UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-KSB

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(Mark one)

[X]      Annual Report Under Section 13 or 15(d) of The Securities  Exchange Act
         of 1934

                  For the fiscal year ended December 31, 2002

[ ]      Transition Report Under Section 13 or 15(d) of The Securities  Exchange
         Act of 1934

                  For the transition period from ______________ to _____________

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                         Commission File Number: 0-19276
                                                 -------

                           Parallel Technologies, Inc.
        (Exact name of small business issuer as specified in its charter)

          Nevada                                                13-3140715
------------------------                                ------------------------
(State of incorporation)                                (IRS Employer ID Number)

                  211 West Wall Street, Midland, TX 79701-4556
                  --------------------------------------------
                    (Address of principal executive offices)

                                 (432) 682-1761
                                 --------------
                           (Issuer's telephone number)

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      Securities registered under Section 12 (b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:
                        Common Stock - $0.006 par value

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Check  whether  the issuer  has (1) filed all  reports  required  to be files by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period the Company was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes    No X
                                                             ---   ---

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of Company's knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [ ]

The issuer's revenues for the fiscal year ended December 31, 2003 was $-0-

The aggregate market value of voting common equity held by  non-affiliates as of
July 15, 2004 was approximately $19,243.66.

As of July 16,  2004,  there were  39,243,659  shares of Common Stock issued and
outstanding.

Transitional Small Business Disclosure Format : Yes    No X
                                                   ---   ---


<PAGE>

                           Parallel Technologies, Inc.

                                Index to Contents

                                                                     Page Number
                                                                     -----------
Part I

Item 1     Description of Business                                        3
Item 2     Description of Property                                       11
Item 3     Legal Proceedings                                             12
Item 4     Submission of Matters to a Vote of Security Holders           12

Part II

Item 5     Market for Company's Common Stock and Related
              Stockholders Matters                                       12
Item 6     Management's Discussion and Analysis or Plan of Operation     13
Item 7     Financial Statements                                          F-1
Item 8     Changes in and Disagreements with Accountants
              on Accounting and Financial Disclosures                    15
Item 8A       Controls and Procedures                                    15

Part III

Item 9     Directors, Executive Officers, Promoters and Control
              Persons; Compliance with Section 16(a) of the
              Exchange Act                                               15
Item 10    Executive Compensation                                        16
Item 11    Security Ownership of Certain Beneficial Owners
              and Management and Related Stockholder Matters             17
Item 12    Certain Relationships and Related Transactions                17
Item 13    Exhibits and Reports on 8-K                                   17

Signatures                                                               18














                                                                               2

<PAGE>

                  Caution Regarding Forward-Looking Information

Certain  statements  contained  in  this  annual  filing,   including,   without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

Such factors include, among others, the following:  international,  national and
local general economic and market conditions:  demographic  changes; the ability
of the Company to sustain,  manage or  forecast  its growth;  the ability of the
Company to successfully make and integrate acquisitions;  raw material costs and
availability;  new product  development and  introduction;  existing  government
regulations  and  changes  in,  or  the  failure  to  comply  with,   government
regulations;  adverse publicity;  competition; the loss of significant customers
or suppliers;  fluctuations  and  difficulty in forecasting  operating  results;
changes in business strategy or development  plans;  business  disruptions;  the
ability  to attract  and  retain  qualified  personnel;  the  ability to protect
technology; and other factors referenced in this and previous filings.

Given  these  uncertainties,  readers  of this Form  10-KSB  and  investors  are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company  disclaims  any  obligation  to update any such  factors or to  publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.


                                     PART I

Item 1 - Description of Business

Parallel Technologies,  Inc. (Company) was originally incorporated on October 6,
1982 under the laws of the State of Nevada as M, Inc. The Company was  initially
formed  as a  "blank  check"  entity  for  the  purpose  of  seeking  a  merger,
acquisition or other business  combination  transaction  with a privately  owned
entity seeking to become a publicly-owned  entity.  From October 6, 2982 through
June 3, 1991, the Company was not engaged in any business activity.

The  Company  completed  a public  offering  of its common  stock  pursuant to a
Registration  Statement on Form S-18 prior to March 31, 1983. This offering sold
approximately  19,815,000  shares of common stock at a price of $0.01 per share.
The aggregate  proceeds from this offering were  approximately  $198,150 and the
net proceeds were  approximately  $164,413,  after  deducting  certain  expenses
related  thereto.  These  shares  were  offered  directly  by the Company and no
underwriter was used in this transaction.

On June 3, 1991,  the Company  consummated a business  combination  transaction,
pursuant to an Agreement  and Plan of  Reorganization  (Agreement)  with Graphex
Imaging  Systems,   Inc.   whereby  Graphex  Imaging  Systems,   Inc.  became  a
wholly-owned  subsidiary of the Company.  This transaction  involved the Company
issuing approximately 9,750,000 shares of restricted,  unregistered common stock
in exchange  for 100.0% of the issued and  outstanding  common  stock of Graphex
Imaging Systems,  Inc. The full details of the Graphex  transaction is disclosed
in a Current  Report on Form 8-K,  dated June 3, 1991, as previously  filed with
the U. S. Securities and Exchange Commission.

Concurrent  with this  transaction,  the Company  changed its corporate  name to
Parallel Technologies, Inc.

In November 1993, the Company formed a new wholly-owned  subsidiary,  Healthcom,
Inc., a Nevada corporation, to devise, integrate and sell information processing
systems for the  medical/healthcare  industry.  This entity  started  operations
during 1994.

During 1995, the activities of both Graphex Imaging Systems, Inc. and Healthcom,
Inc. ceased to operate and the Company  disposed of all assets,  liabilities and
operating  activities related to both entities by December 31, 1995. The Company
has had no operations,  assets or liabilities  since the year ended December 31,
1995.

On February 23, 2004, the Company sold  20,000,000  shares of restricted  common
stock at $0.006  per  share  for  gross  proceeds  of  $120,000,  pursuant  to a
subscription  agreement,  to Glenn A. Little,  who became the Company's  current
Chief Executive Officer.  The Company relied upon Section 4(2) of The Securities
Act of 1933, as amended,  for an exemption from registration of these shares and
no underwriter was used in this  transaction.  As a result of this  transaction,


                                                                               3

<PAGE>

Glenn A. Little became the Company's controlling shareholder,  owning 20,000,000
shares of the  39,243,659  issued  and  outstanding  shares of the  Registrant's
common stock, or approximately  50.96%, at the close of business on February 23,
2004.

On  Tuesday,  June  8,  2004,  the U.  S.  Securities  and  Exchange  Commission
temporarily  suspended  trading in 26 separate stocks,  including the Company's,
because  the  respective   companies  had  failed  to  file  periodic  financial
statements as required by the Securities  Exchange Act of 1934, as amended.  The
Company, through the actions of prior management,  had been delinquent in filing
its Annual and Quarterly  Reports on either Form 10-KSB or Form 10-QSB since the
quarter ended September 30, 1994.

With the engagement of S. W. Hatfield, CPA, management, through a Current Report
on Form 8-K,  notified  the  general  public of it's  intent to file the  Annual
Report on Form 10-KSB for each of the years ended  December 31,  2001,  December
31, 2002 and December  31, 2003,  as soon as the  appropriate  records  could be
provided  to  the  Company's  newly  appointed   independent   certified  public
accounting  firm and the required audits of the Company's  financial  statements
may be  completed.  Additionally,  the  Company  intends  to file  the  required
Quarterly  Reports  on Form 10- QSB for each of the  respective  quarters  ended
March 31, June 30, and September 30, 2002;  March 31, June 30, and September 30,
2003 and March 31,  2004.  This  Annual  Report on Form  10-KSB is a part of the
commitment  of current  management to maintain  current  financial and corporate
information to the investing community.

The  Company's  equity  securities  are traded  under the symbol  "PLLK" on Pink
Sheets,  LLC. As such, the Company may be referred to as a trading and reporting
shell corporation.  Shell corporations have zero or nominal assets and typically
no  stated  or  contingent  liabilities.  Private  companies  wishing  to become
publicly  trading  may wish to merge with a shell (a  reverse  merger or reverse
acquisition) whereby the shareholders of the private company become the majority
of the  shareholders of the combined  company.  The private company may purchase
for cash all or a portion of the common shares of the shell corporation from its
major  stockholders.  Typically,  the Board and officers of the private  company
become the new Board and officers of the combined  Company and often the name of
the private company becomes the name of the combined entity.

The Company has very limited  capital,  and it is unlikely that the Company will
be able to take  advantage  of more  than one  such  business  opportunity.  The
Company intends to seek  opportunities  demonstrating the potential of long-term
growth as opposed to short-term  earnings.  However,  at the present  time,  the
Company has not identified any business opportunity that it plans to pursue, nor
has the Company  reached any  agreement  or  definitive  understanding  with any
person concerning an acquisition.

It is  anticipated  that the  Company's  officers  and  directors  will  contact
broker-dealers  and other persons with whom they are acquainted who are involved
with corporate finance matters to advise them of the Company's  existence and to
determine if any  companies or  businesses  that they  represent  have a general
interest in considering a merger or acquisition with a blind pool or blank check
or shell entity. No direct  discussions  regarding the possibility of merger are
expected to occur until after the effective date of this registration statement.
No  assurance  can be given that the Company  will be  successful  in finding or
acquiring a desirable  business  opportunity,  given the limited  funds that are
expected to be available  for  acquisitions.  Furthermore,  no assurance  can be
given  that  any  acquisition,  which  does  occur,  will be on  terms  that are
favorable to the Company or its current stockholders.

The Company's search will be directed toward small and medium-sized enterprises,
which have a desire to become public corporations. In addition these enterprises
may wish to satisfy,  either  currently or in the  reasonably  near future,  the
minimum  tangible  asset  requirement  in order to qualify shares for trading on
NASDAQ or on an exchange such as the American Stock Exchange. (See Investigation
and  Selection  of Business  Opportunities).  The Company  anticipates  that the
business  opportunities  presented  to it will (i)  either be in the  process of
formation,  or be recently organized with limited operating history or a history
of  losses  attributable  to   under-capitalization   or  other  factors;   (ii)
experiencing financial or operating  difficulties;  (iii) be in need of funds to
develop new  products or services or to expand into a new market,  or have plans
for rapid expansion through acquisition of competing  businesses;  (iv) or other
similar  characteristics.  The Company  intends to concentrate  its  acquisition
efforts on properties or businesses  that it believes to be  undervalued or that
it believes may realize a substantial  benefit from being publicly owned.  Given
the above factors,  investors  should expect that any acquisition  candidate may
have  little  or  no  operating   history,   or  a  history  of  losses  or  low
profitability.

The Company does not propose to restrict its search for investment opportunities
to any particular  geographical area or industry, and may, therefore,  engage in
essentially any business,  to the extent of its limited resources.  This include
industries such as service,  finance,  natural  resources,  manufacturing,  high


                                                                               4

<PAGE>

technology,  product  development,   medical,  communications  and  others.  The
Company's discretion in the selection of business opportunities is unrestricted,
subject to the  availability of such  opportunities,  economic  conditions,  and
other factors.

As a consequence of this registration of its securities,  any entity,  which has
an interest in being acquired by, or merging into the Company, is expected to be
an entity that desires to become a public Company and establish a public trading
market for its securities.  In connection with such a merger or acquisition,  it
is highly  likely  that an amount of stock  constituting  control of the Company
would either be issued by the Company or be purchased from the current principal
stockholders of the Company by the acquiring entity or its affiliates.  If stock
is purchased from the current principal stockholders,  the transaction is likely
to result in substantial gains to the current principal stockholders relative to
their  purchase  price for such stock.  In the Company's  judgment,  none of the
officers and directors would thereby become an underwriter within the meaning of
the  Section  2(11) of the  Securities  Act of 1933,  as  amended as long as the
transaction  is a  private  transaction  rather  than a public  distribution  of
securities. The sale of a controlling interest by certain principal shareholders
of the Company  would occur at a time when minority  stockholders  are unable to
sell their shares because of the lack of a public market for such shares.

Depending upon the nature of the transaction, the current officers and directors
of the Company may resign their  management and board positions with the Company
in connection with a change of control or acquisition of a business  opportunity
(See  Form of  Acquisition,  below,  and  Risk  Factors,  The  Company,  Lack of
Continuity of  Management).  In the event of such a  resignation,  the Company's
current  management  would  thereafter  have no control  over the conduct of the
Company's business.

It is  anticipated  that  business  opportunities  will  come  to the  Company's
attention from various sources,  including its officers and directors, its other
stockholders,   professional   advisors  such  as  attorneys  and   accountants,
securities  broker-  dealers,  venture  capitalists,  members  of the  financial
community,  and others who may present unsolicited proposals. The Company has no
plan,  understandings,  agreements,  or commitments with any individual for such
person to act as a finder of opportunities for the Company.

The  Company  does not foresee  that it will enter into a merger or  acquisition
transaction with any business with which its officers or directors are currently
affiliated. Should the Company determine in the future, contrary to the forgoing
expectations,  that a  transaction  with  an  affiliate  would  be in  the  best
interests  of the  Company  and its  stockholders,  the  Company is, in general,
permitted by Nevada law to enter into a transaction if: The material facts as to
the  relationship  or  interest  of the  affiliate  and as to  the  contract  or
transaction are disclosed or are known to the Board of Directors,  and the Board
in good faith  authorizes,  approves or ratifies the contract or  transaction by
the affirmative vote of a majority of the disinterested  directors,  even though
the disinterested directors constitute less than a quorum; or the material facts
as to the  relationship  or interest of the  affiliate and as to the contract or
transaction  are  disclosed  or are known to the  stockholders  entitled to vote
thereon, and the contract or transaction is specifically authorized, approved or
ratified  in  good  faith  by  vote  of the  stockholders;  or the  contract  or
transaction is fair as to the Company as of the time it is authorized,  approved
or ratified, by the Board of Directors or the stockholders.

Investigation and Selection of Business Opportunities

To a large extent, a decision to participate in a specific business  opportunity
may be made upon  management's  analysis of the  quality of the other  Company's
management  and  personnel,  the  anticipated  acceptability  of new products or
marketing concepts,  the merit of technological  changes,  the perceived benefit
the business  opportunity will derive from becoming a publicly held entity,  and
numerous  other  factors  which are  difficult,  if not  impossible,  to analyze
through the  application of any objective  criteria.  In many  instances,  it is
anticipated that the historical  operations of a specific  business  opportunity
may not  necessarily  be indicative of the potential for the future because of a
variety of factors,  including,  but not limited to, the possible need to expand
substantially,  shift marketing approaches,  change product emphasis,  change or
substantially augment management, raise capital and the like.

It is  anticipated  that the  Company  will not be able to  diversify,  but will
essentially be limited to the acquisition of one business opportunity because of
the Company's limited financing.  This lack of  diversification  will not permit
the Company to offset  potential  losses from one business  opportunity  against
profits from another,  and should be considered an adverse factor  affecting any
decision to purchase the Company's securities.

Certain types of business acquisition  transactions may be completed without any
requirement  that the Company first submit the  transaction to the  stockholders
for their approval.  In the event the proposed transaction is structured in such
a fashion that  stockholder  approval is not required,  holders of the Company's
securities (other than principal  stockholders  holding a controlling  interest)
should not anticipate  that they will be provided with  financial  statements or


                                                                               5

<PAGE>

any other documentation prior to the completion of the transaction.  Other types
of transactions require prior approval of the stockholders.

In the event a proposed business combination or business acquisition transaction
is  structured in such a fashion that prior  stockholder  approval is necessary,
the  Company  will be  required  to  prepare  a Proxy or  Information  Statement
describing  the proposed  transaction,  file it with the Securities and Exchange
Commission  for  review  and  approval,  and  mail a copy  of it to all  Company
stockholders  prior to holding a stockholders  meeting for purposes of voting on
the  proposal.  Minority  shareholders  that do not vote in favor of a  proposed
transaction  will then have the right,  in the event the transaction is approved
by the required number of stockholders, to exercise statutory dissenter's rights
and elect to be paid the fair value of their shares.

The  analysis  of  business  opportunities  will be  undertaken  by or under the
supervision  of  the  Company's  officers  and  directors,   none  of  whom  are
professional  business analysts (See Management).  Although there are no current
plans to do so, Company management might hire an outside consultant to assist in
the  investigation  and  selection  of business  opportunities,  and might pay a
finder's fee.  Since Company  management has no current plans to use any outside
consultants or advisors to assist in the investigation and selection of business
opportunities,  no policies have been adopted  regarding use of such consultants
or advisors,  the criteria to be used in selecting such consultants or advisors,
the  services to be provided,  the term of service,  or the total amount of fees
that may be paid.  However,  because of the limited resources of the Company, it
is likely that any such fee the Company agrees to pay would be paid in stock and
not in cash.

Otherwise,  in analyzing  potential business  opportunities,  Company management
anticipates that it will consider, among other things, the following factors:

     o    Potential for growth and  profitability  indicated by new  technology,
          anticipated market expansion, or new products;
     o    The Company's  perception of how any particular  business  opportunity
          will be  received by the  investment  community  and by the  Company's
          stockholders;
     o    Whether,  following the business combination,  the financial condition
          of the  business  opportunity  would be, or would  have a  significant
          prospect in the foreseeable  future of becoming,  sufficient to enable
          the securities of the Company to qualify for listing on an exchange or
          on a national automated  securities  quotation system, such as NASDAQ,
          so as to permit the trading of such  securities  to be exempt from the
          requirements  of Rule 15g-9  adopted by the  Securities  and  Exchange
          Commission (See Risk Factors The Company Regulations of Penny Stocks).
     o    Capital  requirements and anticipated  availability of required funds,
          to be provided by the Company or from operations,  through the sale of
          additional securities, through joint ventures or similar arrangements,
          or from other sources;
     o    The extent to which the business opportunity can be advanced;
     o    Competitive  position as compared to other  companies  of similar size
          and  experience  within  the  industry  segment  as well as within the
          industry as a whole;
     o    Strength and diversity of existing management or management  prospects
          that are scheduled for recruitment;
     o    The cost of  participation by the Company as compared to the perceived
          tangible and intangible values and potential; and
     o    The accessibility of required  management  expertise,  personnel,  raw
          materials,  services,  professional  assistance,  and  other  required
          items.

                                                                               6

<PAGE>

In regard to the  possibility  that the shares of the Company  would qualify for
listing on NASDAQ,  the current  standards for initial  listing  include,  among
other  requirements,  that the Company (1) have net tangible  assets of at least
$4.0 million, or a market  capitalization of $50.0 million, or net income of not
less that $0.75  million in its latest  fiscal  year or in two of the last three
fiscal  years;  (2) have a public float  (i.e.,  shares that are not held by any
officer, director or 10% stockholder) of at least 1.0 million shares; (3) have a
minimum  bid  price  of at  least  $4.00;  (4)  have  at  least  300  round  lot
stockholders (i.e., stockholders who own not less than 100 shares); and (5) have
an operating history of at least one year or have a market  capitalization of at
least $50.0 million.  Many, and perhaps most, of the business opportunities that
might be  potential  candidates  for a  combination  with the Company  would not
satisfy the NASDAQ listing criteria.

No one of the factors  described above will be controlling in the selection of a
business  opportunity,  and  management  will  attempt  to analyze  all  factors
appropriate to each  opportunity and make a determination  based upon reasonable
investigative  measures  and  available  data.  Potentially  available  business
opportunities  may occur in many  different  industries and at various stages of
development,  all of which will make the task of comparative  investigation  and
analysis  of  such  business  opportunities  extremely  difficult  and  complex.
Potential  investors  must  recognize  that,  because of the  Company's  limited
capital  available for  investigation  and  management's  limited  experience in
business analysis,  the Company may not discover or adequately  evaluate adverse
facts about the opportunity to be acquired.

The  Company  is  unable  to  predict  when  it may  participate  in a  business
opportunity.  It expects,  however,  that the analysis of specific proposals and
the selection of a business opportunity may take several months or more.

Prior to making a decision to participate in a business opportunity, the Company
will generally request that it be provided with written materials  regarding the
business  opportunity  containing  as much  relevant  information  as  possible,
including, but not limited to, such items as a description of products, services
and  Company  history;  management  resumes;  financial  information;  available
projections,  with related assumptions upon which they are based; an explanation
of proprietary products and services; evidence of existing patents,  trademarks,
or service marks, or rights thereto;  present and proposed forms of compensation
to  management;  a  description  of  transactions  between  such Company and its
affiliates  during the relevant  periods;  a description of present and required
facilities; an analysis of risks and competitive conditions; a financial plan of
operation and estimated capital requirements;  audited financial statements,  or
if  they  are not  available,  unaudited  financial  statements,  together  with
reasonable  assurance  that  audited  financial  statements  would be able to be
produced  within a  reasonable  period of time not to  exceed 60 days  following
completion of a merger or acquisition transaction; and the like.

As part of the Company's  investigation,  the Company's  executive  officers and
directors may meet personally  with management and key personnel,  may visit and
inspect  material  facilities,  obtain  independent  analysis or verification of
certain information provided,  check references of management and key personnel,
and take other reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise.

It is possible that the range of business  opportunities that might be available
for  consideration  by the Company  could be limited by the impact of Securities
and Exchange Commission regulations regarding purchase and sale of penny stocks.
The regulations would affect, and possibly impair, any market that might develop
in the  Company's  securities  until such time as they  qualify  for  listing on
NASDAQ or on an exchange which would make them exempt from  applicability of the
penny stock regulations. (See Risk Factors Regulation of Penny Stocks)

Company   management   believes  that  various  types  of  potential  merger  or
acquisition  candidates might find a business combination with the Company to be
attractive.  These include  acquisition  candidates  desiring to create a public
market for their shares in order to enhance liquidity for current  stockholders,
acquisition  candidates  which have long-term  plans for raising capital through
public sale of  securities  and believe that the possible  prior  existence of a
public  market  for  their  securities  would  be  beneficial,  and  acquisition
candidates  which  plan  to  acquire   additional  assets  through  issuance  of
securities rather than for cash, and believe that the possibility of development
of a public market for their  securities  will be of assistance in that process.
Acquisition  candidates,  which have a need for an immediate cash infusion,  are
not likely to find a potential  business  combination  with the Company to be an
attractive alternative.

                                                                               7

<PAGE>

Form of Acquisition

It is impossible to predict the manner in which the Company may participate in a
business opportunity.  Specific business  opportunities will be reviewed as well
as the  respective  needs and desires of the Company  and the  promoters  of the
opportunity  and,  upon the basis of the  review  and the  relative  negotiating
strength of the Company and such promoters, the legal structure or method deemed
by management to be suitable will be selected.  Such structure may include,  but
is not limited to leases, purchase and sale agreements, licenses, joint ventures
and other contractual  arrangements.  The Company may act directly or indirectly
through an interest in a partnership, corporation or other form of organization.
Implementing   such   structure  may  require  the  merger,   consolidation   or
reorganization  of the  Company  with other  corporations  or forms of  business
organization.  In  addition,  the present  management  and  stockholders  of the
Company  most likely will not have  control of a majority of the voting stock of
the Company following a merger or reorganization  transaction. As part of such a
transaction,  the Company's  existing directors may resign and new directors may
be appointed without any vote by stockholders.

It is likely  that the Company  will  acquire  its  participation  in a business
opportunity  through the  issuance of Common  Stock or other  securities  of the
Company.  Although the terms of any such  transaction  cannot be  predicted,  it
should be noted that in  certain  circumstances  the  criteria  for  determining
whether or not an acquisition is a so-called B tax free reorganization under the
Internal  Revenue  Code of 1986 as  amended,  depends  upon the  issuance to the
stockholders of the acquired  Company of a controlling  interest  (i.e.,  80% or
more) of the common stock of the combined  entities  immediately  following  the
reorganization.  If a transaction  were  structured  to take  advantage of these
provisions  rather than other a tax free provisions  provided under the Internal
Revenue Code, the Company's current  stockholders  would retain in the aggregate
20% or less of the total  issued and  outstanding  shares.  This could result in
substantial  additional dilution in the equity of those who were stockholders of
the Company prior to such reorganization. Any such issuance of additional shares
might also be done simultaneously with a sale or transfer of shares representing
a  controlling  interest in the Company by the current  officers,  directors and
principal stockholders.

It is anticipated that any new securities issued in any reorganization  would be
issued  in  reliance  upon  one  or  more  exemptions  from  registration  under
applicable  federal and state securities laws to the extent that such exemptions
are available.  In some  circumstances,  however, as a negotiated element of the
transaction,  the Company may agree to register  such  securities  either at the
time the  transaction is  consummated  or under certain  conditions at specified
times thereafter.  The issuance of substantial  additional  securities and their
potential  sale into any  trading  market  that might  develop in the  Company's
securities may have a depressive effect upon such market.

The  Company  will  participate  in  a  business   opportunity  only  after  the
negotiation  and  execution of a written  agreement.  Although the terms of such
agreement  cannot  be  predicted,  generally  such an  agreement  would  require
specific  representations and warranties by all of the parties thereto,  specify
certain events of default,  detail the terms of closing and the conditions which
must be satisfied by each of the parties thereto prior to such closing,  outline
the manner of bearing costs if the transaction is not closed, set forth remedies
upon default, and include miscellaneous other terms.

As a general  matter,  the Company  anticipates  that it,  and/or its  principal
stockholders will enter into a letter of intent with the management,  principals
or owners  of a  prospective  business  opportunity  prior to  signing a binding
agreement.  Such a letter  of intent  will set  forth the terms of the  proposed
acquisition but will not bind any of the parties to consummate the  transaction.
Execution of a letter of intent will by no means indicate that  consummation  of
an acquisition is probable.  Neither the Company nor any of the other parties to
the letter of intent  will be bound to  consummate  the  acquisition  unless and
until a definitive  agreement is executed.  Even after a definitive agreement is
executed,  it is possible that the acquisition  would not be consummated  should
any party elect to exercise any right  provided in the agreement to terminate it
on specific grounds.

It is anticipated that the investigation of specific business  opportunities and
the  negotiation,  drafting  and  execution of relevant  agreements,  disclosure
documents and other  instruments  will require  substantial  management time and
attention and  substantial  costs for  accountants,  attorneys and others.  If a
decision is made not to  participate  in a specific  business  opportunity,  the
costs incurred in the related investigation would not be recoverable.  Moreover,
because many providers of goods and services require compensation at the time or
soon after the goods and services are provided,  the inability of the Company to
pay until an  indeterminate  future time may make it impossible to produce goods
and services.

                                                                               8

<PAGE>

Investment Company Act and Other Regulation

The Company may participate in a business opportunity by purchasing,  trading or
selling the securities of such business.  The Company does not, however,  intend
to engage  primarily in such  activities.  Specifically,  the Company intends to
conduct its activities so as to avoid being classified as an investment  Company
under the Investment  Company Act of 1940 (the Investment Act), and therefore to
avoid  application  of  the  costly  and  restrictive   registration  and  other
provisions of the Investment Act, and the regulations promulgated thereunder.

The  Company's  plan of business may involve  changes in its capital  structure,
management,   control  and   business,   especially   if  it   consummates   the
reorganization  as  discussed  above.  Each of these areas is  regulated  by the
Investment Act, in order to protect purchasers of investment Company securities.
Since the Company will not register as an investment Company,  stockholders will
not be afforded these protections.

Competition

The  Company  expects to  encounter  substantial  competition  in its efforts to
locate attractive  business  combination  opportunities.  The competition may in
part come from business development companies,  venture capital partnerships and
corporations, small investment companies, brokerage firms, and the like. Some of
these  types of  organizations  are likely to be in a better  position  than the
Company to obtain access to attractive  business  acquisition  candidates either
because they have greater experience, resources and managerial capabilities than
the Company,  because they are able to offer immediate access to limited amounts
of cash,  or for a variety of other  reasons.  The Company also will  experience
competition from other public companies with similar business purposes,  some of
which may also have funds available for use by an acquisition candidate.

Employees

The Company currently has no employees. Management of the Company expects to use
consultants,  attorneys and accountants as necessary,  and does not anticipate a
need to engage any full-time  employees so long as it is seeking and  evaluating
business  opportunities.  The need for employees and their  availability will be
addressed  in  connection  with  the  decision  whether  or  not to  acquire  or
participate in specific business opportunities.

Risk Factors

Conflicts of Interest.  Certain  conflicts of interest exist between the Company
and its officers and directors. They have other business interests to which they
currently devote attention,  and are expected to continue to do so. As a result,
conflicts of interest may arise that can be resolved only through their exercise
of judgement in a manner which is consistent with their fiduciary  duties to the
Company. (See Management, Conflicts of Interest.)

It is  anticipated  that  the  Company's  principal  shareholders  may  actively
negotiate  or  otherwise  consent to the  purchase of a portion of their  common
stock as a condition to, or in connection with, a proposed merger or acquisition
transaction.  In this process, the Company's principal shareholders may consider
their own  personal  pecuniary  benefit  rather than the best  interest of other
Company  shareholders.  Depending  upon the  nature of a  proposed  transaction,
Company  shareholders other than the principal  shareholders may not be afforded
the opportunity to approve or consent to a particular transaction.

Possible Need for Additional Financing.  The Company has very limited funds, and
such funds,  may not be adequate to take  advantage  of any  available  business
opportunities.  Even if the  Company's  currently  available  funds  prove to be
sufficient to pay for its operations until it is able to acquire an interest in,
or complete a transaction with, a business opportunity,  such funds will clearly
not be sufficient to enable it to exploit the  opportunity.  Thus,  the ultimate
success of the Company  will depend,  in part,  upon its  availability  to raise
additional  capital.  In the event that the Company  requires  modest amounts of
additional  capital  to fund  its  operations  until  it is able to  complete  a
business acquisition or transaction,  such funds, are expected to be provided by
the  principal  shareholders.  However,  the  Company has not  investigated  the
availability,  source,  or  terms  that  might  govern  the  acquisition  of the
additional  capital  which is  expected  to be  required  in order to  exploit a
business  opportunity,  and will not do so until it has  determined the level of
need for  such  additional  financing.  There is no  assurance  that  additional
capital  will be  available  from any  source or, if  available,  that it can be
obtained on terms  acceptable to the Company.  If not  available,  the Company's
operations  will be  limited  to those  that  can be  financed  with its  modest
capital.

                                                                               9

<PAGE>

Regulation of Penny Stocks. The Company's securities, when available for trading
will be subject to a Securities and Exchange Commission rule that impose special
sales practice  requirements  upon  broker-dealers  who sell such  securities to
persons other than established customers or accredited investors. For purpose of
the rule, the phrase accredited  investor means, in general terms,  institutions
with assets in excess of $5,000,000, or individuals having a net worth in excess
of $1,000,000 or having an annual  income that exceeds  $200,000 (or that,  when
combined with a spouse's income, exceeds $300,000).  For transactions covered by
the rule, the broker dealer must make special suitability  determination for the
purchaser and receive the purchasers  written agreement to the transaction prior
to the sale.  Consequently,  the rule may affect the  ability of  broker-dealers
ability of broker-dealers  to sell the Company's  securities and ability of also
may affect the ability of purchasers  of the  Company's  securities to sell such
securities in any market that might develop therefor.

In addition,  the  Securities  and Exchange  Commission  has adopted a number of
rules to  regulate  penny  stocks.  Such rules  include  Rule  3a51-1  under the
Securities Act of 1933, an Rules 15g-1,  15g-2,  15g-3, 15g-4, 15g-5, 15g-6, and
15g-7  under the  Securities  Exchange  Act of 1934,  as  amended.  Because  the
securities of the Company may constitute  penny stocks within the meaning of the
rules, the rules would apply to the Company and to its securities. The rules may
further affect the ability of the Company's shareholders to sell their shares in
any public market, which might develop.

Shareholders  should  be  aware  that,  according  to  Securities  and  Exchange
Commission  Release No.  34-29093,  the market for penny  stocks has suffered in
recent years form patterns of fraud and abuse. Such patterns include (i) control
of the market for the  security  by one or a few  broker-dealers  that are often
related  to  the  promoter  or  issuer;  (ii)  manipulation  of  prices  through
prearranged  matching  of  purchases  and sales and false and  misleading  press
releases;  (iii) boiler room practices involving high-pressure sales tactics and
unrealistic price projections by inexperienced sales persons; (iv) excessive and
undisclosed bid-ask differential and markups by selling broker-dealers;  and (v)
the wholesale  dumping of the same  securities  by promoters and broker  dealers
after prices have been manipulated to a desired level,  along with the resulting
inevitable  collapse of those prices and with consequent  investor  losses.  The
Company's  management is aware of the abuses that have occurred  historically in
the penny stock market. Although the Company does not expect to be in a position
to dictate the behavior of the market or of broker  dealers who  participate  in
the market,  management will strive within the confines of practical limitations
to prevent the  described  patterns form being  established  with respect to the
Company's securities.

No  Operating  History.  The  Company  has no  current or  meaningful  operating
history,  revenues from operations or assets. The Company faces all of the risks
of a  new  business  and  the  special  risks  inherent  in  the  investigation,
acquisition,  or involvement in a new business opportunity.  The Company must be
regarded  as a new  or  start-up  venture  with  all of  the  unforeseen  costs,
expenses, problems, and difficulties to which such ventures are subject.

No Assurance of Success or Profitability. There is no assurance that the Company
will acquire a favorable business opportunity. Even if the Company should become
involved in a business opportunity, there is no assurance that it will generate
revenues or profits, or that the market price of the Company's outstanding
shares will be increased thereby.

Possible  Business  Not  Identified  and  Highly  Risky.  The  Company  has  not
identified and has no  commitments to enter into or acquire a specific  business
opportunity. As a result, it is only able to make general disclosures concerning
the risks and hazards of acquiring a business opportunity, rather than providing
disclosure  with respect to specific risks and hazards  relating to a particular
business opportunity.  As a general matter, prospective investors can expect any
potential business opportunity to be quite risky.

Type of Business  Acquired.  The type of business to be acquired may be one that
desires to avoid effecting its own public offering an the accompanying  expense,
delays,  uncertainties,  and federal  and state  requirements  which  purport to
protect investors.  Because of the Company's limited capital,  it is more likely
than not that any  acquisition  by the Company will involve  other parties whose
primary  interest is the  acquisition of control of a publicly  traded  Company.
Moreover,  any business  opportunity  acquired may be currently  unprofitable or
present other negative factors.

Impracticability  of Exhaustive  Investigation.  The Company's limited funds and
lack of full-time  management will make it  impracticable  to conduct a complete
and exhaustive  investigation and analysis of a business  opportunity before the
Company commits its capital or other resources  thereto.  Management  decisions,

                                                                              10

<PAGE>

therefore, will likely be made without detailed feasibility studies, independent
analysis,  market  surveys  and the like  which,  if the  Company had more funds
available to it, would be desirable.  The Company will be particularly dependent
in making decisions upon information provided by the promoter,  owner,  sponsor,
or  others  associated  with the  business  opportunity  seeking  the  Company's
participation.  A significant  portion of the Company's  available  funds may be
expended for  investigative  expenses and other expenses  related to preliminary
aspects of completing an  acquisition  transaction,  whether or not any business
opportunity investigated is eventually acquired.

Lack of  Diversification.  Because of the limited  financial  resources that the
Company  has, it is  unlikely  that the Company  will be able to  diversify  its
acquisitions or operations.  The Company's  probable  inability to diversify its
activities  into  more  than one area  will  subject  the  Company  to  economic
fluctuations within a particular business or industry and therefore increase the
risks associated with the Company's operations.

Need  for  Audited  Financial  Statements.  The  Company  will  require  audited
financial  statements  from any business that it proposes to acquire.  Since the
Company will be subject to the reporting  provisions of the Securities  Exchange
Act of 1934,  as amended  (the  Exchange  Act),  it will be  required to include
audited financial statements in its periodical reports for any existing business
it may acquire.  In addition,  the lack of audited  financial  statements  would
prevent the  securities  of the Company  from  becoming  eligible for listing on
NASDAQ,  the  automated   quotation  system  sponsored  by  the  Association  of
Securities Dealers, Inc., or on any existing stock exchange.  Moreover, the lack
of such  financial  statements  is  likely  to  discourage  broker-dealers  from
becoming  or  continuing  to serve as  market  makers in the  securities  of the
Company. Finally, without audited financial statements, the Company would almost
certainly be unable to offer securities under a Registration  Statement pursuant
to the  Securities  Act of 1933, and the ability of the Company to raise capital
would be significantly limited. Consequently, acquisitions prospects that do not
have, or are unable to provide  reasonable  assurances that they will be able to
obtain,  the required audited  statements would not be considered by the Company
to be appropriate for acquisition.

Other  Regulation.  An acquisition made by the Company may be of a business that
is subject to regulation or licensing by federal,  state, or local  authorities.
Compliance  with such  regulations  and  licensing can be expected to be a time-
consuming, expensive process and may limit other investment opportunities of the
Company.

Dependence upon Management;  Limited  Participation  of Management.  The Company
will be entirely  dependant upon the experience of its officers and directors in
seeking,  investigating,  and  acquiring  a  business  and in  making  decisions
regarding the Company's operations.  It is possible that, from time to time, the
inability  of such  persons to devote  their full time  attention to the Because
investors  will not be able to evaluate the merits of possible  future  business
acquisitions  by the  Company,  they should  critically  assess the  information
concerning the Company's officers and directors. (See Management.)

Lack of  Continuity  in  Management.  The  Company  does not have an  employment
agreement  with any of its officers or directors,  and as a result,  there is no
assurance  that they will  continue  to manage  the  Company in the  future.  In
connection with acquisition of a business opportunity,  it is likely the current
officers and  directors of the Company may resign.  A decision to resign will be
based  upon the  identity  of the  business  opportunity  and the  nature of the
transaction,  and is  likely  to  occur  without  the  vote  or  consent  of the
stockholders of the Company.

Indemnification of Officers and Directors. The Company's By-Laws provide for the
indemnification  of its,  directors,  officers,  employees,  and  agents,  under
certain  circumstances,  against  attorney's fees and other expenses incurred by
them in any  litigation  to  which  they  become  a  party  arising  from  their
association  with or activities on behalf of the Company.  The Company will also
bear  the  expenses  of  such  litigation  for any of its  directors,  officers,
employees, or agents, upon such persons promise to repay the Company therefor if
it is ultimately determined that any such person shall not have been entitled to
indemnification.   This  indemnification  policy  could  result  in  substantial
expenditures by the Company, which it may be unable to recoup.

Dependence upon Outside Advisors.  To supplement the business  experience of its
officers  and  directors,  the Company  may be  required to employ  accountants,
technical experts, appraisers,  attorneys, or other consultants or advisors. The
selection of any such advisors will, be made by the Company's officers,  without

                                                                              11

<PAGE>

any input by shareholders.  Furthermore, it is anticipated that such persons may
be  engaged  on an as needed  basis  without  a  continuing  fiduciary  or other
obligation to the Company.  In the event the officers of the Company consider it
necessary  to hire  outside  advisors,  they may elect to hire  persons  who are
affiliates, if those affiliates are able to provide the required services.

Leveraged  Transactions.  There  is a  possibility  that  any  acquisition  of a
business  opportunity  by the Company  may be  leveraged,  i.e.  the Company may
finance the  acquisition of the business  opportunity  by borrowing  against the
assets of the  business  opportunity  to be acquired,  or against the  projected
future revenues or profits of the business opportunity.  This could increase the
Company's exposure to larger losses. A business  opportunity  acquired through a
leveraged  transaction  is profitable  only if it generates  enough  revenues to
cover the  related  debt and  expenses.  Failure  to make  payments  on the debt
incurred to purchase  the  business  opportunity  could  result in the loss of a
portion or all of the assets  acquired.  There is no assurance that any business
opportunity  acquired through a leveraged  transaction will generate  sufficient
revenues to cover the related debt and expenses.

Competition.  The search for potentially  profitable  business  opportunities is
intensely  competitive.  The  Company  expects  to  be  at a  disadvantage  when
competing  with  many  firms  that  have  substantially  greater  financial  and
management  resources  and  capabilities  than the  Company.  These  competitive
conditions  will  exist  in  any  industry  in  which  the  Company  may  become
interested.

No Foreseeable Dividends. The Company has not paid dividends on its Common Stock
and does not anticipate paying such dividends in the foreseeable future.

Loss of Control by Present  Management and  Stockholders.  In  conjunction  with
completion of a business  acquisition,  it is anticipated  that the Company will
issue an amount of the  Company's  authorized  but  unissued  Common  Stock that
represents  the greater  majority of the voting power and equity of the Company.
In  conjunction  with  such  a  transaction,  the  Company's  current  Officers,
Directors,  and  principal  shareholders  could also sell all, or a portion,  of
their controlling block of stock to the acquired Company's stockholders.  Such a
transaction  would result in a greatly  reduced  percentage  of ownership of the
Company  by its  current  shareholders.  As a  result,  the  acquired  Company's
stockholders would control the Company, and it is likely that they would replace
the Company's management with persons who are unknown at this time.

No Public Market Exists.  While the Company's  equity  securities are listed for
trading  on Pink  Sheets,  LLC  under the  trading  symbol  "PLLK",  there is no
significant or consistent  public market for the Company's  common stock, and no
assurance  can be given that a market will  develop or that a  shareholder  will
ever be able to liquidate his investment without  considerable delay, if at all.
If a market should develop,  the price may be highly  volatile.  Factors such as
those discussed in this Risk Factors section may have a significant  impact upon
the market price of the securities offered hereby. Owing to the low price of the
securities,  many brokerage  firms may not be willing to effect  transactions in
the  securities.  Even if a  purchasers  finds a  broker  willing  to  effect  a
transaction in theses  securities,  the  combination  of brokerage  commissions,
state transfer taxes, if any, and any other selling costs may exceed the selling
price.  Further,  many  leading  institutions  will not  permit  the use of such
securities as collateral for any loans.

Rule 144 Sales. Of the 39,243,659 presently  outstanding shares of the Company's
stock,  20,000,000 shares are "restricted securities" within the meaning of Rule
144 under the Securities Act of 1933, as amended.  As restricted  shares,  these
shares may be resold only  pursuant to an  effective  registration  statement or
under the  requirements of Rule 144 or other  applicable  state  securities law.
Rule 144  provides in essence that a person who has held  restricted  securities
for a prescribed period, may under certain conditions,  sell every three months,
in brokerage  transactions,  a number of shares that does not exceed the greater
of 1.0% of a company's  outstanding  common stock or the average  weekly trading
volume  during the four calendar  weeks prior to sale.  There is no limit on the
amount of restricted  securities that may be sold by a  non-affiliate  after the
restricted  securities have been held by the owner, for a period of at least two
years.  A sale  under Rule 144,  or under an other  exemption  from the Act,  if
available,  or pursuant to subsequent  registrations  of common stock of present
shareholders, may have a depressive effect upon the price of the Common Stock in
may market that may  develop.  As of the date  hereof,  the current  controlling
shareholders have held approximately  50.96% of the total issued and outstanding
shares of the common  stock of the Company  thereof  since  February  13,  2004.
Accordingly,  such shares are not  currently  available for resale in accordance
with the provisions of Rule 144.

Blue Sky  Consideration.  Because the securities  registered  hereunder have not
been registered for resale under the Blue Sky laws of any state,  the holders of


                                                                              12

<PAGE>

such shares and persons who desire to purchase  them in any trading  market that
might  develop in the  future,  should be aware,  that there may be  significant
state  Blue Sky law  restrictions  upon the  ability  of  investors  to sell the
securities and of purchasers to purchase the securities.  Accordingly, investors
should  consider  the  secondary  market for the  Company's  securities  to be a
limited one.


Item 2 - Description of Property

The Company  currently  maintains a mailing  address at 211 West Wall,  Midland,
Texas 79701. The Company's telephone number there is (915) 682-1761.  Other than
this mailing address,  the Company does not currently  maintain any other office
facilities,  and does not anticipate the need for maintaining  office facilities
at any time in the  foreseeable  future.  The Company pays no rent or other fees
for the use of the mailing address as these offices are used virtually full-time
by other businesses of the Company's President.

It is  likely  that  the  Company  will not  establish  an  office  until it has
completed a business acquisition transaction,  but it is not possible to predict
what   arrangements  will  actually  be  made  with  respect  to  future  office
facilities.


Item 3 - Legal Proceedings

The  Company  is not a  party  to any  pending  legal  proceedings,  and no such
proceedings are known to be contemplated.


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

The Company has not conducted any meetings of shareholders  during the preceding
quarter or periods subsequent thereto.


                                     PART II

Item 5 - Market for Company's Common Stock and Related Stockholder Matters

Market for Trading

The  Company's  common stock is traded  under the symbol  "PLLK" on Pink Sheets,
LLC. As of July 15, 2004,  the Company has  approximately  477  shareholders  of
record.

There has been no regular,  established  trading market for the Company's common
stock  since the  completion  of the 1993  public  offering  via a  Registration
Statement on Form S-18. Further, to the knowledge of management,  there has been
no significant trading activity in the past three years.

Common Stock

The Company's  Articles of  Incorporation  authorize the issuance of 100,000,000
shares of $0.006 par value Common  Stock.  Each record holder of Common Stock is
entitled to one vote for each share held on all matters  properly  submitted  to
the  stockholders  for their vote. The Articles of  Incorporation  do not permit
cumulative voting for the election of directors.

Holders of outstanding  shares of Common Stock are entitled to such dividends as
may be  declared  from time to time by the  Board of  Directors  out of  legally
available funds; and, in the event of liquidation,  dissolution or winding up of
the affairs of the Company,  holders are entitled to receive,  ratably,  the net
assets of the Company  available to stockholders  after  distribution is made to
the  preferred  stockholders,  if  any,  who are  given  preferred  rights  upon
liquidation.  Holders of outstanding  shares of Common Stock have no preemptive,
conversion or redemptive  rights.  All of the issued and  outstanding  shares of
Common Stock are,  and all  unissued  shares when offered and sold will be, duly
authorized,  validly issued, fully paid, and non- assessable. To the extent that
additional  shares of the  Company's  Common  Stock  are  issued,  the  relative
interests of then existing stockholders may be diluted.

                                                                              13

<PAGE>

Transfer Agent

Our independent  stock transfer agent is Jersey Transfer and Trust Co.,  located
in Verona, New Jersey.  Their mailing address and telephone number is: P. O. Box
26, Verona, New Jersey 07044; (973) 239-2712.

Reports to Stockholders

The Company  plans to furnish its  stockholders  with an annual  report for each
fiscal year ending December 31 containing  financial  statements  audited by its
independent certified public accountants. In the event the Company enters into a
business  combination  with  another  Company,  it is the present  intention  of
management to continue furnishing annual reports to stockholders.  Additionally,
the Company  may, in its sole  discretion,  issue  unaudited  quarterly or other
interim  reports to its  stockholders  when it deems  appropriate.  The  Company
intends to comply with the periodic  reporting  requirements  of the  Securities
Exchange Act of 1934.

Dividend policy

No dividends  have been paid to date and the Company's  Board of Directors  does
not anticipate  paying  dividends in the foreseeable  future.  It is the current
policy to retain all earnings, if any, to support future growth and expansion.


Item 6 - Management's Discussion and Analysis or Plan of Operation

General

Parallel Technologies,  Inc. (Company) was originally incorporated on October 6,
1982 under the laws of the State of Nevada as M, Inc. The Company was  initially
formed  as a  "blank  check"  entity  for  the  purpose  of  seeking  a  merger,
acquisition or other business  combination  transaction  with a privately  owned
entity seeking to become a publicly-owned  entity.  From October 6, 2982 through
June 3, 1991, the Company was not engaged in any business activity.

The  Company  completed  a public  offering  of its common  stock  pursuant to a
Registration  Statement on Form S-18 prior to March 31, 1983. This offering sold
approximately  19,815,000  shares of common stock at a price of $0.01 per share.
The aggregate  proceeds from this offering were  approximately  $198,150 and the
net proceeds were  approximately  $164,413,  after  deducting  certain  expenses
related  thereto.  These  shares  were  offered  directly  by the Company and no
underwriter was used in this transaction.

On June 3, 1991,  the Company  consummated a business  combination  transaction,
pursuant to an Agreement  and Plan of  Reorganization  (Agreement)  with Graphex
Imaging Systems,  Inc.  whereby Graphex Imaging  Systems,  Inc. became a wholly-
owned subsidiary of the Company.  This transaction  involved the Company issuing
approximately  9,750,000  shares of  restricted,  unregistered  common  stock in
exchange  for  100.0% of the  issued  and  outstanding  common  stock of Graphex
Imaging Systems,  Inc. The full details of the Graphex  transaction is disclosed
in a Current  Report on Form 8-K,  dated June 3, 1991, as previously  filed with
the U. S. Securities and Exchange Commission.

Concurrent  with this  transaction,  the Company  changed its corporate  name to
Parallel Technologies, Inc.

In November 1993, the Company formed a new wholly-owned  subsidiary,  Healthcom,
Inc., a Nevada corporation, to devise, integrate and sell information processing
systems for the  medical/healthcare  industry.  This entity  started  operations
during 1994.

During 1995, the activities of both Graphex Imaging Systems, Inc. and Healthcom,
Inc. ceased to operate and the Company  disposed of all assets,  liabilities and
operating activities related to both entities by December 31, 1995.

The Company has had no operations,  assets or  liabilities  since the year ended
December 31, 1995.

                                                                              14
<PAGE>

Results of Operations

The  Company  had no revenue  for the years  ended  December  31, 2002 and 2001,
respectively.

General and  administrative  expenses for the years ended  December 31, 2002 and
2001 were  approximately  $2,000 and $2,000,  respectively.  These costs  relate
solely to charges from the Company's Stock Transfer agent.  The Company has been
delinquent in providing periodic filings pursuant to the Securities Exchange Act
of 1934. It is anticipated that future  expenditure  levels will increase as the
Company  intends to fully  comply  with it's  periodic  reporting  requirements.
Earnings per share for the respective years ended December 31, 2002 and 2001 was
$0.00 and $0.00 based on the  weighted-average  shares issued and outstanding at
the end of each respective year.

The  Company  does not  expect  to  generate  any  meaningful  revenue  or incur
operating  expenses for purposes  other than  fulfilling  the  obligations  of a
reporting  company  under the  Securities  Exchange Act of 1934 unless and until
such time that the Company's operating subsidiary begins meaningful operations.

At December 31, 2002 and 2001, respectively,  the Company had working capital of
approximately $(21,500) and $(19,500), respectively.

On February 23, 2004, the Company sold  20,000,000  shares of restricted  common
stock at $0.006  per  share  for  gross  proceeds  of  $120,000,  pursuant  to a
subscription  agreement,  to Glenn A. Little,  who became the Company's  current
Chief Executive Officer.  The Company relied upon Section 4(2) of The Securities
Act of 1933, as amended,  for an exemption from registration of these shares and
no underwriter was used in this  transaction.  As a result of this  transaction,
Glenn A. Little became the Company's controlling shareholder,  owning 20,000,000
shares of the  39,243,659  issued  and  outstanding  shares of the  Registrant's
common stock, or approximately  50.96%, at the close of business on February 23,
2004.

It  is  the  intent  of  management  and  significant  stockholders  to  provide
sufficient  working  capital  necessary to support and preserve the integrity of
the  corporate  entity.  However,  there  is  no  legal  obligation  for  either
management or significant  stockholders  to provide  additional  future funding.
Should this pledge fail to provide financing, the Company has not identified any
alternative  sources.  Consequently,   there  is  substantial  doubt  about  the
Company's ability to continue as a going concern.

The  Company's  need for  capital  may  change  dramatically  as a result of any
business acquisition or combination transaction.  There can be no assurance that
the Company will  identify any such  business,  product,  technology  or company
suitable for acquisition in the future.  Further, there can be no assurance that
the Company would be successful in  consummating  any  acquisition  on favorable
terms  or that it will be able  to  profitably  manage  the  business,  product,
technology or company it acquires.

Plan of Business

General

The  Company  intends to locate and  combine  with an  existing,  privately-held
company which is profitable  or, in  management's  view,  has growth  potential,
irrespective of the industry in which it is engaged.  However,  the Company does
not  intend  to  combine  with a  private  company  which may be deemed to be an
investment  company subject to the Investment Company Act of 1940. A combination
may be structured as a merger,  consolidation,  exchange of the Company's common
stock for stock or assets or any other form which  will  result in the  combined
enterprise's becoming a publicly-held corporation.

Pending  negotiation and consummation of a combination,  the Company anticipates
that it will have, aside from carrying on its search for a combination  partner,
no business  activities,  and, thus, will have no source of revenue.  Should the
Company incur any significant  liabilities prior to a combination with a private
company, it may not be able to satisfy such liabilities as are incurred.

If the Company's management pursues one or more combination opportunities beyond
the  preliminary  negotiations  stage and those  negotiations  are  subsequently
terminated,  it is  foreseeable  that such efforts  will  exhaust the  Company's
ability to continue to seek such combination opportunities before any successful
combination can be consummated.  In that event,  the Company's common stock will
become  worthless  and  holders of the  Company's  common  stock will  receive a
nominal distribution, if any, upon the Company's liquidation and dissolution.


                                                                              15

<PAGE>

Combination Suitability Standards

In its pursuit for a combination  partner,  the Company's  management intends to
consider only  combination  candidates  which are profitable or, in management's
view, have growth potential.  The Company's management does not intend to pursue
any  combination  proposal  beyond the  preliminary  negotiation  stage with any
combination  candidate which does not furnish the Company with audited financial
statements  for at least its most  recent  fiscal year and  unaudited  financial
statements for interim periods  subsequent to the date of such audited financial
statements, or is in a position to provide such financial statements in a timely
manner.  The Company will, if necessary  funds are available,  engage  attorneys
and/or accountants in its efforts to investigate a combination  candidate and to
consummate a business  combination.  The Company may require  payment of fees by
such combination  candidate to fund the investigation of such candidate.  In the
event such a combination candidate is engaged in a high technology business, the
Company may also obtain  reports from  independent  organizations  of recognized
standing  covering the technology  being developed and/or used by the candidate.
The  Company's  limited  financial  resources may make the  acquisition  of such
reports  difficult  or even  impossible  to obtain  and,  thus,  there can be no
assurance  that the Company  will have  sufficient  funds to obtain such reports
when considering combination proposals or candidates.  To the extent the Company
is  unable to  obtain  the  advice or  reports  from  experts,  the risks of any
combined enterprise's being unsuccessful will be enhanced.  Furthermore,  to the
knowledge of the Company's officers and directors, neither the candidate nor any
of  its  directors,   executive  officers,  principal  shareholders  or  general
partners:

     1)   will not have been  convicted of  securities  fraud,  mail fraud,  tax
          fraud, embezzlement,  bribery, or a similar criminal offense involving
          misappropriation  or theft of funds,  or be the  subject  of a pending
          investigation or indictment involving any of those offenses;

     2)   will not have been subject to a temporary or permanent  injunction  or
          restraining  order arising from unlawful  transactions  in securities,
          whether as issuer, underwriter, broker, dealer, or investment advisor,
          may be the subject of any pending  investigation  or a defendant  in a
          pending  lawsuit  arising from or based upon  allegations  of unlawful
          transactions in securities; or

     3)   will not have been a defendant in a civil  action which  resulted in a
          final judgement against it or him awarding damages or rescission based
          upon unlawful practices or sales of securities.

The Company's  officers and directors will make these  determinations  by asking
pertinent  questions of the  management of prospective  combination  candidates.
Such persons will also ask pertinent  questions of others who may be involved in
the combination proceedings.  However, the officers and directors of the Company
will not generally take other steps to verify independently information obtained
in this manner which is favorable.  Unless  something  comes to their  attention
which  puts  them on  notice  of a  possible  disqualification  which  is  being
concealed  from them,  such persons will rely on  information  received from the
management of the prospective  combination  candidate and from others who may be
involved in the combination proceedings.

Liquidity and Capital Resources

The Company, for all practical purposes,  remains dormant and has experienced no
significant  change in liquidity or capital  resources or  stockholders  equity.
Management  has  no  plans  or  commitments  for  capital  requirements  in  the
foreseeable future.

It  is  the  intent  of  management  and  significant  stockholders  to  provide
sufficient  working  capital to preserve the integrity of the corporate  entity,
however,  there are no commitments to provide additional funds have been made by
management  or other  stockholders,  and the  Company  has no plans,  proposals,
arrangements  or  understandings  with  respect  to  the  sale  or  issuance  of
additional  securities  prior  to  the  location  of  a  merger  or  acquisition
candidate. Accordingly, there can be no assurance that any additional funds will
be available to the Company to allow it to cover its  expenses.  Notwithstanding
the forgoing,  to the extent that  additional  funds are  required,  the Company
anticipates  receiving  such  funds in the  form of  advancements  from  current
shareholders  without  issuance of  additional  shares or other  securities,  or
through the private  placement of  restricted  securities  rather than through a
public offering.  The Company does not currently contemplate making a Regulation
S offering.

Regardless of whether the  Company's  cash assets prove to be inadequate to meet
the Company's  operational needs, the Company might seek to compensate providers
of services by issuances  of stock in lieu of cash.  For  information  as to the
Company's  policy in regard to payment  for  consulting  services,  see  Certain
Relationships and Transactions.

                                                                              16

<PAGE>

Item 7 - Index to Financial Statements

The required financial statements begin on page F-1 of this document.


Item 8 -  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosures

On March 25, 2004,  reporting an event  occurring on March 14, 2004, the Company
filed a Current  Report on Form 8-K  reporting  a change in control  transaction
through the sale of 20,000,000 shares of restricted,  unregistered  common stock
to Glenn A. Little. Mr. Little was concurrently elected Chief Executive Officer,
President,  Chief  Operating  Officer,  Chairman of the Board of Directors,  and
Secretary and Treasurer of the Company.  With Mr. Little's assumption of control
of the  Company,  he began to  undertake  the  necessary  steps to  correct  the
previous  administration's  lapses in filing the required periodic reports under
the Securities Exchange Act of 1934 ('34 Act).

On February 28, 1996,  Parallel  Technologies,  Inc. (Company) was notified that
it's then appointed auditors,  Grant Thornton,  through their Melville, New York
office,  was resigning  due to reasons as set forth in their  letter,  which was
filed as a  component  of a Current  Report on Form 8-K filed by the  Company on
March 12, 1996.

Grant Thornton's work was to be performed on the Company's financial  statements
for the year ended  December 31, 1994 and their work was not  completed due to a
lack of available  capital to complete the  Company's  then  business  plan.  No
Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q have been filed by
the  Company  since the Form 10-Q for the  quarter  ended  September  30,  1994.
Further,  the  Company has not had an auditor of record  since Grant  Thornton's
resignation in February 1996.

Engagement of S. W. Hatfield, CPA
---------------------------------

On June 15,  2004,  as a result of the  change in control  of the  Company,  the
Company's Sole Director  authorized  the  engagement of S. W.  Hatfield,  CPA of
Dallas,  Texas (SWHCPA) as the Company's new independent  auditors.  The Company
did not consult with SWHCPA at any time prior to the February 18, 2004 change in
control or  subsequent  thereto,  including the Company's two most recent fiscal
years ended  December  31, 2003 and 2002,  and the  subsequent  interim  periods
through  the date of this  Report,  regarding  any of the  matters or events set
forth in Item 304(a)(2)(i) and (ii) of Regulation S-B.

Item 8A - Controls and Procedures

As of December  31,  2003,  evaluation  of the  effectiveness  of the design and
operation of Parallel  Technologies,  Inc.'s disclosure  controls and procedures
was carried out under the supervision and with the  participation of management,
including our Chief Executive and Financial Officer. Based upon that evaluation,
our  Chief  Executive  and  Financial   Officer  concluded  that  the  Company's
disclosure controls and procedures are effective. There have been no significant
changes in our internal  controls or in other  factors that could  significantly
affect internal controls subsequent to the date we carried out the evaluation.


                                    PART III

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

The directors and executive officers serving the Company are as follows:

         Name                  Age                 Position Held and Tenure
         ----                  ---                 ------------------------

     Glenn Little              50           President, Chief Executive Officer
                                            Chief Financial Officer and Director



                                                                              17

<PAGE>

The  director  named  above  will  serve  until the next  annual  meeting of the
Company's  stockholders  or until  their  successors  are duly  elected and have
qualified.   Directors  will  be  elected  for  one-year  terms  at  the  annual
stockholders meeting.  Officers will hold their positions at the pleasure of the
board of directors,  absent any  employment  agreement,  of which none currently
exists or is contemplated.  There is no arrangement or understanding between any
of the  directors  or officers of the Company and any other  person  pursuant to
which any director or officer was or is to be selected as a director or officer,
and there is no arrangement,  plan or understanding as to whether non-management
shareholders  will exercise their voting rights to continue to elect the current
directors to the Company's board. There are also no arrangements,  agreements or
understandings  between   non-management   shareholders  that  may  directly  or
indirectly participate in or influence the management of the Company's affairs.

The directors and officers will devote their time to the Company's affairs on an
as needed  basis,  which,  depending  on the  circumstances,  could amount to as
little as two hours per month, or more than forty hours per month, but more than
likely  encompass  less than ten hours per  month.  There are no  agreements  or
understandings  for any  officer or director to resign at the request of another
person,  and none of the officers or directors  are acting on behalf of, or will
act at the direction of, any other person.

Biographical Information

Glenn A.  Little,  is a  graduate  of The  University  of  Florida,  Gainesville
(Bachelor  of Science in  Business  Administration)  and the  American  Graduate
School  of  International   Management  (Master  of  Business  Administration  -
International  Management)  and has been the  principal  of Little  and  Company
Investment  Securities  (LITCO),  a  Securities  Broker/Dealer  with  offices in
Midland,  Texas  since  1979.  Mr.  Little  currently  serves as an officer  and
director of other inactive public  corporations having the same business purpose
as the Company.

Before founding LITCO Mr. Little was a stockbroker with Howard,  Weil, Labouisse
Friedrich in New Orleans and Midland and worked for the First  National  Bank of
Commerce in New Orleans, Louisiana.

Indemnification of Officers and Directors.

The  Company's  By-Laws  provide  for the  indemnification  of  its,  directors,
officers, employees, and agents, under certain circumstances, against attorney's
fees and other expenses  incurred by them in any litigation to which they become
a party  arising  from their  association  with or  activities  on behalf of the
Company.  The Company will also bear the expenses of such  litigation for any of
its directors,  officers,  employees,  or agents,  upon such persons  promise to
repay the Company  therefor if it is ultimately  determined that any such person
shall not have been entitled to  indemnification.  This  indemnification  policy
could result in substantial  expenditures by the Company, which it may be unable
to recoup.

Conflicts of Interest

None of the  officers  of the Company  will devote more than a small  portion of
their  respective  time to the affairs of the  Company.  There will be occasions
when the time  requirements of the Company's  business conflict with the demands
of the officers'  other business and investment  activities.  Such conflicts may
require that the Company  attempt to employ  additional  personnel.  There is no
assurance  that the  services of such persons will be available or that they can
be obtained upon terms favorable to the Company.

The officers,  directors and principal  shareholders of the Company may actively
negotiate for the purchase of a portion of their common stock as a condition to,
or in  connection  with, a proposed  merger or  acquisition  transaction.  It is
anticipated  that  a  substantial  premium  may be  paid  by  the  purchaser  in
conjunction  with any sale of shares by the  Company's  officers,  directors and
principal shareholders made as a condition to, or in connection with, a proposed
merger or acquisition  transaction.  The fact that a substantial  premium may be
paid to members of Company management to acquire their shares creates a conflict
of interest for them and may compromise  their state law fiduciary duties to the
Company's  other  shareholders.  In making  any such  sale,  members  of Company
management  may consider  their own personal  pecuniary  benefit rather than the
best  interests of the Company and the  Company's  other  shareholders,  and the
other shareholders are not expected to be afforded the opportunity to approve or
consent to any particular buy-out  transaction  involving shares held by members
of Company management.

The Company has adopted a policy under which any  consulting or finders fee that
may be paid to a third party for  consulting  services to assist  management  in


                                                                              18

<PAGE>

evaluating a prospective business opportunity would be paid in stock rather than
in  cash.  Any  such  issuance  of  stock  would  be  made  on an ad hoc  basis.
Accordingly,  the Company is unable to predict whether,  or in what amount, such
stock issuance might be made.

It is not currently anticipated that any salary, consulting fee, or finders fee
shall be paid to any of the Company's directors or executive officers, or to any
other affiliate of the Company except as described under Executive Compensation
above.

Although  management  has no current  plans to cause the Company to do so, it is
possible  that the  Company  may enter  into an  agreement  with an  acquisition
candidate requiring the sale of all or a portion of the Common Stock held by the
Company's  current  stockholders  to the  acquisition  candidate  or  principals
thereof,  or to other individuals or business entities,  or requiring some other
form of payment to the Company's current  stockholders,  or requiring the future
employment  of specified  officers  and payment of salaries to them.  It is more
likely  than  not  that  any  sale  of  securities  by  the  Company's   current
stockholders  to an  acquisition  candidate  would  be at a price  substantially
higher than that  originally paid by such  stockholders.  Any payment to current
stockholders  in the context of an  acquisition  involving  the Company would be
determined  entirely by the largely  unforeseeable  terms of a future  agreement
with an unidentified business entity.


Item 10 - Executive Compensation

Currently,  management  of the  Company  requires  less  than five (5) hours per
month.  Accordingly,  no officer or director has received any compensation  from
the  Company.   Until  the  Company  acquires  additional  capital,  it  is  not
anticipated  that any officer or director  will  receive  compensation  from the
Company other than  reimbursement for out-of-pocket  expenses incurred on behalf
of the Company. See Certain Relationships and Related Transactions.

The Company has no stock option, retirement, pension, or profit-sharing programs
for the  benefit of  directors,  officers or other  employees,  but the Board of
Directors may recommend adoption of one or more such programs in the future.


Item 11 - Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, as of the date of this  Registration  Statement,
the  number of  shares of Common  Stock  owned of  record  and  beneficially  by
executive officers, directors and persons who hold 5% or more of the outstanding
Common Stock of the Company.  Also included are the shares held by all executive
officers and directors as a group.

                                                                 % of Class
     Name and address               Number of Shares          Beneficially Owned
     ----------------               ----------------          ------------------

Glenn A. Little                        20,000,000                    50.96%
211 West Wall
Midland, Texas 79701

All Directors and                      20,000,000                    50.96%
Executive Officers (1 person)


Item 12 - Certain Relationships and Related Transactions

The Company  currently  maintains a mailing  address at 211 West Wall,  Midland,
Texas  79701.  The  Company's  telephone  number there is (915)  682-1761.  This
address  is  maintained  and  controlled  by  Glenn  A.  Little,  the  Company's
President.  Other than this  mailing  address,  the Company  does not  currently
maintain  any other  office  facilities,  and does not  anticipate  the need for
maintaining office facilities at any time in the foreseeable future. The Company
pays no rent or other fees for the use of the mailing  address as these  offices
are used virtually full-time by other businesses of the Company's President.


Item 13 - Exhibits and Reports on Form 8-K

Exhibits
--------
   31.1     Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
   32.1     Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

Reports on Form 8-K
-------------------

   March 14, 2004 - Announcing a change in control of the Company
   June 15, 2004  - Announcing a change in certifying public accountant


                                                                              19

<PAGE>

                                   SIGNATURES

In accord with Section 13 or 15(d) of the  Securities  Act of 1933,  as amended,
the Company  caused  this report to be signed on its behalf by the  undersigned,
thereto duly authorized.

                                                     Parallel Technologies, Inc.

Dated: July 16, 2004                                 By:   /s/ Glenn A. Little
       -------------                                    ------------------------
                                                                 Glenn A. Little
                                                        Chief Executive Officer,
                                                         Chief Financial Officer
                                                                    and Director


In accordance with the Securities Exchange Act of 1934, as amended,  this report
has been signed below by the  following  persons on behalf of the Company and in
the capacities and on the date as indicated.

Dated: July 16, 2004                     By:      /s/ Glenn A. Little
       -------------                        ------------------------------------
                                                                 Glenn A. Little
                                             President, Chief Executive Officer,
                                            Chief Financial Officer and Director






















                                                                              20

<PAGE>

                           Parallel Technologies, Inc.

                                    Contents
                                                                            Page
                                                                            ----

Report of Independent Certified Public Accountants                           F-2

Financial Statements

   Balance Sheets
     as of December 31, 2002 and 2001                                        F-3

   Statements of Operations and Comprehensive Loss
     for the years ended December 31, 2002 and 2001                          F-4

   Statement of Changes in Shareholders' Equity
     for the years ended December 31, 2002 and 2001                          F-5

   Statements of Cash Flows
     for the years ended December 31, 2002 and 2001                          F-6

   Notes to Financial Statements                                             F-7






















                                                                             F-1

<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
               --------------------------------------------------


Board of Directors and Stockholders
Parallel Technologies, Inc.

We have audited the accompanying balance sheets of Parallel  Technologies,  Inc.
(a  Nevada  corporation)  as of  December  31,  2002 and  2001  and the  related
statements of operations and comprehensive loss, changes in shareholders' equity
(deficit)  and cash flows for the each of the two years ended  December 31, 2002
and 2001, respectively. These financial statements are the responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
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
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Parallel Technologies,  Inc. as
of December  31, 2002 and 2001 and the  results of its  operations  and its cash
flows  for the  each  of the  two  years  ended  December  31,  2002  and  2001,
respectively,  in  conformity  with  generally  accepted  accounting  principles
generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note C to the
financial statements, the Company has no viable operations or significant assets
and is dependent upon  significant  shareholders to provide  sufficient  working
capital to maintain the integrity of the corporate entity.  These  circumstances
create  substantial  doubt  about the  Company's  ability to continue as a going
concern and are discussed in Note C. The financial statements do not contain any
adjustments that might result from the outcome of these uncertainties.


                                        S. W. HATFIELD, CPA
Dallas, Texas
July 15, 2004









                                                                             F-2

<PAGE>
<TABLE>
<CAPTION>

                           Parallel Technologies, Inc.
                                 Balance Sheets
                           December 31, 2002 and 2001


                                                                  December 31,    December 31,
                                                                      2002            2001
                                                                  ------------    ------------
<S>                                                               <C>             <C>
                                     ASSETS
                                     ------
Current Assets
   Cash on hand and in bank                                       $       --      $       --
                                                                  ------------    ------------

   Total Current Assets                                                   --              --
                                                                  ------------    ------------

Total Assets                                                      $       --      $       --
                                                                  ============    ============


                 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
                 ----------------------------------------------
Liabilities
   Current Liabilities
     Accounts payable - trade                                     $     19,500    $     17,500
                                                                  ------------    ------------

     Total Current Liabilities                                          19,500          17,500
                                                                  ------------    ------------


Commitments and Contingencies


Shareholders' Equity (Deficit)
   Common stock - $0.006 par value
     100,000,000 shares authorized
     19,243,659 shares issued and outstanding, respectively            115,461         115,461
   Additional paid-in capital                                       11,897,663      11,897,663
   Accumulated deficit                                             (12,032,624)    (12,030,624)
                                                                  ------------    ------------

   Total Shareholders' Equity (Deficit)                                (19,500)        (17,500)
                                                                  ------------    ------------

   Total Liabilities and Shareholders' Equity                     $       --      $       --
                                                                  ============    ============
</TABLE>



The accompanying notes are an integral part of these financial statements.
                                                                             F-3

<PAGE>

                           Parallel Technologies, Inc.
                 Statements of Operations and Comprehensive Loss
                     Years ended December 31, 2002 and 2001


                                                    Year ended      Year ended
                                                   December 31,    December 31,
                                                       2002            2001
                                                   ------------    ------------

Revenues                                           $       --      $       --
                                                   ------------    ------------

Expenses
   General and administrative expenses                    2,000           2,000
                                                   ------------    ------------

     Total operating expenses                             2,000           2,000
                                                   ------------    ------------

Loss from continuing operations
   before provision for income taxes                     (2,000)         (2,000)

Provision for income taxes                                 --              --
                                                   ------------    ------------

Net Loss                                                 (2,000)         (2,000)

Other Comprehensive Income                                 --              --
                                                   ------------    ------------

Comprehensive Loss                                 $     (2,000)   $     (2,000)
                                                   ============    ============


Earnings per share of common stock
   outstanding computed on net loss -
   basic and fully diluted                                  nil             nil
                                                   ============    ============

Weighted-average number of shares
   outstanding - basic and fully diluted             19,243,659      19,243,659
                                                   ============    ============




The accompanying notes are an integral part of these financial statements.
                                                                             F-4

<PAGE>
<TABLE>
<CAPTION>



                                        Parallel Technologies, Inc.
                               Statement of Changes in Shareholders' Equity
                                  Years ended December 31, 2002 and 2001



                               Common Stock            Additional
                        ---------------------------      paid-in      Accumulated
                           Shares         Amount         capital        deficit          Total
                        ------------   ------------   ------------   ------------    ------------
<S>                     <C>            <C>            <C>            <C>             <C>
Balances at
   January 1, 2001        19,243,659   $    115,461   $ 11,897,663   $(12,028,624)   $    (15,500)

Net loss for the year           --             --             --           (2,000)         (2,000)
                        ------------   ------------   ------------   ------------    ------------

Balances at
   December 31, 2001      19,243,659        115,461     11,897,663    (12,030,624)        (17,500)

Net loss for the year           --             --             --           (2,000)         (2,000)
                        ------------   ------------   ------------   ------------    ------------

Balances at
   December 31, 2002      19,243,659   $    115,461   $ 11,897,663   $(12,032,624)   $    (19,500)
                        ============   ============   ============   ============    ============
</TABLE>



























The accompanying notes are an integral part of these financial statements.
                                                                             F-5

<PAGE>
<TABLE>
<CAPTION>

                           Parallel Technologies, Inc.
                            Statements of Cash Flows
                     Years ended December 31, 2002 and 2001


                                                             Year ended     Year ended
                                                            December 31,   December 31,
                                                                2002           2001
                                                            ------------   ------------
<S>                                                         <C>            <C>
Cash Flows from Operating Activities
   Net income (loss) for the period                         $     (2,000)  $     (2,000)
   Adjustments to reconcile net loss
     to net cash provided by operating activities
       Increase (Decrease) in
         Accounts payable - trade                                  2,000          2,000
                                                            ------------   ------------

Net cash used in operating activities                               --             --
                                                            ------------   ------------


Cash Flows from Investing Activities                                --             --
                                                            ------------   ------------


Cash Flows from Financing Activities
   Cash advanced by shareholder                                     --             --
                                                            ------------   ------------

Net cash provided by financing activities                           --             --
                                                            ------------   ------------

Increase (Decrease) in Cash                                         --             --

Cash at beginning of period                                         --             --
                                                            ------------   ------------

Cash at end of period                                       $       --     $       --
                                                            ============   ============

Supplemental Disclosure of Interest and Income Taxes Paid
     Interest paid for the year                             $       --     $       --
                                                            ============   ============
     Income taxes paid for the year                         $       --     $       --
                                                            ============   ============
</TABLE>



The accompanying notes are an integral part of these financial statements.
                                                                             F-6

<PAGE>

                           Parallel Technologies, Inc.

                          Notes to Financial Statements


Note A - Organization and Description of Business

Parallel Technologies,  Inc. (Company) was originally incorporated on October 6,
1982 under the laws of the State of Nevada as M, Inc. The Company was  initially
formed  as a  "blank  check"  entity  for  the  purpose  of  seeking  a  merger,
acquisition or other business  combination  transaction  with a privately  owned
entity seeking to become a publicly- owned entity.

On June 3, 1991,  the Company  consummated a business  combination  transaction,
pursuant to an Agreement  and Plan of  Reorganization  (Agreement)  with Graphex
Imaging  Systems,   Inc.   whereby  Graphex  Imaging  Systems,   Inc.  became  a
wholly-owned  subsidiary of the Company.  Concurrent with this transaction,  the
Company changed its corporate name to Parallel Technologies, Inc.

During 1995,  this  activity  ceased to operate and the Company  disposed of all
assets, liabilities and operating activities related to Graphex Imaging Systems,
Inc. The Company has had no  operations,  assets or  liabilities  since the year
ended December 31, 1995.


Note B - Preparation of Financial Statements

The  Company  follows  the  accrual  basis  of  accounting  in  accordance  with
accounting principles generally accepted in the United States of America and has
a year-end of December 31.

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

Management further acknowledges that it is solely responsible for adopting sound
accounting  practices,   establishing  and  maintaining  a  system  of  internal
accounting  control and preventing and detecting  fraud. The Company's system of
internal  accounting  control is designed to assure,  among other items, that 1)
recorded  transactions  are valid; 2) valid  transactions  are recorded;  and 3)
transactions  are  recorded in the proper  period in a timely  manner to produce
financial  statements which present fairly the financial  condition,  results of
operations  and cash  flows of the  Company  for the  respective  periods  being
presented


Note C - Going Concern Uncertainty

The Company  was  originally  formed in 1982 for the purpose of entering  into a
business  combination  transaction  with a privately  owned  company  seeking to
become a  publicly-owned  entity.  In 1991,  the Company  consummated a business
combination transaction and this endeavor was unsuccessful.  The Company has had
no operations, assets or liabilities since 1995.

The  Company's  continued  existence is  dependent  upon its ability to generate
sufficient cash flows from operations to support its daily operations as well as
provide sufficient resources to retire existing liabilities and obligations on a
timely basis.

The Company  anticipates  offering future sales of equity  securities.  However,
there is no assurance that the Company will be able to obtain additional funding
through the sales of additional  equity  securities  or, that such  funding,  if
available, will be obtained on terms favorable to or affordable by the Company.

                                                                             F-7

<PAGE>

                           Parallel Technologies, Inc.

                    Notes to Financial Statements - Continued


Note C - Going Concern Uncertainty - Continued

If no additional  operating  capital is received  during the next twelve months,
the  Company  will be  forced  to rely on  existing  cash in the  bank  and upon
additional  funds  loaned  by  management  and/or  significant  stockholders  to
preserve the integrity of the corporate  entity at this time. In the event,  the
Company  is  unable to  acquire  advances  from  management  and/or  significant
stockholders, the Company's ongoing operations would be negatively impacted.

It  is  the  intent  of  management  and  significant  stockholders  to  provide
sufficient  working  capital  necessary to support and preserve the integrity of
the corporate entity.  However, no formal commitments or arrangements to advance
or loan funds to the Company or repay any such advances or loans exist. There is
no legal obligation for either management or significant stockholders to provide
additional future funding.

While the Company is of the opinion that good faith  estimates of the  Company's
ability to secure additional  capital in the future to reach our goals have been
made, there is no guarantee that the Company will receive  sufficient funding to
sustain operations or implement any future business plan steps.


Note D - Summary of Significant Accounting Policies

1.   Cash and cash equivalents
     -------------------------

     For  Statement of Cash Flows  purposes,  the Company  considers all cash on
     hand  and  in  banks,  including  accounts  in  book  overdraft  positions,
     certificates of deposit and other highly-liquid investments with maturities
     of three months or less, when purchased, to be cash and cash equivalents.

2.   Income Taxes
     ------------

     The Company uses the asset and liability  method of  accounting  for income
     taxes. At December 31, 2002 and 2001, respectively,  the deferred tax asset
     and deferred  tax  liability  accounts,  as recorded  when  material to the
     financial  statements,  are entirely  the result of temporary  differences.
     Temporary  differences  represent  differences in the recognition of assets
     and  liabilities  for  tax  and  financial  reporting  purposes,  primarily
     accumulated depreciation and amortization,  allowance for doubtful accounts
     and vacation accruals.

     As of December 31, 2002 and 2001,  the  deferred  tax asset  related to the
     Company's net operating loss  carryforward  is fully  reserved.  Due to the
     provisions  of Internal  Revenue  Code Section 338, the Company may have no
     net operating loss carryforwards available to offset financial statement or
     tax  return  taxable  income in future  periods  as a result of a change in
     control   involving  50  percentage  points  or  more  of  the  issued  and
     outstanding securities of the Company.

3.   Earnings (loss) per share
     -------------------------

     Basic  earnings  (loss) per share is computed  by  dividing  the net income
     (loss) available to common shareholders by the  weighted-average  number of
     common shares  outstanding  during the respective  period  presented in our
     accompanying financial statements.  Fully diluted earnings (loss) per share
     is  computed  similar  to basic  income  (loss) per share  except  that the
     denominator is increased to include the number of common stock  equivalents
     (primarily outstanding options and warrants).

                                                                             F-8

<PAGE>

                           Parallel Technologies, Inc.

                    Notes to Financial Statements - Continued


Note D - Summary of Significant Accounting Policies - Continued

3.   Earnings (loss) per share - continued
     -------------------------

     Common  stock  equivalents  represent  the  dilutive  effect of the assumed
     exercise of the outstanding stock options and warrants,  using the treasury
     stock method, at either the beginning of the respective period presented or
     the date of  issuance,  whichever  is later,  and only if the common  stock
     equivalents  are  considered  dilutive  based upon the Company's net income
     (loss) position at the calculation date.

     At December 31, 2002 and 2001, and subsequent  thereto,  the Company had no
     outstanding common stock equivalents.


Note E - Fair Value of Financial Instruments

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.

Interest  rate risk is the risk  that the  Company's  earnings  are  subject  to
fluctuations  in interest  rates on either  investments  or on debt and is fully
dependent  upon  the  volatility  of  these  rates.  The  Company  does  not use
derivative instruments to moderate its exposure to interest rate risk, if any.

Financial  risk  is  the  risk  that  the  Company's  earnings  are  subject  to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the  volatility  of  these  rates.  The  company  does  not use  derivative
instruments to moderate its exposure to financial risk, if any.

Note F - Income Taxes

The  components  of income tax  (benefit)  expense  for each of the years  ended
December 31, 2002 and 2001, are as follows:

                                                      Year ended     Year ended
                                                     December 31,   December 31,
                                                         2002           2001
                                                     ------------   ------------
     Federal:
       Current                                       $       --     $       --
       Deferred                                              --             --
                                                     ------------   ------------
                                                             --             --
                                                     ------------   ------------
     State:
       Current                                               --             --
       Deferred                                              --             --
                                                     ------------   ------------
                                                             --             --
                                                     ------------   ------------
       Total                                         $       --     $       --
                                                     ============   ============

As a result of an April 2004  change in  control,  the Company has a nominal net
operating  loss   carryforwards   for  income  tax  purposes.   The  amount  and
availability  of  any  net  operating  loss  carryforwards  may  be  subject  to
limitations set forth by the Internal  Revenue Code.  Factors such as the number
of shares ultimately issued within a three year look- back period; whether there
is a deemed more than 50 percent change in control; the applicable long-term tax
exempt bond rate;  continuity of historical  business;  and subsequent income of
the  Company  all  enter  into  the  annual   computation  of  allowable  annual
utilization of the carryforwards.

                                                                             F-9

<PAGE>

                           Parallel Technologies, Inc.

                    Notes to Financial Statements - Continued


Note F - Income Taxes - Continued

The Company's income tax expense  (benefit) for each of the years ended December
31, 2002 and 2001, respectively,  differed from the statutory federal rate of 34
percent as follows:
<TABLE>
<CAPTION>

                                                             Year ended      Year ended
                                                            December 31,    December 31,
                                                                2002            2001
                                                            ------------    ------------
<S>                                                         <C>             <C>
Statutory rate applied to income before income taxes        $       (680)   $       (680)
Increase (decrease) in income taxes resulting from:
     State income taxes                                             --              --
     Other, including reserve for deferred tax asset
       and application of net operating loss carryforward            680             680
                                                            ------------    ------------

         Income tax expense                                 $       --      $       --
                                                            ============    ============
</TABLE>

Temporary  differences,  consisting primarily of statutory deferrals of expenses
for organizational costs and statutory  differences in the depreciable lives for
property and equipment, between the financial statement carrying amounts and tax
bases of assets and liabilities give rise to deferred tax assets and liabilities
as of December 31, 2002 and 2001, respectively:
<TABLE>
<CAPTION>

                                                                        December 31,   December 31,
                                                                            2002           2001
                                                                        ------------   ------------
     <S>                                                                <C>            <C>
     Deferred tax assets, reflecting the April 2004 change in control
       Net operating loss carryforwards                                 $       --     $       --
       Less valuation allowance                                                 --             --
                                                                        ------------   ------------

       Net Deferred Tax Asset                                           $       --     $       --
                                                                        ============   ============
     </TABLE>

During the years ended  December  31, 2002 and 2001,  there was no change in the
reserve for the deferred current tax asset.


Note G - Common Stock Transactions

On February 23, 2004, the Company sold  20,000,000  shares of restricted  common
stock at $0.006  per  share  for  gross  proceeds  of  $120,000,  pursuant  to a
subscription  agreement,  to Glenn A. Little,  who became the Company's  current
Chief Executive Officer.  The Company relied upon Section 4(2) of The Securities
Act of 1933, as amended,  for an exemption from registration of these shares and
no underwriter was used in this  transaction.  As a result of this  transaction,
Glenn A. Little became the Company's controlling shareholder,  owning 20,000,000
shares of the  39,243,659  issued  and  outstanding  shares of the  Registrant's
common stock, or approximately  50.96%, at the close of business on February 23,
2004.






                                                                            F-10