Item 1.01 – Entry into a Material Definitive Agreement

          On March 14, 2005, Neose Technologies, Inc. (the “Company”) entered into a Premium Finance Agreement, Disclosure Statement and Security Agreement (“Finance Agreement”) with AICCO, Inc. (“Lender”) to finance the insurance policy premiums due on certain insurance policies of the Company (the “Policies”).

          The amount financed under the Finance Agreement is $700,859 and pursuant to its terms, the Company is required to make a payment of $64,997 during each of the 11 months beginning on March 15, 2005 and ending on January 15, 2006.  Each payment includes an amount for principal and interest.  Interest is calculated based on an annual percentage rate of 3.91%.  To secure payment of the amounts financed under the Finance Agreement, the Company granted the Lender a security interest in all of the Company’s right, title and interest to the Policies.

          If the Company is in default under the Finance Agreement, the Lender can demand, and will have the right to receive, immediate payment of the total unpaid balance under the Finance Agreement.  In the event of default and the demand for immediate payment by the Lender, interest will accrue on any unpaid amounts at the highest rate allowed by applicable law.

          On March 8, 2005, to allow for the Finance Agreement, the Company entered into an amendment (the “Amendment”) to the Credit Agreement by and between the Company and Brown Brothers Harriman & Co. (the “Bank”) dated January 30, 2004 (the “Credit Agreement”).  The Credit Agreement restricts the nature and the amount of indebtedness incurred by the Company during the term of the Credit Agreement.  The Amendment provides for exceptions to these restrictions, allowing the Company to incur up to $1,000,000 of indebtedness for the financing of insurance policy premiums and permitting the Company to grant security interests in the Policies to secure such indebtedness.

          The Company does not have any material relationship with the Lender or its affiliates other than in respect of the Finance Agreement.  The Company does not have any material relationship with the Bank or its affiliates other than in respect of the Credit Agreement, the Amendment and related documents.

Item 2.03 – Creation of a Direct Financial Obligation

Please refer to the discussion in Item 1.01, above, with regard to the Finance Agreement.

Item 9.01 – Financial Statements and Exhibits

(c)          Exhibits.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:  Statements in this report regarding our business that are not historical facts are “forward-looking statements” that involve risks and uncertainties.  For a discussion of these risks and uncertainties, any of which could cause our actual results to differ from those contained in the forward-looking statement, see the section entitled “Factors Affecting the Company’s Prospects” in our Annual Report on Form 10-K for the year ended December 31, 2004 and discussions of potential risks and uncertainties in Neose’s subsequent filings with the SEC.

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