AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 22, 2005

Registration No. 333-______

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_________________________

FORM SB-2
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
_________________________

DYNECO CORPORATION
(Name of Small Business Issuer in Its Charter)

Minnesota 8711 41-1508703
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Number) Identification No.)

564 International Place
Rockledge, FL 32955
(321) 639-0333
(Address and Telephone Number of Principal Executive Offices)
_________________________

Thomas C. Edwards, Ph.D., President
564 International Place
Rockledge, FL 32955
(321) 639-0333
(Name, Address and Telephone Number of Agent For Service)
_________________________

Copies of all communications to:

Steven I. Weinberger, Esq.
Schneider Weinberger & Beilly LLP
2200 Corporate Blvd., N.W., Suite 210
Boca Raton, FL 33431
Telephone: (561) 362-9595
Facsimile No. (561) 362-9612

Approximate Date of Proposed Sale to the Public:

As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act, check
the following box: [X]

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

CALCULATION OF REGISTRATION FEE

Proposed Proposed
Title of Each Maximum Maximum
Class of Securities Amount to be Offering Price Aggregate Amount of
to be Registered Registered Per Security(1) Offering Price(1) Registration Fee(1)
-------------------- ------------ --------------- ----------------- -------------------

Common Stock, par
value $.01 per share 450,000 $ .10 (2) $ 45,000.00 $ 5.30

Common Stock, par value
$.01 per share, underlying
convertible notes 4,905,000 $ .10 (3) $490,500.00 $ 57.73

Common Stock, par value
$.01 per share, underlying
warrants 3,270,000 $.14375 (3) $470,062.50 $ 55.33

Common Stock, par value
$.01 per share, underlying
warrants 1,500,000 $ .25 (3) $375,000.00 $ 44.14

Common Stock, par value
$.01 per share, underlying
warrants 3,000,000 $ .10 (3) $300,000.00 $ 35.31

Common Stock, par value
$.01 per share, underlying
warrants 225,000 $ .15 (3) $33,750.00 $ 3.97
-------

Total Registration Fee $201.78
=======

_______________________________________

(1) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457.

(2) Fee computed based upon the higher of the conversion price of the notes
and the average of the closing bid and asked prices for the common
stock within five trading days prior to filing the registration
statement.

(3) Fee computed based upon the higher of the exercise price of the
warrants and the average of the closing bid and asked prices for the
common stock within five trading days prior to filing the registration
statement.

Pursuant to Rule 416, this registration statement also covers such additional
number of common shares as may be necessary to prevent dilution resulting from
stock splits, stock dividends or similar transactions attributable to the
securities being registered.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.

iii

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.

Subject to Completion April 22, 2005

PROSPECTUS

DYNECO CORPORATION

13,350,000 SHARES OF COMMON STOCK

This prospectus covers the resale of a total of 13,350,000 shares being
offered by selling security holders. Of the shares covered by this prospectus,
450,000 shares have been issued and are outstanding, 4,905,000 shares are
issuable upon conversion of outstanding convertible promissory notes and
7,995,000 shares are issuable upon exercise of outstanding warrants. We will not
receive any proceeds from sales of shares by the selling security holders.

Our common stock is traded on the over-the-counter bulletin board under
the symbol "DYCO." On April 11, 2005, the closing bid price for our common stock
was $.10 per share.

THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 6.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The date of this prospectus is _____, 2005

ABOUT THIS PROSPECTUS

You should only rely on the information contained in this document or
to which we have referred you. We have not authorized anyone to provide you with
information that is different. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not making an offer
to sell these securities in any jurisdiction where the offer or sale is not
permitted. Our business, financial condition, results of operations and
prospectus may have changed since that date.

PROSPECTUS SUMMARY

THE COMPANY

We are engaged in the development of high efficiency compressors and
pumps that we believe will have commercial application in various products, the
sale of which will generate revenue for us. The technology underlying our
compressors and pumps was created by Dr. Thomas Edwards, our founder and Chief
Executive Officer. The primary innovation in our compressors and pumps is that
they are lubricant free - they do not require oil to lubricate moving parts, as
do traditional compressors and pumps.

On February 4, 2004, we entered into a patent license agreement with
Dr. Edwards under which we have been granted the exclusive right to use Dr.
Edwards' patented technology to develop products that have commercial
application. We have agreed to pay a royalty fee to Dr. Edwards based upon gross
revenues we generate from sales or leases of products incorporating the licensed
technology. Under the license agreement, we are required to pay Dr. Edwards a
royalty fee equal to 1% of the sales or lease price of all products sold or
leased by us that incorporate the licensed technology. We are also obligated to
pay Dr. Edwards a royalty fee equal to 10% of gross royalty fees in excess of
$500,000 per calendar year received by us from sublicenses of the licensed
technology. To date, no royalty fees are due and owning to Dr. Edwards under the
license agreement.

To date, we have developed a line of compressors and pumps
incorporating Dr. Edwards' technology, known as UniVane(R) devices. We believe
that our UniVane devices can be successfully incorporated into commercially
viable fuel cell applications. Fuel cells are an emerging energy source that is
being developed as an alternative to traditional energy sources such as gasoline
and coal. We believe that our compressors and pumps enable fuel cells to operate
more efficiently and with greater power output, thereby promoting the
development and adoption of compact, economical fuel cell power systems.

In May 2003, we entered into a license agreement with Parker-Hannifin
Corporation, a Fortune 500 industrial company that, among other things, designs,
develops, manufactures and distributes a wide range of industrial and consumer
products and has been engaged in, among other things, the development of fuel
cells as an alternative energy source. Under the license agreement, we have
granted Parker-Hannifin the exclusive right to our UniVane technology. We are
discussing with Parker-Hannifin the development of non-fuel cell applications
for our UniVane devices such as in the areas of water quality improvement and
aqua farming through aeration.

To the extent that Parker-Hannifin is successful in developing and
marketing fuel cell devices or other products that incorporate our UniVane
devices, we will be entitled to royalty payments from Parker-Hannifin based upon
product sales. To date, no such products have been commercially produced and we
have not yet received any royalty payments from Parker-Hannifin under the
license agreement. We are currently dependent on Parker-Hannifin to
commercialize our UniVane devices, although there is no assurance that
commercial applications for our UniVane devices will be developed or, even if
developed, that they will be successfully marketed.

We are also developing non-fuel cell applications for our UniVane
technology. However, until such time as we are able to generate substantial
revenues from royalty payments under the license agreement with Parker-Hannifin,
or we are able to secure significant third party financing, our ability to
successfully develop, manufacture and market commercially viable non-fuel cell
products is uncertain.

Our executive offices are located at 564 International Place,
Rockledge, Florida 32955, and our telephone number there is (321) 639-0333.
References in this prospectus to "DynEco", "we", "us" and "our" are to DynEco
Corporation and our wholly owned subsidiary, DynEco International, Inc.

THE OFFERING

This prospectus covers the resale of a total of 13,350,000 shares of
our common stock by selling security holders. Of those shares covered by this
prospectus, 450,000 shares have been issued and are currently outstanding,
4,905,000 shares are issuable upon conversion of outstanding convertible
promissory notes and 7,995,000 shares are issuable upon exercise of outstanding
warrants. Selling security holders may resell their shares from time-to-time,
including through broker-dealers, at prevailing market prices. We will not
receive any proceeds from the resale of our shares by the selling security
holders. We will pay all of the fees and expenses associated with registration
of the shares covered by this prospectus.

Common Stock:

Outstanding Prior to this Offering .... 33,562,978 shares
Outstanding After this Offering ...... 46,462,978 shares, including
12,900,000 shares the resale of
which is covered by this prospectus
issuable upon the exercise of
outstanding promissory notes and
warrants. The promissory notes are
convertible at $.10 per share,
subject to adjustment. The warrants
are exercisable at prices ranging
from $.10 per share to $.25 per
share, subject to adjustment.

Common Stock Reserved: ............... 3,736,167 shares issuable on
exercise of options (including
options that have been granted and
options that may be granted under
our equity compensation plans),
4,905,000 shares covered by this
prospectus that are issuable upon
conversion of promissory notes and
24,280,120 shares issuable upon
exercise of outstanding warrants
(including warrants to purchase
7,995,000 shares the resale of
which is covered by this
prospectus). The promissory notes
are convertible at $.10 per share,
subject to adjustment. The warrants
are exercisable at prices ranging
from $.10 per share to $.25 per
share, subject to adjustment.

SELECTED FINANCIAL DATA

The following summary of our financial information for the years ended
December 31, 2004 and 2003 has been derived from, and should be read in
conjunction with, our audited financial statements included elsewhere in this
prospectus.

Years Ended December 31,
------------------------
2004 2003
---- ----

Revenues $ 286,900 $ 176,500

Cost of Revenues $ 16,096 --

Operating expenses $ 670,213 $ 778,372

Net (loss) $ (434,523) $ (598,889)

Net (loss) per share $ (.01) $ (.02)

December 31, 2004
-----------------

Working capital (deficit) $ (638,325)

Total assets $ 88,921

Current liabilities $ 667,232

Total liabilities $ 808,117

Shareholders' (deficit) $ (719,196)

RISK FACTORS

AN INVESTMENT IN THE SECURITIES OFFERED HEREBY IS SPECULATIVE IN NATURE
AND INVOLVES A HIGH DEGREE OF RISK. THE FOLLOWING FACTORS ARE BELIEVED BY
MANAGEMENT TO BE ALL OF THE MATERIAL RISKS THAT SHOULD BE CAREFULLY CONSIDERED
BY INVESTORS BEFORE PURCHASING OUR SHARES.

OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM HAS RAISED DOUBT OVER OUR
CONTINUED EXISTENCE AS A GOING CONCERN.

We have incurred substantial operating and net losses, as well as
negative operating cash flow, since our inception. As a result, we continued to
have significant working capital and stockholders' deficits including a
substantial accumulated deficit at December 31, 2004 and 2003. In recognition of
such, our independent registered public accounting firm has included an
explanatory paragraph in their report on our consolidated financial statements
for the fiscal years ended December 31, 2004 and 2003, that expressed
substantial doubt regarding our ability to continue as a going concern.

WE HAVE EXPERIENCED HISTORICAL LOSSES AND A SUBSTANTIAL ACCUMULATED DEFICIT. IF
WE ARE UNABLE TO REVERSE THIS TREND, WE WILL LIKELY BE FORCED TO CEASE
OPERATIONS.

For the fiscal years ended December 31, 2004 and 2003, we experienced
net losses of $(423,523) and $(598,889), respectively. In addition, at December
31, 2004, we had an accumulated deficit of $8,123,828. Our operating results for
future periods will include significant expenses, including new product
development expenses, potential marketing costs, professional fees and
administrative expenses, and will be subject to numerous uncertainties. As a
result, we are unable to predict whether we will achieve profitability in the
future, or at all.

WE HAVE A WORKING CAPITAL DEFICIT AND SIGNIFICANT CAPITAL REQUIREMENTS. SINCE WE
WILL CONTINUE TO INCUR LOSSES UNTIL WE ARE ABLE TO GENERATE SUFFICIENT REVENUES
TO OFFSET OUR EXPENSES, AS A RESULT OF WHICH INVESTORS MAY BE UNABLE TO SELL OUR
SHARES AT A PROFIT OR AT ALL.

As of December 31, 2004, our current liabilities were approximately
$667,232, our current assets were approximately $28,907, and we had a working
capital deficit of approximately $638,325. To date, our operating expenses have
greatly exceeded our limited revenues. We immediately require substantial
working capital, but we have received no commitments for funding from any third
parties. If we are unable to generate substantial revenues from operations or
obtain working capital from external sources, we will be forced to curtail or
cease operations in which event investors will lose their investment in our
company.

WE CURRENTLY HAVE A SINGLE STRATEGIC BUSINESS PARTNER, AND IF OUR PARTNER IS
UNABLE TO SUCCESSFULLY DEVELOP, MANUFACTURE OR MARKET PRODUCTS OR OTHER PRODUCTS
INCORPORATING OUR TECHNOLOGY, WE WILL NOT GENERATE SUBSTANTIAL REVENUES AND WE
WILL LIKELY CEASE OPERATIONS.

We have granted an exclusive, worldwide license to Parker-Hannifin
Corporation for our air UniVane compressors, hydrogen circulators and related
technology. In connection with this license, Parker-Hannifin is responsible for
the development, manufacture and marketing of products incorporating the
licensed technology. While Parker-Hannifin is producing demonstration
compressors and hydrogen circulators incorporating our licensed technology,
Parker-Hannifin has not yet manufactured commercial products that incorporate
our technology. See "Business - License Agreement with Parker-Hannifin
Corporation." We are entitled to a royalty fee from Parker-Hannifin Corporation
that is based upon its sale of our products and products incorporating our
technology. However, Parker-Hannifin may not be

successful in marketing these products, in which event we will not receive
royalty fees from Parker- Hannifin. While we depend upon Parker-Hannifin for
sales of royalty-generating products, we have no control over Parker-Hannifin's
technical and manufacturing development or marketing activities, and
Parker-Hannifin is only required to use reasonable commercial efforts to market
these products. If Parker-Hannifin does not successfully market
royalty-generating products under our license agreement, we will not receive
royalty fees and we will likely be forced to cease operations. To date,
Parker-Hannifin has not sold any products as to which we are entitled to a
royalty payment.

SINCE WE PLACE EXCLUSIVE RELIANCE ON PARKER-HANNIFIN FOR UNIVANE PRODUCT SALES,
OUR REVENUES MAY BE ADVERSELY AFFECTED BECAUSE WE MAY FOREGO OTHER POTENTIAL
SOURCES OF REVENUE PRODUCTION WITHOUT ASSURANCE THAT SALES BY PARKER-HANNIFIN
WILL BE SUBSTANTIAL.

During the term of our exclusive license agreement with
Parker-Hannifin, which, in general, continues for the life of the licensed
patent, we are prohibited from selling our UniVane devices to any other party.
While Parker-Hannifin has agreed to use commercially reasonable efforts to
develop, manufacture or sell our products during the period that the exclusive
license agreement is in effect, we will forgo potential sales of UniVane devices
to third parties. Moreover, Parker-Hannifin may not be successful in its
marketing efforts.

FUEL CELL TECHNOLOGY HAS NOT YET BECOME A WIDELY ACCEPTED ALTERNATIVE FUEL
SOURCE AND ABSENT MARKET ACCEPTANCE, OR IF ACCEPTANCE IS SUBSTANTIALLY DELAYED,
WE MAY BE FORCED TO CEASE OPERATIONS.

Fuel cell systems represent a relatively new technology and our success
will depend on this technology achieving market acceptance. The development of a
substantial market for fuel cell systems may be impacted by many factors, all of
which are out of our control, including:

o Cost competitiveness of cell systems;
o User acceptance of fuel cell systems;
o Cost of hydrogen fuel;
o User perception of fuel cell systems' safety; and
o Emergence of newer, more competitive technologies and
products.

The success of our license agreement with Parker-Hannifin Corporation,
and our receipt of royalty payments under the license agreement, is dependent
upon the success of Parker-Hannifin in developing and marketing fuel cell
products incorporating the technology we have licensed to them. If a substantial
fuel cell systems market develops slower than anticipated or fails to develop,
Parker-Hannifin's efforts may be delayed or frustrated and we may not be able to
recover the expenses we incurred to develop our fuel cell compressor products,
and we may be forced to cease operations. Moreover, our UniVane compressors are
based upon and rely solely upon our unique technology. They have not been
produced on a commercial basis and have not received substantial compressor
product market acceptance for several reasons, including manufacturing cost.

IF THE LICENSE AGREEMENT WITH OUR CHIEF EXECUTIVE OFFICER IS TERMINATED WE WILL
BE UNABLE TO USE THE TECHNOLOGY INCORPORATED INTO OUR PRODUCTS AND WE WILL CEASE
OPERATIONS.

The technology in our compressor products is the subject of various
patents owned by Dr. Thomas Edwards, our president and chief executive officer.
We license the technology from Dr. Edwards under a license agreement entered
into in January 2004, which replaced a license agreement entered into in 1992.
Under the license agreement, we are required to pay Dr. Edwards' one percent of
revenues we receive from sales of products incorporating the licensed
technology, and ten percent of gross royalty fees

in excess of $500,000 per calendar year received by us from sublicenses of the
licensed technology. In the event we fail to make required royalty payments to
Dr. Edwards under the license agreement, or if we become bankrupt, the license
agreement will terminate and we will no longer be entitled to use the licensed
technology. If we lose the right to use the licensed technology, we will likely
cease operations, in which event investors will lose their entire investment in
DynEco.

CONFLICTS OF INTEREST WERE PRESENT IN THE NEGOTIATION OF OUR LICENSE AGREEMENT
WITH DR. EDWARDS THAT MIGHT HAVE AFFECTED THE TERMS THAT WE ARE NOW BOUND BY.

Dr. Edwards is our founder, Chief Executive Officer and the Chairman of
our Board of Directors. Due to the positions occupied by Dr. Edwards, and his
influence over our operations, conflicts of interest were present in connection
with the negotiation of our license agreement with Dr. Edwards. Since the
license agreement was not negotiated at arms' length, the license agreement may
provide terms less favorable to us than if the agreement had been negotiated by
unrelated parties or if had we obtained a fairness opinion prior to entering
into the license agreement.

WE HAVE NO COMMERCIAL PRODUCT SALES AND ONLY LIMITED SALES OF PROTOTYPES. IF
PARKER-HANNIFIN DOES NOT GENERATE SIGNIFICANT SALES OF OUR PRODUCTS, WE WILL BE
UNABLE TO FUND OUR OPERATIONS OR ACHIEVE PROFITABILITY, IN WHICH CASE WE WILL BE
FORCED TO CEASE OPERATIONS.

Parker-Hannifin may not be able to manufacture or commercialize our
UniVane compressor and hydrogen circulator products in a cost effective manner.
Most recently, we have derived revenues principally from consulting fees and
research and development contracts. Our compressor and hydrogen circulator
product sales have been limited to demonstration and prototype models. We have
not made any commercial sales of units that include fuel-processing
capabilities. Parker-Hannifin may not be able to produce or commercialize any of
our fuel cell compressor products in a cost-effective manner, and, if produced,
may be unable to successfully market these products.

Parker-Hannifin may not be able to develop manufacturing technologies
and processes or expand their manufacturing facilities to the point of being
capable of economically or profitably satisfying large commercial orders that
may occur. Development and expansion of these technologies and processes require
extensive lead times and the commitment of significant financial, engineering
and human resources. Parker-Hannifin may choose not to develop the required
manufacturing technologies and processes.

WE DEPEND ON THE CONTINUED SERVICES OF OUR CHIEF EXECUTIVE OFFICER, WHOSE
EXPERTISE IS CRITICAL TO OUR SUCCESS, AND WHO WE MAY BE UNABLE TO REPLACE.

Our future success depends upon the continued services of Thomas
Edwards, Ph.D., as our chief executive officer. The expertise of Dr. Edwards in
the technology that is fundamental to our business operations is unique and if
we were to lose Dr. Edwards' services, we will encounter difficulty in replacing
him, which would have a material adverse effect on our business, financial
condition and results of operations. Our loss of the services of Dr. Edwards
would not affect the continued validity of the proprietary technology we license
from Dr. Edwards.

WE HAVE BEEN UNSUCCESSFUL IN OUR ATTEMPTS TO RAISE SUFFICIENT CAPITAL TO FUND
OUR BUSINESS PLANS. IF WE ARE UNABLE TO DO SO WE WILL LIKELY CEASE OPERATIONS.

To date, we have funded our operations through limited revenues and
debt and equity financing. However, we have been unsuccessful in attracting
significant additional private funding for our business.

We continue to incur operating expenses, including executive and staff salaries,
lease obligations and costs associated with our in-house product development
efforts, but we have not yet received royalty payments from Parker-Hannifin
under our license agreement with them. Until such time, if ever, as we begin to
receive a royalty income stream from Parker-Hannifin, we will continue to be
dependent upon our receipt of third-party financing to fund our current cash
flow deficit and to enable us to develop new products. To date, we have received
no commitment for additional funding, and if we are unsuccessful in attracting
such funding, we may be required to cease active operations until such time, if
ever, as we receive royalty income from Parker-Hannifin.

WE MAY BE EXPOSED TO POTENTIAL RISKS RELATING TO OUR INTERNAL CONTROLS OVER
FINANCIAL REPORTING AND OUR ABILITY TO HAVE THOSE CONTROLS ATTESTED TO BY OUR
INDEPENDENT AUDITORS.

As directed by Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX
404"), the Securities and Exchange Commission adopted rules requiring public
companies to include a report of management on the company's internal controls
over financial reporting in their annual reports, including Form 10-KSB. In
addition, the independent registered public accounting firm auditing a company's
financial statements must also attest to and report on management's assessment
of the effectiveness of the company's internal controls over financial reporting
as well as the operating effectiveness of the company's internal controls. We
were not subject to these requirements for the fiscal year ended December 31,
2004. We are evaluating our internal control systems in order to allow our
management to report on, and our independent auditors attest to, our internal
controls, as a required part of our Annual Report on Form 10-KSB beginning with
our report for the fiscal year ended December 31, 2006.

While we expect to expend significant resources in developing the
necessary documentation and testing procedures required by SOX 404, there is a
risk that we will not comply with all of the requirements imposed thereby. At
present, there is no precedent available with which to measure compliance
adequacy. Accordingly, there can be no positive assurance that we will receive a
positive attestation from our independent auditors.

In the event we identify significant deficiencies or material
weaknesses in our internal controls that we cannot remediate in a timely manner
or we are unable to receive a positive attestation from our independent auditors
with respect to our internal controls, investors and others may lose confidence
in the reliability of our financial statements and our ability to obtain equity
or debt financing could suffer.

IN THE EVENT THAT WE ISSUE ADDITIONAL SHARES UPON THE EXERCISE OF OPTIONS AND
WARRANTS, INCLUDING SHARES ISSUABLE UPON EXERCISE OF OPTIONS AND WARRANTS
COVERED BY THIS PROSPECTUS, THE MARKET PRICE FOR OUR SHARES MAY BE ADVERSELY
AFFECTED.

We have granted options and issued warrants to purchase an aggregate of
28,116,287 shares of our common stock, including the resale of 7,995,000 shares
issuable upon exercise of warrants covered by this prospectus. The options are
exercisable at prices ranging from $.05 per share to $.38 per share, and the
warrants are exercisable at prices ranging from $.10 to $.25 per share. To the
extent that options and warrants are exercised, the shares that are issued may
result in an oversupply of shares and an undersupply of purchasers. The
existence of options and options that are exercisable at below market may have a
depressive effect on the market price for our common stock.

THERE IS NO ACTIVE TRADING MARKET FOR OUR SHARES AND IF AN ACTIVE TRADING MARKET
DOES NOT DEVELOP, PURCHASERS OF OUR SHARES MAY BE UNABLE TO PUBLICLY RESELLING
THEM.

There is no active trading market for our shares and we do not know if
an active trading market will develop. An active market will not develop unless
broker-dealers develop interest in trading our shares, and we may be unable to
generate interest in our shares among broker-dealers until we generate
meaningful revenues and profits from operations. Until that time occurs, if it
does at all, purchasers of our shares may be unable to sell them publicly. In
the absence of an active trading market:

o Investors may have difficulty buying and selling our shares or
obtaining market quotations;

o Market visibility for our common stock may be limited; and

o A lack of visibility for our common stock may depress the
market price for our shares.

THIS PROSPECTUS PERMITS SELLING SECURITY HOLDERS TO RESELL THEIR SHARES. IF THEY
DO SO, THE MARKET PRICE FOR OUR SHARES MAY FALL AND PURCHASERS OF OUR SHARES MAY
BE UNABLE TO RESELL THEM.

This prospectus includes 13,350,000 shares being offered by existing
stockholders, including 12,900,000 shares issuable upon the exercise of
outstanding warrants and the conversion of outstanding promissory notes. To the
extent that these shares are sold into the market for our shares, there may be
an oversupply of shares and an undersupply of purchasers. If this occurs the
market price for our shares may decline significantly and investors may be
unable to sell their shares at a profit, or at all. The existence of warrants
and notes that are exercisable or convertible at below market may have a
depressive effect on the market price for our shares. In the event that the
warrants and notes are exercised and converted at a price per share that is
below the market price for our shares, the issuance of shares upon exercise may
be dilutive to existing stockholders.

WE CANNOT PREDICT WHETHER WE WILL SUCCESSFULLY EFFECTUATE OUR CURRENT
BUSINESS PLAN. EACH PROSPECTIVE PURCHASER IS ENCOURAGED TO CAREFULLY ANALYZE THE
RISKS AND MERITS OF AN INVESTMENT IN THE SHARES AND SHOULD TAKE INTO
CONSIDERATION WHEN MAKING SUCH ANALYSIS, AMONG OTHERS, THE RISK FACTORS
DISCUSSED ABOVE.

USE OF PROCEEDS

We will not receive any proceeds upon the sale of shares by the selling
security holders.

MARKET FOR COMMON STOCK AND DIVIDEND POLICY

MARKET INFORMATION

Our common stock commenced trading on the over-the-counter bulletin
board on January 25, 2005, under the symbol "DYCO". From March 1994 until
January 25, 2005, our shares were listed on the pink sheets under the symbol
"DYCO." The trading market for our shares on the pink sheets was not active. The
following table sets forth the high and low bid prices for our common stock on
the bulletin board (for the period from January 1, 2005 to March 31, 2005) and
on the pink sheets (for the period from January 1, 2003 to December 31, 2004).
The bid prices are inter-dealer prices, without retail markup, markdown or
commission, and do not reflect actual transactions.

PERIOD HIGH BID LOW BID
------ -------- -------
January 1, 2005 to March 31, 2005 $.20 $.12

October 1, 2004 to December 31, 2004 $.26 $.16

July 1, 2004 to September 30, 2004 $.18 $.10

April 1, 2004 to June 30, 2004 $.18 $.08

January 1, 2004 to March 31, 2004 $.16 $.10

October 1, 2003 to December 31, 2003 $.38 $.13

July 1, 2003 to September 30, 2003 $.30 $.13

April 1, 2003 to June 30, 2003 $.30 $.13

INFORMATION RELATING TO OUTSTANDING SHARES

As of the date of this prospectus, there were 33,562,978 shares of our
common stock issued and outstanding. We have also reserved a total of 23,280,120
shares for issuance upon exercise of outstanding common stock purchase warrants,
3,736,167 shares upon exercise of outstanding options to purchase shares of our
common stock and 4,905,000 shares issuable upon conversion of outstanding
promissory notes.

Of the issued and outstanding shares, approximately 18,000,000 shares
of our common stock (5,277,577 of which are owned by our officers, directors and
principal stockholders) have been held for in excess of one year and are
available for public resale pursuant to Rule 144 promulgated under the
Securities Act. The resale of another 8,175,000 shares, including 4,150,000
shares issuable upon exercise of outstanding warrants, is covered by an
effective registration statement on Form SB-2 (SEC File No. 333-112585), and may
be publicly transferred under that registration statement. Unless covered by an
effective registration statement, the resale of our shares of common stock owned
by officers, directors and affiliates is subject to the volume limitations of
Rule 144. In general, Rule 144 permits our shareholders who have beneficially
owned restricted shares of common stock for at least one year to sell without
registration, within a three-month period, a number of shares not exceeding one
percent of the then outstanding shares of common stock. Furthermore, if such
shares are held for at least two years by a person not affiliated with us (in
general, a person who is not one of our executive officers, directors or
principal shareholders during the three month period prior to resale), such
restricted shares can be sold without any volume limitation.

Sales of our common stock under Rule 144 or pursuant to such
registration statement may have a depressive effect on the market price for our
common stock.

DIVIDENDS

We have never paid cash dividends on our common stock. We intend to
keep future earnings, if any, to finance the expansion of our business, and we
do not anticipate that any cash dividends will be paid in the foreseeable
future. Our future payment of dividends will depend on our earnings, capital
requirements, expansion plans, financial condition and other relevant factors.
Our retained earnings deficit currently limits our ability to pay dividends.

SHAREHOLDERS OF RECORD

As of December 31, 2004, there were approximately 816 holders of record
of our common stock.

SEC "PENNY STOCK" RULES

The Securities and Exchange Commission has adopted regulations which
generally define a "penny stock" to be any equity security that has a market
price of less than $5.00 per share, subject to certain exceptions. Depending on
market fluctuations, our common stock could be considered to be a "penny stock".
A penny stock is subject to rules that impose additional sales practice
requirements on broker/dealers who sell these securities to persons other than
established customers and accredited investors. For transactions covered by
these rules, the broker-dealer must make a special suitability determination for
the purchase of these securities. In addition he must receive the purchaser's
written consent to the transaction prior to the purchase. He must also provide
certain written disclosures to the purchaser. Consequently, the "penny stock"
rules may restrict the ability of broker/dealers to sell our securities, and may
negatively affect the ability of holders of shares of our common stock to resell
them.

FORWARD-LOOKING STATEMENTS

This prospectus, including the Management's Discussion and Analysis or
Plan of Operation, contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, Section 21E of the
Securities and Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995, as amended. These forward-looking statements are
subject to risks and uncertainties and other factors that may cause our actual
results, performance or achievements to be materially different from the
results, performance or achievements expressed or implied by the forward-looking
statements. You should not unduly rely on these statements. Our forward-looking
statements in this prospectus are not protected by the safe harbor provisions of
Section 27A of the Securities Act of 1933, as amended, Section 21E of the
Securities and Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995, as amended.

Forward-looking statements can be identified by the fact that they do
not relate strictly to historical or current facts. They use words such as
"anticipate," "estimate," "expect," "project," "intend," "plan," "believe,"
"project," "contemplate," "would," "should," "could," or "may."

With respect to any forward-looking statement that includes a statement
of its underlying assumptions or bases, we believe such assumptions or bases to
be reasonable and have formed them in good faith, assumed facts or bases almost
always vary from actual results, and the differences between assumed facts or
bases and actual results can be material depending on the circumstances. When,
in any forward-looking statement, we express an expectation or belief as to
future results, that expectation or belief is expressed in good faith and is
believed to have a reasonable basis, but there can be no assurance that the
stated expectation or belief will result or be achieved or accomplished. All
subsequent written and oral forward-looking statements attributable to us, or
anyone acting on our behalf, are expressly qualified in their entirety by the
cautionary statements. We do not undertake any obligations to publicly release
any revisions to any forward-looking statements to reflect events or
circumstances after the date of this report or to reflect unanticipated events
that may occur.

Factors that may cause our actual results to differ materially from
those described in forward-looking statements include the risks discussed
elsewhere in this prospectus under the caption "Risk Factors".

MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION

The following analysis of our consolidated financial condition and
results of operations for the years ended December 31, 2004 and 2003, should be
read in conjunction with the Consolidated Financial Statements and other
information presented elsewhere in this prospectus.

GENERAL

We are engaged primarily in developing and commercializing patented
high efficiency low-pressure non-lubricated air compressors and hydrogen
circulators, known collectively as UniVane devices. The basic UniVane compressor
technology development has been carried out by DynEco and is based upon the
concepts, innovations and embodiments of the patents Dr. Edwards has exclusively
licensed to us. That license agreement was entered into in January 2004, which
replaced a license agreement entered into in 1992. Under the license agreement,
we are required to pay Dr. Edwards one percent of revenues we receive from sales
of products incorporating the licensed technology, and ten percent of gross
royalty fees in excess of $500,000 per calendar year received by us from
sublicenses of the licensed technology. The underlying UniVane patent
#6,623,261, filed July 21, 2001 has a term of twenty years and expires on July
21, 2021. During May 2003, we granted an exclusive, world-wide patent license to
Parker-Hannifin Corporation to further develop, enhance, manufacture and market
our UniVane devices for all product applications into which the UniVane is
incorporated.

Under the license agreement, Parker-Hannifin is responsible for
generating production UniVane compressor engineering designs and producing and
marketing them. As a result, our technical efforts have been re-directed to
generating potentially improved UniVane manufacturing designs, decreasing costs,
increasing UniVane operational speeds and capacities and creating initial
engineering conceptual layouts for different size UniVanes. In addition to
engineering efforts to improve UniVane machines, we are also identifying
non-fuel cell markets for UniVane compressors and designing systems that would
employ the machines in those markets. Presently, we are designing and testing
aeration systems that could be applied to pond water reclamation and the
aquaculture industry. We believe that similar systems can be adapted for use in
dental offices to produce vacuum for patient saliva ejection. Since UniVanes
contain little or no lubricant, contamination of the medical system can be
avoided.

We have historically incurred losses primarily resulting from
expenditures related to the research, development, testing and preliminary
marketing of our proprietary technology. To date, no products incorporating our
UniVane technology have been commercially manufactured and we have not yet
generated revenues, including royalty income, from the sale of products
incorporating our UniVane technology. Until we established our relationship with
Parker-Hannifin, we were unable to identify manufacturers who were willing to
aid in the commercialization of products incorporating our UniVane technology.
However, we expect that operating losses will continue until such time as either
our future royalty income generates sufficient revenues to fund continuing
operations or a combination of royalties and profits that may be generated from
the sale of systems, such as aerators, that use UniVane air compressors.

Under the Parker License Agreement, DynEco was being paid $25,000 per
month for 12-months primarily to transfer UniVane technology to Parker and to
aid in the transition from prototype production to commercial manufacturing. We
continued to provide these services to Parker-Hannifin on a monthly basis until
we mutually agreed with Parker-Hannifin that

our consulting services would cease to be provided effective December 10, 2004.
The cessation of consulting services did not alter our rights and obligations
relating to our right to future royalty payments based upon sales of products
incorporating our UniVane devices. Prior to 2003, DynEco was developing and
attempting to commercialize the licensed UniVane technology with its own limited
resources.

CRITICAL ACCOUNTING ESTIMATES

Valuation of Patent Rights

The valuation of patent rights has a material impact on our reported
financial condition and operating performance. Patent rights consist of the
costs incurred to obtain patent rights associated with compressor technology.
Patent rights are amortized using the straight-line method over their seventeen
to twenty year lives commencing upon patent issuance and the generation of
revenues utilizing the underlying technology. Future revenues, if any, generated
by these patents will be in the form of royalties from Parker-Hannifin. There is
no assurance that commercial applications will be developed.

Due to: (a) uncertainties in the developing fuel cell industry, (b)
inherent risk of competing future technologies, and (c) our reliance on
Parker-Hannifin, we recognized an impairment loss of the entire net carrying
value of patent rights of $144,603. This loss is reflected as an operating
expense and an increased the stockholders' deficit to $719,196 at December 31,
2004.

We recorded and charged to operations impairment losses of $144,603 and
$0, relating to patent rights, for the years ended December 31, 2004 and 2003,
respectively.

Stock Based Compensation Plans

We have two stock based compensation plans. The board of directors
administers these plans and may grant options to key individuals at their
discretion. Terms and prices are to be determined by the compensation committee
or the board. These plans have an aggregate of 2,500,000 shares of common stock
reserved for issuance. Options outstanding were for 3,736,167 and 4,713,369 of
shares of common stock at December 31, 2004 and 2003 respectively. During the
years ended December 31, 2004 and 2003 there were no options granted under any
of these plans. Therefore there was no compensation expense in accordance with
the provisions of Accounting Principles Board Opinion No. 25 and no pro forma
disclosures required under the provisions of SFAS No. 123. If, however, we were
to grant significant options to key individuals in the future, there may be an
expense, which could be material, determined under the fair value based method
to arrive at pro forma net income (loss).

RESULTS OF OPERATIONS

Our historical results of operations prior to 2003 are not indicative
of our current operations due to a shift in business operations, commencing with
the licensing of our UniVane patent rights to the Parker-Hannifin Corporation
along with the associated consulting agreement. Revenues for the near term will
depend upon our receipt of royalty payments, if any, related to the sale of
systems that employ our UniVane technology.

In May 2003, we licensed our UniVane patent rights to the
Parker-Hannifin Corporation. At the same time we commenced providing services
under an associated product consulting agreement with Parker-Hannifin. The
product development and marketing and distribution resources of Parker-Hannifin
are far greater than those of DynEco, and, in the long-term we anticipate that
these resources will enable us to realize a greater level of revenues without
the related costs that we would incur if we were to

undertake these activities on our own. Moreover, our limited resources do not
enable us to undertake performance of these activities.

Our revenues for 2004 and 2003 were primarily derived from consulting
fees under the agreement with Parker-Hannifin. Our monthly consulting fee
terminated in December of 2004.

To date, there have been no sales of UniVane products that generated
any royalty fees. In general, our license agreement with Parker-Hannifin does
not expire until the later to occur of the last licensed UniVane patent
expiration (i.e., July 21, 2021), or the final use of UniVane-related technology
by Parker-Hannifin.

YEAR ENDED DECEMBER 31, 2004 COMPARED TO THE YEAR ENDED DECEMBER 31, 2003

Our revenues were $275,000 from consulting fees during 2004 compared
with $175,000 in 2003. Prototype sales increased $10,400 to $11,900 in 2004 from
$1,500 in 2003. These consulting fees related to the Parker-Hannifin consulting
agreement entered into during May 2003. Other revenues were from prototype
sales. We now rely on Parker-Hannifin for the commercialization of the licensed
technology.

Operating expenses decreased 13.9% to $670,213 in 2004 from $778,372 in
2003. General and administrative expenses decreased by $252,762 from 2003 to
2004,offset by an impairment loss of $144,603 in 2004. Professional fees
included in general and administrative expenses increased $ 43,246 due to legal
and accounting fees associated with filing a Form SB-2 Registration Statement
and preparation of relevant financial information for each subsequent SEC
filing.

Our net loss for 2004 decreased $164,366 to $434,523 from $598,889.
Gross margin increased $94,304 to $270,804 in 2004, from $176,500 in 2003.

During the years ending December 31, 2004 and 2003, we recognized an
impairment loss of $144,603 and $0, respectively, for patented technology
because there is no determinable income directly related to our patents.

Financial Condition - Liquidity and Capital Resources

DynEco Corporation is a developmental stage company. Our financial
condition relies on continuing equity investment until, if ever, Parker-Hannifin
is successful in commercializing the UniVane technology. During 2004 and 2003
equity funding was augmented by prototype sales and consulting fees.

From time-to-time, we issue stock, options and warrants to satisfy
operating expenses, which provides us with a form of liquidity. For example,
during February 2004, the Company settled an outstanding legal services
agreement from August 1, 2001, in which the holder was owed $10,000 payable with
100,000 shares of issuable common stock, which had been reflected in the
Company's records as common stock issuable. In February 2004, the Company
granted a stock option in lieu of issuing shares. In April 2004, the Company
issued 200,000 shares of common stock to a director for services rendered and
100,000 common stock purchase warrants to a consultant for services rendered.
During 2003 we issued 60,000 shares of common stock valued at $7,200 and 120,000
warrants to purchase common stock at $.18 per share, in settlement of $15,000 of
accounts payable. Also during 2003, we issued 2,775,000 shares of common stock
valued at $333,000 in exchange for consulting, legal, directors and employee
services. Due, in part, to our lack of earnings, our success in attracting
additional funding has been limited to transactions in which our equity is used
as currency. In light of the availability of this type of financing, and the
lack of alternative proposals, our board of directors has

determined that the continued use of our equity for these purposes may be
necessary if we are to sustain operations. Equity financings of the type we have
been required to pursue are dilutive to our stockholders and may adversely
impact the market price for our shares.

In November 2002, we entered into an agreement with the Technological
Research and Development Authority that provided $150,000 in funding for the
development and commercialization of DynEco's UniVane compressors and hydrogen
circulators for fuel cell applications. In consideration of the funding, we are
obligated to make royalty payments to the Authority equal to five percent of
future UniVane-related sales up to an amount equal to three times the amount
DynEco receives from the Authority. During 2003, the entire $150,000 funding
commitment was received. The agreement expires in November 2012. We do not
anticipate any additional funding from the Technological Research and
Development Authority.

As of December 31, 2004, our primary source of liquidity was $16,889 of
cash and $6,875 of accounts receivable. The working capital deficit was
$(638,325). We had total assets of $88,921, of which long-term assets consisted
of other assets of $566, and $59,448 of property and equipment, net. Our
liabilities totaling $808,117 included $126,240 of accounts payable, $311,417 of
accrued liabilities, $190,935 loans payable and $38,640 of current maturities of
long-term debt. Total shareholders' deficit was $(719,196). At December 31,
2004, we had an accumulated deficit of $(8,134,828).

We are in default of the repayment terms on notes payable aggregating
$35,000 at December 31, 2004, and no extension has been granted by the debt
holders. The notes were issued to David O'Brien and Edward Werner, neither of
whom is affiliated with us. The proceeds of the loans were used for general
working capital purposes. Currently, there have been no actions taken by the
debt holders to foreclose since the notes payable were unsecured. We anticipate
settling the balance owing on these notes payable through issuance of common
stock in 2005.

Net cash used in operating activities was $176,100 for year ended
December 31, 2004 compared to $285,459 for 2003. The cash provided by financing
activities in 2004 of $3,088 was due to $20,000 from the sale of common stock,
less repayments of shareholder loans and capital lease obligations.

Historically, we have relied upon limited revenues from consulting fees
and equity financing in order to fund operations. While these activities have
provided limited resources, they have never resulted in cash flow in excess of
immediately needed funding. Our inability to generate cash flow in excess of
immediately needed funds was, in large part responsible for our decision to
enter into the strategic relationship with Parker-Hannifin as a means to develop
commercially viable products and a potential source of revenue generation.

As of December 31, 2004, and the date of this filing, our sources of
internal and external financing are limited. In January 2005, the Company issued
an additional 250,000 common shares and 125,000 warrants exercisable for two
years in exchange $25,000 cash. In March of 2005 the Company completed a
$300,000 financing consisting of secured convertible promissory notes and common
stock purchase warrants. It is not expected that the internal sources of
liquidity will improve until net cash is provided from operating activities, and
until such time, we will rely upon external sources of liquidity, including
additional private placements of our common stock and exercise of various
outstanding stock warrants and stock options. In December 2004, we completed
regulatory review of a public registration of 8,175,000 shares of our common
stock, comprised of 4,025,000 for shares outstanding and 4,150,000 for shares
issuable to an option holder and warrant holders at an exercise price of $.18
per share. In January 2005, our shares were listed on the OTC Bulletin Board. We
are hopeful the exposure of a securities exchange might help increase the
Company's market capitalization and encourage the exercise

of outstanding warrants. We have no understandings or commitments from anyone
with respect to external financing, and we cannot predict whether we will be
able to secure necessary funding when needed, or at all.

We project our current monthly cash flow requirement to be
approximately $40,000. While our cash and anticipated receipt of funds from the
financing agreement in March 2005, should be sufficient to satisfy our capital
requirements for the next six to nine months, they are insufficient to satisfy
our anticipated costs associated with new product development. There can be no
assurance, however, that we will be able to generate sufficient cash from
operations, if any, in future periods beyond this six to nine month period to
satisfy our capital requirements. Therefore, we will have to continue to rely on
external financing activities, including the sale of our equity securities, to
satisfy our capital requirements for the foreseeable future. Due, in part, to
our lack of earnings, our success in attracting additional funding has been
limited to transactions in which our equity is used as currency. In light of the
availability of this type of financing, and the lack of alternative proposals,
our board of directors has determined that the continued use of our equity for
these purposes may be necessary if we are to sustain operations. Equity
financings of the type we have been required to pursue are dilutive to our
stockholders and may adversely impact the market price for our shares. However,
we have no commitments for borrowings or additional sales of equity, the precise
terms upon which we may be able to attract additional funding is not known at
this time, and there can be no assurance that we will be successful in
consummating any such future financing transactions on terms satisfactory to us,
or at all.

SEASONALITY AND INFLATION

Our business is not seasonal in nature, and management does not believe
that our operations have been materially affected by inflationary forces. If the
recent increase in oil prices proves to be long lasting, we believe the interest
in fuel cell development will only increase. As previously stated, our future
success is dependent upon the successful development and market acceptance of
fuel cell systems.

BUSINESS

We are engaged in the development of high efficiency compressors and
pumps that we believe will have commercial application in products, the sale of
which will generate revenue for us. The technology underlying our compressors
and pumps was created by Dr. Thomas Edwards, our founder and Chief Executive
Officer, and is the subject of three patents that have been issued by the United
States Patent and Trademark Office. Although numerous compressor manufacturers
produce lubricant-free (oiless) compressors, the primary innovation in our
lubricant-free compressors and pumps is that they are more reliable and
efficient than other oiless compressors and pumps. We have entered into a patent
license agreement with Dr. Edward under which we have been granted the exclusive
right to use the Dr. Edwards' patented technology to develop, produce, license
and manufacture products that have commercial application.

'run down'. Fuel cells are believed to be more efficient than traditional energy
sources for many reasons, including that they introduce almost no pollutants
into the atmosphere and they utilize fuel more efficiently than combustion
devices.

To date, our limited financial resources have prevented us from
commercializing our UniVane devices into revenue-producing products. In
addition, fuel cell technology has not yet become accepted as an alternative
energy source on a commercial basis and, until recently, we were unable to
attract manufacturers who are willing to devote their resources to alter their
manufacturing processes to accommodate production of our UniVane devices.
However, in May 2003, we entered into a license agreement with Parker-Hannifin
Corporation, a Fortune 500 industrial company that, among other things, designs,
develops, manufactures and distributes a wide range of industrial and consumer
products and has been engaged in, among other things, the development of fuel
cells as an alternative energy source. Under the license agreement, we have
granted Parker-Hannifin the exclusive right to our UniVane technology. We are
discussing with Parker-Hannifin the development of additional applications for
our UniVane devices such as in the areas of water quality improvement and
aqua-farming through aeration.

To the extent that Parker-Hannifin is successful in developing and
marketing fuel cell devices or other products that incorporate our UniVane
devices, we will be entitled to royalty payments from Parker-Hannifin based upon
product sales. Non-fuel cell product applications incorporating UniVane
technology being considered for development by Parker-Hannifin include pond
aeration systems, vacuum systems, hydrogen circulators and oxygenation systems.
To date, no such products have been commercially produced and we have not yet
received any royalty payments from Parker-Hannifin under the license agreement.
Further information relating to royalty arrangements with Parker-Hannifin is
discussed below under "License Agreement with Parker-Hannifin Corporation." Due
to the exclusive nature of our license agreement with Parker-Hannifin, we are
currently dependent on Parker-Hannifin to commercialize our UniVane devices,
although there is no assurance that commercial applications for our UniVane
devices will be developed or, even if developed, that they will be successfully
marketed.

We are also developing non-fuel cell applications utilizing UniVane
technology. However, until such time as we are able to generate substantial
revenues from royalty payments under the license agreement with Parker-Hannifin,
or we are able to secure significant third party financing, our ability to
successfully develop, manufacture and market commercially viable non-UniVane
products is uncertain.

FUEL CELLS

Parker-Hannifin Corporation, as the licensee of our Univane technology,
is in the process of developing fuel cells incorporating our UniVane compressor
and hydrogen generator.

Over the past several years, environmental and economic concerns have
led to searches for alternative sources of power for electricity generation and
transportation. Fuel cells have emerged as a leading source of power for these
applications as they are an inherently cleaner, more efficient and a more
reliable source of power than current generation methods. Fuel cells convert
hydrogen and oxygen into electricity through a process that can be twice as
efficient as conventional electrical energy production, and they result in
virtually no emissions while producing only heat and water as by-products. A
fuel cell is a device that is much like a battery. However, rather than storing
energy in the manner that a battery does, a fuel cell continuously changes the
chemical energy of hydrogen and oxygen into electrical energy and heat. It does
so without combustion.

Recently, interest in fuel cell technology has accelerated due to
increasing environmental concerns and energy reliability awareness. In addition,
some fuel cell applications have progressed to the

pre-production stage and have received significant attention in the financial
and popular press. Fuel cells can be used in stationary applications such as
generating electricity or heating buildings, and for non-stationary applications
such as powering vehicles including automobiles, buses and trains.

DYNECO UNIVANE COMPRESSOR AND HYDROGEN CIRCULATOR

We control the rights to two proprietary mechanisms - Orbital Vane(R)
and UniVane devices. UniVane compressors operate without a lubrication system -
a primary requirement for fuel cell compressors and, therefore, the current
focal point of DynEco activities. On the other hand, Orbital Vane machines
require lubricant systems and, therefore, unlike the UniVane, they are
unsuitable for fuel cell applications. Thus, we are focusing current technology
development efforts only on UniVane technology. Further, DynEco no longer renews
patent annuity/maintenance fees for Orbital Vane patents, which hastens the
transition of these patents to the public domain.

The UniVane compressor and hydrogen circulator provide a flow of oxygen
or hydrogen to an entire fuel cell. UniVane technology can be used for hydrogen
circulator pumps, natural gas/air mixing compressors, cathode air compressors
and as a duel compressor for gas and air. It is a high efficiency device that is
designed to offer higher flow at lower pressures than alternative systems.
DynEco UniVane devices produce a greater flow while utilizing about one half the
energy of a conventional product.

UniVane compressors consist of a closed stationary cylindrical housing
containing a rotor fitted with a single vane. These rotating parts are suspended
in the housing by non-lubricated ceramic ball bearings so that neither rotating
component actually touches the inner surfaces of the housing. Energy-efficient
non-contact sealing is achieved, and result in essentially no friction or wear
among the parts, even over thousands of hours. These attributes enable the
design and manufacture of subsystems that we believe, for example, can be used
to reliably and efficiently supply air to and circulate hydrogen through fuel
cells.

LICENSE AGREEMENT WITH DR. THOMAS C. EDWARDS

In February 2004, we entered into an Exclusive Patent and Know-How
License Agreement with Thomas C. Edwards, Ph.D., our president and chief
executive officer. Under the license agreement, we have been granted the
exclusive, worldwide, royalty-bearing license to use certain patented technology
owned by Dr. Edwards, as well as the related technical know-how, for the lives
of the respective patents. The patents covered by the license agreement include
Dr. Edwards' patents for UniVane technology. The license agreement with Dr.
Edwards covers three patents issued by the United States Patent and Trademark
Office. We are permitted to sublicense the licensed technology, and have
sublicensed the licensed technology to Parker-Hannifin under our exclusive
license agreement with Parker-Hannifin.

Under the license agreement, we are required to pay Dr. Edwards a
royalty fee equal to 1% of the sales or lease price of all products sold or
leased by us that incorporate the licensed technology. We are also obligated to
pay Dr. Edwards a royalty fee equal to 10% of gross royalty fees in excess of
$500,000 per calendar year received by us from sublicenses of the licensed
technology. To date, no royalty fees are due and owning to Dr. Edwards under the
license agreement.

The license agreement has a term expiring in July 2021, when the last
patent covered by the license agreement expires. The license agreement may be
terminated by a non-defaulting party in the event the other party fails to cure
a default within 90 days of written notice of such default. In addition, we have
the right to terminate the license agreement upon six months' written notice at
any time after

2009. In the event of our bankruptcy, the license agreement shall terminate and
Dr. Edwards will succeed to the rights and obligations under DynEco's license
agreement with Parker-Hannifin Corporation.

The February 2004 license agreement replaces and supercedes a license
agreement that we entered into with Dr. Edwards on March 9, 1992. Our license to
use Dr. Edwards' inventions prior to the January 2004 license agreement was
granted under the 1992 license agreement. As consideration to Dr. Edwards' under
the 1992 license agreement, we issued Dr. Edwards 2,200,000 shares of our common
stock.

LICENSE AGREEMENT WITH PARKER-HANNIFIN CORPORATION

In May 2003, we entered into an exclusive license agreement with
Parker-Hannifin Corporation, a Cleveland, Ohio-based, multinational designer,
manufacturer and distributor of industrial and products.

Under the license agreement, we have granted Parker-Hannifin a
sublicense agreement that grants them exclusive world-wide rights to develop,
manufacture, sell and use our UniVane air compressors and hydrogen circulators,
as well as the technology and patents incorporated in our products, throughout
the world. Under the license agreement, we are precluded from manufacturing,
using or selling our air compressors and hydrogen circulators to anyone other
than Parker-Hannifin, and from developing or licensing our UniVane technology
air compressor and hydrogen circulator technology to any other party.

We anticipate that our UniVane air compressors and hydrogen circulators
will be sold by Parker-Hannifin both as individual products and a as part of
systems manufactured and/or distributed by Parker-Hannifin. The license
agreement continues in force until the later of the end date of the last to
expire patent or the final use of the technology by Parker-Hannifin or its
customer(s). Parker-Hannifin has agreed to use reasonable commercial efforts to
promote the sale of our air compressors and hydrogen circulators.

In consideration for the license grant, Parker-Hannifin has agree to
pay us a royalty for each air compressor and hydrogen circulator incorporating
our UniVane technology and sold by Parker-Hannifin to third parties other than
Parker-Hannifin's subsidiaries and affiliates. The royalty is payable quarterly,
will be calculated as a percentage of the net selling price of the UniVane air
compressor or hydrogen circulator included in the product sold by
Parker-Hannifin, and is based upon attaining the following levels of product
sales:

Annual Number of Products Percentage of Net Selling Price
------------------------- -------------------------------

1 - 50 15%
51 - 250 10%
251 - 10,000 8%
10,000 + 6%

After the third year of the license agreement, royalties will not be
paid on products sold into a country where none of our technology is covered by
a valid patent. In the event that royalty fees from Parker-Hannifin are less
than $100,000 in any calendar year beginning with the calendar year commencing
January 1, 2007, Parker-Hannifin may elect to either (a) pay us the difference
between $100,000 and the amount of royalty fees paid for that year, or (b)
permit the license granted to it to become non-exclusive.

With the exception of an immaterial number of sales of prototype units,
no sales of licensed products have been made to date and we cannot predict
whether Parker-Hannifin will successfully sell licensed products incorporating
our technology. The license agreement with Parker-Hannifin will continue until
to the earliest to occur of (a) expiration of the licensed patent, (b) the final
use of the licensed technology by a customer of Parker-Hannifin, (c) termination
of the license agreement by one party due to a material uncured breach by the
other party, (d) termination of the license agreement by a party due to a
bankruptcy or similar proceeding involving the other party, or (e) the mutual
agreement of the parties.

In connection with the license agreement, we provided consulting
services to Parker-Hannifin to assist in transitioning our UniVane technology to
them and for developing and improving products covered by the license agreement.
The consulting agreement provided for an initial term of one year terminating
May 31, 2004, subject to automatic month-to-month renewals unless one party
provides 90-days notice of termination to the other. We received consulting fees
of $25,000 per month under the agreement. Following expiration of the initial
12-month period, we continued to provide consulting services to Parker-Hannifin
until we mutually agreed with Parker-Hannifin that our consulting services would
cease to be provided effective December 10, 2004. The cessation of consulting
services does not alter our rights and obligations relating to our right to
future royalty payments based upon sales of products incorporating our UniVane
devices.

Parker-Hannifin has purchased machine tools and special tooling, and
has appointed a specialized engineering and manufacturing team to produce
UniVane compressors. This team has commenced the manufacture of approximately 50
demonstration machines that will test the efficacy of our UniVane air
compressors and hydrogen circulators on both test benches and in operating fuel
cells. We also believe that these compressors can be demonstrated in other
applications such as aeration and natural gas pumping

During the term of our exclusive license agreement with
Parker-Hannifin, we are prohibited from selling our UniVane fuel cell
compressors and hydrogen circulators to any other party. Since, at the present
time, our UniVane fuel cell compressors and hydrogen circulators are our only
products capable of generating revenues, we are substantially dependent upon
Parker-Hannifin for sales of royalty-generating products. However, we have no
control over Parker-Hannifin's technical and manufacturing development or
marketing activities, and Parker-Hannifin is only required to use reasonable
commercial efforts to market these products. If Parker-Hannifin does not
successfully market royalty-generating products under our license agreement, we
will not receive royalty fees and we will likely be forced to cease operations.

SUPPLY AGREEMENT WITH PARKER-HANNIFIN CORPORATION

On August 6, 2004, we entered into a supply agreement with
Parker-Hannifin under which Parker-Hannifin has agreed to supply us with our
requirements of UniVane products for resale in non-fuel cell applications, if
any, that we may develop in the future. Under the supply agreement, any UniVane
products we purchase from Parker-Hannifin will be sold to us at the standard
distributor pricing established by Parker-Hannifin from time-to-time. We are
under no obligation to purchase any products from Parker Hannifin and have made
no commitment to purchase any products under the supply agreement. If we are
able to develop non-fuel cell applications for our UniVane devices, we have
granted Parker-Hannifin a right of first refusal to supply us with systems
incorporating those devices, if Parker-Hannifin demonstrates that it can supply
systems meeting our technical requirements at pricing that is

reasonably competitive with other suppliers. As of the date of this prospectus,
we have not developed any non-fuel cell applications that would be subject to
the provisions of the supply agreement with Parker-Hannifin, although we may do
so in the future.

TECHNOLOGICAL RESEARCH AND DEVELOPMENT AUTHORITY FUNDING AGREEMENT

Effective November 20, 2002, we entered into a funding agreement with
the Technological Research and Development Authority, headquartered in
Titusville, Florida. Under the funding agreement, we are entitled to receive a
maximum of $150,000 from the Authority to provide partial funding for the
development and commercialization of our UniVane compressors and hydrogen
circulators. During 2003, we received the entire $150,000 funding commitment
under this agreement.

As consideration for the funding, we are required to pay the Authority
a royalty equal to 5% of our revenues from the sale, distribution, lease or
other disposal of our UniVane compressors and hydrogen circulators. The royalty
is payable until such time as total royalty payments equal $450,000. The
agreement is for a term of 10 years.

NEW PRODUCT DEVELOPMENT

Our present business and technical activities are primarily focused
upon aiding Parker-Hannifin in improving UniVane machines and putting them into
production in various sizes and capacities. We are also investigating the
feasibility of incorporating UniVane devices into products and systems other
than fuel cells, such as water aeration and aquaculture and septic system
aeration, as well as manufacturing, dental vacuum systems and food processing.
Parker-Hannifin is also evaluating our UniVane devices for non-fuel cell
applications.

To the extent that Parker-Hannifin successfully develops new product
applications for our UniVane devices, our exclusive license agreement with
Parker-Hannifin grants Parker-Hannifin the exclusive right to manufacture and
distribute those products. However, under the agreement, we will be entitled to
a royalty payment for each UniVane device sold by Parker-Hannifin. In the event
Parker is unsuccessful in their efforts to manufacture and sell UniVane devices
for fuel cell and non-fuel cell applications, we will likely be forced to cease
operations. We believe that Parker-Hannifin has spent in excess of $1 million on
its UniVane development activities and have been advised that the UniVane was
awarded the Innovation Product of the Year in Parker-Hannifin's recent corporate
innovation competition.

In the event that we develop non-cell cell applications for our UniVane
devices, our exclusive license agreement with Parker-Hannifin requires us to
purchase UniVane devices from Parker-Hannifin. Under a recently executed supply
agreement, Parker-Hannifin has agreed to supply us with UniVane devices for
incorporation into those non-fuel cell applications. If we are successful in
developing non-fuel cell applications for our UniVane devices, we have also
granted Parker-Hannifin a right of first refusal to manufacture and supply us
with products and systems incorporating our UniVane devices. However, we will be
required to develop infrastructure to market and sell any new products we
develop. The development of sales and marketing capabilities for any new
products will require us to secure additional financing and there is no
assurance that we will be able to do so.

RESEARCH AND DEVELOPMENT

For each of the two years ended December 31, 2004 and 2003, we spent
approximately $145,171 and $175,000, respectively, on research and development
activities. In addition to our research and

development expenditures, Parker-Hannifin incurs expenses associated with its
research and development activities relating to UniVane applications.

GOVERNMENT REGULATION

Our principal products and services currently consist of our UniVane
devices and consulting services provided to Parker-Hannifin. We are also engaged
in technology development unrelated to our UniVane devices. None of our
principal products or services requires governmental approvals and we do not
believe or anticipate that existing or probable government regulations will have
a material effect on our business. To the extent that fuel cells or other
products developed by Parker-Hannifin are or will be subject to government
regulation, or require or will require governmental approvals, Parker-Hannifin
is responsible for necessary compliance and securing any necessary approvals.

Our current activities do not subject us to the costs or effects of
compliance with environmental laws, rules or regulations. To the extent that
these laws, rules or regulations are applicable to the activities of
Parker-Hannifin, the costs and effects are borne by Parker-Hannifin.

COMPETITION

For reasons discussed elsewhere in this prospectus, we believe that
non-lubricated compressors, such as our UniVane compressors, are more desirable
than conventional lubricated compressors for incorporation into fuel cell
systems. However, there are numerous manufacturers of non-lubricated compressors
that can deliver air to fuel cells. Many of these manufacturers have longer
operating histories than does DynEco and have far greater financial and physical
resources than we do. Among the manufacturers of non-lubricated compressors are
Rieschle Thomas, Becker Pumps Corporation, Gast Manufacturing and Dresser Roots.

We believe that our UniVane compressors offer the significant advantage
over conventional non-lubricated compressors that have proven, from the
standpoint of fuel cell use, to be relatively inefficient, and of limited
longevity and reliability. This is the case primarily because the moving parts
of conventional non-lubricated compressors rub against one another, thus
invoking significant friction and wear. Various types of fans or blowers are
used in some fuel cell designs, but because fans cannot develop significant
pressure, fuel cells must be larger, therefore, generally more expensive. We
believe that it will remain difficult for conventional devices to compete
effectively with our non-contact UniVane devices.

We also believe that the strength of the Parker-Hannifin Corporation
name will, through our license agreement with them, provide product development,
manufacturing and marketing capabilities that we would otherwise be unable to
assemble, so as to permit our UniVane devices to be successfully developed and
marketed. However, for this reason, we are dependent upon Parker-Hannifin to
continue to devote its resources to developing our UniVane devices, and, there
is no assurance that Parker-Hannifin will not identify devices competitive with
our UniVane devices and choose to develop fuel cells and other products with
their, and not our, devices. In that event, we will likely be forced to cease
operations.

To the extent that we develop non-fuel cell applications for our
UniVane devices, we will also compete with manufacturers and distributors of
conventional lubricated, as well as non-lubricated compressors. Many
manufacturers of lubricated compressors have longer operating histories and
greater financial and physical resources than we do. While the manufacture and
distribution of non-fuel cell products using our UniVane devices will be subject
to our license agreement with Parker-Hannifin, and, therefore, we will have the
benefit of their manufacturing and marketing capabilities, Parker-Hannifin

may chose to incorporate the compressors of other companies in their products,
rather than ours. There is no assurance that we can become a competitive force
in the market for lubricated compressors.

HISTORY

We were incorporated under the laws of the state of Minnesota in
December 1984, under the name TERTM, Inc. In 1989, we changed our name to TERTM
Technology Corporation and, in December 1993, again changed our name to DynEco
Corporation. Prior to 1991, we engaged in the design, development, manufacture
and marketing of certain proprietary products using a proprietary production
process known as the Thermal Expansion Resin Transfer Molding Process. We also
marketed and licensed a design engineering and contract manufacturing capability
of products using the TERTM process to third parties. We discontinued these
operations in 1991 and, until the acquisition of the compressor assets and
business of DynEco International, Inc. in March 1994, we only engaged in
licensing the TERTM process and providing application engineering consulting
with respect to those licenses. We ceased all TERTM-related activities in March
1994.

In January 1993, we were introduced to DynEco International, a
development stage company engaged in the development of proprietary compressor
technology intended to be commercially exploited primarily through licensing to
third parties. While DynEco International expressed interest in being acquired
by us, due to our financial obligations, DynEco International was unwilling to
consummate a business combination with us until we restructured our obligations.
In order to do so, on July 12, 1993, we filed a Plan of Reorganization and a
Disclosure Statement under Chapter 11 of the Federal Bankruptcy laws with the
United States Bankruptcy Court for the District of Minnesota. The Plan of
Reorganization was subsequently confirmed by the Order of the Bankruptcy Court
on December 17, 1993. The Chapter 11 case was closed by the Order of the
Bankruptcy Court in June 1994.

On March 31, 1994, we consummated the acquisition of all of the issued
and outstanding shares of capital stock of DynEco International in exchange for
(a) approximately 3,926,000 shares of our common stock and (b) warrants to
purchase approximately 392,600 shares of our common stock, exercisable at $7.00
per share. Those warrants have since expired unexercised. On the effective date
of the acquisition, DynEco International became our wholly owned subsidiary, and
DynEco International's security holders collectively became our majority
shareholders. At the same time, our directors and officers resigned their
positions, and the directors and officers of DynEco International became our
directors and officers.

From the time of our acquisition of DynEco International until May
2003, we engaged in the development and commercialization of the patented
technologies licensed to us by our Chief Executive Officer, Thomas C. Edwards,
Ph.D. We funded those activities through limited revenues and sales of our
equity securities. The focus of our activities was the development of products
that could be used in fuel cell applications. However, we were unable to
successfully develop these products on a commercial basis due to our limited
financial resources, the lack of public acceptance of fuel cells as an
alternative energy source and our inability to attract manufacturers willing to
devote resources to altering their manufacturing processes to accommodate the
production of our products.

In May 2003, we entered into the exclusive license agreement with
Parker Hannifin Corporation that is described elsewhere in this prospectus.
Since that time, our activities have been limited to our consulting services
rendered to Parker Hannifin and our continued development of non-fuel cell
applications for our UniVane technology. All of our existing material agreements
have been executed and are being performed by DynEco Corporation. As a result,
the operations of DynEco International,

Inc. as an operating subsidiary have ceased, and DynEco International, Inc. is
no longer engaged in active operations.

EMPLOYEES

As of December 31, 2004, we employed four persons on a full-time basis,
consisting of our chief executive officer/president and engineer, office
manager, facility manager and designer/model maker. We also employ one person on
a part-time/as-needed basis as our electronics expert. None of our employees is
a party to a collective bargaining agreement and relationships with our
employees are believed to be good.

PROPERTIES

We lease approximately 4,296 square feet of space at 564 International
Place, Rockledge, FL 32955, under a verbal lease with an unaffiliated lessor. We
pay rent of $1,500 per month, and make payments for our use of electricity
directly to the power company. The space is used as our corporate offices and as
a laboratory/shop facility. We are advised that the landlord is seeking to sell
the premises and the landlord has verbally agreed to provide us with 30-60 days'
notice if we are required to move. We do not anticipate difficulty in relocating
to comparable facilities should we be required to relocate.

LEGAL PROCEEDINGS

We are not a party to any pending legal proceeding, nor are we aware of
any legal proceedings being contemplated against us by any governmental
authority. We are not aware of any legal proceeding in which any of our
officers, directors, affiliates or security holders is a party adverse to us or
in which any of them have a material interest adverse to us.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table includes the names, positions held and ages of our
executive officers and directors.

NAME AGE POSITION
---- --- --------

Thomas C. Edwards, Ph.D. 61 Chief Executive Officer, President
and Director

George R. Schell 68 Director

Leonard Sculler 66 Director

Kevin Hooper 41 Director

Thomas C. Edwards, Ph.D., has served as our chief executive officer,
president and a director since 1996 He received his Ph.D. in mechanical
engineering from Purdue University in 1970 where he specialized in thermo
sciences and machine design. Dr. Edwards has received many patents and has
published numerous professionally peer-reviewed technical papers in areas
related to his expertise. He is the only known living person after whom a
thermodynamic cycle is named, the "Edwards Cycle". Processes within this cycle
also appear in fuel cell operation.

George R. Schell has served on our board of directors since 1998. Since
September 2002, Mr. Schell has been retired. He received a Bachelor of Science
degree in civil engineering in 1958 from Virginia Military Institute and an MBA
from the College William and Mary in Williamsburg VA. From February 2002 until
August 2002, he served as our acting chief operating officer. From August 1999
until February 2002, he was a private consultant in the areas of and
distribution and marketing. Mr. Schell founded Schell Supply Corporation, a
Virginia Beach, Virginia-based wholesale plumbing pipe and valve fitting company
in 1968, and served as its president until his retirement in August 1999. Mr.
Schell continues to conduct special projects on behalf of DynEco on an as-needed
basis.

Leonard Sculler has served on our board of directors since June 2003.
Mr. Sculler founded M&R Marking Systems, Inc. in 1960, and served as its chief
executive officer until his retirement in May 2001. During his tenure, M&R
Marking Systems, a privately held company, grew to become the largest
manufacturer of hand-held embossers in the world, and is currently the largest
US manufacturer of hand-held marking products, with sales in over 85 countries.
Mr. Sculler has served as Chairman of the Board of M&R Marking Systems since
1992.

Kevin Hooper has served on our board of directors since June 2003. From
October 2000 to the present, Mr. Hooper served as a project manager in the
United States Air Force at Cape Canaveral Air Force Station. From November 1987
to the present he also serves as managing trustee of The Hooper Partnership, a
privately-held owner of commercial real estate and agricultural property
headquartered in Cocoa, Florida. From June 1998, until October of 2000, Mr.
Hooper was employed as a mechanical engineer for Lockheed Martin Astronautics at
the Cape Canaveral Air Force Station. Mr. Hooper has been a registered
professional engineer in the State of Florida since 1994.

All directors serve for one year and until their successors are elected
and qualify. Directors do not presently receive monetary compensation for
serving as directors but have received stock and stock options. Officers are
appointed by the board of directors, and, subject to employment agreements,
their terms of office are at the discretion of the board of directors.

There are no family relationships between any of our officers or
directors.

CORPORATE GOVERNANCE MATTERS

Audit Committee. The board of directors has not yet established an
audit committee, and the functions of the audit committee are currently
performed by the entire board of directors. We are not currently subject to any
law, rule or regulation requiring that we establish or maintain an audit
committee. We may establish an audit committee in the future if the board
determines it to be advisable or we are otherwise required to do so by
applicable law, rule or regulation.

Board of Directors Independence. Our board of directors consists of
four members. We are not currently subject to any law, rule or regulation
requiring that all or any portion of our board of directors include
"independent" directors. However, three of our directors - George R. Schell,
Leonard Sculler and Kevin Hooper - are "independent" directors, within the
meaning of Section 10A-3 of the Securities Exchange Act of 1934 and Nasdaq
Marketplace Rule 4200.

Audit Committee Financial Expert. We do not yet have an audit committee
and no member of our board of directors is an "audit committee financial expert"
within the meaning of Item 401(e) of Regulation S-B. In general, an "audit

committee financial expert" is an individual member of the audit committee
(board of directors) who (a) understands generally accepted accounting
principles and financial statements, (b) is able to assess the general
application of such principles in connection with accounting for estimates,
accruals and reserves, (c) has experience preparing, auditing, analyzing or
evaluating financial statements comparable to the breadth and complexity to the
Company's financial statements, (d) understands internal controls over financial
reporting and (e) understands audit committee functions.

Code of Ethics. We have adopted a Code of Ethics applicable to our
Chief Executive Officer, principal financial and accounting officers and persons
performing similar functions. A Code of Ethics is a written standard designed to
deter wrongdoing and to promote (a) honest and ethical conduct, (b) full, fair,
accurate, timely and understandable disclosure in regulatory filings and public
statements, (c) compliance with applicable laws, rules and regulations, (d) the
prompt reporting violation of the code and (e) accountability for adherence to
the Code. A copy of our Code of Ethics is filed as an exhibit to the
registration statement of which this prospectus forms a part, and we will
provide a copy, without charge, to any person desiring a copy of the Code of
Ethics, by written request to us at our principal offices.

Nominating Committee. We have not yet established a nominating
committee. Our board of directors, sitting as a board, performs the role of a
nominating committee. We are not currently subject to any law, rule or
regulation requiring that we establish a nominating committee.

Compensation Committee. We have not yet established a nominating
committee. Our board of directors, sitting as a board, performs the role of a
compensation committee. We are not currently subject to any law, rule or
regulation requiring that we establish a compensation committee.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth information relating to all compensation
awarded to, earned by or paid by us during each of the three fiscal years ended
December 31, 2004 to: (a) our chief executive officer; and (b) each of our
executive officers who was awarded, earned or we paid more than $100,000 for the
fiscal year ended December 31, 2004:

Fiscal Other Annual LTIP All Other
Name and Principal Position Year Salary Bonus Compensation Options/ (#) Payouts Compensation
- --------------------------- ----- ------- ----- ------------ ------------ ------- ------------

Thomas C. Edwards, Ph.D. 2004 $60,000 $-0- -0- -0- $-0- $-0-
Chief Executive Officer and 2003 $60,000 $-0- -0- -0- $-0- $-0-
President 2002 $60,000 $-0- -0- -0- $-0- $-0-

Effective January 1, 2004, we entered into an employment agreement with
Thomas C. Edwards, Ph.D., for his services as our chief executive officer and
chief technical officer. The employment agreement is for a term of five years
and provides that we pay Dr. Edwards an annual salary of $60,000 for his first
year of service under the agreement, $70,000 for the second year, $80,000 for
the third year, $90,000 for the fourth year and $100,000 for the final year. Dr.
Edwards will be reimbursed for his expenses incurred in connection with his
services and we have agreed to pay Dr. Edwards' medical, dental and supplemental
insurance in accordance with our policies for such benefits. The employment
agreement precludes Dr. Edwards from disclosing our confidential information to
any third party and provides that Dr. Edwards will not compete with us during
the term of the agreement and for a period of five years thereafter.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table sets forth information relating to our outstanding
equity compensation plans as of December 31, 2004:

Number of Securities Remaining
Number of Securities to Available for Future Issuance
Be Issued Upon Exercise Weighted-average Exercise Under Equity Compensation Plan
Of Outstanding Options, Price of Outstanding Options, (excluding securities reflected
Warrants and Rights Warrants and Rights in column a)
----------------------- ----------------------------- -------------------------------

Equity Compensation
Plans Approved by
Security Holders

2001 Equity Incentive
Plan ................... 0 N/A 1,000,000

1993 Corporate Stock
Option Plan ............ 43,333 $.13 706,667

1993 Advisors Stock
Option Plan ............ 200,000 $.12 0

Equity Compensation
Plans not Approved by
Security Holders

Options ................ 2,217,834 $.30 0

Warrants ............... 2,973,120 $.18 0
--------- ---- ---------

TOTAL .................. 5,434,287 $.27 1,706,667

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information concerning our grant of
options to purchase shares of our common stock during the fiscal year ended
December 31, 2004 to each person named in the Summary Compensation table.

Percent of
Number of Total Options/
Securities SARs Granted
Underlying To Employees Exercise Or
Options/SARs In Fiscal Base Price Expiration
Name Granted (#) Year ($/Sh) Date
- ------------------------- ------------ -------------- ----------- ----------
Thomas C. Edwards, Ph.D.
Chief Executive Officer -0- 0% N/A N/A

2001 EQUITY INCENTIVE PLAN

In October 2001, our board of directors authorized and approved the
2001 Equity Incentive Plan. The plan was approved and ratified by our
shareholders on October 25, 2001. Under the 2001 Equity Incentive Plan, we have
reserved a total of 1,000,000 shares of our common stock for issuance upon
exercise of incentive and non-qualified stock options, stock bonuses and rights
to purchase awarded from time-to-time, to our officers, directors, employees and
consultants.

The 2001 Equity Incentive Plan is currently administered by our board
of directors. Under the plan, the board determines which of our employees,
officers, directors and consultants are to be granted awards, as well as the
material terms if each award, including whether options are to be incentive
stock options or non-qualified stock options.

Subject to the provisions of the plan, and the Internal Revenue Code
with respect to incentive stock options, the board determines who shall receive
awards, the number of shares of common stock that may be purchased under the
awards, the time and manner of exercise of options and exercise prices. At its
discretion, the board also determines the form of consideration to be received
upon exercise and may permit the exercise price of options granted under the
plan to be paid in whole or in part with previously acquired shares and/or the
surrender of options. The term of options granted under the stock option plan
may not exceed ten years, or five years for an incentive stock option granted to
an optionee owning more than 10% of our voting stock. The exercise price for
incentive stock options may not be less than 100% of the fair market value of
our common stock at the time the option is granted. However, incentive stock
options granted to a 10% holder of our voting stock may not be exercisable at
less than 110% of the fair market value of our common stock on the date of the
grant. The exercise price for non-qualified options will be set by the board, in
its discretion, but in no event shall the exercise price be less than 85% of the
fair market value of our common stock on the date of grant.

Absent registration under the Securities Act of 1933, as amended, or
the availability of an applicable exemption therefrom, shares of common stock
issued upon the exercise of options or as restricted stock awards will be
subject to restrictions on sale or transfer. As of the date of this prospectus,
options to purchase 668,333 shares have been granted under the 2001 Equity
Incentive Plan.

1993 CORPORATE STOCK OPTION PLAN

In May 1993, our board of directors authorized and approved the 1993
Corporate Stock Option Plan. The plan was approved and ratified by our
shareholders on March 31, 1994. Under the 1993 Corporate Stock Option Plan, we
have reserved a total of 750,000 shares of our common stock for issuance upon
exercise of stock options granted, from time-to-time, to our officers,
directors, and employees.

The Corporate Stock Option Plan is currently administered by our board
of directors. Under the plan, the board determines which of our employees,
officers and directors are to be granted options. The committee or board
determines whether options are to be incentive stock options or non-qualified
stock options.

Subject to the provisions of the plan, and the Internal Revenue Code
with respect to incentive stock options, the board determines who shall receive
options, the number of shares of common stock that may be purchased under the
options, the time and manner of exercise of options and exercise prices. At its
discretion, the board also determines the form of consideration to be received
and may permit the exercise price of options granted under the plan to be paid
in whole or in part with previously acquired shares and/or the surrender of
options. The term of options granted under the stock option plan may not exceed
ten years, or five years for an incentive stock option granted to an optionee
owning more than 10% of our voting stock. The exercise price for incentive stock
options may not be less than 100% of the fair market value of our common stock
at the time the option is granted. However, incentive stock options granted to a
10% holder of our voting stock may not be exercisable at less than 110% of the
fair market value of our common stock on the date of the grant. The exercise
price for non-qualified options will be set by the board, in its discretion, but
in no event shall the exercise price be less than 85% of the fair market value
of our common stock on the date of grant.

Absent registration under the Securities Act of 1933, as amended, or
the availability of an applicable exemption therefrom, shares of common stock
issued upon the exercise of options will be subject to restrictions on sale or
transfer. As of the date of this report, options to purchase 650,000 shares are
outstanding under the 1993 Corporate Stock Option Plan. No incentive stock
option may be granted under the plan after April 30, 2003.

1993 ADVISORS STOCK OPTION PLAN

In May1993, our board of directors authorized and approved the 1993
Advisors Stock Option Plan. The plan was approved and ratified by our
shareholders on March 31, 1994. Under the 1993 Advisors Stock Option Plan, we
have reserved a total of 750,000 shares of our common stock for issuance upon
exercise of stock options granted, from time-to-time, to our advisors and
consultants.

The Advisors Stock Option Plan is currently administered by our board
of directors. Under the plan, the board determines which of our consultants
and/or advisors are to be granted options. Options granted under the plan are
non-qualified stock options. Subject to the provisions of the plan, the board
determines the number of shares of common stock that may be purchased under the
options, the time and manner of exercise of options and exercise prices. At its
discretion, the board also determines the form of consideration to be received
and may permit the exercise price of options granted under the plan to be paid
in whole or in part with previously acquired shares and/or the surrender of
options. The exercise price for options granted under the plan are set by the
board, at its discretion, but in no event may the exercise price be less than
85% of the fair market value of our common stock on the date of grant.

Absent registration under the Securities Act of 1933, as amended, or
the availability of an applicable exemption therefrom, shares of common stock
issued upon the exercise of options are subject to restrictions on sale or
transfer. As of the date of this report, options to purchase 200,000 shares had
been granted and are outstanding under the 1993 Advisors Stock Option Plan. The
1993 Advisors Stock Option Plan has terminated and no further awards may be made
thereunder, however, outstanding awards of 200,000 shares remain effective until
their termination date on December 31, 2008.

OTHER PLANS

Other Plans includes equity compensation plans not approved by
shareholders. These plans are comprised of options granted and/or warrants
issued to employees and non-employees, including directors, consultants,
advisers, suppliers, vendors, customers and lenders for purposes including to
provide continued incentives, as compensation for services and/or to satisfy
outstanding indebtedness to them.

As of December 31, 2004, we had outstanding options covering 2,217,834
shares of our common stock and warrants covering 2,973,120 shares of our common
stock under equity plans not approved by shareholders. The options have exercise
prices ranging from $.10 per share to $.38 per share and expiration dates
ranging from January 2006 to November 2008. The warrants are exercisable at $.18
per share and expire on June 30, 2006, except that warrants to purchase
4,000,000 shares expire on November 30, 2006.

The grants of these options were approved on a case-by-case basis by
the board of directors, and are within the limits of the number of shares that
we are authorized to issue. The grant of these options and warrants were not
authorized by our shareholders. We may, in the future, authorize the grant of

additional options and/or issuance of additional warrants for the foregoing
purposes and other valid corporate purposes.

OPTION EXERCISES AND HOLDINGS

The following table contains information with respect to the exercise
of options to purchase shares of common stock during the fiscal year ended
December 31, 2004 to each person named in the Summary Compensation Table.

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

Number of
Securities Value of
Underlying Unexercised
Shares Unexercised In-The-Money
Acquired Options/SARs Options/SARs
On Value At FY-End (#) At FY-End ($)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
- --------------------------------------------------------------------------------

Thomas C. Edwards, Ph.D.
Chief Executive Officer -0- $-0- 1,517,834/0 $0/$0

LIMITATION ON LIABILITY AND INDEMNIFICATION MATTERS

Section 302A.521, subdivision 2, of the Minnesota Statutes requires
DynEco to indemnify a person made or threatened to be made a party to a
proceeding by reason of the former or present official capacity of the person
with respect to DynEco, against judgments, penalties, fines, including, without
limitation, excise taxes assessed against the person with respect to an employee
benefit plan, settlements, and reasonable expenses, including attorneys' fees
and disbursements, incurred by the person in connection with the proceeding with
respect to the same acts or omissions if such person (1) has not been
indemnified by another organization or employee benefit plan for the same
judgments, penalties or fines; (2) acted in good faith; (3) received no improper
personal benefit, and statutory procedure has been followed in the case of any
conflict of interest by a director; (4) in the case of a criminal proceeding,
had no reasonable cause to believe the conduct was unlawful; and (5) in the case
of acts or omissions occurring in the person's performance in the official
capacity of director or, for a person not a director, in the official capacity
of officer, board committee member or employee, reasonably believed that the
conduct was in the best interests of DynEco, or, in the case of performance by a
director, officer or employee of DynEco involving service as a director,
officer, partner, trustee, employee or agent of another organization or employee
benefit plan, reasonably believed that the conduct was not opposed to the best
interests of DynEco. In addition, Section 302A.521, subdivision 3, requires
payment by DynEco, upon written request, of reasonable expenses in advance of
final disposition of the proceeding in certain instances. A decision as to
required indemnification is made by a disinterested majority of the board of
directors present at a meeting at which a disinterested quorum is present, or by
a designated committee of the board, by special legal counsel, by the
shareholders, or by a court.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling
DynEco pursuant to the foregoing provisions, we have been informed that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Act and is therefore unenforceable.

CERTAIN TRANSACTIONS

Effective January 1, 2004, we entered into an Exclusive Patent and
Know-How License Agreement with Thomas C. Edwards, Ph.D., our president and
chief executive officer. The license agreement is more fully described elsewhere
in this prospectus. The license agreement superceded and replaced the 1992
license agreement with Dr. Edwards. During each of the two years ended December
31, 2002, we neither accrued nor made any payments to Dr. Edwards under either
of the license agreements. See "Business - License Agreement with Dr. Thomas C.
Edwards."

On December 11, 2003, we issued 200,000 shares of common stock to each
of Kevin S. Hooper and Leonard Sculler, as consideration for their services as
directors, valued at the contemporaneous cash sales price of $.12 per share.

On April 27, 2004, we issued 200,000 shares of common stock to George
R. Schell, as consideration for his services as a director, valued at $.12 per
share.

On August 17, 2004, we entered into an Amended and Restated Business
and Advisory Consulting Agreement with MBN Consulting, LLC. MBN is the
beneficial owner of approximately 6% of our common stock. The agreement replaces
and supercedes a consulting agreement dated November 10, 2003 between DynEco and
MBN. Under the amended and restated agreement, MBN has agreed to (a) advise us
with respect to the implementation of short and long range strategic planning to
fully develop and enhance DynEco's assets, resources, products and services, (b)
serving as liaison between DynEco and its shareholders; and providing such
investor relations services as we may request, (c) identifying and providing
advice and consultation in the areas of strategic alliances and business
combinations, including mergers and acquisitions; and preparation for and
attendance at meetings and conferences relating thereto, (d) arranging meetings
between representatives of DynEco and members of the investment community at
which presentations concerning DynEco and its business operations may be
discussed; (e) providing advice and consultation relating to internal business
operations including (i) advice regarding the formation of corporate goals and
their implementation, advice regarding the financial structure of DynEco and its
divisions or subsidiaries, (iii) advice regarding the securing of debt and/or
equity financing and (iv) advice regarding corporate organization and personnel,
(f) serving as liaison between DynEco and its legal and accounting advisors, and
(g) providing such other services as may be mutually agreed upon by DynEco and
MBN. For its services, MBN is entitled to a monthly fee of $3,000, commencing
upon our receipt of combined equity and debt funding from any sources in an
amount of at least $1,000,000. Under the original consulting agreement, MBN also
received 2,000,000 shares of our common stock as consideration for advising
DynEco in connection with restructuring its board of directors; providing advice
and consultation prior to and in connection with DynEco's relationship with
Parker-Hannifin Corporation, including the May 2003 License Agreement; serving
as liaison to DynEco's shareholders and providing investor relations services;
serving as DynEco's liaison to its financial and legal advisers; providing
administrative support and services to relieve DynEco's chief executive officer
of those responsibilities so that he could attend to his designated duties; and,
providing advice and consultation with respect to new business development. In
March 2005, we requested MBN to devote additional time to our business matters
and, in light of the additional responsibilities undertaken by MBN, we verbally
agreed to pay MBN a monthly consulting fee of $3,000 commencing March 1, 2005
(in lieu of the monthly consulting fee provided for in the Amended and Restated
Consulting Agreement).

PRINCIPAL SHAREHOLDERS

The following table sets forth information known to us as of March 24,
2005, relating to the beneficial ownership of shares of our common stock by:

o each person who is known by us to be the beneficial owner of
more than five percent of our outstanding common stock;
o each director;
o each executive officer; and
o all executive officers and directors as a group.

Unless otherwise indicated, the address of each beneficial owner in the
table set forth below is care of DynEco Corporation, 564 International Place,
Rockledge, Florida 32955.

We believe that all persons named in the table have sole voting and
investment power with respect to all shares of common stock shown as being owned
by them.

Under securities laws, a person is considered to be the beneficial
owner of securities owned by him (or certain persons whose ownership is
attributed to him) and that can be acquired by him within 60 days from the date
of this Report, including upon the exercise of options, warrants or convertible
securities. We determine a beneficial owner's percentage ownership by assuming
that options, warrants or convertible securities that are held by him, but not
those held by any other person, and which are exercisable within 60 days of the
date of this prospectus, have been exercised or converted.

The table is based on 33,562,978 shares currently outstanding. Except
as otherwise required by SEC rules relating to beneficial ownership, the table
does not give effect to the issuance of up to:

o 3,736,167 shares upon exercise of options that have been granted; or
o 16,385,120 shares in the event of exercise of outstanding warrants.

Name and Address of Amount Percent
Beneficial Owner Beneficial Ownership of Class
---------------- -------------------- ----------

Thomas C. Edwards 5,691,931 shares (1) 16.1%
George R. Schell 1,021,130 shares (2) 3.0%
Leonard Sculler 320,000 shares (3) 1.0%
Kevin Hooper 329,000 shares (4) 1.0%
Officers and Directors
as a group (4 persons) 7,362,061 shares 20.7%

MBN Consulting, LLC (5) 2,706,000 shares (6) 7.9%
7865 Amethyst Lake Pt.
Lake Worth, FL 33467

Richard F. Galbraith 3,355,500 shares (7) 9.8%
5313 320th Street
Cushing, MN 56443

Sausilito Ltd. (8) 3,000,000 shares (9) 8.2%
P. O. Box 150, Design House
Providenciales, Turks & Caicos, BWI

__________________________
(1) Includes shares owned by the spouse of Dr. Edwards. Consists of (a)
3,907,447 shares of common stock, (b) 1,617,834 shares issuable upon
exercise of currently exercisable options and (c) 166,650 shares
issuable upon exercise of currently exercisable warrants.
(2) Consists of (a) 921,130 shares of common stock and (b) 100,000 shares
issuable upon exercise of currently exercisable stock options.
(3) Consists of (a) 220,000 shares of common stock and (b) 100,000 shares
issuable upon exercise of currently exercisable stock options.
(4) Consists of (a) 229,000 shares of common stock and (b) 100,000 shares
issuable upon exercise of currently exercisable stock options.
(5) MBN Consulting, LLC is a business consultant, whose sole beneficial
owner is Steven Sanders. Mr. Sanders exercises sole investment and
voting powers over the shares included in the table.
(6) Consists of (a) 2,106,000 shares of common stock, (b) 500,000 shares
issuable upon exercise of currently exercisable stock options and (c)
100,000 shares exercisable upon exercise of currently exercisable
warrants. Includes shares registered in the name of Steven Sanders, the
beneficial owner of MBN Consulting, LLC. Does not include 75,000 shares
or 75,000 shares issuable upon exercise of outstanding warrants owned
by the son of Steven Sanders, as to which Steven Sanders disclaims
beneficial ownership.
(7) Includes (a) 958,832 shares owned by Dr. Galbraith, (b) 1,100,000
shares owned by the spouse of Dr. Galbraith, (c) 566,668 shares owned
by the children of Dr. Galbraith and (d) 730,000 shares issuable upon
exercise of outstanding warrants.
(8) Sausilito Ltd. is an offshore investor, whose sole beneficial owner is
Bridgitte Longshore. Ms. Longshore exercises sole investment and voting
powers over the shares included in the table.
(9) Consists of 3,000,000 shares issuable upon exercise of currently
exercisable warrants.

DESCRIPTION OF SECURITIES
GENERAL

The following description of our capital stock and provisions of our
Articles of Incorporation is a summary thereof and is qualified by reference to
our Articles of Incorporation, copies of which may be obtained upon request. Our
authorized capital consists of 80,000,000 shares of common stock, par value $.01
per share, and 20,000,000 shares of preferred stock, par value $.01 per share.
As of the date of this prospectus, 33,562,978 shares of common stock and no
shares of preferred stock were issued and outstanding.

COMMON STOCK

Holders of shares of common stock are entitled to share, on a ratable
basis, such dividends as may be declared by the board of directors out of funds,
legally available therefore. Upon our liquidation, dissolution or winding up,
after payment to creditors, our assets will be divided pro rata on a per share
basis among the holders of our common stock.

Each share of common stock entitles the holders thereof to one vote.
Holders of common stock do not have cumulative voting rights which means that
the holders of more than 50% of the shares voting for the election of directors
can elect all of the directors if they choose to do so, and, in such event, the
holders of the remaining shares will not be able to elect any directors. Our
By-Laws require that only a majority of our issued and outstanding shares need
be represented to constitute a quorum and to transact

business at a stockholders' meeting. Our common stock has no preemptive,
subscription or conversion rights and is not redeemable by us.

PREFERRED STOCK

We are authorized to issue 20,000,000 shares of preferred stock, par
value $.01 per share, having such designations, rights, preferences, powers and
limitations as may be determined by the board of directors at the time of
designation. No preferred stock has yet been designated or issued, and we have
no plans to issue any preferred stock at this time or in the near future.

COMMON STOCK PURCHASE WARRANTS

There are currently outstanding common stock purchase warrants to
purchase an aggregate of 24,280,120 shares of our common stock. The warrants
were issued in connection with various financing transactions, as well as to
employees and non-employees, including directors, consultants, advisers,
suppliers, vendors, customers and lenders for purposes including to provide
continued incentives, as compensation for services and/or to satisfy outstanding
indebtedness to them. The warrants are exercisable at prices ranging from $.10
per share to $.25 per share and expire on various dates through March 2, 2010.
We are entitled to call warrants to purchase 11,835,120 shares of common stock,
on ten days' prior written notice in the event that our common stock (a) is
included for quotation on the OTC Bulletin Board or any Nasdaq quotation system
and (b) the closing bid price of our common stock is $.27 or more for 20
consecutive trading days. Any callable warrants not exercised prior to
expiration of the ten day period shall terminate and cease to be of any further
force or effect. We may require holders of 3,000,000 warrants to exercise those
warrants if the closing price for our common stock is $.15 or more for 30
consecutive trading days, and average daily volume during such period is at
least 250,000 shares. The exercise of warrants to purchase 7,770,000 shares is
also subject to a 4.99% cap on the beneficial ownership that each holder may
have at any point in time while any of the warrants (or the promissory notes in
connection with which the warrants were issued) are outstanding.

CONVERTIBLE PROMISSORY NOTES

In connection with a private placement completed in March 2005, we
issued our secured convertible promissory notes in the aggregate principal
amount of $300,000. The notes are convertible at the option of the holder into
shares of our common stock, at a price of $.10 per share, subject to adjustment.
The notes are payable with interest at the rate of 5% per annum. Principal
amortization payments, each in the amount of $15,789.47 plus accrued interest,
are to be paid in 19 equal monthly installments, commencing July 2, 2005.
Amortization payments may be made in cash (accompanied by a 10% premium) or, at
our option, in registered common stock, at a 20% discount to market.
Amortization payments in stock are subject to (a) a limitation based upon the
weighted average trading volume of the common stock for the 20 trading days
preceding the payment date and (b) a 4.99% cap on the beneficial ownership that
note holder may have at any point in time while the notes (or warrants in
connection with which the notes were issued) are outstanding. Repayment of the
notes is collateralized by a general security interest in all of our assets.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is Computershare
Trust Company, Inc., 350 Indiana Street, Suite 800, Golden, CO 80401. Our
transfer agent may be reached by telephone at 303-262-0600.

SELLING SECURITY HOLDERS

BACKGROUND OF THE TRANSACTIONS

This prospectus covers the resale of 13,350,000 shares of our common
stock issued or issuable in connection with the following transactions:

December 2004 - January 2005. During the period from December 7, 2004
to January 31, 2005, we sold an aggregate of 450,000 shares of common stock to
four individuals, for an aggregate purchase price of $45,000, or $.10 per share.
For each two shares purchased, the purchaser also received one warrant to
purchase one additional share of common stock, exercisable until December 31,
2006, at an exercise price of $.15 per share. The proceeds from the sales are
being used for general working capital purposes.

The registration statement of which this prospectus forms a part covers
resale of the shares and warrants issued in the foregoing transaction.

March 2004. On March 2, 2005, we completed a $300,000 financing
consisting of our convertible promissory notes and common stock purchase
warrants. The notes are convertible at the option of the holder into shares of
our common stock, at a price of $.10 per share, subject to adjustment. The notes
are payable with interest at the rate of 5% per annum. Principal amortization
payments, each in the amount of $15,789.47 plus accrued interest, are to be paid
in 19 equal monthly installments, commencing July 2, 2005. Amortization payments
may be made in cash (accompanied by a 10% premium) or, at our option, in
registered common stock, at a 20% discount to market. Amortization payments in
stock are subject to (a) a limitation based upon the weighted average trading
volume of the common stock for the 20 trading days preceding the payment date
and (b) a 4.99% cap on the beneficial ownership that each investor may have at
any point in time while the notes and warrants are outstanding.

We also issued the investors common stock purchase warrants to purchase
an aggregate of 7,500,000 shares of common stock, consisting of (a) five year
warrants to purchase 3,000,000 shares at an exercise price of $.14375 per share,
subject to adjustment, (b) five-year warrants to purchase 1,500,000 shares at an
exercise price of $.25 per share, subject to adjustment and (c) five year
warrants to purchase 3,000,000 shares at $.10 per share, subject to adjustment.
We may require the investors to exercise the warrants described in (c) if the
closing price for our common stock is $.15 or more for 30 consecutive trading
days, and average daily volume during such period is at least 250,000 shares.
The exercise of warrants is also subject to the 4.99% cap on the beneficial
ownership that each investor may have at any point in time while the notes and
warrants are outstanding.

We agreed to file a registration statement (of which this prospectus
forms a part) covering the shares issuable upon conversion or payment of the
notes and exercise of the warrants. In accordance with our obligations under the
subscription agreement with the investors, the registration statement of which
this prospectus forms a part covers 150% of the number of shares issuable upon
conversion of the promissory notes, as well as up to 680,000 shares of common
stock issuable upon conversion of promissory notes and exercise of warrants
issued to finders (including an investor) in this transaction. If the
registration is not filed with the Securities and Exchange Commission on or
before April 30, 2005, or if the registration statement is not effective by the
first to occur of 90 days after the date of filing or July 29, 2005, the Company
will be responsible to pay liquidated damages to the investors equal to 2% of
the outstanding amount of the notes, per month, until the deficiencies are
corrected. The proceeds of the loan

are being used for general working capital purposes. Repayment of the notes is
collateralized by a general security interest in all of our assets.

SELLING SECURITY HOLDERS

The following table sets forth:

o the name of each selling security holder;
o the number or shares of common stock beneficially owned by
each selling security holder as of the date of this
prospectus, giving effect to the exercise of the selling
security holders' warrants;
o the number of shares being offered by each selling security
holder; and
o the number of shares to be owned by each selling security
holder following completion of this offering.

Beneficial ownership is determined in accordance with the rules of the
SEC and generally includes voting or investment power with respect to securities
and includes any securities which the person has the right to acquire within 60
days through the conversion or exercise of options, warrants, promissory notes
and any other security or other right. The information as to the number of
shares of our common stock owned by each selling security holder is based upon
our records and information provided by our transfer agent.

We may amend or supplement this prospectus from time to time to update
the disclosure set forth in the table. Because the selling security holders
identified in the table may sell some or all of the shares owned by them which
are included in this prospectus, and because there are currently no agreements,
arrangements or understandings with respect to the sale of any of the shares, no
estimate can be given as to the number of shares available for resale hereby
that will be held by the selling security holders upon termination of the
offering made hereby. We have therefore assumed, for the purposes of the
following table, that the selling security holders will sell all of the shares
owned by them that are being offered hereby, but will not sell any other shares
of our common stock that they presently own. We do not believe that any of the
selling security holders are broker-dealers or affiliated with broker-dealers.

The shares of common stock being offered have been registered to permit
public sales and the selling security holders may offer all or part of the
shares for resale from time to time. All expenses of the registration of the
common stock on behalf of the selling security holder are being borne by us. We
will receive none of the proceeds of this offering.

Shares Owned
Beneficially Shares Available Shares Percent of
Prior to this Pursuant to Owned After Class
Selling Security Holder Offering this Prospectus Offering After Offering
- --------------------------------------------------------------------------------------------------------------

Alpha Capital Aktiengesellschaft 8,000,000 (1)(9) 8,000,000 -- --
JM Investors 4,337,500 (2)(9) 4,337,500 -- --
Libra Finance S.A. 250,000 (3)(9) 250,000 -- --
RJ Prager Corp. 87,500 (4)(9) 87,500 -- --
Ralph Beisner 150,000 (5) 150,000 -- --
Jason W. Sanders 75,000 (6) 75,000 -- --
Mitchell Levy 75,000 (7) 75,000 -- --
Norman Nick 375,000 (8) 375,000 -- --
--------- ---------- ------ ------
TOTAL 13,350,000
==========

_________________________
* Less than 1%.

(1) Consists of 3,000,000 shares of common stock issuable upon conversion
of promissory notes and 5,000,000 shares issuable upon exercise of currently
exercisable warrants. The address of the selling security holder is Pradafant 7,
9490 Furstentums, Vaduz, Lichtenstein. Konrad Ackerman and Rainer Poschof the
selling security holder, make decisions as to the voting and disposition of the
securities.

(2) Consists of 1,702,500 shares of common stock issuable upon conversion
of promissory notes and 2,635,000 shares issuable upon exercise of currently
exercisable warrants. The address of the selling security holder is 152 East 9th
Street, Lakewood, New Jersey 08701. Jeffrey Rubin makes decisions as to the
voting and disposition of the securities.

(3) Consists of 150,000 shares of common stock issuable upon conversion of
promissory notes and 100,000 shares issuable upon exercise of currently
exercisable warrants. The address of the selling security holder is P. O. Box
4603, Zurich, Switzerland. Seymour Braun makes decisions as to the voting and
disposition of the securities.

(4) Consists of 52,500 shares of common stock issuable upon conversion of
promissory notes and 35,000 shares issuable upon exercise of currently
exercisable warrants. The address of the selling security holder is 5301 North
Federal Highway, Boca Raton, Florida 33487. Robert Jay Prager makes decisions as
to the voting and disposition of the securities.

(5) Consists of 100,000 shares of common stock and 50,000 shares issuable
upon exercise of currently exercisable warrants. The address of the selling
security holder is 27 Quaker Farm Trail, Hyde Park, New York 12538.

(6) Consists of 50,000 shares of common stock and 25,000 shares issuable
upon exercise of currently exercisable warrants. The address of the selling
security holder is 100 South Point Drive, Maimi Beach, Florida 33139.

(7) Consists of 50,000 shares of common stock and 25,000 shares issuable
upon exercise of currently exercisable warrants. The address of the selling
security holder is 201 North West 82nd Avenue, Suite 203, Plantation, Florida
33324.

(8) Consists of 250,000 shares of common stock and 125,000 shares issuable
upon exercise of currently exercisable warrants. The address of the selling
security holder is 20220 Boca West Drive, #1803, Boca Raton, Florida 33434.

(9) The exercise of warrants or conversion of convertible promissory notes
by the named selling security holder is subject to a 4.99% beneficial ownership
limitation that the named selling security holder may have at any point in time
while the warrants or notes are outstanding, unless such limitation is voided by
the selling security holder on at least 61 days' notice to us.

PLAN OF DISTRIBUTION

The selling security holders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling security holders may use any one or more of the
following methods when selling shares:

o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell
the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o settlement of short sales;
o broker-dealers may agree with the selling security holders to
sell a specified number of such shares at a stipulated price
per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.

The selling security holders may also sell shares under Rule 144 under
the Securities Act of 1933, if available, rather than under this prospectus.
Broker-dealers engaged by the selling security holders may arrange for other
broker-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling security holders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling security holders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
Broker-dealers may agree to sell a specified number of such shares at a
stipulated price per share, and, to the extent such broker-dealer is unable to
do so acting as agent for us or a selling stockholder, to purchase as principal
any unsold shares at the price required to fulfill the broker-dealer commitment.
Broker-dealers who acquire shares as principal may thereafter resell such shares
from time to time in transactions, which may involve block transactions and
sales to and through other broker-dealers, including transactions of the nature
described above, in the over-the-counter markets or otherwise at prices and on
terms then prevailing at the time of sale, at prices then related to the
then-current market price or in negotiated transactions. In connection with such
resales, broker-dealers may pay to or receive from the purchasers of such
shares, commissions as described above. In the event that shares are resold to
any broker-dealer, as principal, who is acting as an underwriter, we will file a
post-effective amendment to the registration statement of which this prospectus
forms a part, identifying the broker-dealer(s), providing required information
relating to the plan of distribution and filing any agreement(s) with such
broker-dealer(s) as an exhibit. The involvement of a broker-dealer as an
underwriter in the offering will require prior clearance of the terms of
underwriting compensation and arrangements from the Corporate Finance Department
of the National Association of Securities Dealers, Inc.

The selling security holders may, from time to time, pledge or grant a
security interest in some or all of the shares or common stock or warrants owned
by them and, if they default in the performance of their secured obligations,
the pledgees or secured parties may offer and sell the shares of common stock,
from time to time, under this prospectus, or under an amendment to this
prospectus under Rule 424 (b)(3)

or other applicable provision of the Securities Act of 1933 amending the list of
selling security holders to include the pledgee, transferee or other
successors-in-interest as selling security holders under this prospectus.

The selling security holders also may transfer the shares of common
stock in other circumstances, in which case the transferees, pledgees or other
successors-in-interest will be the selling beneficial owners for purposes of
this prospectus.

The selling security holders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933 in connection with such sales. In such
event, any commissions received by such broker-dealers or agents and any profit
on the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act of 1933. The selling security
holders have informed us that they do not have any agreement or understanding,
directly or indirectly, with any person to distribute the common stock.

We are required to pay all fees and expenses incident to the
registration of the shares. We have agreed to indemnify the selling security
holders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act of 1933.

SHARES ELIGIBLE FOR FUTURE SALE

As of the date of this prospectus, we had 33,562,978 shares of common
stock issued and outstanding. Of the issued and outstanding shares,
approximately 18,000,000 shares of our common stock (5,277,577 of which are
owned by our officers, directors and principal stockholders) have been held for
in excess of one year and are available for public resale pursuant to Rule 144
promulgated under the Securities Act. As of the date of this prospectus, the
13,350,000 shares being offered by selling security holders can be publicly
transferred, and the resale of 8,175,000 shares of common stock are covered by a
registration statement that became effective on December 30, 2004. Not included
in the foregoing are 3,736,167 shares issuable upon exercise of options that
have been granted and 16,385,120 shares not covered by this prospectus that are
issuable on exercise of outstanding warrants. They may be resold by their
holders as long as they are covered by a current registration statement or under
an available exemption from registration.

In general, Rule 144 permits a shareholder who has owned restricted
shares for at least one year, to sell without registration, within a three-month
period, up to one percent of our then outstanding common stock. We must be
current in our reporting obligations in order for a shareholder to sell shares
under Rule 144. In addition, shareholders other than our officers, directors or
5% or greater shareholders who have owned their shares for at least two years
may sell them without volume limitation or the need for our reports to be
current.

We cannot predict the effect, if any, that market sales of common stock
or the availability of these shares for sale will have on the market price of
the shares from time to time. Nevertheless, the possibility that substantial
amounts of common stock may be sold in the public market could adversely affect
market prices for the common stock and could damage our ability to raise capital
through the sale of our equity securities.

LEGAL MATTERS

The legality of the securities offered by this prospectus will be
passed upon for us by Schneider Weinberger & Beilly LLP, Boca Raton, Florida.
Members of Schneider Weinberger & Beilly LLP and their affiliates beneficially
own an aggregate of 75,000 shares of our common stock, including 50,000 shares
issuable upon the exercise of outstanding common stock purchase warrants, the
resale of which is covered by a currently effective registration statement.

EXPERTS

The consolidated financial statements of DynEco Corporation as of
December 31, 2004 and 2003, respectively, and for each of the two years then
ended appearing in this prospectus and registration statement have been audited
by Salberg & Company, P.A., Independent Registered Public Accounting Firm, as
set forth in their report thereon appearing elsewhere in this prospectus, and
are included in reliance upon this report given on the authority of such firm as
experts in auditing and accounting.

ADDITIONAL INFORMATION

We have filed with the SEC the registration statement on Form SB-2
under the Securities Act for the common stock offered by this prospectus. This
prospectus, which is a part of the registration statement, does not contain all
of the information in the registration statement and the exhibits filed with it,
portions of which have been omitted as permitted by SEC rules and regulations.
For further information concerning us and the securities offered by this
prospectus, we refer to the registration statement and to the exhibits filed
with it. Statements contained in this prospectus as to the content of any
contract or other document referred to are not necessarily complete. In each
instance, we refer you to the copy of the contracts and/or other documents filed
as exhibits to the registration statement, and these statements are qualified in
their entirety by reference to the contract or document.

The registration statement, including all exhibits, and other materials
we file with the SEC, may be inspected without charge at the SEC's Public
Reference Room at 450 Fifth Street, N.W. Washington, D.C. 20549. Copies of these
materials may also be obtained from the SEC's Public Reference at 450 Fifth
Street, N.W., Room 1024, Washington D.C. 20549, upon the payment of prescribed
fees. You may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330.

The registration statement, including all exhibits and schedules and
amendments, has been filed with the SEC through the Electronic Data Gathering,
Analysis and Retrieval (EDGAR) system. We do not currently file periodic reports
with the SEC; however, following the effective date of the registration
statement relating to this prospectus, we will become a reporting company and
will file annual, quarterly and current reports, and other information with the
SEC. Copies of all of our filings with the SEC may be viewed on the SEC's
Internet web site at http://www.sec.gov. We maintain a website at
http://www.dyneco.com. The information on our website does not form a part of
this prospectus.

For so long as we are a reporting company, we will be required to file
annual reports with the SEC, containing audited financial statements. However,
unless we register our common stock under Section 12(g) of the Exchange Act, we
will not be required to deliver an annual report containing audited financial
statements to security holders. We currently have no plans to register our
common stock under Section 12(g) of the Exchange Act. If we are not required to
deliver an annual report to security holders, we do not intend to voluntarily
deliver annual reports to security holders containing audited financial
statements.

DYNECO CORPORATION AND SUBSIDIARY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2004 and 2003

Page(s)
-------
Report of Independent Registered Public Accounting Firm F-1

Consolidated Balance Sheets F-2

Consolidated Statements of Operations F-3

Consolidated Statements of Changes in Stockholders' Deficit F-4

Consolidated Statements of Cash Flows F-5

Notes to Consolidated Financial Statements F-6 - F-21

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of:
DynEco Corporation:

We have audited the accompanying consolidated balance sheets of DynEco
Corporation as of December 31, 2004 and 2003 and the related consolidated
statements of operations, changes in stockholders' deficit, and cash flows for
each of the two years then ended. 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 audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
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 DynEco
Corporation as of December 31, 2004 and 2003 and the consolidated results of its
operations and its cash flows for the each of the two years then ended in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company's net loss in 2004 of $434,523,
net cash used in operations in 2004 of $176,100, and working capital deficit of
$638,325 accumulated deficit of $8,134,828 and stockholders' deficiency of
$719,196 at December 31, 2004 and default on $35,000 of notes payable raise
substantial doubt about its ability to continue as a going concern. Management's
plans as to these matters are also described in Note 2. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

SALBERG & COMPANY, P.A.
Boca Raton, Florida
March 15, 2005

F-1

DYNECO CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31, 2004 and 2003

ASSETS 2004 2003
---- ----

Current assets:
Cash ................................................. $ 16,889 $ 199,441
Accounts Receivable .................................. 6,875 25,000
Other Current Assets ................................. 5,143 7,083
----------- -----------
Total Current Assets ....................... 28,907 231,524

Property and Equipment, net .............................. 59,448 71,595

Other Assets:
Patent rights, net ................................... - 151,673
Other ................................................ 566 45
----------- -----------
Total Other Assets ......................... 566 151,718
----------- -----------

Total Assets ............................... $ 88,921 $ 454,837
=========== ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Accounts payable ..................................... $ 126,240 $ 116,990
Accrued compensation ................................. 280,708 290,181
Accrued interest ..................................... 24,850 19,600
Other accrued liabilities ............................ 5,859 -
Loans Payable ........................................ 190,935 167,418
Current maturity of notes payable - shareholders ..... 37,102 37,005
Current maturity of capital lease obligations ........ 1,538 21,881
----------- -----------

Total Current Liabilities ....................... 667,232 653,075

Long Term Liabilities:
Notes payable - shareholders, net of current portion . 120,549 122,650
Loan payable - net of current portion ................ 20,336 18,785
----------- -----------

Total Long Term Liabilities ..................... 140,885 141,435

Total Liabilities ............................... 808,117 794,510
----------- -----------

Commitments and contingencies ............................ - -

Stockholders' Deficit:
Preferred Stock, $.01 par value; 20,000,000 authorized
none issued and outstanding
Common stock, $.01 par value; 80,000,000 authorized
33,112,978 issued and outstanding ............... 331,130 329,130
Common stock issuable, 200,000 shares at par ......... 2,000 1,000
Additional paid-in capital ........................... 7,082,502 7,030,502
Accumulated deficit .................................. (8,134,828) (7,700,305)
----------- -----------

Total Stockholders' Deficit ................ (719,196) (339,673)
----------- -----------

Total Liabilities and Stockholders' Deficit $ 88,921 $ 454,837
=========== ===========

See accompanying notes to consolidated financial statements
F-2

DYNECO CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2004 and 2003

2004 2003
---- ----
Revenues
Compressor prototypes .................... $ 11,900 $ 1,500
Consulting ............................... 275,000 175,000
------------ ------------
Total Revenues ...................... 286,900 176,500

Cost of revenues ............................. 16,096 -
------------ ------------

Gross Margin ........................ 270,804 176,500

Operating expenses:
Compensation ............................. 168,541 189,172
Impairment loss .......................... 144,603 -
General and administrative ............... 357,069 589,200
------------ ------------

Total operating expenses ............ 670,213 778,372
------------ ------------

Loss from operations ................ (399,409) (601,872)

Other income (expenses):
Gain on debt settlement .................. - 37,471
Other income ............................. - 25
Interest income .......................... 313 31
Interest expense ......................... (35,427) (34,544)
------------ ------------
Total other income (expense) ........ (35,114) 2,983
------------ ------------

Net loss ............................ $ (434,523) $ (598,889)
============ ============

Basic and diluted net loss per share ......... $ (.01) $ (.02)
============ ============

Weighted average number of
common shares outstanding ................ 33,069,964 28,593,704
============ ============

See accompanying notes to consolidated financial statements
F-3

DYNECO CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
For the Year Ended December 31, 2004 and 2003

Common Stock
Common Stock Issuable Total
-------------------- ------------------ Paid-In Accumulated Stockholders'
Shares Amount Shares Amount Capital Deficit Deficit
---------- -------- -------- ------- ---------- ----------- ---------

Balance at December 31, 2002 .... 26,577,978 $265,780 340,000 $ 3,400 $6,377,272 $(7,101,416) $(454,964)

Common stock issued for cash, net
of offering costs of $17,220 .. 3,260,000 32,600 - - 341,380 - 373,980

Common stock issued for debt .... 60,000 600 - - 6,600 - 7,200

Common stock issued for services 2,775,000 27,750 - - 305,250 - 333,000

Issuance of Common stock issuable 240,000 2,400 (240,000) (2,400) - - -

Net loss 2003 ................... - - - - - (598,889) (598,889)
---------- -------- -------- ------- ---------- ----------- ---------

Balance at December 31, 2003 .... 32,912,978 329,130 100,000 $ 1,000 7,030,502 (7,700,305) (339,673)

Exchange of issuable Common stock
For Common Stock Option ....... - - (100,000) (1,000) 1,000 - -

Common stock issued for services 200,000 2,000 - - 22,000 - 24,000

Common stock warrants granted for
services ...................... - - - - 11,000 - 11,000

Common stock issuable for cash .. - - 200,000 2,000 18,000 - 20,000

Net loss 2004 ................... - - - - - (434,523) (434,523)
---------- -------- -------- ------- ---------- ----------- ---------

Balance at December 31, 2004 .... 33,112,978 $331,130 200,000 $ 2,000 $7,082,502 $(8,134,828) $(719,196)
========== ======== ======== ======= ========== =========== =========

See accompanying notes to consolidated financial statements
F-4

DYNECO CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2004 and 2003

2004 2003
--------- ---------

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss .................................................................. $(434,523) $(598,889)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization ........................................... 28,757 34,296
Impairment loss ......................................................... 144,603 -
Common stock issued for services ........................................ 24,000 333,000
Warrants issued for services ............................................ 11,000 -
Gain on debt settlement ................................................. - (37,471)
Interest accretion on loan payable ...................................... 19,633 17,418
(Increase) decrease in current assets:
Accounts receivable .................................................. 18,125 (21,500)
Inventory ............................................................ - 1,500
Other assets ......................................................... (521) 346
Other current assets ................................................. 1,940 (6,050)
Increase (decrease) in current liabilities:
Accounts payable ..................................................... 9,250 (11,013)
Accrued expenses ..................................................... (4,223) 2,904
Other accrued liabilities ............................................ 5,859 -
--------- ---------
NET CASH USED IN OPERATING ACTIVITIES ................................ (176,100) (285,459)
--------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES
Patent costs ............................................................ (8,491) (26,277)
Purchase of property and equipment ...................................... (1,049) (7,616)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES ................................... (9,540) (33,893)
--------- ---------

CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of notes payable .............................................. - (2,524)
Repayment of shareholder loans .......................................... (2,309) -
Repayment of capital lease obligation ................................... (14,603) (26,649)
Loan payable advances, net .............................................. - 150,000
Proceeds from sale of common stock ...................................... 20,000 373,980
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES ............................... 3,088 494,807
--------- ---------

Net increase (decrease) in cash ........................................... (182,552) 175,455

CASH AT BEGINNING OF YEAR ................................................. 199,441 23,986
--------- ---------

CASH AT END OF YEAR ....................................................... $ 16,889 $ 199,441
========= =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
- -------------------------------------------------
Cash paid during the year for:
Interest .................................................................. $ 10,544 $ 26,601
========= =========

Supplemental disclosure of noncash investing and financing activities:

During 2003, the Company issued 60,000 shares of common stock valued at
$7,200 and 120,000 warrants in settlement of $15,000 of accounts payable,
resulting in a $7,800 gain on debt settlement.

During 2004, the Company refinanced $24,525 of a lease obligation.

See accompanying notes to consolidated financial statements
F-5

DYNECO CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

DynEco Corporation and Subsidiary ("DynEco" or the "Company") is
engaged primarily in developing and commercializing patented air and
hydrogen compressors, known collectively as UniVanetm devices, for
stationary and automotive fuel cells. During 2004 and 2003, the
Company's wholly-owned subsidiary, DynEco International, Inc., was
inactive.

Principles of Consolidation:

For the years ended December 31, 2004 and 2003, the financial
statements include the accounts of DynEco Corporation and its
wholly-owned subsidiary, DynEco International, Inc. All references
to "the Company" in these financial statements relate to the
consolidated entity. All significant intercompany accounts and
transactions have been eliminated in consolidation.

Use of Estimates:

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain
estimates and assumptions about the future outcome of current
transactions, which may affect the reporting and disclosure of these
transactions. Accordingly, actual results could differ from those
estimates used in the preparation of these financial statements.

Significant estimates in 2004 and 2003 include an estimate of the
deferred tax asset valuation allowance, allowance for doubtful
accounts on accounts receivable, amortization period on patent
rights, valuation of patent rights, depreciable lives on equipment
and valuation of stock based compensation.

Cash and cash Equivalents:

For the purpose of the cash flow statement, the Company considers
all highly liquid investments with original maturities of three
months or less at the time of purchase to be cash equivalents.

Accounts Receivable:

The Company believes that all accounts receivable are fully
collectible as of December 31, 2004 and 2003. Accordingly, no
allowance for doubtful accounts has been recorded. If management
becomes aware of collectability issues, based on a specific
identification basis due to the low quantity of customers, an
appropriate amount will be reserved and charged to operations when
that determination is made.

F-6

DYNECO CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003

Property and Equipment:

Property and equipment is stated at cost. Depreciation is computed
using the straight-line method and is expensed based upon the
estimated useful lives of the assets which ranges from three to
seven years. Expenditures for additions and improvements are
capitalized, while repairs and maintenance are expensed as incurred.

Patent Rights:

Patent rights consist of the costs incurred to obtain patent rights
associated with compressor technology. Patent rights are amortized
using the straight-line method over their seventeen to twenty year
life commencing upon patent issuance and the generation of revenues
utilizing the underlying technology. The Company reviews its patent
rights for impairment whenever events or changes in circumstances
indicate that its carrying amount may not be recoverable. If the
undiscounted future cash flows of the patent rights are less than
their carrying amounts, their carrying amounts are reduced to fair
value and an impairment loss is recognized. The Company recorded and
charged to operations impairment losses of $144,603 and $0, relating
to patent rights, for the years ended December 31, 2004 and 2003,
respectively.

Impairment of Other Long-Lived Assets:

The Company reviews other long-lived assets and certain identifiable
assets related to those assets for impairment whenever circumstances
and situations change such that there is an indication that the
carrying amounts may not be recoverable. If the undiscounted future
cash flows of the long-lived assets are less than their carrying
amounts, their carrying amounts are reduced to fair value and an
impairment loss is recognized.

Stock-Based Compensation:

The Company has three stock-based compensation plans, which are
described more fully in Note 9. The Company accounts for stock
options issued to employees in accordance with the provisions of
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for
Stock Issued to Employees," and related interpretations. As such,
compensation cost is measured on the date of grant as the excess of
the current market price of the underlying stock over the exercise
price. Such compensation amounts are amortized over the respective
vesting periods of the option grant. No stock-based employee
compensation cost is reflected in net income during 2004 and 2003,
as there were no option grants.

The Company adopted the disclosure provisions of SFAS No. 123
"Accounting for Stock-Based Compensation," and SFAS No. 148
"Accounting for Stock Based Compensation - Transition and
Disclosure," which permits entities to provide pro forma net income
(loss) and pro forma earnings (loss) per share disclosures for
employee stock option grants as if the fair-valued based method
defined in SFAS No. 123 had been applied.

F-7

DYNECO CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003

The Company accounts for stock options or warrants issued to
non-employees for goods or services in accordance with the fair
value method of SFAS 123. Under this method, the Company records an
expense equal to the fair value of the options or warrants issued.
The fair value is computed using an options pricing model.

The following table illustrates the effect on net income and
earnings per share if the company had applied the fair value
recognition provisions of FASB Statement No. 123, Accounting for
Stock-Based Compensation, to stock-based employee compensation as of
December 31:

2004 2003
--------- ----------
Net loss, as reported ................................. $(434,523) $ (598,889)

Add: Stock-based employee compensation expense included
in reported net income, net of related tax effects .. - -
--------- ----------

Deduct: Total stock-based compensation expense,
determined under fair value based method for all
awards, net of related tax effects .................. - -
--------- ----------
Proforma net loss ..................................... $(434,523) $ (139,402)
========= ==========
Basic and diluted per share information:
Net loss per share, as reported ....................... $ (0.01) $ (0.02)
========= ==========
Net loss per share, proforma .......................... $ (0.01) $ (0.02)
========= ==========

Research and Development

In accordance with Statement of Financial Accounting Standards No. 2
"Accounting For Research and Development Costs," the Company
expenses all research and development costs. Research and
development expenses included in General and administrative expenses
were $6,819 and $20,886 in 2004 and 2003, respectively. Compensation
expenses were $78,352 and $94,114 in 2004 and 2003, respectively.

Revenue Recognition:

The Company follows the guidance of the Securities and Exchange
Commission's Staff Accounting Bulletin 104 for revenue recognition.
In general, the Company records revenue when persuasive evidence of
an arrangement exists, services have been rendered or product
delivery has occurred, the sales price to the customer is fixed or
determinable, and collectability is reasonably assured. The
following policies reflect specific criteria for the various
revenues streams of the Company:

The Company had two sources of revenues totaling $286,900 and
$176,500 during the years ended December 31, 2004 and 2003
respectively; compressor revenues and contract consulting revenue.

Compressor revenues totaled $11,900 for 2004 and $1,500 for 2003.
Sales revenues for customer orders of compressors are recognized at
the time of order completion, defined as when all Company
manufacturing and internal inspection obligations related to that
order have been satisfied. This occurs upon order shipment.

F-8

DYNECO CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003

Contract consulting revenue totaled $275,000 for 2004 and $175,000
for 2003 and related to the Parker-Hannifin ("Parker") agreement
stipulating a monthly fee of $25,000 per month starting in June
2003. Contract consulting revenue is recognized for service
contracts at the time of satisfaction of all obligations pursuant to
the underlying contract. That contract terminated after November
2004.

Income Taxes:

The Company accounts for income taxes under the Financial Accounting
Standards No. 109 "Accounting for Income Taxes" ("Statement 109").
Under Statement 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled.
Under Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the
period, which includes the enactment date.

Basic and Diluted Net Income (Loss) Per Share:

Basic net income (loss) per common share (Basic EPS) excludes
dilution and is computed by dividing net income (loss) by the
weighted average number of common shares outstanding during the
year. Diluted net income per share (Diluted EPS) reflects the
potential dilution that could occur if stock options or other
contracts to issue common stock, such as convertible notes, were
exercised or converted into common stock. At December 31, 2004,
there were approximately 18,846,287 common stock equivalents
outstanding, which may dilute future earnings per share. There is no
calculation of fully diluted earnings per share in 2004 or 2003 due
to the Company reporting a net loss and the exercise or conversion
of common stock equivalents would have been anti-dilutive.

Concentration of Credit Risk and Other Concentrations

Financial instruments that potentially subject the Company to
concentration of credit risk consist principally of accounts
receivable. Accounts receivable arose principally from consulting
contract revenues with Parker-Hannifin Corporation in 2004, from the
sale of developmental compressor products to the Company's customer
base consisting of businesses in the stationary and automotive fuel
cell industries located throughout the world.

The Company performs ongoing credit evaluations of its customers'
financial condition, and generally requires no collateral from its
customers. The Company's credit losses are subject to general
economic conditions of the emerging fuel cell industry. At December
31, 2004, $6,797 or 99% of the accounts receivable balance was due
from one customer and in 2003, 100% of accounts receivable was due
from one customer.

F-9

DYNECO CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003

The Company recognized $275,000 or 96% in revenues for the year
ended December 31, 2004 from the same customer and recognized 99% of
revenues in 2003 from one customer.

As of December 31, 2004, the Company's business is dependent upon
three U.S. patents along with several related foreign patents and
foreign patents pending. All patents issued and pending are in the
name of a current officer/director of the Company, which the Company
licenses from that officer/director pursuant to the terms of a
Technology License Agreement (see Note 8).

The Company is relying on it Parker-Hannifin Exclusive Worldwide
License Agreement for future revenues (see Note 8).

Fair Value of Financial Instruments:

Statement of Financial Accounting Standards No. 107, "Disclosures
about Fair Value of Financial Instruments," requires disclosures of
information about the fair value of certain financial instruments
for which it is practicable to estimate the value. For purpose of
this disclosure, the fair value of a financial instrument is the
amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced sale or
liquidation.

The Company's financial instruments include cash, accounts
receivable, accounts payable, accrued liabilities, notes payable and
capital leases. The fair values of cash, accounts receivable,
accounts payable and accrued liabilities approximated carrying
values due to the short-term nature of these instruments. Fair
values for notes payable and capital leases are not readily
available, but the carrying values are believed to approximate fair
value.

New Accounting Pronouncements:

The Financial Accounting Standards Board has recently issued several
new accounting pronouncements, which may apply, to the Company.

In December 2004, the FASB issued SFAS 153 "Exchanges of
Non-monetary Assets" - an amendment of APB Opinion No. 29. This
Statement amended APB Opinion 29 to eliminate the exception for
non-monetary exchanges of similar productive assets and replaces it
with a general exception for exchanges of non-monetary assets that
do not have commercial substance. A non-monetary exchange has
commercial substance if the future cash flows of the entity are
expected to change significantly as a result of the exchange. The
adoption of this Standard is not expected to have any material
impact on the Company's consolidated financial position, results of
operations or cash flows.

In December 2004, the FASB issued SFAS 123 (revised 2004)
"Share-Based Payment." This Statement requires that the cost
resulting from all share-based transactions be recorded in the
financial statements. The Statement establishes fair value as the
measurement objective in accounting for share-based payment

F-10

DYNECO CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003

arrangements and requires all entities to apply a fair-value-based
measurement in accounting for share-based payment transactions with
employees. The Statement also establishes fair value as the
measurement objective for transactions in which an entity acquires
goods or services from non-employees in share-based payment
transactions. The Statement replaces SFAS 123 "Accounting for
Stock-Based Compensation" and supersedes APB Opinion No. 25
"Accounting for Stock Issued to Employees." The provisions of this
Statement will be effective for the Company beginning with its
fiscal year ending 2005. The Company is currently evaluating the
impact this new Standard will have on its consolidated financial
position, results of operations or cash flows.

Reclassifications

Certain amounts in the year 2003 consolidated financial statements
have been reclassified to conform to the year 2004 consolidated
presentation.

NOTE 2 GOING CONCERN

The Company has a net loss of $434,523 and net cash used in operations
of $176,100 for the year ended December 31, 2004, a working capital
deficiency of $638,325, accumulated deficit of $8,134,828, and a
stockholders' deficiency of $719,196 at December 31, 2004.
Additionally, the Company was in default of the repayment terms on
notes payable aggregating $35,000 at December 31, 2004. The Company
plans to settle the balance owing on these notes payable through
issuance of common stock in 2005. Because the Company's developmental
contracts generate insufficient operating capital and given these
financial results along with the Company's expected cash requirements
in 2005, additional capital investment will be necessary to develop and
sustain the Company's operations.

In February 2005, the Company raised $300,000 before offering costs
through the sale of convertible debentures with warrants.

Management believes that its plans will allow for adequate funding of
the Company's cash requirements through December 31, 2005, although no
assurance regarding this belief nor the success of these efforts can be
provided at this time.

In the event that management's plans as described above are not
successful, the Company may be required to delay or curtail its fuel
cell compressor development and commercialization programs or be forced
to further reduce its present operations. The financial statements do
not contain any adjustments, which might be necessary if the Company is
unable to continue as a going concern.

In addition, in September 2004, the Company received 90 days notice
from Parker Hannifin to cancel the consulting agreement as laid out in
the original exclusive worldwide license agreement dated May 1, 2003.
The consulting agreement terminated after November 2004.

F-11

DYNECO CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003

NOTE 3 PATENT RIGHTS

Patent rights are licensed from an officer/director (see Note 8) and
consisted of the following at December 31:

Estimated
Useful Life in
2004 2003 Years
--------- --------- --------------
Patent Rights ................ $ 223,995 $ 215,504 17 - 20
Less: accumulated amortization (79,392) (63,831)
Impairment Loss .............. (144,603) -
--------- ---------
Patent rights, net ........... $ - $ 151,673
========= =========

Amortization expense was $15,561 in 2004 and $13,099 in 2003.

During the year ending December 31, 2004, the Company recognized an
impairment loss of $144,603 on its UniVane(TM) patent rights. Although
the license agreement with a customer is still in effect, since license
revenues have not started and since the consulting agreement was
cancelled, the Company has been unable to project a positive cash flow
from this product or establish a fair market value of the patent using
other valuation techniques.

NOTE 4 PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 31:

Estimated
Useful Life in
2004 2003 Years
--------- --------- --------------
Machinery and equipment ...... $ 136,322 $ 148,114 3 - 10
Equipment under capital lease 108,840 95,999 7
Office furniture and equipment 57,865 57,865 3 - 10
Leasehold improvements ....... 4,615 4,615 5
--------- ---------
Total property and equipment . $ 307,642 $ 306,593
Less accumulated depreciation (248,194) (234,998)
--------- ---------
Property and equipment, net .. $ 59,448 $ 71,595
========= =========

Depreciation expense, including that on equipment under capital lease,
was $13,196 in 2004 and $21,197 in 2003.

NOTE 5 LOANS PAYABLE

Loans Payable

Technological Research and Development Authority Funding Agreement:

F-12

DYNECO CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003

In November 2002, the Company entered into an agreement with the
Florida Technological Research and Development Authority (TRDA),
which provides for up to $150,000 in funding for the development and
commercialization of DynEco's UniVanetm compressors and hydrogen
circulators for fuel cell applications. In consideration of the
funding, the Company is obligated to make royalty payments to TRDA
equal to five percent of future UniVanetm-related sales up to an
amount equal to three times the amount DynEco receives from TRDA.
During 2003, the entire $150,000 funding commitment was received.
The agreement expires in November 2012. Pursuant to EITF No. 88-18
"Sale of Future Revenues", the Company recorded the funding as a
current liability and in connection with APB No. 21 "Interest on
Receivables and Payables," accretes interest to the maximum value of
$450,000 through the November 2012 expiration date. At December 31,
2004, in connection with the accretion of interest, the Company
charged $19,633 to interest expense. The accreted balance due as of
December 31, 2004 was $187,052 and is included in loans payable in
the accompanying balance sheet.

Loan Payable to Finance Company

The Company refinanced a capital lease obligation through a new
finance company in November of 2004. The loan requires 60 monthly
payments of $521 consisting of principal and interest. One payment
of $521 was made during the year. The principal balance at December
31, 2004 was $24,219 consisting of $3,883 current portion included
in loans payable and $20,336 included in loans payable, net of
current portion.

NOTE 6 NOTES PAYABLE-SHAREHOLDERS

Notes payable - shareholders consisted of the following at December 31:

2004 2003
--------- ---------
Promissory notes payable - shareholders;
Interest bearing at rates ranging from 8% to
15 %, unsecured and due at various dates
through August 2007 ........................ $ 157,651 $ 159,655
Less current maturities .................... (37,102) (37,005)
--------- ---------
Long - term portion of notes payable -
shareholders .............................. $ 120,549 $ 122,650
========= =========

Future maturities of notes payable - shareholders are as follows for
years ending December 31:

2005 $ 37,102
2006 2,216
2007 118,333
--------
$157,651
========

The Company repaid $2,309 of notes payable to a shareholder during the
year ended December 30, 2004.

F-13

DYNECO CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003

At December 31, 2004, the Company was in default of the repayment terms
on notes aggregating $35,000. This amount is included in the current
maturities of notes payable on the accompanying consolidated balance
sheet at December 31, 2004.

NOTE 7 CAPITAL LEASES

The company repaid $14,603 of capital leases during the year ended
December 31, 2004 and an additional $24,525 was repaid through a
refinancing transaction discussed above.

The maturities of the Capital Lease Obligations are as follows:

2005 $ 1,538
=======

NOTE 8 COMMITMENTS AND CONTINGENCIES

Edwards Technology License Agreement:

During February 2004, under an amendment to a 1992 license
agreement, the Company was granted an exclusive license to utilize
certain compressor technology, which includes the current UniVanetm
technology, developed by a current officer/director in exchange for
future royalty payments based on the underlying technology-producing
income. The Company is obligated to pay the officer/director
quarterly royalties equal to one percent of sales or lease of
related products and sublicensed products and ten percent of any
royalty income in excess of $500,000 per year received from
sublicense agreements. The agreement expires upon the last to expire
of the license patents (July 2021) and the Company may cancel the
license agreement any time after December 2009, upon six months
written notice by the Company. As of December 31, 2004, no royalty
payments were incurred or due as no related sales have yet occurred.
(See Note 3)

Technological Research and Development Authority Funding Agreement:

See Note 5

Parker-Hannifin Exclusive Worldwide License Agreement and Consulting
Agreement:

During May 2003, the Company granted an exclusive worldwide license
agreement to Parker to manufacture and market the Company's
UniVanetm air compressors and hydrogen circulators. Under the
license agreement, the Company is precluded from manufacturing,
using, or selling its air compressors and hydrogen circulators to
anyone other than Parker-Hannifin and from developing or licensing
our technology air compressor and hydrogen circulator technology to
any other party. In consideration of the license, Parker is
obligated to pay the Company a royalty fee on a quarterly basis. The
royalty rate ranges from 15% of the licensed technology's net sales
for the first 50 units sold on an annual basis to 6% for units sold
in excess of 10,000 annually. Beginning in 2007, the minimum annual
royalty fee is $100,000. If units sold are insufficient to reach the
minimum annual royalty, Parker has the right to

F-14

DYNECO CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003

remit the difference or the Agreement converts to a non-exclusive
license. This Agreement expires at the later date of either the last
licensed UniVanetm patent expiration, or the final use of UniVanetm
-related technology by Parker-Hannifin.

Additionally in June 2003, the Company entered into a product
consulting agreement with Parker. In exchange for continued product
development and engineering services from the Company, Parker is
obligated to pay a monthly fee of $25,000 for the first year of
service. In December 2004, the consulting agreement terminated.

Operating Lease:

The Company currently leases space on a month-to-month basis. Rent
expense for the years ending December 31, 2004 and 2003 were $18,888
and $12,800, respectively.

NOTE 9 STOCKHOLDERS' DEFICIT

Common Stock Issued for Cash

During 2003, the Company issued 3,260,000 common shares for $0.12
per share or $391,200 and incurred offering costs of $17,220, which
were offset against the proceeds.

On December 15, 2004, the Company accepted $20,000 for 200,000
shares of common stock from three individuals. The transfer agent
has not yet issued the shares as of December 31, 2004 and
accordingly, the shares are reflected as issuable at December 31,
2004.

Common Stock Issued for Debt and Services:

During 2003, the Company issued 60,000 shares of common stock valued
at $7,200 and 120,000 warrants to purchase common stock at $.18 per
share, in settlement of $15,000 of accounts payable. In connection
with the settlement, the Company recognized a gain on debt
settlement totaling $7,800.

During 2003, the Company issued 2,775,000 shares of common stock
valued at $333,000 in exchange for consulting, legal, directors and
employee services.

All shares of common stock issued in settlement of debt or for
payment of services received were valued at the stated share price
actually received in the respective year's contemporaneous private
placement offerings. During 2004 and 2003, the stated share price
received was $.12.

On February 5, 2004, the Company settled an outstanding legal
services agreement from August 1, 2001, in which the holder was owed
$10,000 payable with 100,000 shares of issuable common stock, which
had been reflected in the Company's records

F-15

DYNECO CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003

as common stock issuable. In February 2004, the Company granted a
stock option in lieu of issuing shares. Under the terms of the
option, which expires August 1, 2006, the holder could exercise an
option to purchase 100,000 shares with an exercise price of $.10 per
share. The Company has determined that the exercise price has been
pre-paid but the option has not been exercised as of the balance
sheet date. As a result of this exchange of one equity instrument
for another, there is no additional compensation expense pursuant to
the rules of SFAS No. 123. Accordingly, $1,000 was reclassified from
common stock issuable to additional paid-in capital.

On April 27, 2004, the Company issued 200,000 shares of common stock
having a fair value of $24,000 to a Director for services rendered.
The shares were valued at $0.12 per share, which reflects recent
cash offering prices at that time of the Company's common stock
since the Company was not yet publicly trading its common stock (See
Note 10).

Common Stock Issuable:

At December 31, 2003, the Company was obligated to issue an
aggregate of 100,000 shares of common stock from a 2001 grant for
legal services incurred in connection with a private placement of
common stock. In February 2004, these shares due were cancelled in
exchange for stock options (see above). During 2003, the Company
issued 240,000 shares of common stock, which were issuable at
December 31, 2002. At December 31, 2004, 200,000 shares were
issuable pursuant to a stock sale (see above).

Common Stock Warrants:

At December 31, 2004, the Company had warrants outstanding as
follows:

Common Shares Exercise Price Expiration
Under Warrant Per Share Date
------------- -------------- --------------
12,185,120 $ .18 June 2007
4,000,000 $ .18 November 2005
100,000 $ .18 September 2006
100,000 $ .15 December 2006
----------
16,385,120
==========
==========
A summary of changes in stock warrants during 2004 and 2003 is
presented below:

2004 2003
----------- -----------
Outstanding at beginning of year 16,215,120 9,535,120
Granted ........................ 200,000 7,170,000
Expired or Cancelled ........... (30,000) (490,000)
----------- -----------
Balance at December 31, 2004 ... 16,385,120 16,215,120
=========== ===========

During April 2004, the Company granted a consultant 100,000 common
stock warrants for services rendered exercisable immediately at $.18
per share and expiring in September 2006. The warrants have an
$11,000 value based on a Black-Scholes

F-16

DYNECO CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003

options pricing computation using a fair value of $.12 per share
based on a recent offering, 2 year expected term, zero expected
dividends, volatility of 281% and a discount rate of 3.43%. The
$11,000 is included in General and Administrative expense for 2004.

Another 100,000 warrants were issued as part of the December 2004
common stock sale discussed above.

Stock-Based Compensation Plans:

At December 31, 2004, the Company has two stock-based compensation
plans, as follows: The 1993 Corporate Stock Option Plan, and the
2001 Equity Incentive Plan. The 1993 Advisors Stock Option Plan has
terminated however, outstanding grants under the plan will continue
according to their terms until exercised or expired.

The 1993 Corporate and Advisors Stock Option plans have an aggregate
1,500,000 shares of common stock reserved for issuance under the
plans. The Corporate Plan provides for the issuance of incentive
stock options and nonqualified stock options, whereas, the Advisors
Plan only allows for the issuance of nonqualified stock options.
Pursuant to the plans, the board of directors may grant options to
key individuals at their discretion. Options are granted under the
Corporate and Advisors plans on such terms and at prices as
determined by the compensation committee. All options granted by the
Company have been at prices equal to the current offering's private
placement stated per share prices.

The 2001 Equity Incentive Plan has an aggregate 1,000,000 shares of
common stock reserved for issuance under the plan. The Equity
Incentive Plan provides for the issuance of incentive stock options,
nonstatutory options, stock bonuses, and rights to purchase
restricted stock. The board of directors administers the Plan and
options, stock bonuses and stock rights are granted to key
individuals at their discretion. The maximum option term is ten
years. There have been no stock options, stock bonuses or stock
rights granted under the 2001 Equity Incentive Plan through December
31, 2004.

In February 2004, the Company issued 100,000 options exercisable at
$.10 as settlement of common stock issuable (see above).

At December 31, 2004, the Company had the following non-qualified
options outstanding and exercisable as follows:

Range of Common Shares Weighted Average Weighted Average
Exercise Price Under Option Remaining Life Exercise Price
-------------- ------------- ---------------- ----------------
$ .12 200,000 4.0 Years $ .12
$ .38 1,517,834 3.9 Years $ .38
$ .38 10,000 3.4 Years $ .38
$ .10 700,000 1.1 Years $ .10
$ .05 33,333 0.5 Years $ .05
---------
2,461,167

F-17

DYNECO CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003

All options are presently exercisable.

A summary of the changes in stock options outstanding during 2004
and 2003 is presented below:

2004 2003
--------------------- --------------------
Weighted Weighted
Average Average
Exercise Exercise
Shares Price Shares Price
---------- -------- --------- --------
Options outstanding at the 4,713,369 $ 0.33 4,783,369 $ 0.33
beginning of the year
Options granted 100,000 $ 0.10 - $ -
Options exercised - $ - - $ -
Options forfeited (2,352,202) $ (0.37) (70,000) $ (0.10)
---------- ---------
Options outstanding at end 2,461,167 $ 0.28 4,713,369 $ 0.33
of year
========== =========
Weighted average fair value
of options granted during
the year $ - $ -

NOTE 10 RELATED PARTY TRANSACTIONS

Employment Agreement:

On January 1, 2004, the Company entered into an employment agreement
with an individual acting as the Company's Chief Technical Officer
and Chief Executive Officer. Under the terms of the agreement, the
individual will receive a salary as follows:

Year ended December 31,
-----------------------
2004 $ 60,000
2005 $ 70,000
2006 $ 80,000
2007 $ 90,000
2008 $100,000

On June 29, 2004, the Company issued 200,000 shares of common stock
having a fair value of $24,000 to a director of the Board of
Directors for services rendered (See Note 9).

Patent rights are licensed from an officer/director of the Company.
(See Notes 3 and 8)

NOTE 11 INCOME TAXES

The effective tax rate varies from the maximum federal statutory rate
as a result of the following items:

F-18

DYNECO CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003

2004 2003
------- -------
Tax benefit computed at the maximum
federal statutory rate .................... (34.0)% (34.0)%
Net (increase) due to various
basis differences in assets and liabilities 5.1 .2
Net operating loss carryforward .............. 28.9 34.2
------ ------

Income tax provision ......................... - % - %
====== ======

The tax effect of temporary differences at December 31 were as follows:

2004 2003
----------- -----------
Asset:
Net operating loss carryforward .... $ 2,389,507 $ 2,887,000
Other individually immaterial items 81,125 110,000
----------- -----------
Net deferred tax asset before valuation
allowance ........................... 2,470,632 2,997,000
Less valuation allowance .............. (2,470,632) (2,997,000)
----------- -----------

Net deferred tax asset ................ $ - $ -
=========== ===========

For financial statement purposes, no tax benefit has been reported in
2004 or 2003 as the Company has had significant losses since inception
and realization of the tax benefits is uncertain. Accordingly, a
valuation allowance has been established for the full amount of the
deferred tax asset. The change in the valuation allowance was a
decrease of approximately $526,000 in 2004 and an increase of $179,000
in 2003.

At December 31, 2004, the Company had net operating loss carryforwards
as follows for income tax purposes:

Carryforward Net Operating
Expires December 31 Loss Carryforwards
------------------- ------------------
2005 550,000
2006 206,000
2007 236,000
2008 274,000
2009 716,000
2010 1,110,000
2011 1,718,000
2012 1,017,000
2018 436,000
2019 392,000
2020 195,000
2021 180,000
2022 337,000
2023 603,000
2024 425,000
-----------
$8,395,000

F-19

DYNECO CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003

The utilization of the carryforwards is dependent upon the ability to
generate sufficient taxable income during the carryforward period. In
addition, utilization of these carryforwards may be limited due to
ownership changes as defined in the Internal Revenue Code. Furthermore,
carryforwards relating to DynEco International, Inc., prior to its
March 31, 1994 acquisition (approximately $400,000) are subject to
separate return limitation regulations.

NOTE 12 GAIN ON DEBT SETTLEMENT

In 2003, the Company recognized a gain of $37,471 related to a
settlement of accounts payable for $7,800 and various statutory
expirations of accounts payable totaling $29,671.

NOTE 13 SUBSEQUENT EVENTS

Sale of Common Stock and Warrants

In January 2005, the Company issued an additional 250,000 common
shares and 125,000 warrants exercisable at $.15 per share for two
years in exchange for $25,000 cash.

Sale of Secured Convertible Promissory Notes and Warrants

On March 2, 2005, the Company completed a $300,000 financing
consisting of secured convertible promissory notes and common stock
purchase warrants. The notes mature on March 2, 2007. The notes are
convertible at the option of the two holders into shares of our
common stock, at a price of $.10 per share, subject to adjustment.
The notes are payable with interest at the rate of 5% per annum.
Principal amortization payments, each in the amount of $15,789.47
plus accrued interest, are to be paid in 19 equal monthly
installments, commencing July 2, 2005. Amortization payments may be
made in cash (accompanied by a 10% premium) or, at our option, in
registered common stock, at a 20% discount to market. Amortization
payments in stock are subject to (a) a limitation based upon the
weighted average trading volume of the common stock for the 20
trading days preceding the payment date and (b) a 4.99% cap on the
beneficial ownership that each investor may have at any point in
time while the notes and warrants are outstanding.

We also issued the investors immediately exercisable common stock
purchase warrants to purchase an aggregate of 7,500,000 shares of
common stock, consisting of (a) five year warrants to purchase
3,000,000 shares at an exercise price of $.14375 per share, subject
to adjustment, (b) five-year warrants to purchase 1,500,000 shares
at an exercise price of $.25 per share, subject to adjustment and
(c) five year warrants to purchase 3,000,000 shares at $.10 per
share, subject to adjustment. We may require the investors to
exercise the warrants described in (c) if the closing price for our
common stock is $.15 or more for 30 consecutive trading days, and
average daily volume during such period is at least 250,000 shares.
The exercise of warrants is also subject to the 4.99% cap on the
beneficial ownership that each investor may have at any point in
time while the notes and warrants are outstanding. If certain

F-20

DYNECO CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003

registration statement requirements as discussed below are not met,
the warrants holders may cashless exercise the warrants.

We agreed to file a registration statement covering the shares
issuable upon conversion or payment of the notes and exercise of the
warrants. The registration statement must be filed by April 30, 2005
and effective within 90 days from the filing date or we will incur
liquidated damages equal to 2% of the promissory note principal
balance per 30 days of non-compliance. Repayment of the notes is
collateralized by a general security interest in all of our assets.

If the Company does not issue unlegended shares under the provisions
of the agreements, the Company may incur additional liquidated
damages of $100 per day for each $10,000 of purchase price per 30
days of non-compliance.

We paid unaffiliated finders a total of $27,000, by the issuance of
promissory notes payable in the same manner as the investor notes,
and issued the finders five-year warrants to purchase a total of
270,000 shares of common stock, exercisable at $.14375 per share,
subject to adjustment. The warrants are valued at $27,000 (see
valuation method and assumptions below). In addition, we incurred
$21,726 of legal expenses relating to this offering. The total costs
of $75,726 are considered a debt issue cost deferred asset to be
amortized over the debt term.

The value of the 7,500,000 warrants issued with the convertible
promissory notes exceeded the $300,000 promissory note value and
accordingly, the full amount of the note of $300,000 was allocated
to the warrant value by recording a debt discount of $300,000 and a
credit to additional paid-in capital. The debt discount will be
amortized to interest expense over the debt term. The warrants were
valued using the Black-Scholes option pricing method with a common
stock price of $.10 based on recent offerings by the Company, 5 year
expected term, zero expected dividends, volatility of 294% and a
discount rate of 3.99%. As there was no value allocated to the debt,
there was no beneficial conversion amount to record.

F-21

NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE
UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES
OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF
ANY OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THE INFORMATION SET FORTH HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE HEREOF.

TABLE OF CONTENTS

Page
----

Prospectus Summary................... 3
Risk Factors......................... 6
Use of Proceeds...................... 10
Market for Common Stock
and Dividend Policy............... 10
Forward-Looking Statements........... 12 13,350,000 SHARES
Management's Discussion and
Analysis or Plan of Operation...... 13 DYNECO CORPORATION
Business............................. 17
Management........................... 25 PROSPECTUS
Executive Compensation............... 27
Certain Transactions................. 32
Principal Shareholders............... 32 ________________, 2005
Description of Securities............ 34
Selling Security Holders............. 36
Plan of Distribution................. 39
Shares Eligible for Future Sale...... 40
Legal Matters........................ 41
Experts.............................. 41
Additional Information............... 41
Financial Statements.................F-1

PART TWO

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed that
in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the act and is therefore unenforceable.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The estimated expenses in connection with the distribution of the
securities being registered, all of which are payable by the Company, are as
follows:

SEC Registration and Filing Fee....................... $ 202.00
Legal Fees and Expenses*.............................. $ 7,500.00
Accounting Fees and Expenses*......................... $ 5,000.00
Financial Printing*................................... $ 2,500.00
Transfer Agent Fees*.................................. $ 1,500.00
Blue Sky Fees and Expenses*........................... $ 0.00
Miscellaneous*........................................ $ 3,298.00
----------

TOTAL........................................ $20,000.00
==========
* Estimated

II-1

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

On July 1, 2002, we issued 1,041,560 shares of our common stock and
warrants to purchase an additional 2,083,120 shares to the following in
settlement of $125,000 of notes payable:

Name Shares Warrants
---- ------ --------

George Manning 208,320 416,640
James O'Halloran 208,320 416,640
Karl Huber 208,320 416,640
Thomas Edwards 83,280 166,560
Joseph Murphy 208,320 416,640
Harry Bakker 125,000 250,000

The warrants are exercisable until June 30, 2006, at an exercise price
of $.18 per share. Each of the note holders had a preexisting business
relationship with the Company, was provided access to business and financial
about the Company and had such knowledge and experience in business and
financial matters that they were able to evaluate the risks and merits of an
investment in the Company. Accordingly, the investors were "sophisticated"
within the meaning of federal securities laws. Each certificate evidencing
securities issued in the transaction included a legend to the effect that the
securities were not registered under the Securities Act and could not be resold
absent registration or the availability of an applicable exemption therefrom. No
general solicitation or advertising was used in connection with the transaction.
The transaction was exempt from the registration requirements of the Securities
Act by reason of Section 4(2) thereunder as a transaction by an issuer not
involving any public offering.

On July 16, 2002, we issued 150,000 shares of our common stock to
Theodore Boeger, a vendor, in settlement of $30,820 of accounts payable. The
vendor had a preexisting business relationship with the Company, was provided
access to business and financial about the Company and had such knowledge and
experience in business and financial matters that it was able to evaluate the
risks and merits of an investment in the Company. Accordingly, the investor was
"sophisticated" within the meaning of federal securities laws. Each certificate
evidencing securities issued in the transaction included a legend to the effect
that the securities were not registered under the Securities Act and could not
be resold absent registration or the availability of an applicable exemption
therefrom. No general solicitation or advertising was used in connection with
the transaction. The transaction was exempt from the registration requirements
of the Securities Act by reason of Section 4(2) thereunder as a transaction by
an issuer not involving any public offering.

On August 15, 2002, we issued 120,000 shares of our common stock and
warrants to purchase an additional 240,000 shares to Roger Jensen, our
intellectual property attorney in settlement of $14,400 of accounts payable. The
warrants are exercisable until June 30, 2006 at an exercise price of $.18 per
share. The vendor had a preexisting business relationship with the Company, was
provided access to business and financial about the Company and had such
knowledge and experience in business and financial matters that it was able to
evaluate the risks and merits of an investment in the Company. Accordingly, the
investor was "sophisticated" within the meaning of federal securities laws. Each
certificate evidencing securities issued in the transaction included a legend to
the effect that the securities were not registered under the Securities Act and
could not be resold absent registration or the availability of an applicable
exemption therefrom. No general solicitation or advertising was used in
connection with the transaction. The transaction was exempt from the
registration requirements of the Securities Act by reason of Section 4(2)
thereunder as a transaction by an issuer not involving any public offering.

II-2

From February 25, 2002 until December 18, 2002, we issued a total of
3,086,000 shares of our common stock and warrants to purchase an additional
6,172,000 shares to the following 38 accredited investors, for $370,320 of cash:

Name Shares Warrants
---- ------ --------

Robert Deford ................... 60,000 120,000
Michael Sifen ................... 120,000 240,000
Jerry Womack .................... 120,000 240,000
W.H. McCutcheon ................. 60,000 120,000
Margaret Galbraith .............. 182,500 365,000
Richard Galbraith ............... 182,500 365,000
Richard Lilly ................... 300,000 600,000
Stephen Brodsky ................. 60,000 120,000
David Commers ................... 60,000 120,000
Thomas Limberis ................. 120,000 240,000
John Linsmayer .................. 60,000 120,000
Thomas Sheets ................... 120,000 240,000
Steven Adelstein ................ 60,000 120,000
Herbert Holin ................... 120,000 240,000
Joseph Scaturro ................. 120,000 240,000
Captial Growth
Investment Trust .............. 210,000 420,000
Jason Sanders ................... 60,000 120,000
Irene Mirman .................... 180,000 360,000
Robert Schwartz
Rev. Living Trust ............. 30,000 60,000
Robert Schwartz
Profit Sharing Plan & Trust... 30,000 60,000
Warren Knight ................... 45,000 90,000
Joe Langer ...................... 60,000 120,000
Barry Lewis ..................... 60,000 120,000
Steven Sanders .................. 6,000 12,000
Thomas Tsatsos .................. 30,000 60,000
John Tsatsos .................... 30,000 60,000
Nick Radulovich ................. 60,000 120,000
William Botnan .................. 60,000 120,000
William Galbraith ............... 60,000 120,000
Milton Lampros .................. 20,000 40,000
Andrea Lampros .................. 20,000 40,000
Georgia Lampros
Obradovich ................... 20,000 40,000
Steven Horning .................. 120,000 240,000
Michael Minty ................... 60,000 120,000
Billy Moma ...................... 60,000 120,000
Jack McDonough .................. 60,000 120,000
Michael Head .................... 60,000 120,000

II-3

The warrants are exercisable until June 30, 2006, at an exercise price of $.18
per share. Each of the investors was provided access to business and financial
about the Company and had such knowledge and experience in business and
financial matters that they were able to evaluate the risks and merits of an
investment in the Company. Accordingly, the investors were "sophisticated"
within the meaning of federal securities laws. Each certificate evidencing
securities issued in the transaction included a legend to the effect that the
securities were not registered under the Securities Act and could not be resold
absent registration or the availability of an applicable exemption therefrom. No
general solicitation or advertising was used in connection with the transaction.
The transaction was exempt from the registration requirements of the Securities
Act by reason of Section 4(2) thereunder as a transaction by an issuer not
involving any public offering, and under Rule 506 of Regulation D.

On March 14, 2003, we issued 60,000 shares of common stock and warrants
to purchase an additional 120,000 shares to James Hittman, a vendor in
settlement of $15,000 of accounts payable. The warrants are exercisable until
June 30, 2006, at an exercise price of $.18 per share. The investor had a
preexisting business relationship with the Company, was provided access to
business and financial about the Company and had such knowledge and experience
in business and financial matters that it was able to evaluate the risks and
merits of an investment in the Company. Accordingly, the investor was
"sophisticated" within the meaning of federal securities laws. Each certificate
evidencing securities issued in the transaction included a legend to the effect
that the securities were not registered under the Securities Act and could not
be resold absent registration or the availability of an applicable exemption
therefrom. No general solicitation or advertising was used in connection with
the transaction. The transaction was exempt from the registration requirements
of the Securities Act by reason of Section 4(2) thereunder as a transaction by
an issuer not involving any public offering.

On June 30, 2003, we issued 350,000 shares of common stock to the
following four employees for services rendered, valued at the contemporaneous
cash sales price of $.12 per share.

Name Shares
---- ------

Michael Owens 125,000
Jennifer Dockery 75,000
Paul Esparza 75,000
Phil Keener 75,000

Each of the employees had a preexisting business relationship with the Company,
were provided access to business and financial about the Company and had such
knowledge and experience in business and financial matters that they were able
to evaluate the risks and merits of an investment in the Company. Accordingly,
the investors were "sophisticated" within the meaning of federal securities
laws. Each certificate evidencing securities issued in the transaction included
a legend to the effect that the securities were not registered under the
Securities Act and could not be resold absent registration or the availability
of an applicable exemption therefrom. No general solicitation or advertising was
used in connection with the transaction. The transaction was exempt from the
registration requirements of the Securities Act by reason of Section 4(2)
thereunder as a transaction by an issuer not involving any public offering.

On November 10, 2003, we issued 2,000,000 shares of common stock to MBN
Consulting, LLC, a consulting firm, for services rendered, valued at the
contemporaneous cash sales price of $.12 per share. The investor had a
preexisting business relationship with the Company, was provided access to
business and financial about the Company and had such knowledge and experience
in business and financial matters that it was able to evaluate the risks and
merits of an investment in the Company. Accordingly,

II-4

the investor was "sophisticated" within the meaning of federal securities laws.
Each certificate evidencing securities issued in the transaction included a
legend to the effect that the securities were not registered under the
Securities Act and could not be resold absent registration or the availability
of an applicable exemption therefrom. No general solicitation or advertising was
used in connection with the transaction. The transaction was exempt from the
registration requirements of the Securities Act by reason of Section 4(2)
thereunder as a transaction by an issuer not involving any public offering.

On November 18, 2003, we issued 2,000,000 shares of common stock to the
following four investors, for a purchase price of $240,000.

Name Shares
---- ------

Blaine Schmidt 400,000
Avonlea Homes Investments Ltd. 600,000
Corporate Capital Group Int'l 500,000
Centaurus Capital Corp. 500,000

In connection with this transaction, we also issued warrants to purchase
4,000,000 shares of common stock to Centaurus Capital Corp. On March 24, 2004,
Centaurus Capital Corp. assigned warrants to purchase 3,000,000 shares to
Sausilito Ltd. The warrants are exercisable until November 30, 2005
(subsequently extended to November 30, 2006), at an exercise price of $.18 per
share. Each of the investors was provided access to business and financial about
the Company and had such knowledge and experience in business and financial
matters that they were able to evaluate the risks and merits of an investment in
the Company. Accordingly, the investors were "sophisticated" within the meaning
of federal securities laws. Each certificate evidencing securities issued in the
transaction included a legend to the effect that the securities were not
registered under the Securities Act and could not be resold absent registration
or the availability of an applicable exemption therefrom. No general
solicitation or advertising was used in connection with the transaction. The
transaction was exempt from the registration requirements of the Securities Act
by reason of Section 4(2) thereunder as a transaction by an issuer not involving
any public offering.

On December 11, 2003, we issued 200,000 shares of common stock to each
of Kevin Hooper and Leonard Sculler, as consideration for their services as
directors of the Company, valued at the contemporaneous cash sales price of $.12
per share. Each of the directors had a preexisting business relationship with
the Company, were provided access to business and financial about the Company
and had such knowledge and experience in business and financial matters that
they were able to evaluate the risks and merits of an investment in the Company.
Accordingly, the investors were "sophisticated" within the meaning of federal
securities laws. Each certificate evidencing securities issued in the
transaction included a legend to the effect that the securities were not
registered under the Securities Act and could not be resold absent registration
or the availability of an applicable exemption therefrom. No general
solicitation or advertising was used in connection with the transaction. The
transaction was exempt from the registration requirements of the Securities Act
by reason of Section 4(2) thereunder as a transaction by an issuer not involving
any public offering.

On December 11, 2003, we issued 25,000 shares of common stock and
warrants to purchase an additional 50,000 shares to the following designees of
Schneider Weinberger & Beilly LLP, counsel to the Company, for services
rendered, valued at the contemporaneous cash sales price of $.12 per share:

II-5

Name Shares Warrants
---- ------ --------

Susan Schneider 11,750 22,500
Steven Weinberger 11,750 22,500
Sydney Monda 1,500 5,000

The warrants are exercisable until June 30, 2006, at an exercise price of $.18
per share. Schneider Weinberger & Beilly LLP had a preexisting business
relationship with the Company, was provided access to business and financial
about the Company and had such knowledge and experience in business and
financial matters that it was able to evaluate the risks and merits of an
investment in the Company. Accordingly, the investor was "sophisticated" within
the meaning of federal securities laws. Each certificate evidencing securities
issued in the transaction included a legend to the effect that the securities
were not registered under the Securities Act and could not be resold absent
registration or the availability of an applicable exemption therefrom. No
general solicitation or advertising was used in connection with the transaction.
The transaction was exempt from the registration requirements of the Securities
Act by reason of Section 4(2) thereunder as a transaction by an issuer not
involving any public offering.

From January 6, 2003 until April 7, 2003, we issued a total of
1,560,000 shares of common stock and warrants to purchase an additional
3,120,000 shares to the following 23 accredited investors, for a purchase price
of $187,200:

Name Shares Warrants
---- ------ --------

F. Patrick McQuillan
IRA Trust .................... 60,000 120,000
James McQuillan ................. 60,000 120,000
Douglas Michael ................. 60,000 120,000
The Kendall Family
Rev. Trust .................... 60,000 120,000
Steven Horning .................. 240,000 480,000
Thomas Limberis ................. 60,000 120,000
D.J. Fretland ................... 60,000 120,000
John Linsmaye ................... 60,000 120,000
David Commers ................... 60,000 120,000
Joe Langer ...................... 60,000 120,000
William Galbraith ............... 120,000 240,000
Lee Evans ....................... 60,000 120,000
Margaret Galbraith .............. 60,000 120,000
Robert Gosselin ................. 60,000 120,000
Robert Bailey ................... 60,000 120,000
Gerald Neal ..................... 30,000 60,000
Tony Walker ..................... 60,000 120,000
Brett Hutchings ................. 60,000 120,000
Joseph Hutchings ................ 60,000 120,000
Christopher Jones ............... 120,000 240,000
Gerald Neal ..................... 15,000 30,000
Richard Caveglia ................ 15,000 30,000

II-6

experience in business and financial matters that they were able to evaluate the
risks and merits of an investment in the Company. Accordingly, the investors
were "sophisticated" within the meaning of federal securities laws. Each
certificate evidencing securities issued in the transaction included a legend to
the effect that the securities were not registered under the Securities Act and
could not be resold absent registration or the availability of an applicable
exemption therefrom. No general solicitation or advertising was used in
connection with the transaction. The transaction was exempt from the
registration requirements of the Securities Act by reason of Section 4(2)
thereunder as a transaction by an issuer not involving any public offering, and
under Rule 506 of Regulation D.

On April 27, 2004, we issued 200,000 shares of common stock to George
Schell, as consideration for his services as a director of a Company, valued at
$.12 per share. Mr. Schell had a preexisting business relationship with the
Company, was provided access to business and financial about the Company and had
such knowledge and experience in business and financial matters that it was able
to evaluate the risks and merits of an investment in the Company. Accordingly,
the investor was "sophisticated" within the meaning of federal securities laws.
Each certificate evidencing securities issued in the transaction included a
legend to the effect that the securities were not registered under the
Securities Act and could not be resold absent registration or the availability
of an applicable exemption therefrom. No general solicitation or advertising was
used in connection with the transaction. The transaction was exempt from the
registration requirements of the Securities Act by reason of Section 4(2)
thereunder as a transaction by an issuer not involving any public offering.

During the period from December 7, 2004 to January 31, 2005, we sold an
aggregate of 450,000 shares of common stock for an aggregate purchase price of
$45,000, or $.10 per share. For each two shares purchased, the purchaser also
received one warrant to purchase one additional share of common stock,
exercisable until December 31, 2006, at an exercise price of $.15 per share. The
proceeds from the sales are being used for general working capital purposes. The
shares and warrants were sold to the following four persons, each of whom we had
reasonable grounds to believe was an "accredited investor" within the meaning of
Rule 501 of Regulation D under the Securities Act.

Name Shares Warrants
---- ------ --------

Ralph A. Beinser 100,000 50,000
Jason W. Sanders 50,000 25,000
Mitchell Levy 50,000 25,000
Norman Nick 250,000 125,000

Each investor was provided access to business and financial about us and had
such knowledge and experience in business and financial matters that it was able
to evaluate the risks and merits of an investment. Accordingly, each investor
was also "sophisticated" within the meaning of federal securities laws. Each
certificate evidencing securities issued to the investors included a legend to
the effect that the securities were not registered under the Securities Act and
could not be resold absent registration or the availability of an applicable
exemption therefrom. No general solicitation or advertising was used in
connection with the transactions. No commissions, similar compensation or other
remuneration was paid in connection with the sales. The issuance of the shares
and warrants was exempt from the registration requirements of the Securities Act
by reason of Section 4(2) of the Securities Act and the rules and regulations
thereunder, as transactions by an issuer not involving any public offering.

On March 2, 2005, we completed a $300,000 financing consisting of our
convertible promissory notes and common stock purchase warrants. The notes are
convertible at the option of the holder into

II-7

shares of our common stock, at a price of $.10 per share, subject to adjustment.
We also issued the investors common stock purchase warrants to purchase an
aggregate of 7,500,000 shares of common stock, consisting of (a) five year
warrants to purchase 3,000,000 shares at an exercise price of $.14375 per share,
subject to adjustment, (b) five-year warrants to purchase 1,500,000 shares at an
exercise price of $.25 per share, subject to adjustment and (c) five year
warrants to purchase 3,000,000 shares at $.10 per share, subject to adjustment.
The conversion of the notes and exercise of warrants is subject to a 4.99% cap
on the beneficial ownership that each investor may have at any point in time
while the notes and warrants are outstanding. Repayment of the notes is
collateralized by a general security interest in all of our assets. The notes
and warrants were sold to the following investors, each of whom we had
reasonable grounds to believe was an "accredited investor" within the meaning of
Rule 501 of Regulation D under the Securities Act:

Name Note Principal Warrants
---- -------------- --------

Alpha Capital Aktiengesellschaft $200,000 5,000,000
JM Investors $100,000 2,500,000

Each investor was provided access to business and financial about the Company
and had such knowledge and experience in business and financial matters that it
was able to evaluate the risks and merits of an investment. Each certificate
evidencing securities issued to the investors included a legend to the effect
that the securities were not registered under the Securities Act and could not
be resold absent registration or the availability of an applicable exemption
from registration. No general solicitation or advertising was used in connection
with the transactions. We paid unaffiliated finders a total of $27,000, by the
issuance of our promissory notes payable in the same manner as the investor
notes, and issued the finders five-year warrants to purchase a total of 270,000
shares of common stock, exercisable at $.14375 per share, subject to adjustment.
The issuance of the shares and warrants was exempt from the registration
requirements of the Securities Act by reason of Sections 4(2) and 4(6) of the
Securities Act and the rules and regulations, including Rule 506 of Regulation D
thereunder, as transactions by an issuer not involving a public offering.

ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Exhibit No. Description of Document
- ----------- -----------------------

3.1 Amended and Restated Articles of Incorporation (1)
3.2 Bylaws (2)
5 Legal Opinion of Schneider Weinberger & Beilly LLP **
10.1 2001 Equity Compensation Plan (3) *
10.2 1993 Corporate Stock Option Plan (4) *
10.3 1993 Advisors Option Plan (5) *
10.4 Amended and Restated Business Advisory and Consulting Agreement dated
August 17, 2004 with MBN Consulting, LLC (6)
10.5 License Agreement dated February 4, 2004 between DynEco Corporation
and Dr. Thomas Edwards (7)
10.6 Funding Agreement dated November 20, 2002 between DynEco Corporation
and the Florida Technological Research and Development Authority (8)
10.7 Employment Agreement dated January 1, 2004 with Thomas C.
Edwards, Ph.D. (9) *

II-8

10.8 Exclusive Worldwide License Agreement dated May 1, 2003 between
DynEco Corporation and Parker-Hannifin Corporation (10)
10.9 Agreements dated August 1, 2001 and February 5, 2004 with
Mark Vieno (11)
10.10 Supply Agreement dated August 6, 2004 with Parker-Hannifin
Corporation (12)
10.11 Subscription Agreement dated March 2, 2005 used in connection with
$300,000 financing transaction (13) 10.12 Form of Convertible
Promissory Note dated March 2, 2005 used in connection with $300,000
financing transaction (14)
10.13 Security Agreement dated March 2, 2005 used in connection with $300,000
financing transaction (15)
10.14 Collateral Agent Agreement dated March 2, 2005 used in connection
with $300,000 financing transaction (16)
10.15 Form of Non-Callable Warrant used in connection with $300,000
financing transaction (17)
10.16 Form of Callable Warrant used in connection with $300,000 financing
transaction (18)
14 Code of Ethics **
23.1 Consent of Schneider Weinberger & Beilly LLP (filed with Exhibit 5) **
23.2 Consent of Salberg & Company PA **
_________________________
* Compensatory Agreement.
** Filed herewith.

(1) Incorporated by reference to Exhibit 3.1 to the Company's registration
statement on Form SB-2, filed with the Securities and Exchange
Commission on August 23, 2004.
(2) Incorporated by reference to Exhibit 3.2 to the Company's registration
statement on Form SB-2, filed with the Securities and Exchange
Commission on February 6, 2004.
(3) Incorporated by reference to Exhibit 10.1 to the Company's registration
statement on Form SB-2, filed with the Securities and Exchange
Commission on February 6, 2004.
(4) Incorporated by reference to Exhibit 10.2 to the Company's registration
statement on Form SB-2, filed with the Securities and Exchange
Commission on February 6, 2004.
(5) Incorporated by reference to Exhibit 10.3 to the Company's registration
statement on Form SB-2, filed with the Securities and Exchange
Commission on February 6, 2004.
(6) Incorporated by reference to Exhibit 10.4 to the Company's registration
statement on Form SB-2, filed with the Securities and Exchange
Commission on August 23, 2004.
(7) Incorporated by reference to Exhibit 10.5 to the Company's registration
statement on Form SB-2, filed with the Securities and Exchange
Commission on February 6, 2004.
(8) Incorporated by reference to Exhibit 10.6 to the Company's registration
statement on Form SB-2, filed with the Securities and Exchange
Commission on February 6, 2004.
(9) Incorporated by reference to Exhibit 10.7 to the Company's registration
statement on Form SB-2, filed with the Securities and Exchange
Commission on February 6, 2004.
(10) Incorporated by reference to Exhibit 10.8 to the Company's registration
statement on Form SB-2, filed with the Securities and Exchange
Commission on February 6, 2004.
(11) Incorporated by reference to Exhibit 10.9 to the Company's registration
statement on Form SB-2, filed with the Securities and Exchange
Commission on June 18, 2004.
(12) Incorporated by reference to Exhibit 10.10 to the Company's
registration statement on Form SB-2, filed with the Securities and
Exchange Commission on August 23, 2004.
(13) Incorporated by reference to Exhibit 10.11 to the Company's Annual
Report on Form 10-KSB, filed with the Securities and Exchange
Commission on March 31, 2005.

II-9

(14) Incorporated by reference to Exhibit 10.12 to the Company's Annual
Report on Form 10-KSB, filed with the Securities and Exchange
Commission on March 31, 2005.
(15) Incorporated by reference to Exhibit 10.13 to the Company's Annual
Report on Form 10-KSB, filed with the Securities and Exchange
Commission on March 31, 2005.
(16) Incorporated by reference to Exhibit 10.14 to the Company's Annual
Report on Form 10-KSB, filed with the Securities and Exchange
Commission on March 31, 2005.
(17) Incorporated by reference to Exhibit 10.15 to the Company's Annual
Report on Form 10-KSB, filed with the Securities and Exchange
Commission on March 31, 2005.
(18) Incorporated by reference to Exhibit 10.16 to the Company's Annual
Report on Form 10-KSB, filed with the Securities and Exchange
Commission on March 31, 2005.

ITEM 28. UNDERTAKINGS

The undersigned Registrant also undertakes:

(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;

(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;

Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission (the "Commission") such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for

II-10

indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
preceding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such.

II-11

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Rockledge, Florida on April 14, 2005.

DYNECO CORPORATION

By: /s/ Thomas C. Edwards, Ph.D.
-----------------------------------------------------
Thomas C. Edwards, Ph.D. President, Chief Executive
Officer, Principal Executive Officer, Chief Financial
Officer and Principal Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this Form
SB-2 registration statement has been signed by the following persons in the
capacities and on the dates indicated.

SIGNATURE TITLE DATE
- --------- ----- ----

/s/ Thomas C. Edwards, Ph.D. President, Principal Executive April 14, 2005
- ---------------------------- Officer, Chief Executive Officer,
Thomas C. Edwards, Ph.D. Chief Financial Officer, Principal
Financial Officer and Director

/s/ George R. Schell Director April 14, 2005
- --------------------
George R. Schell

/s/ Leonard Sculler Director April 14, 2005
- -------------------
Leonard Sculler

/s/ Kevin Hooper Director April 14, 2005
- ----------------
Kevin Hooper