstockholders
                deficit
            
            $
            4,458,353
            
            $
            5,076,879
            
            $
            5,168,368
            
            $
            4,815,883




F-17














Univec,
                Inc. and SubsidiariesBalance
                Sheets**December
                31, 2003**
            
            **September
                30, 2003**
            
            **June
                30, 2003**
            
            **March
                31, 2003**AssetsCash
            
            $
            11,821
            
            $
            5,968
            
            $
            7,738
            
            $
            54,823Accounts
                receivable
            
            
            1,273,322
            
            
            61,308
            
            
            72,820
            
            
            163,851Inventories
            
            
            291,715
            
            
            448,438
            
            
            457,021
            
            
            459,480Other
                current assets
            
            
            147,635
            
            
            157,422
            
            
            137,832
            
            
            129,301Total
                current assets
            
            
            1,724,493
            
            
            673,136
            
            
            675,411
            
            
            807,455Fixed
                assets - net
            
            
            633,536
            
            
            573,011
            
            
            620,714
            
            
            665,887Goodwill
            
            
            2,328,662
            
            
            2,328,662
            
            
            2,328,662
            
            
            2,328,662Other
                assets
            
            
            6,000
            
            
            46,691
            
            
            55,581
            
            
            55,581Total
                assets
            
            $
            4,692,691
            
            $
            3,621,500
            
            $
            3,680,368
            
            $
            3,857,585Liabilities
                and Stockholders DeficitAccounts
                payable &accrued
                expenses
            
            $
            2,571,528
            
            $
            1,397,920
            
            $
            1,388,157
            
            $
            1,322,089Deferred
                payroll
            
            
            922,899
            
            
            681,047
            
            
            582,167
            
            
            502,262Notes
                and loans pay-
                current
            
            
            177,663
            
            
            412,997
            
            
            418,545
            
            
            423,093Loans
                payable -officers/directors
            
            
            216,493
            
            
            200,419
            
            
            112,419
            
            
            4,419Due
                to affiliatedcompanies
            
            
            235,734
            
            
            133,224
            
            
            54,037
            
            
            45,645Total
                current liabilities
            
            
            4,124,317
            
            
            2,825,607
            
            
            2,555,325
            
            
            2,297,508Notes
                and loanspayable
                - long-term
            
            
            505,739
            
            
            403,246
            
            
            403,246
            
            
            403,246Total
                liabilities
            
            
            4,630,056
            
            
            3,228,853
            
            
            2,958,571
            
            
            2,700,754Stockholders’
                deficitPreferred
                stock - A
            
            
            
            
            
            
            
            
            
            
            
            1Preferred
                stock - B
            
            
            
            
            
            
            
            
            1
            
            
            1Preferred
                stock - C
            
            
            
            
            
            
            
            
            1
            
            
            1Preferred
                stock - D
            
            
            104
            
            
            104
            
            
            104
            
            
            104Preferred
                stock - E
            
            
            1
            
            
            1Common
                stock
            
            
            35,169
            
            
            34,366
            
            
            33,616
            
            
            33,616Additional
                paid-incapital
            
            
            10,506,007
            
            
            10,410,745
            
            
            10,294,788
            
            
            10,294,785Treasury
                stockStock
                subscriptionAccumulated
                deficit
            
            
            (10,478,646
            )
            
            (10,052,569
            )
            
            (9,606,713
            )
            
            (9,171,677
            )Total
                stockholders'deficit
            
            
            62,635
            
            
            392,647
            
            
            721,797
            
            
            1,156,831Total
                liabilities andstockholders
                deficit
            
            $
            4,692,691
            
            $
            3,621,500
            
            $
            3,680,368
            
            $
            3,857,585




F-18











Univec,
                Inc. and SubsidiariesStatements
                of Operations**Year
                ended**
            
            **Three
                months ended**
            
            **Nine
                months ended**
            
            **Three
                months ended**
            
            **Six
                months ended**
            
            **Three
                months ended**
            
            **Three
                months ended****Dec.
                31, 2004**
            
            **Dec.
                31, 2004**
            
            **Sept.
                30, 2004**
            
            **Sept.
                30, 2004**
            
            **June
                30, 2004**
            
            **June
                30, 2004**
            
            **March
                31, 2004**Revenues
            
            $
            327,827
            
            $
            31,658
            
            $
            296,169
            
            $
            99,631
            
            $
            196,538
            
            $
            171,688
            
            $
            24,850Cost
                of revenues
            
            
            (128,933
            )
            
            (71,997
            )
            
            (56,936
            )
            
            (33,861
            )
            
            (23,075
            )
            
            (38,511
            )
            
            15,426Gross
                margin
            
            
            198,894
            
            
            (40,339
            )
            
            239,233
            
            
            65,770
            
            
            173,463
            
            
            133,177
            
            
            40,286Operating
                expensesMarketing
                and selling
            
            
            (123,400
            )
            
            (7,986
            )
            
            (115,414
            )
            
            14,052
            
            
            (129,466
            )
            
            (5,328
            )
            
            (124,138
            )Product
                development
            
            
            (28,871
            )
            
            (609
            )
            
            (28,262
            )
            
            (25,530
            )
            
            (2,732
            )
            
            (1,886
            )
            
            (846
            )General
                & administrative
            
            
            (1,772,246
            )
            
            (457,965
            )
            
            (1,314,281
            )
            
            (393,881
            )
            
            (920,400
            )
            
            (486,329
            )
            
            (434,071
            )Loss
                on write-off ofgoodwill
            
            
            (1,774,119
            )
            
            (1,774,119
            )Total
                operating expenses
            
            
            (3,698,636
            )
            
            (2,240,679
            )
            
            (1,457,957
            )
            
            (405,359
            )
            
            (1,052,598
            )
            
            (493,543
            )
            
            (559,055
            )Loss
                from operations
            
            
            (3,499,742
            )
            
            (2,281,018
            )
            
            (1,218,724
            )
            
            (339,589
            )
            
            (879,135
            )
            
            (360,366
            )
            
            (518,769
            )Other
                income (expense)Interest
                expense, net
            
            
            (108,092
            )
            
            (23,288
            )
            
            (84,804
            )
            
            (38,424
            )
            
            (46,380
            )
            
            (32,003
            )
            
            (14,377
            )Gain
                on extinguishmentof
                debt
            
            
            144,819
            
            
            64,225
            
            
            80,594
            
            
            40,554
            
            
            40,040
            
            
            0
            
            
            40,040Other
                income (expense)
            
            
            47,795
            
            
            47,795Total
                other income(expense)
            
            
            84,522
            
            
            88,732
            
            
            (4,210
            )
            
            2,130
            
            
            (6,340
            )
            
            (32,003
            )
            
            25,663Loss
                from continuingoperations
            
            
            (3,415,220
            )
            
            (2,192,286
            )
            
            (1,222,934
            )
            
            (337,459
            )
            
            (885,475
            )
            
            (392,369
            )
            
            (493,106
            )Loss
                from discontinuedoperationsDiscontinued
                operatinglosses
            
            
            (8,260
            )
            
            
            
            
            (8,260
            )
            
            (8,260
            )Loss
                on sale ofsubsidiary
            
            
            (597,056
            )
            
            (116,000
            )
            
            (481,056
            )
            
            (481,056
            )Net
                loss
            
            
            (4,020,536
            )
            
            (2,308,286
            )
            
            (1,712,250
            )
            
            (826,775
            )
            
            (885,475
            )
            
            (392,369
            )
            
            (493,106
            )Dividends
                attributable topreferred
                stock
            
            
            (35,921
            )
            
            (8,721
            )
            
            (27,200
            )
            
            (8,650
            )
            
            (18,550
            )
            
            (9,275
            )
            
            (9,275
            )Loss
                attributable tocommon
                stockholders
            
            
            ($4,056,457
            )
            
            ($2,317,007
            )
            
            ($1,739,450
            )
            
            ($835,425
            )
            
            ($904,025
            )
            
            ($401,644
            )
            
            ($502,381
            )Basic
                net loss per share
            
            
            ($0.11
            )
            
            ($0.06
            )
            
            ($0.05
            )
            
            ($0.02
            )
            
            ($0.02
            )
            
            ($0.01
            )
            
            ($0.01
            )Basic
                weighted avg
            
            
            38,510,467
            
            
            39,393,090
            
            
            37,394,433
            
            
            38,244,097
            
            
            36,952,559
            
            
            37,871,795
            
            
            35,331,157number
                commonshares
                outstanding


F-19













Univec,
                Inc. and SubsidiariesStatements
                of Operations**Year
                ended**
            
            **Three
                months ended**
            
            **Nine
                months ended**
            
            **Three
                months ended**
            
            **Six
                months ended**
            
            **Three
                months ended**
            
            **Three
                months ended****Dec.
                31, 2003**
            
            **Dec.
                31, 2003**
            
            **Sept.
                30, 2003**
            
            **Sept.
                30, 2003**
            
            **June
                30, 2003**
            
            **June
                30, 2003**
            
            **March
                31, 2003**Revenues
            
            $
            939,747
            
            $
            296,642
            
            $
            643,105
            
            $
            234,698
            
            $
            718,617
            
            $
            197,866
            
            $
            520,751Cost
                of revenues
            
            
            (948,490
            )
            
            (366,830
            )
            
            (581,660
            )
            
            (247,832
            )
            
            (644,038
            )
            
            (262,916
            )
            
            (381,122
            )Gross
                margin
            
            
            (8,743
            )
            
            (70,188
            )
            
            61,445
            
            
            (13,134
            )
            $
            74,579
            
            
            (65,050
            )
            
            139,629Operating
                expensesMarketing
                and selling
            
            
            (379,738
            )
            
            (16,008
            )
            
            (363,730
            )
            
            (109,061
            )
            
            (254,669
            )
            
            (119,289
            )
            
            (135,380
            )Product
                development
            
            
            (28,547
            )
            
            (5,544
            )
            
            (23,003
            )
            
            (2,850
            )
            
            (20,153
            )
            
            (15,530
            )
            
            (4,623
            )General
                & administrative
            
            
            (847,013
            )
            
            (228,882
            )
            
            (618,131
            )
            
            (206,054
            )
            
            (412,077
            )
            
            (242,824
            )
            
            (169,253
            )Loss
                on write-off ofcapitalized
                lease
            
            
            (121,366
            )
            
            
            
            
            (121,366
            )
            
            
            
            
            (121,366
            )
            
            
            
            
            (121,366
            )Total
                operating expenses
            
            
            (1,376,664
            )
            
            (250,434
            )
            
            (1,126,230
            )
            
            (317,965
            )
            
            (808,265
            )
            
            (377,643
            )
            
            (430,622
            )Loss
                from operations
            
            
            (1,385,407
            )
            
            (320,622
            )
            
            (1,064,785
            )
            
            (331,099
            )
            
            (733,686
            )
            
            (442,693
            )
            
            (290,993
            )Other
                income (expense)Interest
                expense, net
            
            
            (91,564
            )
            
            (14,516
            )
            
            (77,048
            )
            
            (27,501
            )
            
            (49,547
            )
            
            (20,108
            )
            
            (29,439
            )Gain
                on extinguishmentof
                debt
            
            
            24,872
            
            
            24,872Total
                other income(expense)
            
            
            (66,692
            )
            
            10,356
            
            
            (77,048
            )
            
            (27,501
            )
            
            (49,547
            )
            
            (20,108
            )
            
            (29,439
            )Loss
                from continuingoperations
            
            
            (1,452,099
            )
            
            (310,266
            )
            
            (1,141,833
            )
            
            (358,600
            )
            
            (783,233
            )
            
            (462,801
            )
            
            (320,432
            )Loss
                from discontinuedoperationsDiscontinued
                operatingincome
                (losses)
            
            
            (93,502
            )
            
            (117,809
            )
            
            24,307
            
            
            4,450
            
            
            19,857
            
            
            27,765
            
            
            (7,908
            )Net
                loss
            
            
            (1,545,601
            )
            
            (428,075
            )
            
            (1,117,526
            )
            
            (354,150
            )
            
            (763,376
            )
            
            (435,036
            )
            
            (328,340
            )Dividends
                attributable topreferred
                stock
            
            
            (39,025
            )
            
            (9,704
            )
            
            (29,321
            )
            
            (8,811
            )
            
            (20,510
            )
            
            (10,255
            )
            
            (10,255
            )Loss
                attributable tocommon
                stockholders
            
            
            ($1,584,626
            )
            
            ($502,810
            )
            
            ($1,081,816
            )
            
            ($362,961
            )
            
            ($718,855
            )
            
            ($495,291
            )
            
            ($338,595
            )Basic
                net loss per share
            
            
            ($0.05
            )
            
            ($0.02
            )
            
            ($0.03
            )
            
            ($0.01
            )
            
            ($0.02
            )
            
            ($0.01
            )
            
            ($0.01
            )Basic
                weighted avg
            
            
            33,751,508
            
            
            33,298,675
            
            
            33,421,349
            
            
            33,790,008
            
            
            32,307,211
            
            
            33,616,095
            
            
            32,847,588number
                commonshares
                outstanding


F-20














Univec,
                Inc. and SubsidiariesStatement
                of Cash Flow**Year
                Ended**
            
            **Nine
                Months Ended**
            
            **Six
                MonthsEnded**
            
            **Three
                Months Ended****December
                31, 2004**
            
            **September
                30, 2004**
            
            **June
                30, 2004**
            
            **March
                30, 2004**Cash
                flows from operating activitiesNet
                loss
            
            
            ($4,020,536
            )
            
            ($1,712,250
            )
            
            ($885,475
            )
            
            ($493,106
            )Adjustments
                to reconcile net loss to net cashused
                in operating activitiesLoss
                on write-off of goodwill
            
            
            1,774,119Loss
                on sale of subsidiary
            
            
            481,719
            
            
            489,316Depreciation
                and amortization
            
            
            189,008
            
            
            135,686
            
            
            91,135
            
            
            45,938Write-off
                of equipment
            
            
            57,295Valuation
                allowance for inventories
            
            
            75,000Stock
                based compensation
            
            
            4,000Loss
                (gain) on cancellation of capital lease
            
            
            (2,894
            )Gain
                on extinguishment of debt
            
            
            (98,547
            )
            
            (80,594
            )
            
            (40,040
            )
            
            (40,040
            )Gain
                on receipt of marketable securities
            
            
            (36,349
            )Other
            
            
            (11,435
            )Changes
                in assets and liabilities, net ofeffects
                from sale of TWTAccounts
                receivable
            
            
            (506,983
            )
            
            (367,110
            )
            
            (235,611
            )
            
            (199,313
            )Inventories
            
            
            17,698
            
            
            2,904
            
            
            (10,198
            )
            
            (3,533
            )Other
                current assets and other assets
            
            
            (3,320
            )
            
            (104,130
            )
            
            51,338
            
            
            28,332Accounts
                payable and accrued expenses
            
            
            713,610
            
            
            674,430
            
            
            306,120
            
            
            228,872Deferred
                payroll
            
            
            619,631
            
            
            440,840
            
            
            496,793
            
            
            299,497Net
                cash used in operating activities
            
            
            (747,984
            )
            
            (520,908
            )
            
            (225,938
            )
            
            (133,353
            )Cash
                flows from investing activitiesPurchases
                of fixed assets (net of capitalized
            
            
            (397,068
            )
            
            (397,068
            )Increase
                in restricted cash
            
            
            (340,407
            )
            
            (335,000
            )
            
            (335,000
            )Cash
                used in sale of subsidiary (net of notes andother
                payables in 2004)
            
            
            (5,670
            )
            
            (92,977
            )Net
                cash used in investing activities
            
            
            (743,145
            )
            
            (825,045
            )
            
            (335,000
            )
            
            0Cash
                flows from financing activitiesProceeds
                from notes and loans payable,net
                of expenses
            
            
            1,104,344
            
            
            1,184,623
            
            
            140,585Increase
                in due to affiliated companies
            
            
            567,193
            
            
            270,883
            
            
            429,693
            
            
            92,283Increase
                in loans payable - officers/directors
            
            
            54,000
            
            
            54,000
            
            
            54,000
            
            
            54,000Proceeds
                from sale of stock
            
            
            50,000Payments
                on notes and loans payable
            
            
            (242,386
            )
            
            (167,350
            )
            
            (25,999
            )
            
            (23,899
            )Payments
                of capitalized lease obligations
            
            
            (21,232
            )Dividends
                converted to proferred stock
            
            
            (3,168
            )Net
                cash provided by financing activities
            
            
            1,508,751
            
            
            1,342,156
            
            
            598,279
            
            
            122,384Net
                increase (decrease) in cash
            
            
            17,622
            
            
            (3,797
            )
            
            37,341
            
            
            (10,969
            )Cash,
                beginning of period
            
            
            11,821
            
            
            11,821
            
            
            11,821
            
            
            11,821Cash,
                end of period
            
            $
            29,443
            
            $
            8,024
            
            $
            49,162
            
            $
            852






F-21











Univec,
                Inc. and SubsidiariesStatement
                of Cash Flow**Year
                Ended**
            
            **Nine
                Months Ended**
            
            **Six
                MonthsEnded**
            
            **Three
                Months Ended****December
                31, 2003**
            
            **September
                30, 2003**
            
            **June
                30, 2003**
            
            **March
                30, 2003**Cash
                flows from operating activitiesNet
                loss
            
            
            ($1,545,601
            )
            
            ($1,052,495
            )
            
            ($698,345
            )
            
            ($213,309
            )Adjustments
                to reconcile net loss to net cashused
                in operating activitiesDepreciation
                and amortization
            
            
            165,511
            
            
            144,278
            
            
            96,575
            
            
            51,402Valuation
                allowance for inventories
            
            
            45,000
            
            
            45,000
            
            
            50,000Stock
                based compensation
            
            
            14,400Issuance
                of common stock and options for services
            
            
            22,000
            
            
            22,000Loss
                (gain) on cancellatioin of capital lease
            
            
            121,366Gain
                on extinguishment of debt
            
            
            (24,872
            )Changes
                in assets and liabilitiesAccounts
                receivable
            
            
            (2,293,183
            )
            
            274,005
            
            
            262,493
            
            
            171,462Inventories
            
            
            128,413
            
            
            21,690
            
            
            8,107
            
            
            5,648Other
                current assets and other assets
            
            
            7,727
            
            
            (42,751
            )
            
            (17,051
            )
            
            (23,520
            )Accounts
                payable and accrued expenses
            
            
            2,547,614
            
            
            (6,526
            )
            
            (9,288
            )
            
            (50,359
            )Deferred
                payroll
            
            
            536,934
            
            
            295,081
            
            
            196,201
            
            
            116,296Escrow
                deposits
            
            
            (10,000
            )Net
                cash used in operating activities
            
            
            (284,691
            )
            
            (299,718
            )
            
            (111,308
            )
            
            57,620Cash
                flows from investing activitiesPurchases
                of fixed assets
            
            
            (1
            )Net
                cash used in investing activities
            
            
            (1
            )Cash
                flows from financing activitiesProceeds
                from notes and loans payable,net
                of expenses
            
            
            178,453
            
            
            179,452
            
            
            51,375
            
            
            18,200Increase
                in due to affiliated companies
            
            
            71,870
            
            
            112,579
            
            
            18,392Increase
                in loans payable - officers/directors
            
            
            230,419
            
            
            200,419
            
            
            112,419
            
            
            5,019Proceeds
                from sale of stock
            
            
            20,000
            
            
            20,000Payments
                on notes and loans payable
            
            
            (229,364
            )
            
            (144,985
            )
            
            (114,150
            )
            
            (77,026
            )Payments
                of capitalized lease obligations
            
            
            (62,125
            )
            
            (149,039
            )
            
            (36,250
            )
            
            (36,250
            )Net
                cash provided by financing activities
            
            
            209,253
            
            
            218,426
            
            
            31,786
            
            
            (90,057
            )Net
                increase (decrease) in cash
            
            
            (75,439
            )
            
            (81,292
            )
            
            (79,522
            )
            
            (32,437
            )Cash,
                beginning of period
            
            
            87,260
            
            
            87,260
            
            
            87,260
            
            
            87,260Cash,
                end of period
            
            $
            11,821
            
            $
            5,968
            
            $
            7,738
            
            $
            54,823







F-22