<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

                               AMENDMENT NUMBER 2


  (X)  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934


      FOR THE FISCAL YEAR                           COMMISSION FILE
    ENDED December 31, 2003                         NUMBER 001-15591


                                 Parentech, Inc.
                      (FORMERLY Premier Classic Art, Inc.)
                 ----------------------------------------------
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)


                  DELAWARE                               94-3353519
          (STATE OF INCORPORATION)         (I.R.S. EMPLOYER IDENTIFICATION NO.)


                        777 SOUTH HIGHWAY 101, SUITE 215
                             SOLANA BEACH, CA 92075
                                 (858) 847-9000
             (ADDRESS AND TELEPHONE OF PRINCIPAL EXECUTIVE OFFICES)

                               1158 Staffler Road
                              Bridgewater, NJ 08807
                  Registrant's former address as last reported

         Securities registered pursuant to Section 12(b) of the Act:  None



          Securities registered pursuant to Section 12(g) of the Act:

                        Common Stock, $0.00001 par value
          -----------------------------------------------------------
                                (Title of class)


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

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]

<PAGE>

Parentech, Inc.'s revenues for its most recent fiscal year: $58,393.

         The aggregate market value of the common equity held by non-affiliates
computed by reference to the price at which the common equity was sold as of
December 31, 2003, was $1.7 million.

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

The number of shares outstanding of common stock, as of March 15, 2004 was
43,397,293 shares of Common Stock, $0.001 par value.

         Documents Incorporated by Reference:  None

         Transitional Small Business Disclosure Format (check one):
 [  ] Yes    [X] No





<PAGE>



                                PARENTECH, INC.
                              Report on Form 10KSB
                   For the Fiscal Year Ended December 31, 2003

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                         PAGE

<S>           <C>                                                                                        <C>
                                     PART I

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

                                     PART II

Item 5.       Market for Common Equity and Related Stockholder Matters..................................   13
Item 6.       Management's Discussion and Analysis......................................................   14
Item 7.       Financial Statements......................................................................   18
Item 8.       Changes in and Disagreements with Accountants on Accounting and Financial Disclosure......   18

                                    PART III

Item 9.       Directors, Executive Officers, Promoters and Control Persons..............................    19
Item 10.      Executive Compensation....................................................................    21
Item 11.      Security Ownership of Certain Beneficial Owners and Management............................    23
Item 12.      Certain Relationships and Related Transactions............................................    24

                                     PART IV

Item 13.      Exhibits and Reports on Form 8-K..........................................................    26
Item 14.      Principal Accountant Fees and Services....................................................    27

Signatures .............................................................................................    28
</TABLE>


                                     PART I


ITEM 1.  DESCRIPTION OF BUSINESS


History

Premier Classic Art, Inc. ("Premier" or the "Company") was incorporated as
Pet-Con Industries, Inc. in the State of Delaware on June 14, 1991. Premier
originally manufactured recyclable containers and bottles for sale to private
grocery product manufacturers and food packers. Premier discontinued these
operations in June 1995 and had no operating activities from then until
September 1999.

<PAGE>

Acquisition of Cool Classics Incorporated

On September 2, 1999, Premier hired Charles Trapp as its President, appointed
him a director and issued to him 1,158,845 shares of its common stock. At the
same time, Louis A. Pistilli joined the Company as a director. Mr. Pistilli was
issued 75,000 shares of the Company's common stock.

On September 2, 1999, the Company also acquired all of the outstanding shares of
stock of Cool Classic Incorporated, a Nevada corporation, in exchange for
3,069,788 shares of the Company's common stock. Cool Classic Incorporated is the
owner of approximately 385,000 original, hand-painted animation production cels.
The purpose of the acquisition was for Premier to enter into the business of
marketing these cels as its principal business activity.


Despite continued efforts to commercialize the cels, the Company's business of
marketing them did not succeed. In an effort to improve the Company's prospects,
it sought to acquire companies with products that could be commercialized.

Merger with Parentech

One of the companies that Premier evaluated was Parentech, Inc. ("Parentech"), a
Delaware corporation with its principal offices in Solana Beach, California.
Parentech held patents on a child development product that Premier considered to
have substantial commercial appeal.

In December 2001, the Company determined that the potential success of Parentech
justified a merger between the two companies, and it entered into a Memorandum
of Understanding for that purpose. Upon execution of this memorandum, Parentech
paid the Company a transaction fee of $75,000 in the form of a six-month, 8%
loan. The note was to be cancelled upon completion of the merger. Under the
terms of the memorandum, if the merger was not completed for certain, specified
reasons, the Company would have owed Parentech a breakup fee of $75,000 in
addition to repayment of the loan. On March 1, 2002, the Company issued 683,108
shares of common stock and 186,000 shares of preferred stock of Premier to
parties who provided the transaction fee in consideration of Parentech's
agreeing to make the transaction fee non-refundable.

In the course of negotiations to reach and enter into definitive agreements to
implement the merger between Premier and Parentech, the parties determined that
a change in the structure originally set forth in the memorandum of
understanding between them would be mutually advantageous. For that reason, on
September 6, 2002, the Board of Directors of the Company and the Board of
Directors of Parentech entered into a new agreement that called for Premier
Acquisition Corporation, a wholly owned subsidiary of the Company, to merge with
and into Parentech (the "Merger"). In connection with the Merger, the Company
was to issue one and one-half (1.5) shares of its common stock to Parentech
Shareholders in exchange for each share of Parentech common stock, Series A
preferred stock or Series B preferred stock they held.

In addition, as part of this transaction, each outstanding share of Premier
Classic Acquisition Corporation common stock was, by the virtue of the merger
and without any action on the part of the parties, converted into one share of
Parentech common stock.

In the course of negotiations, Parentech's officers and directors had stated an
unwillingness to proceed with the Merger if the liabilities of Premier were not
reduced substantially or eliminated. To address this concern, prior to the
merger with Parentech the Company transferred substantially all of its tangible
and intangible assets to Cool Classics, Inc., its wholly owned subsidiary.
Subsequent to that transfer Premier transferred all of the outstanding shares of
capital stock of Cool Classics, Inc. to certain of its creditors of Premier.


<PAGE>

Each creditor received a number of shares of the capital stock of Cool Classics,
Inc. that was equal to his pro rata portion of the aggregate amount of
indebtedness owed to all such creditors. The transfer of capital stock of Cool
Classics, Inc. to the company's creditors was subject to its creditors'
agreement to:

     o    consent to the transfer their liabilities from Premier to Cool
          Classics, Inc.;

     o    release Premier from all liabilities in connection with the
          indebtedness to them; and

     o    accept the shares of Cool Classics, Inc. stock as full satisfaction of
          all claims that they had against Premier.

In evaluating the proposed Merger, Premier's management considered criteria such
as the value of the assets of Parentech and the anticipated business operations
of Parentech in comparison with Premier's inability to achieve commercial
success in marketing the cels. Based on these criteria, Premier's management
determined that the Merger remained in the best interests of Premier's
Shareholders, notwithstanding the need to transfer substantially all of its
assets to Cool Classics, Inc. and then transfer all of Cool Classics, Inc. stock
to the creditors to obtain a release of those creditors' claims against Premier.

The Merger took effect on November 6, 2002 (the "Merger"). The Merger resulted
in the issuance of 1.5 shares of Premier common stock to Parentech shareholders
in exchange for each share of Parentech common or preferred stock they held. A
total of 31,748,856 shares of Premier common stock were issued to Parentech
Shareholders in consummation of the Merger. Immediately following the Merger,
Premier had 41,761,565 shares of common stock issued and outstanding, excluding
shares issuable upon exercise of stock options and conversion of shares of
Series A Preferred Stock.

The resignations of Charles F. Trapp and Louis A.Pistilli from the Board of
Directors of Premier and from their positions as President and Chief Executive
Officer and as Secretary of Premier, respectively, took effect upon the close of
the Merger. By action of Premier's Board of Directors, upon the close of the
Merger Gerald Beemiller, Daniel P. Beharry, Scott D. Landow, Richard Rosenblum,
Richard D. Propper and Charles R. Smith were appointed directors, Scott D.
Landow was appointed President and Treasurer of Premier, and Daniel P. Beharry
was appointed Secretary of Premier. All of the officers and directors of
Parentech prior to the Merger continued in those roles with Parentech subsequent
to the Merger.


As a consequence of the Merger, the former Shareholders of Parentech now own,
collectively, a majority of the issued and outstanding shares of Premier common
stock, although no individual or group of which Premier is aware is able to
assert control over Premier. Specifically:

Amount and Source of Consideration. The sole consideration paid by the former
Parentech Shareholders for the Premier common stock that they received in the
Merger was their Parentech common stock. In addition, as a result of the Merger,
Parentech assumed approximately $300,000 of liabilities from Premier.

Basis of Control. As a result of the Merger, former Shareholders of Parentech
hold 31,748,856 shares of Premier common stock out of 41,761,565 issued and
outstanding shares, or 76% of the issued and outstanding common stock of
Premier. While the former Parentech Shareholders now own more than a majority of
the issued and outstanding shares of Premier, no individual stockholder holds
enough shares to assert control over Premier, and Premier is not aware of any
group of Shareholders that is acting together in order to assert control over
Premier.

Date of Change in Control. The date of the change in control is the date of the
Merger, November 6, 2002.

Transactions Resulting in the Change in Control. The change in control was
solely the result of the Merger.

Percentage Ownership. The former Shareholders of Parentech now own 76% of the
issued and outstanding common stock of Premier. However, no single stockholder
owns enough of Premier's common stock to assert control, and, to Premier's
knowledge, there is no voting or other agreement among any Shareholders that
would enable them, acting as a group, to assert control over Premier.
<PAGE>

Identity of Persons from Whom Control Was Assumed. Premier was not aware of any
stockholder or group of Shareholders that was able to assert control over
Premier prior to the Merger. However, Charles F.Trapp and Joe Cool Collectables,
Inc. each beneficially owned greater than 10% of the issued and outstanding
common stock of Premier prior to the Merger. As a result of the issuance of
stock to Parentech Shareholders in the Merger, each now beneficially owns less
than 5% of the issued and outstanding common stock of Premier.

Parentech Stock Options Assumed. Pursuant to the Merger Agreement, all
outstanding but unexercised options to purchase shares of Parentech common
stock, whether vested or unvested, were assumed by Premier at the time of the
Merger and are now options to purchase shares of Premier common stock.

As of November 6, 2002, the effective date of the Merger, virtually all of the
operations of Premier were being conducted by and through Parentech. References
to the Company's operations on and subsequent to that date are, therefore, to
operations of Parentech. On January 17, 2003 Premier merged Parentech into
Premier and changed its name to Parentech.


OVERVIEW OF PARENTECH'S BUSINESS AND OPERATIONS

Parentech was organized under the laws of Delaware in February 2000. Parentech's
principal business is designing, developing and marketing products that enhance
the development and well-being of infants. Parentech's first product, the
Nature's Cradle(TM) Sound and Motion System, or Nature's Cradle, is an infant
environmental transition system that eases the stress experienced by infants in
the post partum period by simulating certain aspects of the pre-birth
environment. Parentech believes that Nature's Cradle markedly enhances the
development and well-being of newborns as shown in extensive clinical trials.

On the basis of those trials, the U.S. Food and Drug Administration, or FDA, has
cleared the following claims to be made about Nature's Cradle:

     o    Nature's Cradle babies cry 65% less;

     o    Nature's Cradle babies are more alert and develop faster, as
          determined by standard, well-accepted neonatal development tests;

     o    Nature's Cradle babies sleep through the night sooner;

     o    Nature's Cradle babies sleep for longer intervals;

     o    Nature's Cradle babies have a lower incidence of colic.

Parentech does not believe that the FDA has approved any device that is
competitive with Nature's Cradle that can assert such claims. Parentech believes
its challenge will be to establish awareness of the product's value to parents
of infants and convert that awareness into consumer demand. Parentech has
developed a strategy that relies on placement of Nature's Cradle in hospitals,
where Parentech believes large numbers of parents will experience its benefits.
Parentech believes that parents' exposure to Nature's Cradle in the hospital
will lead many of those parents to adopt Nature's Cradle for use at home once
mother and child leave the hospital.

Parentech is initially focusing its marketing efforts in Asia, where mothers
traditionally spend seven to 10 days in the hospital with their newborns.
Parentech has chosen to enter into relationships with sales and marketing
organizations that Parentech believes are recognized and well-established in
their own markets to assist in implementing this strategy, rather than trying to
create its own marketing and distribution system..

Parentech's overall business strategy is designed to take advantage of the
inherent obstacles that independent inventors and start-up companies in the
infant products market traditionally confront. The infant products market is
dominated by a few relatively large, well-known companies that are responsible
for the design, sales and marketing of many of the new products introduced each
year. There are, however, a substantial number of products designed for this
market by individual inventors and small entrepreneurs who have innovative
ideas, but who often lack the market savvy or the financial and human resources
to manufacture, market and distribute their product profitably. It is often
parents, pediatricians and nurses who observe the activities of young children
who conceive products that could make their lives and those of their children
easier, less stressful and more enjoyable. Yet these groups lack the know-how or
resources to get their products successfully to market.
<PAGE>

Parentech believes that the most daunting barrier for small entrepreneurs is the
lack of a large enough distribution channel at an early stage to enable the
product to be produced at a cost that will lead to profitability within an
acceptable time frame. Most of these small entrepreneurs exhaust their limited
capital on high cost prototypes and small runs of pre-production units, well
before they can take advantage of the economies of scale associated with mass
production. If they have any money left after working out production issues, it
is quickly absorbed by initial marketing and distribution costs. Unless the
product is an "instant success," it will usually not achieve sufficient market
penetration in a short enough time frame to generate the cash flow critical to
survival.

Parentech's strategy is designed to overcome this inherent problem by leveraging
the FDA-endorsed efficacy of Nature's Cradle to create an international
distribution consortium. The establishment of such a distribution network should
allow Parentech to place its products, starting with Nature's Cradle, into many
markets more rapidly than could be otherwise achieved. That, in turn, will
enable Parentech to produce large enough quantities of a new product from the
outset to realize economies of scale in production, thus accelerating the
profitability of each new product line introduced. Parentech had an agreement
with such a network in Japan, however that arrangement is currently on hold as
of December 31, 2003, has received a purchase order from another network in
Korea, and is in the process of putting establishing both manufacturing and
distribution capability in Mainland China, however there is no such partner in
place as of December 31, 2003.

These relationships, representing very large potential markets, would, on the
basis of market penetration projections provided by the distribution networks
themselves, will enable Parentech to achieve quickly the volumes needed to
benefit from the economies of scale in production. Parentech expects that
similar relationships will be established over time in other major markets, such
as the U.S, Western Europe and Latin America.

Successful introduction of Nature's Cradle is key to ensuring that these
distribution networks will remain receptive to future products. Parentech
decided that the Nature's Cradle is the right "first product" because it is a
patented, differentiable, clinically proven and doctor-recommended technology.
Parentech's management believes that Nature's Cradle is a very robust and
universally applicable product, which makes it the right first product not only
for its potential to succeed in its own right, but because it can serve as a
platform for the introduction of a series of follow-on products.

COMPETITION

Presently, the Company has no direct competition. Several products have
previously been sold which created "womb" sounds or generated vibration to a
crib or bassinet. None of these products was clinically tested or designed to be
"physiologic" representations of true sounds or motions developed from the
actual intrauterine/prenatal environment. It is anticipated that with success
will come competition. The partnering strategy described above should help
mitigate the effects of this competition, should it develop.

The company has patents which relate to environmental simulation and transition
systems which simulate the intrauterine environment, including motions that
approximate those experienced by the fetus, intrauterine sounds, tactile
stimulation, controlled temperature, light shielding and/or modification of the
rate of intensity of the stimuliIn addition, the Company is filing additional
patents that cover new embodiments of the technology.

While the Company cannot assure that its issued patents and those covered in its
applications will, if issued, block competitive products, they should help the
Company become the leader in the marketplace.

Our strategy of being first to market and establishing brand name recognition as
the clinically tested, child development device will create another barrier to
competition.

<PAGE>

Parentech's first effort to enter the Asian market focused on Japan, and the
company secured an agreement with SII Trading, Inc. ("SII") an affiliate of
Seiko of Japan. SII performed due diligence for the Japanese market before it
entered into a relationship with the Company, and it confirmed that at this
point, no competition exists for the Nature's Cradle and Motion System It is
expected that, for the time being, this will remain the case, but if Nature's
Cradle performs well in the market, it can be assumed that a competitor will
emerge. During September 2003, SII decided to close all divisions that were not
part of their core business of watches, printers and robotics.

Several products that create "womb" sounds or generate vibration to a crib or
bassinet have been in the past or are presently being marketed. However, none of
these products has been clinically tested or designed to be a "physiologic"
representation of true sounds or motions derived from the actual
intrauterine/prenatal environment. It is anticipated that Parentech, if
successful, will spawn competition from products that attempt to approximate the
patented aspects of the Nature's Cradle without infringing. Parentech intends to
protect its intellectual property but believes that a significant portion of its
competitive advantage will come from working only with well-recognized and
established distribution organizations in each of its markets. Parentech
believes that its being first to market and the only company that can cite FDA
cleared claims in its promotional materials and advertising, establishing
Nature's Cradle as the clinically tested, child development device, will give it
a significant advantage over any potential competitors. In addition, Parentech's
partners in each region will have a vested interest in defending its patents
locally and should be helpful should infringing competition arise.

Patents, Copyrights and Trademarks

Parentech has acquired the patents filed in the United States, Canada, Japan,
and Europe originally held by its predecessor company that relate to
environmental simulation and transition systems. The patents cover claims of
systems that simulate the intrauterine environment, including motions that
approximate those experienced by the fetus, intrauterine sounds, tactile
stimulation, controlled temperature, light shielding and/or modification of the
rate of intensity of the stimuli and others. These patents expire at various
times between 2009 and 2016. In addition, Parentech has filed a provisional
patent in the United States that covers new embodiments of and improvements to
the technology intended to cover all of the above listed countries, plus China
and Hong Kong. Parentech believes that it will have sufficient time to exploit
the inventions covered by the patents commercially during the effective lives of
the patents.

While Parentech cannot be completely assured that the issued patents and pending
applications will block competitive products, they should help delay
introduction of competing products. Most important, only the specific patented
motion of the Nature's Cradle was submitted for FDA approval, and the
FDA-cleared claims can be made only for a device that embodies that motion. No
other non-infringing device will be able to make the FDA cleared claims
regarding less crying, better and longer sleep and improved development that
form the cornerstone of Nature's Cradle marketing.

Parentech uses the trademark Nature's Cradle Sound and Motion Sleep System(TM)
for its main product and uses numerous unregistered or pending trademarks for
other areas of its business.

In addition, Parentech depends upon trade secrets, know-how and continuing
technological advances to develop and maintain its competitive position. To
maintain the confidentiality of trade secrets and proprietary information,
Parentech requires its employees and consultants, upon commencement of a
relationship with it, to execute confidentiality agreements and to agree to
assign inventions created, developed or discovered during the relationship
period to Parentech. These agreements are designed to protect Parentech's
proprietary information and to grant Parentech ownership of technologies that
are developed in connection with employees' and consultants' relationships with
Parentech.

Parentech attempts to control the disclosure and use of its proprietary
technology, know-how and trade secrets under agreements with the parties
involved. However, it cannot ensure that others will honor all confidentiality
agreements. It cannot prevent others from independently developing similar or
superior technology, nor can it prevent disputes that could arise concerning the
ownership of intellectual property.
<PAGE>

Employees.

As of December 31, 2003, the Company had one full-time employee. Other
individuals working on Parentech's behalf are hired as consultants and utilized
on an as-needed basis as a way of minimizing overhead expenses.


ITEM 2.  DESCRIPTION OF PROPERTIES

The Company's corporate headquarters and principal executive office is located
in Solana Beach, California. The Company originally leased this space under a
three-year lease at the cost of approximately $3,000 per month. The Company
sublet a majority of that space to a third party, which has paid all of the rent
on those premises since December 2001. The Company's only remaining cost for
leased space is $310 per month on warehouse space where it stores some of its
products and records. This space will be vacated in April 2004.


ITEM 3.  LEGAL PROCEEDINGS

From time to time the Company has been party to various lawsuits in the normal
course of business. Management does not believe that the financial statements
will be materially impacted by these transactions.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

                                     PART II


ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock is traded in the over-the-counter market on the NASD
"Electronic Bulletin Board" (Symbol: "PRNH"). The following table shows for the
periods indicated the high and low bid quotations for our common stock (or its
predecessor-"PMCL"), as reported by publicly-available Internet data
information. These quotations are believed to represent inter-dealer quotations
without adjustment for retail mark-up, mark-down or commissions and may not
represent actual transactions.


<TABLE>
<CAPTION>
PERIOD                            HIGH BID                         LOW BID
------                            --------                         -------
<S>                               <C>                              <C>
Calendar 2003
    First Quarter                 $0.24                            $0.08
    Second Quarter                $0.35                            $0.02
    Third Quarter                 $0.15                            $0.07
    Fourth Quarter                $0.07                            $0.03


Calendar 2002
    First Quarter                 $0.18                            $0.72
    Second Quarter                $0.30                            $0.51
    Third Quarter                 $0.18                            $0.36
    Fourth Quarter                $0.12                            $0.45
</TABLE>

<PAGE>

HOLDERS

As of December 31, 2003, the Company had approximately 690 record holders of our
43,397,293 outstanding shares of common stock.

DIVIDEND POLICY

We have never paid cash dividends on our capital stock. We currently intend to
retain all available funds to operate and expand our business, and, therefore,
we do not anticipate paying any cash dividends in the foreseeable future.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION

THE FOLLOWING DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
THE COMPANY SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND
NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT.

THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES, THE COMPANY'S ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING, BUT NOT LIMITED TO COMPETITION AND OVERALL MARKET CONDITIONS.

OVERVIEW

Prior to the Merger with Parentech, Premier was not actively engaged in any
operations. Upon consummation of the Merger in November 2002, Premier conducted
operations solely through Parentech. This discussion and analysis, therefore,
provides a discussion of the operating activity of Parentech, both prior to and
subsequent to the Merger.

The previous owner of the Nature's Cradle technology failed to make the
mechanism for the product reliable or robust enough to avoid a high rate of
product failures and returns. Since its inception in February 2000, Parentech's
primary operating activities have focused on improving the durability of the
Nature's Cradle to make it a marketable product. Durability of the mechanism is
essential to Parentech's long-term financial success. The Company has not yet
engaged in extensive marketing of the product, but it expects to do so using a
rental revenue model. In this model, the Nature's Cradle will not be sold to the
customer (who uses it for just 17 weeks) but will be rented. The fee per rental
cycle received by Parentech is, as a result, only a portion of the cost of
manufacturing the product. Thus, depending on the final costs of manufacturing
the unit and the fee per rental cycle, some number of cycles will be needed to
cover manufacturing costs. The Company's positive cash flow and profitability
will depend on having a mechanism that lasts through a sufficient number of
rental cycles to offset the manufacturing cost. To accomplish the improvements
in durability, Parentech took the available product performance data from the
predecessor company and analyzed the strengths and weaknesses of its design.
Parentech then redesigned the mechanism and submitted it for approval to SII
Trading, Inc. ("SII"), an affiliate of Seiko of Japan. In November of 2000, SII
approved the new design and entered into a distribution agreement for all of
Japan for the Nature's Cradle and related products. In the second quarter of
2001, 100 test units were distributed throughout Japan for testing and feedback.

<PAGE>


Simultaneously, Micro Processor Designs of Vermont, (the original engineering
design team for the product), was brought back in to evaluate the new design. As
a result of the feedback from Japan and Vermont, several potential enhancements
and changes were identified that could extend the expected life of the unit from
five rental cycles to ten. As the revenue from each rental cycle offsets the
initial manufacturing costs, increasing the number of cycles per unit has a
significant affect on the Company's potential profitability, the more cycles,
the better.

The first proto type models of this design were completed at the end of 2001.
This generation of design met all of the critical specifications we have
outlined for the product and provided us with a marketable product.

From inception through December 31, 2001 we had an accumulated deficit of
approximately $2.8 million and had relied upon invested capital initially from
two founders, with a subsequent round of capital from a larger group of
investors who had also invested in the predessor company. Our losses to date
have resulted primarily from costs incurred in research and development and from
general and administrative expenses associated with operations.

The prototype Nature's Cradles were machined in Japan at Shinpo Engineering at a
cost of approximately $1,000 each. Production quantities have been quoted at
approximately $400, still too expensive. As a result, the Company is pursuing
production at lower cost, with a focus on Mainland China. To that end, Parentech
management went to China in December 2001 to survey potential suppliers.
Although initially approached solely as a low-cost manufacturing source, a study
of the Chinese market revealed a substantial unexpected consumer demand, and the
decision was made to pursue a partner for both manufacturing and distribution
within China. Discussions in China have led to a proposed joint venture for
distribution of Nature's Cradle and future products within China and a license
of worldwide manufacturing rights. Several substantial Chinese entities are
being considered, and discussions with some of them are in process.

One of the parties, Jiangsu Sunshine Group (a large Chinese conglomerate),
reviewed the product from a manufacturing standpoint and offered several
suggestions for improvement, many of which have been incorporated. The Company
continues to seek alternatives that can supply the unit at even lower cost.

Separately, Proactive Medicare Enterprise, Ltd. ("PME"), of Hong Kong, has
approached Parentech to acquire non-exclusive distribution of Nature's Cradle
within China through its chain of specialty obstetrical clinics in China. Their
target market segment is the top 1% of the Chinese population, based on income.
This group is highly educated and understands the importance of quality
childcare. PME intends to include the seventeen-week lease of Nature's Cradle in
its package of services for every baby delivered. Its first clinic opened in
September 2002, and a Nature's Cradle was on display at the initial promotional
festivities.

In September of 2002, a Korean entrepreneur approached Parentech to acquire the
rights to distribute the Nature's Cradle in Korea. The health care system in
Korea pays much more attention to the needs of post-natal mothers and their
newborn children than is the case in most other countries:

     o    Women from families in the top 15% of the population spend the first
          two weeks of their postpartum experience in `after care clinics' with
          their newborn infants.

     o    An average "after care clinic" houses 12 women and their babies

     o    Services in these clinics include room, board, informational classes,
          exercise, baby photos, pampering, etc...

     o    The price of this experience is approximately $500 - $700 per week.

     o    There are about 300 of these clinics in Korea, which cater to
          approximately 94,000 mothers per year.

These features of the Korean post-partum experience create circumstances that
are conducive to highly effective and efficient marketing of Nature's Cradle.
They are similar in many important respects to the birth experience that occurs
in Japan and China, which is why Parentech is focusing its initial marketing
efforts on these Asian countries.

<PAGE>

In December 2002 management visited three of these clinics. All were very
excited about the potential of Nature's Cradle and asked when Parentech could
deliver units. They envision a marketing program where all of the babies are on
the Nature's Cradles while they are in the clinic, and the new parents sign up
to lease one for home use when they leave the clinic. An agreement to enter into
a distribution agreement for Korea, Singapore and Taiwan was signed in December
of 2002, pending the Company's making its production sourcing decision.

Doing so will require additional capital. From January through December 31,
2002, we increased our accumulated deficit to approximately $ 4.5 million. By
that time we had used the capital that had been raised to that date and were
relying on borrowed funds to support operations until market conditions made it
more realistic for Parentech to attract additional equity investment. By the end
of 2002, we had borrowed $468,990 and had additional payables of $1,012,485.

The Company expects to continue to incur operating losses for the duration of
2003, but it believes that with the Korean agreement signed and units scheduled
for delivery there and in China beginning in the second quarter of 2004, the
Company has the prospect of becoming cash flow positive by the end of the year
or the beginning of 2005.

We have a limited operating history. Your assessment of our prospects should
include the market risks, expenses and other difficulties frequently encountered
by development stage companies. We have attempted to address these risks by,
among other things, hiring and retaining highly qualified persons and forging
strategic alliances with established companies that complement and leverage our
market strategies. However, our best efforts cannot guarantee that we will
overcome these risks in a timely manner, if at all.

CRITICAL ACCOUNTING POLICIES

This discussion and analysis of the Company's financial condition and results of
operations is based upon our financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States.
The preparation of these financial statements requires the Company to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenue and expenses and related disclosure of contingent assets and
liabilities. On an on-going basis, the Company evaluates its estimates. The
Company bases its estimates on historical experience and on other assumptions
that it believes to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.

Organization - The Company was incorporated in February 2000. It has been in the
development stage since its formation and is primarily engaged in the creation
of products that enhance the well-being of infants. On July 7, 2000, the Company
acquired the rights to an FDA-registered sound and motion device called
"Nature's Cradle," an infant environmental transition sleep system that has been
shown to enhance infant sleep, decrease infant crying and promote child
development.

Because the Company meets the criteria of a development stage enterprise, as
discussed more fully below, these financial statements are presented in
accordance with Statements of Financial Accounting Standards ("SFAS") Number 7,
Accounting and Reporting by Development Stage Enterprises".
<PAGE>

Development Stage Enterprise: The Company is currently devoting substantially
all of its efforts to establishing a new business and its planned principle
operations have not commenced as of December 31, 2003. In their efforts to
establish a new business, management is commencing with design of its business
and marketing plans that include the following: preparation of a financial plan,
cash forecast and operating budget; identifying markets to raise additional
equity capital and debt financing; embarking on research and development
activities; performing employment searches, recruiting and hiring technicians
and management and industry specialists; acquiring operational and technological
assets; and, developing market and distribution strategies. General and
administrative expenses include professional fees, internet service charges, and
other related operating expenses. Marketing and promotional expenses include
costs incurred in connection with raising capital and promoting the
Company.

Basis of Presentation: In accordance with SFAS No.7, the Company's policy
regarding the preparation of these financial statements includes the presenting,
in addition to its statements of operations, changes in shareholders'
(deficiency) equity and cash flows, the cumulative amounts of revenues and
expenses, shareholder equity transactions and cash flows since Inception through
December 31, 2003.

The Company's independent accountants are including a "going concern" paragraph
in their accountants' report accompanying these financial statements that
cautions the users of the Company's financial statements that these statements
do not include any adjustments that might result from the outcome of this
uncertainty because the Company is a development stage enterprise that has not
commenced its planned principal operations. Furthermore, the "going concern"
paragraph states that the Company's ability to continue is also dependent on its
ability to, among other things, obtain additional debt and equity financing,
identify customers, secure vendors and suppliers, and establish an
infrastructure for its operations.

Even though the Company has not commenced planned principal operations or
generated revenues from prospective customers nor has it secured the funding
necessary to meet its current working capital needs, management believes that,
despite the extent of the financial requirements and funding uncertainties going
forward, it has under development a business plan that, if successfully funded
and executed as an integral part of a financial structuring, the Company can
overcome the concerns of the independent accountants within the next twelve
months.

Management continues to actively seek various sources and methods of short and
long-term financing and support; however, there can be no assurances that some
or all of the necessary financing can be obtained. Management continues to
explore alternatives that include seeking strategic investors, lenders and/or
technology partners and pursuing other transactions that, if consummated, might
ultimately result in the dilution of the interest of the current shareholders.

Because of the nature and extent of the uncertainties, many of which are outside
the control of the Company, there can be no assurances that the Company will be
able to ultimately consummate planned principal operations or secure the
necessary financing.

Start-up Costs: Cost incurred in connection with commencing operations,
including general and administrative expenses, are charged to operations in the
period incurred.

Cash and Cash Equivalents - The Company considers all unrestricted, highly
liquid investments purchased with a maturity of three months or less to be cash
equivalents. The carrying value of cash equivalents approximates fair value.

Fair Value of Financial Instruments - The carrying amounts of cash and cash
equivalents, accounts receivable, accounts payable and accrued expenses
approximate fair market value because of the short maturity of those
instruments.
<PAGE>

Credit Risk - It is the Company's practice to place its cash equivalents in high
quality money market securities with one major banking institution. Such funds
are not insured by the Federal Deposit Insurance Corporation; however the
Company considers its credit risk associated with cash and cash equivalents to
be minimal.

Revenue Recognition -Revenue from product sales and demonstration units is
recognized upon shipment to customers. The Company has adopted Security and
Exchange Commission's Staff Accounting Bulletin (SAB) No. 101, which provides
guidance on the recognition, presentation and disclosure of revenue in financial
statements.

Property and Equipment: Property and equipment are stated at cost. Depreciation
and amortization are provided in amounts sufficient to relate the cost of
depreciable assets to operations over their estimated service lives. When
applicable, leasehold improvements and capital leases are amortized over the
lives of respective leases, or the service lives of the improvements, whichever
is less.

The straight-line method of depreciation is used for financial reporting
purposes.

The estimated useful lives, of property and equipment, are as follows:

                                                            YEARS

     Computer equipment, peripherals and software            2-3
     Office equipment                                        3-5
     Furniture and fixtures                                  5-7

Expenditures for renewals and improvements that significantly extend the useful
life of an asset are capitalized. The costs of software used in the business
operations are capitalized and amortized over their expected useful lives.
Expenditures for maintenance and repairs are charged to operations when
incurred. When assets are sold or retired, the cost of the asset and the related
accumulated depreciation are removed from the accounts and any gain or loss is
recognized at such time.

Intangible Assets - Intangible assets, primarily patents, are amortized on a
straight-line basis over the estimated useful life of the asset (See Note 4).
Intangible assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. If the
fair value is less than the carrying amount of the asset, an impairment loss is
then recognized.

The Company regularly reviews its excess of cost over net assets acquired and
other intangible assets to determine if any adverse conditions exist that would
indicate impairment. Conditions that would trigger an impairment assessment
include, but are not limited to, a significant adverse change in legal factors
or business climate that could affect the value of an asset or an adverse action
or assessment by a regulator. If the carrying amount of an asset exceeds the sum
of its undiscounted cash flows, the carrying value is written down to fair value
in the period identified. Fair value is calculated as the present value of
estimated future cash flows using a risk-adjusted discount rate commensurate
with the Company's weighted-average cost of capital.

Research and Development Costs: Generally accepted accounting principles state
that costs that provide no discernible future benefits, or allocating costs on
the basis of association with revenues or among several accounting periods that
serve no useful purpose, should be charged to expense in the period occurred.
Since the Company is in its development stage, SFAS No. 2 "Accounting for
Research and Development Costs" requires that certain costs be charged to
current operations including, but not limited to: salaries and benefits;
contract labor; consulting and professional fees; depreciation; repairs and
maintenance on operational assets used in the production of prototypes; testing
and modifying product and service capabilities and design; and, other similar
costs.

Income Taxes - The Company uses the asset and liability method of accounting for
income taxes as required by Statement of Financial Accounting Standards No. 109
("SFAS 109"), ACCOUNTING FOR INCOME TAXES. SFAS 109 requires the recognition of
deferred tax assets and liabilities for the expected future tax consequences of
temporary differences between the carrying amounts and the tax basis of certain
assets and liabilities
<PAGE>

Stock Issued For Services -- The value of stock issued for services is based on
management's estimate of the fair value of the Company's stock at the date of
issue or the fair value of the services received, whichever is more reliably
measurable.

Use of Estimates: In preparing financial statements in conformity with generally
accepted accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and revenues and expenditures during the reported periods. Actual
results could differ materially from those estimates. Estimates may include, but
not be limited to, those pertaining to the estimated useful lives of property
and equipment and software, determining the estimated net realizable value of
receivables, and the realization of deferred tax assets.

Risks and Uncertainties - The Company is dependent on continued financing from
investors to sustain the development of Nature's Cradle and other activities
necessary to commercialize new products. Management is seeking additional
financing in order to fund its future activities. There is no assurance,
however, that such financing will be available, if and when needed, or if
available, such financing will be completed on commercially favorable terms, or
that such development and other activities in connection with its planned
products will be successful.

Recent Accounting Pronouncements In April 2002, the Financial Accounting
Standards Board ("FASB") issued Statement No. 145 ("Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical
Corrections"). This statement rescinds FASB Statement No. 4, Reporting Gains and
Losses from Extinguishment of Debt, and FASB Statement No. 64, Extinguishments
of Debt Made to Satisfy Sinking-Fund Requirements. Any gain or loss on the
extinguishment of debt that was classified as an extraordinary item in prior
periods has been reclassified into continuing operations.

In June 2002, the FASB issued Statement No. 146, ("Accounting for Costs
Associated with Exit or Disposal Activities"). This statement requires that a
liability for a cost associated with an exit or disposal activity be recognized
when the liability is incurred. Prior to this statement, a liability was
recognized when the entity committed to an exit plan. Management believes that
this statement will not have a material impact on the Company's financial
statements; however, the statement will result in a change in accounting policy
associated with the recognition of liabilities in connection with future
restructuring charges.

In November 2002, the FASB issued Interpretation No. 45, ("Guarantor's
Accounting and Disclosure Requirements for Guarantees Including Indirect
Guarantees of Indebtedness of Others.") This interpretation elaborates on the
disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. It
also clarifies that a guarantor is required to recognize, at the inception of a
guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. This interpretation does not prescribe a specific
approach for subsequently measuring the guarantor's recognized liability over
the term of the related guarantee. This interpretation also incorporates,
without change, the guidance in FASB Interpretation No. 34, "Disclosure of
Indirect Guarantees of Indebtedness of Others," which is being superseded.

In December 2002, the FASB issued Statement No. 148 ("Accounting for Stock-Based
Compensation - Transition and Disclosure"). This statement amends FASB Statement
No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, to provide alternative methods
of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, this statement
amends the disclosure requirements of FASB Statement No. 123 to require
prominent disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported results.

<PAGE>

In January 2003, the FASB issued Interpretation No. 46 ("Consolidation of
Variable Interest Entities"). The interpretation defines a variable interest
entity as corporation, partnership, trust or any other legal structure used for
business purposes that either (a) does not have equity investors with voting
rights nor (b) has equity investors that do not provide sufficient financial
resources for the equity to support its activities. A variable interest entity
often holds financial assets, including loans or receivables, real estate or
other property. A variable interest entity may be essentially passive or it may
engage in research and development or other activities on behalf of another
company. This interpretation requires a variable interest entity to be
consolidated by a company if that company is subject to a majority of the risk
of loss from the variable interest entity's activities or entitled to receive a
majority of the entity's residual returns or both. The Company would have to
consolidate any of its variable interest entities that meet the above criteria
as of July 1, 2003. The interpretation also requires disclosures about variable
interest entities that the company is not required to consolidate but in which
it has a significant variable interest. Management is in the process of
determining if its interests in unconsolidated entities qualify as variable
interest entities and, if so, whether the assets, liabilities, non-controlling
interest, and results of activities are required to be included in the Company's
consolidated financial statements.

In May 2003, the FASB issued Statement No. 150 ("Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity").
This Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. The Statement requires that an issuer classify a financial instrument
that is within its scope as a liability (or an asset in some circumstances).
Many of those instruments were previously classified as equity. The Company is
currently classifying financial instruments within the scope of this Statement
in accordance with this Statement. This Statement is effective for financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of the first interim period beginning after June 15,
2003. Management does not believe that this Statement will have a material
impact on the Company's financial statements.


RESULTS OF OPERATIONS

The following discussion and analysis provides information that the Company's
management believes is relevant to an assessment and understanding of our
results of operations and financial condition. This discussion should be read in
conjunction with the financial statements..

Results of Operations for the Fiscal Year Ended December 31, 2003
Compared to the Fiscal Year Ended December 31, 2002

Revenues

         During the years ended December 31, 2003 and 2002, we had revenues of
approximately $58,393 and $5,494, respectively. Revenues for both periods were
attributable mainly to sales of Nature's Cradle test units.

Research and Development Costs

         Research and development costs include salaries, fees paid to
contractors and consultants and development materials. Research and development
costs were approximately $89,792 in fiscal 2003 compared with approximately
$363,420 for fiscal 2002. The decrease in costs was attributed primarily to a
reduced need for contractors used in the development of the Nature's Cradle
technology.

General and Administrative Expenses

         General and administrative expenses consist principally of salaries,
fees for professional services and rents. General and administrative expenses
were approximately $346,985 for fiscal 2003 compared with approximately $769,348
for fiscal 2002. The decreased costs in 2003 resulted primarily from costs
incurred as the result of the Merger during 2002.

<PAGE>

Interest Expense

Interest expense for fiscal 2003 was approximately $68,590 as compared to
approximately $32,868 for fiscal 2002. The increase in fiscal 2003 resulted
mainly from the Company's need to rely on debt financing to support operations
during that period.


Results of Operations for the Fiscal Year Ended December 31, 2002
Compared to the Fiscal Year Ended December 31, 2001

Revenues

During the years ended December 31, 2002 and 2001, we had revenues of
approximately $5,494 and $37,073, respectively. Revenues for both periods were
attributable mainly to sales of Nature's Cradle test units.

Research and Development Costs

Research and development costs include salaries, fees paid to contractors and
consultants and development materials. Research and development costs were
approximately $363,240 in fiscal 2002 compared with approximately $688,795 for
fiscal 2001. The decrease in costs was attributed primarily to a reduced need
for contractors used in the development of the Nature's Cradle technology.

General and Administrative Expenses

General and administrative expenses consist principally of salaries, fees for
professional services and rents. General and administrative expenses were
approximately $769,348 for fiscal 2002 compared with approximately $504,795 for
fiscal 2001. The increased costs in 2002 resulted primarily from costs incurred
as the result of the Merger.

Interest Expense

Interest expense for fiscal 2002 was approximately $32,868 as compared to
approximately $17,594 for fiscal 2001. The increase in fiscal 2002 resulted
mainly from the Company's need to rely on debt financing to support operations
during that period.

LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its operations until now through private sales of
equity securities and debt instruments. During the years ended December 31, 2003
and 2002, we raised approximately $278,900 and $533,015, respectively, of net
proceeds from the sale of shares of common stock and/or the issuance of debt in
private placement transactions.

During fiscal 2003, cash used in operating activities was approximately $256,900
compared with $535,651 for fiscal 2002.

The Company has financed its operations until now through private sales of
equity securities and debt instruments. During the years ended December 31, 2002
and 2001, we raised approximately $535,015 and $1.4 million, respectively, of
net proceeds from the sale of shares of common stock and/or the issuance of debt
in private placement transactions.

During fiscal 2002, cash used in operating activities was approximately $533,015
compared with $1.2 million for fiscal 2001.

<PAGE>

The Company is in the process of raising approximately $350,000, of which
$147,500 has already been loaned to Source Atlantic under terms of the merger
agreement and the balance of which will be used to satisfy costs associated with
completion of the merger, working capital and operating expenses for the next
twelve months.

Scott Landow has agreed to a salary of $1 per month for the next twelve months
or until the Company reaches positive cash flow, whichever comes first. Company
operations are not expected to exceed $5,000 per month, including rent,
($1,500/mo.), phone, internet, travel, etc...

Parentech had approximately $1,490,000 in debt. This was composed of
approximately $1,490,000 in notes payable, expected to total $1,637,000 by the
completion of the merger and the reverse stock split. The holders of this debt
has agreed to convert into 216,916 shares of unregistered stock, post split. Any
notes due prior to the completion of the merger with Source Atlantic, Inc. have
agreed to extend their maturity date until the completion of that merger and
impending reverse stock split, or December 31, 2004, whichever comes first.


The Company will continue to pursue additional sources of capital in 2004. The
Company has restricted the activity of the Company and has attempted to conserve
cash resources through the use of common stock to fund operating activities. No
assurance can be given that such an attempt will be successful. In the event
Parentech does not raise additional capital, the Company will be unable to
promote its products, which, in turn, will have a material adverse effect on the
Company's business, operating results, financial condition and prospects. Our
accountants have raised concerns regarding our ability to continue as a going
concern. The Company has operating and liquidity concerns, has incurred an
accumulated deficit of approximately $5,122,000 through the period ended
December 31, 2003, and current liabilities exceeded current assets by
approximately $1,741,000 at December 31, 2003. The Company continues to pursue
additional capital investment. However, there can be no assurance that the
Company will be able to successfully acquire the necessary capital to continue
their on-going development efforts and bring products to the commercial market.
These factors, among others, create an uncertainty about the Company's ability
to continue as a going concern.

On a long term basis, the Company believes that the joint venture with UPMG to
set up Parentech China; a Hong Kong based joint venture that would distribute
the Nature's Cradle in China, will result in long term revenues to the Company
that will provide the capital to make the Company profitable by the end of 2004
and in ongoing years.


ACCOUNTING POLICIES SUBJECT TO ESTIMATION AND JUDGMENT

Management's Discussion and Analysis of Financial Condition and Results of
Operations are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. When preparing our financial statements, we make estimates and
judgments that affect the reported amounts on our balance sheets and income
statements, and our related disclosure about contingent assets and liabilities.
We continually evaluate our estimates, including those related to revenue,
allowance for doubtful accounts, reserves for income taxes, and litigation. We
base our estimates on historical experience and on various other assumptions,
which we believe to be reasonable in order to form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily ascertained from other sources. Actual results may deviate from these
estimates if alternative assumptions or condition are used.


<PAGE>



ITEM 7. FINANCIAL STATEMENTS

See "Index to Financial Statements" for a description of the financial
statements included in this Form 10-KSB.


Consolidated balance sheet

Consolidated statements of operations

Consolidated statements of shareholders' equity

Consolidated statements of cash flows

Notes to consolidated financial statements



ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

        None.

ITEM 8A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

         As of the end of the period covered by this report, the Company carried
out an evaluation of the effectiveness of the design and operation of its
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. This
evaluation was done under the supervision and with the participation of the
Company's Principal Executive Officer and Principal Accounting Officer. Based
upon that evaluation, the Principal Executive Officer and Principal Accounting
Officer concluded that the Company's disclosure controls and procedures are
effective in gathering, analyzing and disclosing information needed to satisfy
the Company's disclosure obligations under the Exchange Act.

CHANGES IN INTERNAL CONTROLS

         There were no significant changes in the Company's internal controls or
in other factors that could significantly affect those controls since the most
recent evaluation of such controls.


                                    PART III



ITEM 9. DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS; COMPLIANCE WITH
SECTION 16(a) OF THE EXCHANGE ACT

Directors and Executive Officers

The following table sets forth certain information regarding the Company's
directors and executive officers as of the end of fiscal 2003 and currently.
<PAGE>

<TABLE>
<CAPTION>
Name                      Age                 Position
----------------------   -----  -----------------------------------------------------------------------------
<S>                      <C>    <C>
Scott D. Landow.......     48   President, Chief Executive Officer, Chief Accounting Officer, Chairman of the
                                Board of Directors

Charles R. Smith......     57   Director
</TABLE>


Scott D. Landow, Chairman of the Board, President and Treasurer. Mr. Landow has
served as President, Treasurer and director of the Company since November 6,
2002, the effective date of the Merger. He assumed the position of Chairman of
the Board of Directors effective December 20, 2002. Mr. Landow had served as
President and as a director of Parentech from September 30, 2000 until January
17, 2003, the date on which Parentech merged with and into the Company. Scott D.
Landow, Chairman of the Board, President, Chief Executive Officer and Chief
Accounting Officer. Mr. Landow has served as President, Chief Accounting Officer
and director of the Company since November 6, 2002, the effective date of the
Merger. He assumed the position of Chairman of the Board of Directors effective
December 20, 2002. Mr. Landow had served as President and as a director of
Parentech from September 30, 2000 until January 17, 2003, the date on which
Parentech merged with and into the Company. Mr. Landow resigned his position
effective May 31, 2003 and was reinstated on November 1, 2003. His term as a
director of the Company is through the next annual meeting of the Company's
shareholders, when directors will be elected. Prior to joining Parentech in
September 2000, in 2000, 1999 and 1998, Mr. Landow operated Beyond Conception,
Inc., a Texas-based specialty retail chain of 16 high-end newborn and infant
stores founded by Mr. Landow. .




<PAGE>


Charles R. Smith, Director. Mr. Smith has served as a director of the Company
since November 6, 2002, the effective date of the Merger, and had served as a
member of the Parentech Board of Directors from December 16, 2001 until January
17, 2003, the date on which Parentech merged with and into the Company. His term
as a director of the Company is through the next annual meeting of the Company's
shareholders, when directors will be elected. Mr. Smith was a co-founder of
medibuy, Inc. in 1998 and served as its president until 2002. Prior to his
involvement in medibuy Mr. Smith had held a number of high-level positions in
the health care field.

Board of Directors Committees and Other Information

All directors hold office until the next annual meeting of stockholders and
until their successors have been duly elected and qualified. Officers are
appointed by and serve at the discretion of the Board of Directors. There are no
family relationships among our directors or officers.

The Board of Directors currently has no committees. As and when required by law,
it will establish Audit Committee and a Compensation Committee. The Audit
Committee will oversee the actions taken by our independent auditors and review
our internal financial and accounting controls and policies. The Compensation
Committee will be responsible for determining salaries, incentives and other
forms of compensation for our officers, employees and consultants and will
administer our incentive compensation and benefit plans, subject to full board
approval.

Director Compensation

Our directors do not receive cash for their service as directors. From time to
time, certain directors who are not our employees have served as consultants to
the Company, for which services they have been paid customary fees based on the
value of the services rendered. Prior to the Merger, Parentech had established
an option grant program for its outside directors, which options the Company
assumed in connection with the Merger. Each qualifying director received a grant
of 225,000 options to purchase Parentech common stock at an exercise price based
on the fair market value of Parentech's common stock as of the date of the
grant. Such options were subject to vesting over a three-year period. The
Company does not provide additional compensation for committee participation or
special assignments of the Board of Directors, but may enter into separate
consulting agreements with individual directors at times.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

        Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires that the Company directors and executive officers, and persons who own
more than ten percent (10%) of the Company's outstanding common stock, file with
the Securities and Exchange Commission (the "Commission") initial reports of
ownership and reports of changes in ownership of Common Stock. Such persons are
required by the Commission to furnish the Company with copies of all such
reports they file. The Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and written representation, as
of December 31, 2003, all of the Section 16(a) filing requirements applicable to
its officers, directors and greater than 10% beneficial owners have been
satisfied.

CODE OF ETHICS

The Company has adopted a code of business conduct and ethics that applies to
its directors, officers, and employees, including its principal executive
officers, principal financial officer, principal accounting officer, controller
or persons performing similar functions. A copy of the code is attached to this
report as Exhibit 14.
<PAGE>

ITEM 10.  EXECUTIVE COMPENSATION

SUMMARY COMPENSATION
         The following table sets forth the information, on an accrual basis,
with respect to the compensation of our executive officers for the two fiscal
years ended December 31, 2003.

Summary Compensation

         The following table sets forth the information, on an accrual basis,
with respect to the compensation of our executive officers for the two fiscal
years ended December 31, 2003.

<TABLE>
<CAPTION>

                                   RESTRICTED

                                                 SUMMARY COMPENSATION TABLE
-----------------------------------------------------------------------------------------------------------------
                                    ANNUAL COMPENSATION                         LONG-TERM COMPENSATION
                            -----------------------------------     --------------------------------------------
                                                                            AWARDS            PAYOUTS
                                                                    -----------------------   -------
   NAME                                                                          SECURITIES
   AND                                                                             UNDER-             ALL OTHER
PRINCIPAL      YEAR                                OTHER ANNUAL     RESTRICTED     LYING               COMPEN-
 POSITION                    SALARY        BONUS   COMPENSATION       STOCK       OPTIONS/    LTIP     SATION
                               ($)          ($)         ($)          AWARDS(S)      SARS     PAYOUTS     ($)
                                                                        ($)          (#)       ($)
  (a)           (b)            (c)          (d)        (e)              (f)          (g)       (h)       (i)
-----------------------------------------------------------------------------------------------------------------
<S>            <C>            <C>            <C>        <C>              <C>          <C>       <C>       <C>
CEO,           2003           87,500         0          0                0            0         0         0
SCOTT          2002          120,000         0          0                0            0         0         0
Landow         2001           60,000         0          0                0            0         0         0
</TABLE>

(1) Approximately $87,500 for 2003 and $112,500 for 2002 in salary to Mr. Landow
    remains accrued but unpaid.


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


<TABLE>
<CAPTION>
                                                          NUMBER OF SECURITIES
                                                               UNDERLYING       VALUE OF UNEXERCISED
                                                              UNEXERCISED           IN-THE-MONEY
                                                            OPTIONS/SARS AT        OPTIONS/SARS AT
                                                               FY-END (#)            FY-END ($)
                SHARES ACQUIRED ON       VALUE REALIZED      EXERCISABLE/          EXERCISABLE/
     NAME          EXERCISE (#)               ($)           UNEXERCISABLE          UNEXERCISABLE
------------------------------------------------------------------------------------------------------
<S>                    <C>                      <C>              <C>                    <C>
Scott Landow
CEO                    0                        0                  0                     0
</TABLE>

<PAGE>

Option Grants in Fiscal 2003

No stock options were granted to executive officers of the Company during 2003.

Stock Options Exercised During Fiscal 2002

No stock options were exercised by executive officers of the Company during
fiscal 2003.

Fiscal Year-End Option Values

As of December 31, 2003, Mr. Landow held unexercised options to purchase 400,000
shares of the Company's common stock. The value of such options as the end of
the fiscal year was $40,000. The option value was determined by closing bid
price of the Company's Common Stock on the Nasdaq Electronic Bulletin Board on
($0.01) minus the exercise price.

LTIP Awards During Fiscal Year

We did not make any long-term incentive plan awards to any executive officers or
directors during the fiscal year ended December 31, 2003.

Director Compensation

Our directors do not receive cash for services they provide as directors. From
time to time, certain directors who are not our employees have served as
consultants to us for which they have been paid customary fees based on the
value of the services rendered and/or received grants of options to purchase
shares of our common stock. We do not provide additional compensation for
committee participation or special assignments of the Board of Directors.

Employment Contracts

The Company currently has an employment contract with Scott D. Landow. Mr.
Landow's employment agreement was entered into with Parentech prior to the
merger between it and the Company in January 2003. The agreement commenced on
July 1, 2001, and it is terminable at the will of either party. The initial
salary called for in the agreement is $120,000 per annum, but it was increased
to $150,000 per annum, with $30,000 per annum deferred, effective April 31,
2001. Mr. Landow resigned his position, effective May 31, 2003 and was
reinstated on November 1, 2003. The Company was in a dormant state for that
period.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table provides information known to us about the beneficial
ownership of our common stock as of June 18, 2004 for: (1) each person, entity
or group that is known by us to beneficially own five percent or more of our
common stock; (2) each of our directors (and former directors, as applicable);
(3) each of our named executive officers (and former officers, as applicable) as
defined in Item 402(a)(2) of Regulation S-B; and (4) our directors and executive
officers as a group. To the best of our knowledge, each stockholder identified
below has voting and investment power with respect to all shares of common stock
shown, unless community property laws or footnotes to this table are applicable.
<PAGE>

<TABLE>
<CAPTION>
                                                                                                        Percentage of
                                                              Nature of                                 Shares
                                                              Beneficial       Number of Shares         Beneficially
Directors and Officers (1)                                    Ownership        Beneficially Owned       Owned(1)
------------------------------------------------------        ----------      ------------------        ---------------

<S>                                                             <C>             <C>                       <C>
Scott D. Landow
c/o Parentech, Inc.
777 South Highway 101, Suite 215
Solana Beach, CA  92075  ..........................          Direct               1,616,700                 3.73%

Richard D. Propper, MD
c/o Parentech, Inc.
777 South Highway 101, Suite 215
Solana Beach, California  92075....................          Direct               2,741,472                 6.32%

Charles Smith
c/o Parentech, Inc.
777 South Highway 101, Suite 215
Solana Beach, CA 92075.............................          Direct                 189,844                0.004%

Acorn Technology Fund (2)
777 South Highway 101, Suite 215
Solana Beach, CA  92075............................          Direct               5,460,000                12.58%

Penny Lane Partners (3)
777 South Highway 101, Suite 215
Solana Beach, CA  92075............................          Direct               2,789,265                 6.43%

Total Directors and Executive Officers
 as a group........................................          Direct               1,616,700                 3.73%
</TABLE>

(1) Applicable percentage of beneficial ownership is based on shares outstanding
as of June 18, 2004 in the amount of 43,397,293. Beneficial ownership is
determined in accordance with rules and regulations of the Securities and
Exchange Commission. In computing the number of shares beneficially owned by a
person and the percentage ownership of that person, shares of common stock
subject to options or warrants held by that person that are currently
exercisable or exercisable within 60 days after June 18, 2004 are deemed
outstanding, but are not deemed outstanding for computing the percentage of any
other person.


(2) Acorn Technology Fund is controlled by Richard Moser.

(3) Penny Lane Partners is controlled by Steve Schafer


Equity Compensation Plan Information


<TABLE>
<CAPTION>
Plan Category                       Number of securities to            Weighted Average            Number of securities
                                    be issued upon exercise            exercise price of            available for future
                                    of outstanding options,           outstanding options,               issuance
                                      warrants and rights             warrants and rights

                                            (a)                               (b)                           (c)

<S>                                     <C>                                <C>                            <C>
Equity compensation plans
approved by security                    1,000,000                          $0.033                         2,000,000
holders

Equity compensation plans
not yet approved by                         N/A                              N/A                             N/A
security holders
</TABLE>


<PAGE>



ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


Parentech, prior to the Merger with Premier Classic Art, Inc. entered into a
consulting agreement with Chardan Ventures, LLC. Among the principals of Chardan
Ventures is Richard D. Propper, MD, who also served as a member of the board of
the Company from November 6, 2002 until December 20, 2002, and as a member of
the board of Parentech from its inception until December 20, 2002. Another of
Chardan's principals is Daniel P. Beharry, who served as director of and
Secretary to the Company until December 20, 2002. Under that agreement, the
Company is obligated to pay Chardan Ventures a fixed monthly sum in exchange for
Chardan's performing consulting services. The agreement is terminable by either
party upon thirty (30) days' notice. The Company paid Chardan Ventures $121,467
under the agreement during the year ended December 31, 2001 and $0 during the
year ended December 31, 2002.

Parentech discontinued its consulting relationship with Chardan Ventures at the
end of December, 31, 2002. On March 29, 2004 Chardan Ventures agreed to convert
its receivables into 1,007,606 shares of unregistered Parentech common stock.

Parentech entered into a month-to-month lease, on June 1, 2001 for office space
in Solana Beach, California, with Chardan Ventures a related party. Rent expense
for this facility was $3,000 per month. The lease was cancelled effective
December 31, 2002 and no rent was paid until May 15, 2004 when Parentech entered
into a lease directly with the landlord.


Dr. Propper has loaned money to the Company from time to time under a revolving
line of credit. On February 25, 2003, the Company's Board of Directors, in
consideration of Dr. Propper's forbearance of his rights to enforce a default
under the revolving credit line, granted to Dr. Propper a security interest in
the assets of the Company. At the time that this security interest was granted,
Dr. Propper was no longer a member of the Company's Board of Directors. As of
December 31, 2003, Richard Propper M.D. had loaned the Company $513,000 under
the revolving line of credit.


In December 2001 Dr. Propper loaned to Parentech a portion of the refundable
transaction fee ($37,500 ) that was paid to Premier upon the signing of the
memorandum of understanding outlining the terms of the proposed merger between
Premier and Parentech. On March 1, 2002, all parties concerned agreed that the
transaction fee would be made non-refundable, specifically 100% plus
consideration for an additional $70,000 anticipated to be expended. In exchange
for those agreements, the Company issued 495,608 shares of its common stock and
186,000 shares of Premier preferred stock to persons designated by Dr. Propper
to receive them, including Daniel P. Beharry, who at the time was Secretary and
a director of Parentech, and Scott D. Landow, who at the time was President and
a director of Parentech. In August 2002, Premier entered into an agreement with
certain of its creditors pursuant to which those creditors would release all but
$1.00 of their respective claims against Premier in exchange for the pro rata
transfer to them of all of the stock of the Company's wholly owned subsidiary,
Cool Classics, Inc. Creditors of the Company who participated in that
transaction included Charles F. Trapp, who was President, Chief Executive
Officer and a director of Premier at the time. On October 30, 2002 Premier
Classic Art, Inc. settled the litigation filed October 22, 2002 by a group of
secured creditors which included a director of Parentech, for non-payment of
past due notes and interest. Premier resolved the litigation by releasing the
stock of its subsidiary, Cool Classic Incorporated to the secured creditors. The
stock of Cool Classic Incorporated represented a portion of the collateral
securing the notes. The note holders were due $1,142,287.00 plus accrued
interest and Cool Classic Incorporated had additional liabilities of
approximately $786,000. The settlement will result in Premier reporting a gain
of approximately $1,928,000.


<PAGE>


Giltner Stevens, a director of Premier until July 2, 2002, had outstanding loans
to Premier. Periodically Mr. Stevens would roll over the promissory notes issued
to him in connection with those loans, with accrued interest being added to the
principal amount of the new term loan.

On September 3, 1999, the Premier issued a $775,000 principle 10 1/2%
convertible note due September 3, 2000 (the "Note") to Gil Stevens. On September
3, 2000 the note was reduced by $400,000. The balance of the $375,000, plus
accrued interest was never paid and subsequently dealt with when Premier
exchanged the stock of Cool Classic to secured creditors.


<PAGE>

         ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

The following documents are filed as a part of this report or are incorporated
by reference to previous filings, if so indicated: (Joe Please look at this)

(a)    Exhibits

3.1    Company's Amended and Restated Articles of Incorporation (1)

3.2    Company's Revised Amended and Restated Bylaws (1)

4.3    Specimen of Common Stock Certificate. (1)

14     Code of Ethics (3)

31.1   Certification of Chief Executive Officer Pursuant to Section 302 of the
         Sarbanes-Oxley Act. (3)

31.2   Certification of Principal Financial and Accounting Officer Pursuant
          to Section 302 of the Sarbanes-Oxley Act. (3)

32.1   Certification of Chief Executive Officer Pursuant to Section 906 of the
          Sarbanes-Oxley Act.    (3)

32.2   Certification of Chief Accounting Officer Pursuant to Section 906 of the
          Sarbanes-Oxley Act. (3)


(1)    Incorporated by reference from the Company's Registration Statement,
       as amended, on Form SB-2 filed with the Securities and Exchange
       Commission and declared effective on October 29, 1996.

(2)    Filed as exhibit 2.1 to the Company's Form 8-K dated March 26, 2001 and
       incorporated herein by reference.

(3)    Filed herewith.

       B.          Reports on Form 8-K

                   None.

ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES

Year ended December 31, 2003

Audit Fees: The aggregate fees, including expenses, billed by the Company's
principal accountant in connection with the audit of our consolidated financial
statements for the most recent fiscal year and for the review of our financial
information included in our Annual Report on Form 10-KSB; and our quarterly
reports on Form 10-QSB during the fiscal year ending December 31, 2003 was
$26,000.

Audit Related Fees: The aggregate fees, including expenses, billed by the
Company's principal accountant for services reasonably related to the audit for
the year ended December 31, 2003 were $-0-.

All Other Fees: The aggregate fees, including expenses, billed for all other
services rendered to the Company by its principal accountant during year 2003
was $-0-.

Year ended December 31, 2002

Audit Fees: The aggregate fees, including expenses, billed by the Company's
principal accountant in connection with the audit of our consolidated financial
statements for the fiscal year ended December 31, 2002 and for the review of our
financial information included in our Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2002; and our quarterly reports on Form 10-QSB
during the fiscal year ending December 31, 2002 was approximately $26,000.
<PAGE>

Audit Related Fees: The aggregate fees, including expenses, billed by the
Company's principal accountant for services reasonably related to the audit for
the year ended December 31, 2002 were $-0-.

All Other Fees: The aggregate fees, including expenses, billed for all other
services rendered to the Company by its principal accountant during year 2002
was $-0-.



<PAGE>



                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Parentech, Inc. has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.



                                                    Parentech, Inc.

                                                By /s/ Scott Landow
                                    -------------------------------
                                            Chief Executive Officer


                                                Date: July 16, 2004




                                                    Parentech, Inc.

                                                By /s/ Scott Landow
                                    -------------------------------
                                           Chief Accounting Officer



<PAGE>

                              FINANCIAL STATEMENTS

                                 Parentech, Inc.

                          (A Development Stage Company)


Table of Contents


------------------------------------------------------------------- -----------
Report of Independent Certified Public Accountants................. F - 2
------------------------------------------------------------------- -----------

------------------------------------------------------------------- -----------
Consolidated Balance Sheet as of December 31, 2003................. F - 3
------------------------------------------------------------------- -----------

------------------------------------------------------------------- -----------
Consolidated Statements of Operations..................             F - 4
------------------------------------------------------------------- -----------

------------------------------------------------------------------- -----------
Consolidated Statements of Changes in Shareholders' Deficit........ F - 5
------------------------------------------------------------------- -----------

------------------------------------------------------------------- -----------
Consolidated Statements of Cash Flows.....................          F - 6
------------------------------------------------------------------- -----------

------------------------------------------------------------------- -----------
Notes to Consolidated Financial Statements......................... F - 7 - 17
------------------------------------------------------------------- -----------

<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



To the shareholders and board of directors
Parentech, Inc.


We have audited the accompanying consolidated balance sheet of Parentech, Inc.
(a Delaware corporation) as of December 31, 2003, and the related consolidated
statements of operations, changes in shareholders' deficit and cash flows for
the years ended December 31, 2003 and 2002 and the period from February 10, 2000
(inception) through December 31, 2003. These consolidated 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 auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provided 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 Parentech, Inc. and its
subsidiaries as of December 31, 2003, and the results of their operations and
their cash flows for the years then ended December 31, 2003 and 2002 and the
period February 10, 2000 through December 31, 2003 in conformity with accounting
principles generally accepted in the United States.


These financial statements have been prepared assuming that the Company will
continue as a going concern. As discussed in Note 2 to the financial statements,
the Company has operating and liquidity concerns, has incurred an accumulated
deficit of approximately $5,122,000 through the period ended December 31, 2003,
and current liabilities exceeded current assets by approximately $1,741,000 at
December 31, 2003. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans as to these matters
are also described in Note 2. The financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
may result from the outcome of these uncertainties.


JEWETT, SCHWARTZ & ASSOCIATES
HOLLYWOOD, Florida,
March 29, 2004


                                       F-2

<PAGE>

                                 PARENTECH, INC.
                          (A Development Stage Company)
                                  BALANCE SHEET
                                DECEMBER 31, 2003

<TABLE>
<S>                                                                               <C>
ASSETS

Cash and cash equivalents                                                         $                         -
Other assets                                                                                            4,332
                                                                                  ----------------------------
      Total current assets                                                                              4,332
                                                                                  ----------------------------
Furniture and fixtures, net of accumulated depreciation of  $3,604                                        587
Intangibles, net                                                                                      658,971
                                                                                  ----------------------------
Total assets                                                                      $                   663,890
                                                                                  ============================

LIABIITIES AND SHAREHOLDERS' DEFICIT
 Liabilities:

Accounts payable and accrued expenses                                             $                   519,254
Notes payable                                                                                       1,018,431
Accrued interest payable                                                                              107,486
Accrued payroll and related payables                                                                  100,639
                                                                                  ----------------------------
 Total current liabilities                                                                          1,745,810
                                                                                  ----------------------------

Royalty agreement payable, net of discount                                                          1,628,273

Shareholders' deficit:
Series A convertible preferred stock, $.000001 par value: 5,000,000 shares
authorized, 0 shares issued and outstanding at December 31, 2003                                            -
Series B convertible preferred stock, $.000001 par value: 5,500,000 shares
authorized, 0 shares issued at December 31, 2003                                                            -
Common stock, par value $.001, 100,000,000 shares authorized, 43,397,293 shares
issued at Dec 31, 2003.                                                                                43,397

Additional paid-in-capital                                                                          2,368,417

Deficit accumulated during development stage                                                       (5,122,007)
                                                                                  ----------------------------
 Total Shareholders' deficit                                                                       (2,710,193)

                                                                                  ----------------------------
 Total liabilities & shareholders' deficit                                        $                   663,890
                                                                                  ============================
</TABLE>
     See accompanying report of independent certified public accountants and
                  notes to consolidated financial statements.


                                       F-3
<PAGE>

                                 PARENTECH, INC.
                          (A Development Stage Company)
                             STATEMENT OF OPERATIONS


<TABLE>
<CAPTION>
                                                                       For the Years Ended December 31,         February 10, 2000
                                                                                                                 (Inception) to
                                                                           2003                  2002           December 31, 2003
                                                                  ----------------------- -------------------- --------------------
<S>                                                                         <C>                  <C>                 <C>
       Revenues                                                             $     58,393         $      5,494              100,960
                                                                  ----------------------- -------------------- --------------------
       Cost of Goods Sold                                                         50,051                    -               50,051
                                                                  ----------------------- -------------------- --------------------
       Gross Profit                                                                8,342                5,494               50,909

       Operating expenses:
           General and administrative                                            346,985              769,348            2,224,389
           Research and development                                               89,792              363,240            1,638,620
           Depreciation and amortization                                         145,164              145,169              507,616
           Impairment loss                                                             -              304,504              304,504
           Gain on extinguishment of debt                                       (204,308)             (39,754)            (275,037)
                                                                  ----------------------- -------------------- --------------------
       Total operating expenses                                                  377,633            1,542,507            4,400,092
                                                                  ----------------------- -------------------- --------------------

       Operating loss                                                           (369,291)          (1,537,013)          (4,349,183)
       Other income (expense):
           Loss from misappropriation                                                  -                    -             (120,981)
           Amortization of royalty agreement discount                           (137,140)            (137,140)            (548,560)
           Interest expense                                                      (68,590)             (32,868)            (147,846)
           Interest and other income                                                  81                   72               47,763
                                                                  ----------------------- -------------------- --------------------
       Total other expense                                                      (205,649)            (169,936)            (769,624)
                                                                  ----------------------- -------------------- --------------------
       Net loss before income taxes                                             (574,940)          (1,706,949)          (5,118,807)

       Income taxes                                                                  800                  800                3,200
                                                                  ----------------------- -------------------- --------------------
       Net Loss                                                             $   (575,740)        $ (1,707,749)       $  (5,122,007)
                                                                  ======================= ==================== ====================


Net loss per common share -basic and diluted                                $      (0.01)        $      (0.09)
                                                                  ======================= ====================

Weighted Average Common Shares Outstanding -
 Basic and Diluted                                                            43,107,001           18,162,482
                                                                  ======================= ====================
</TABLE>
      See accompanying report of certified public accountants and notes to
                       consolidated financial statements.


                                       F-4
<PAGE>


                                 PARENTECH, INC.
                          (A Development Stage Company)
                       STATEMENT OF SHAREHOLDERS' DEFICIT



<TABLE>
<CAPTION>
                     Series A   Convertible Series A 8%             Series B Convertible                                Stock
                     Preferred  Shares      Convertible Cumulative  Preferred Shares   Common Stock       Stock         Subscription
                     Shares     Amount      Shares      Amount      Shares     Amount  Shares     Amount  Subscription  Receivable
<S>                    <C>          <C>      <C>        <C>         <C>        <C>     <C>        <C>     <C>           <C>
Balance at
February 10,
2000 inception
of development
stage                      -       -      -          -          -        -                   -       -           -             -
Issuance of
common stock               -       -      -          -          -        -           5,321,917       5           -             -
Issuance of
other shares of
common stock               -       -      -          -          -        -           4,151,594       4           -             -
Preferred stock
subscription               -       -      -          -          -        -                   -       -     169,052             -
Net loss
                  ---------------------------------------------------------------------------------------------------------------
Balance December
31, 2000                   -       -      -          -          -                    9,473,511       9     169,052             -
Conversion of
notes payable to
Series A
preferred stock    3,440,000       -      -          -          -        -                   -       3           -            -
Issuance of
Series B
preferred stock
for cash                   -       -      -          -  3,991,797        -                   -       4      25,000      (72,510)
Conversion of
notes payable to
common stock               -       -      -          -          -        -            2,859,510       3
Issuance of
common stock for
cash                       -       -      -          -          -        -              273,373       1           -           -
Issuance of
common stock in
connection with
the merger                 -       -      -          -          -        -              256,570       -           -           -

Net Loss                   -       -      -          -          -        -                    -       -                       -

                  ---------------------------------------------------------------------------------------------------------------
Balance December
31, 2001           3,440,000        -      -          -  3,991,797       -           12,862,964     $20    $194,052     $(72,510)
Receipt of
subscription
payments                                                                                                                  63,201
Adjustment of
subscription
payments                                                                                                    (25,000)


<CAPTION>
                                             Deficit
                                             Accumulated
                      Additional Paid        During
                      In Capital             Development
                                             Stage               Total
<S>                    <C>                   <C>                <C>
Balance at
February 10,
2000 inception
of development
stage                        -                      -                   -
Issuance of
common stock                 -                      -                   5
Issuance of
other shares of
common stock                 -                      -                   4
Preferred stock
subscription                 -                      -             169,052
Net loss                                   (1,422,539)         (1,422,539)
                     ----------------------------------------------------
Balance December
31, 2000                     -             (1,422,539)         (1,253,478)
Conversion of
notes payable to
Series A
preferred stock        859,997                      -             860,000
Issuance of
Series B
preferred stock
for cash             1,317,289                      -           1,269,783
Conversion of
notes payable to
common stock                                                            3
Issuance of
common stock for
cash                        26                      -                  27
Issuance of
common stock in
connection with
the merger                   -                      -                   -

Net Loss                     -             (1,415,979)         (1,415,979)
                    -----------------------------------------------------
Balance December
31, 2001            $2,177,312           $ (2,838,518)         $ (539,644)
Receipt of
subscription
payments                                                           63,201
Adjustment of
subscription
payments                25,000                                          -

</TABLE>






<PAGE>

<TABLE>
<S>               <C>             <C>      <C>       <C>      <C>            <C>   <C>          <C>     <C>           <C>
Issuance of
Series B
Preferred Stock                                                  133,636       -
Issuance of
common stock for
cash
Issuance of
common stock for
services                                                                             691,295          1
Conversion of
preferred shares
upon merger       (3,440,000)                                 (4,125,433)          7,565,433          -
Common stock
issued as a
result of merger                                                                  20,641,901         21
Series A
cumulative
preferred stock
assumed upon
merger                                     252,000        504
Net Loss
                           -

                  ------------------------------------------------------------------------------------------------------------------
Balance December           -           -   252,000        504          -          41,761,593         42     169,052       (9,309)
31, 2002
Conversion of
preferred stock
to common stock                           (252,000)      (504)                        56,700         56
Conversion of
stock
subscription to
common stock                                                                         939,000        939    (169,052)
Adjustment
stock
subscription
receivable                                                                                                                 9,309
Reclassification
of par value
from additional
paid in capital                                                                                  41,720
Issuances of
common stock for
services                                                                             640,000        640
Net Loss
                  ------------------------------------------------------------------------------------------------------------------
Balance December           -           -         -      $   -          -          43,397,293    $43,397    $      -      $      -
31, 2003
                  ==================================================================================================================

<CAPTION>
<S>                    <C>       <C>          <C>
Issuance of
Series B
Preferred Stock                                         -
Issuance of
common stock for
cash                       823                        823
Issuance of
common stock for
services                22,811                     22,812
Conversion of
preferred shares
upon merger                                             -
Common stock
issued as a
result of merger          (21)                          -
Series A
cumulative
preferred stock
assumed upon
merger                                                504
Net Loss                         (1,707,749)   (1,707,749)

                  ----------------------------------------
Balance December
31, 2002             2,225,925   (4,546,267)   (2,160,053)
Conversion of
preferred stock
to common stock            448                         -
Conversion of
stock
subscription to
common stock           168,113                         -
Adjustment
stock
subscription
receivable              (9,309)                        -
Reclassification
of par value
from additional
paid in capital        (41,720)                        -
Issuances of
common stock for
services                24,960                     25,600
Net Loss                           (575,740)     (575,740)
                  ----------------------------------------
Balance December    $2,368,417 $ (5,122,007)  $(2,710,193)
31, 2003
                  ========================================
</TABLE>

     See accompanying report of independent certified public accountants and
                  notes to consolidated financial statements.

                                       F-5

<PAGE>

                                 PARENTECH, INC
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF CASHFLOWS


<TABLE>
<CAPTION>
                                                                                                            February 10, 2000
                                                         For the Year Ended        For the year Ended         (Inception) to
                                                         December 31, 2003          December 31, 2002       December 31, 2003
                                                      ------------------------- -------------------------- ---------------------
<S>                                                          <C>                         <C>                   <C>
Cash Flows from Operating Activities:

         Net  (Loss)                                         $        (575,740)          $     (1,707,749)     $     (5,122,007)
         Adjustments to reconcile net loss to net
             cash used in operating activities:
         Depreciation and amortization                                 145,164                    145,169               507,616
         Impairment loss                                                     -                    304,504               304,504
         Loss on disposal of equipment                                       -                          -                 2,156
         Amortization of discount on royalty agreement                 137,140                    137,140               548,560
         Gain on extinguishment of debt                               (204,308)                   (39,754)             (275,037)
         Issuance of stock for services                                 25,600                     22,811               217,464
         Changes in operating assets and liabilities:
           (Increase) decrease in:
           Prepaid expenses                                              7,833                     75,000                     -
           Other assets                                                 (4,331)                                          (4,331)
           Accounts payable and accrued expenses                        34,502                    358,974               536,410
           Accrued interest payable                                     68,590                                           68,590
           Accrued payroll                                             108,650                    168,254               317,480
                                                      ------------------------- -------------------------- ---------------------
         Net cash from (used) in operating activities                 (256,900)                  (535,651)          (2,898,595)
                                                      ------------------------- -------------------------- ---------------------

         Cash Flows from Investing Activities:
             Purchase of intangibles                                         -                          -               (81,902)
             Purchase of equipment                                           -                          -                (7,151)

                                                      ------------------------- -------------------------- ---------------------
         Net cash used by investing activities                               -                          -               (89,053)
                                                      ------------------------- -------------------------- ---------------------

         Cash Flows from Financing Activities:
           Proceeds from notes payable                                 278,900                    468,990             1,745,390
           Repayment of notes payable                                  (22,000)                         -               (91,550)
           Issuance of stock subscription                                    -                          -               (72,510)
           Payment received from stock subscription                          -                     63,201                63,201
           Proceeds from sale of stock                                       -                        824             1,343,117
                                                      ------------------------- -------------------------- ---------------------
            Net cash provided by financing activities                  256,900                    535,015             2,987,648
                                                      ------------------------- -------------------------- ---------------------

         Net Increase (Decrease) in Cash and Cash
         Equivalents                                                         -                    (2,636)                     -
         Cash and Cash Equivalents, Beginning                                -                      2,636                     -

                                                      ------------------------- -------------------------- ---------------------
         Cash and Cash Equivalents, Ending                   $               -           $              -      $              -
                                                      ========================= ========================== =====================
</TABLE>
     See accompanying report of independent certified public accountants and
                  notes to consolidated financial statements.


                                       F-6
<PAGE>

                        Notes to the Financial Statements
         For the year period from February 10, 2000 (inception) through
                               December 31, 2003


Note 1 - Summary of Organization and Significant Accounting Policies

         Organization - The Company was incorporated in February 2000. It has
         been in the development stage since its formation and is primarily
         engaged in the creation of products that enhance the well-being of
         infants. On July 7, 2000, the Company acquired the rights to an
         FDA-registered sound and motion device called "Nature's Cradle," an
         infant environmental transition sleep system that has been shown to
         enhance infant sleep, decrease infant crying and promote child
         development.

         Because the Company meets the criteria of a development stage
         enterprise, as discussed more fully below, these financial statements
         are presented in accordance with Statements of Financial Accounting
         Standards ("SFAS") Number 7, Accounting and Reporting by Development
         Stage Enterprises".

         Development Stage Enterprise: The Company is currently devoting
         substantially all of its efforts to establishing a new business and its
         planned principle operations have not commenced as of December 31,
         2003. In their efforts to establish a new business, management is
         commencing with design of its business and marketing plans that include
         the following: preparation of a financial plan, cash forecast and
         operating budget; identifying markets to raise additional equity
         capital and debt financing; embarking on research and development
         activities; performing employment searches, recruiting and hiring
         technicians and management and industry specialists; acquiring
         operational and technological assets; and, developing market and
         distribution strategies. General and administrative expenses include
         professional fees, internet service charges, and other related
         operating expenses. Marketing and promotional expenses include costs
         incurred in connection with raising capital and promoting the
         Company.

         Basis of Presentation: In accordance with SFAS No.7, the Company's
         policy regarding the preparation of these financial statements includes
         the presenting, in addition to its statements of operations, changes in
         shareholders' (deficiency) equity and cash flows, the cumulative
         amounts of revenues and expenses, shareholder equity transactions and
         cash flows since Inception through December 31, 2003.

         The Company's independent accountants are including a "going concern"
         paragraph in their accountants' report accompanying these financial
         statements that cautions the users of the Company's financial
         statements that these statements do not include any adjustments that
         might result from the outcome of this uncertainty because the Company
         is a development stage enterprise that has not commenced its planned
         principal operations. Furthermore, the "going concern" paragraph states
         that the Company's ability to continue is also dependent on its ability
         to, among other things, obtain additional debt and equity financing,
         identify customers, secure vendors and suppliers, and establish an
         infrastructure for its operations.

         Even though the Company has not commenced planned principal operations
         or generated revenues from prospective customers nor has it secured the
         funding necessary to meet its current working capital needs, management
         believes that, despite the extent of the financial requirements and
         funding uncertainties going forward, it has under development a
         business plan that, if successfully funded and executed as an integral
         part of a financial structuring, the Company can overcome the concerns
         of the independent accountants within the next twelve months.

         Management continues to actively seek various sources and methods of
         short and long-term financing and support; however, there can be no
         assurances that some or all of the necessary financing can be obtained.
         Management continues to explore alternatives that include seeking
         strategic investors, lenders and/or technology partners and pursuing
         other transactions that, if consummated, might ultimately result in the
         dilution of the interest of the current shareholders.

<PAGE>

         Because of the nature and extent of the uncertainties, many of which
         are outside the control of the Company, there can be no assurances that
         the Company will be able to ultimately consummate planned principal
         operations or secure the necessary financing.

         Start-up Costs: Cost incurred in connection with commencing operations,
         including general and administrative expenses, are charged to
         operations in the period incurred.

         Cash and Cash Equivalents - The Company considers all unrestricted,
         highly liquid investments purchased with a maturity of three months or
         less to be cash equivalents. The carrying value of cash equivalents
         approximates fair value.

         Fair Value of Financial Instruments - The carrying amounts of cash and
         cash equivalents, accounts receivable, accounts payable and accrued
         expenses approximate fair market value because of the short maturity of
         those instruments.

         Credit Risk - It is the Company's practice to place its cash
         equivalents in high quality money market securities with one major
         banking institution. Such funds are not insured by the Federal Deposit
         Insurance Corporation; however the Company considers its credit risk
         associated with cash and cash equivalents to be minimal.

         Revenue Recognition -Revenue from product sales and demonstration units
         is recognized upon shipment to customers at which time such customers
         are invoiced. Units are shipped under the terms of FOB shipping point.
         The Company has adopted Security and Exchange Commission's Staff
         Accounting Bulletin (SAB) No. 101, which provides guidance on the
         recognition, presentation and disclosure of revenue in financial
         statements.

         Property and Equipment: Property and equipment are stated at cost.
         Depreciation and amortization are provided in amounts sufficient to
         relate the cost of depreciable assets to operations over their
         estimated service lives. When applicable, leasehold improvements and
         capital leases are amortized over the lives of respective leases, or
         the service lives of the improvements, whichever is less.

         The straight-line method of depreciation is used for financial
         reporting purposes.

         The estimated useful lives, of property and equipment, are as follows:

                                                            YEARS

         Computer equipment, peripherals and software        2-3
         Office equipment                                    3-5
         Furniture and fixtures                              5-7

         Expenditures for renewals and improvements that significantly extend
         the useful life of an asset are capitalized. The costs of software used
         in the business operations are capitalized and amortized over their
         expected useful lives. Expenditures for maintenance and repairs are
         charged to operations when incurred. When assets are sold or retired,
         the cost of the asset and the related accumulated depreciation are
         removed from the accounts and any gain or loss is recognized at such
         time.

         Intangible Assets - Intangible assets, primarily patents, are amortized
         on a straight-line basis over the estimated useful life of the asset
         (See Note 4). Intangible assets are reviewed on an annual basis for
         impairment or whenever events or changes in circumstances indicate that
         the carrying amount may not be recoverable. If the fair value is less
         than the carrying amount of the asset, an impairment loss is then
         recognized.
<PAGE>

         The Company regularly reviews its excess of cost over net assets
         acquired and other intangible assets to determine if any adverse
         conditions exist that would indicate impairment. Conditions that would
         trigger an impairment assessment include, but are not limited to, a
         significant adverse change in legal factors or business climate that
         could affect the value of an asset or an adverse action or assessment
         by a regulator. If the carrying amount of an asset exceeds the sum of
         its undiscounted cash flows, the carrying value is written down to fair
         value in the period identified. Fair value is calculated as the present
         value of estimated future cash flows using a risk-adjusted discount
         rate commensurate with the Company's weighted-average cost of capital.

         Research and Development Costs: Generally accepted accounting
         principles state that costs that provide no discernible future
         benefits, or allocating costs on the basis of association with revenues
         or among several accounting periods that serve no useful purpose,
         should be charged to expense in the period occurred. Since the Company
         is in its development stage, SFAS No. 2 "Accounting for Research and
         Development Costs" requires that certain costs be charged to current
         operations including, but not limited to: salaries and benefits;
         contract labor; consulting and professional fees; depreciation; repairs
         and maintenance on operational assets used in the production of
         prototypes; testing and modifying product and service capabilities and
         design; and, other similar costs.

         Income Taxes - The Company uses the asset and liability method of
         accounting for income taxes as required by Statement of Financial
         Accounting Standards No. 109 ("SFAS 109"), ACCOUNTING FOR INCOME TAXES.
         SFAS 109 requires the recognition of deferred tax assets and
         liabilities for the expected future tax consequences of temporary
         differences between the carrying amounts and the tax basis of certain
         assets and liabilities

         Stock Issued For Services -- The value of stock issued for services is
         based on management's estimate of the fair value of the Company's stock
         at the date of issue or the fair value of the services received,
         whichever is more reliably measurable.

         Stock-Based Compensation: The Company accounts for stock options issued
         to employees in accordance with the provisions of Accounting Principles
         Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
         Employees," and related interpretations. As such, compensation cost is
         measured on the date of grant as the excess of the current market price
         of the underlying stock over the exercise price. Such compensation
         amounts are amortized over the respective vesting periods of the option
         grant. The Company adopted the disclosure provisions of SFAS No. 123
         "Accounting for Stock-Based Compensation," and SFAS No. 148 "Accounting
         for Stock Based Compensation - Transition and Disclosure," which
         permits entities to provide pro forma net income (loss) and pro forma
         earnings (loss) per share disclosures for employee stock option grants
         as if the fair-valued based method defined in SFAS No. 123 had been
         applied.

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

         Use of Estimates: In preparing financial statements in conformity with
         generally accepted accounting principles, management is required to
         make estimates and assumptions that affect the reported amounts of
         assets and liabilities and the disclosure of contingent assets and
         liabilities at the date of the financial statements and revenues and
         expenditures during the reported periods. Actual results could differ
         materially from those estimates. Estimates may include, but not be
         limited to, those pertaining to the estimated useful lives of property
         and equipment and software, determining the estimated net realizable
         value of receivables, and the realization of deferred tax assets.
<PAGE>

         Risks and Uncertainties - The Company is dependent on continued
         financing from investors to sustain the development of Nature's Cradle
         and other activities necessary to commercialize new products.
         Management is seeking additional financing in order to fund its future
         activities. There is no assurance, however, that such financing will be
         available, if and when needed, or if available, such financing will be
         completed on commercially favorable terms, or that such development and
         other activities in connection with its planned products will be
         successful.

         Recent Accounting Pronouncements In April 2002, the Financial
         Accounting Standards Board ("FASB") issued Statement No. 145
         ("Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB
         Statement No. 13 and Technical Corrections"). This statement rescinds
         FASB Statement No. 4, Reporting Gains and Losses from Extinguishment of
         Debt, and FASB Statement No. 64, Extinguishments of Debt Made to
         Satisfy Sinking-Fund Requirements. Any gain or loss on the
         extinguishment of debt that was classified as an extraordinary item in
         prior periods has been reclassified into continuing operations.

         In June 2002, the FASB issued Statement No. 146, ("Accounting for Costs
         Associated with Exit or Disposal Activities"). This statement requires
         that a liability for a cost associated with an exit or disposal
         activity be recognized when the liability is incurred. Prior to this
         statement, a liability was recognized when the entity committed to an
         exit plan. Management believes that this statement will not have a
         material impact on the Company's financial statements; however, the
         statement will result in a change in accounting policy associated with
         the recognition of liabilities in connection with future restructuring
         charges.

         In November 2002, the FASB issued Interpretation No. 45, ("Guarantor's
         Accounting and Disclosure Requirements for Guarantees Including
         Indirect Guarantees of Indebtedness of Others.") This interpretation
         elaborates on the disclosures to be made by a guarantor in its interim
         and annual financial statements about its obligations under certain
         guarantees that it has issued. It also clarifies that a guarantor is
         required to recognize, at the inception of a guarantee, a liability for
         the fair value of the obligation undertaken in issuing the guarantee.
         This interpretation does not prescribe a specific approach for
         subsequently measuring the guarantor's recognized liability over the
         term of the related guarantee. This interpretation also incorporates,
         without change, the guidance in FASB Interpretation No. 34, "Disclosure
         of Indirect Guarantees of Indebtedness of Others," which is being
         superseded.

         In December 2002, the FASB issued Statement No. 148 ("Accounting for
         Stock-Based Compensation - Transition and Disclosure"). This statement
         amends FASB Statement No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION,
         to provide alternative methods of transition for a voluntary change to
         the fair value based method of accounting for stock-based employee
         compensation. In addition, this statement amends the disclosure
         requirements of FASB Statement No. 123 to require prominent disclosures
         in both annual and interim financial statements about the method of
         accounting for stock-based employee compensation and the effect of the
         method used on reported results.

         In January 2003, the FASB issued Interpretation No. 46 ("Consolidation
         of Variable Interest Entities"). The interpretation defines a variable
         interest entity as corporation, partnership, trust or any other legal
         structure used for business purposes that either (a) does not have
         equity investors with voting rights nor (b) has equity investors that
         do not provide sufficient financial resources for the equity to support
         its activities. A variable interest entity often holds financial
         assets, including loans or receivables, real estate or other property.
         A variable interest entity may be essentially passive or it may engage
         in research and development or other activities on behalf of another
         company. This interpretation requires a variable interest entity to be
         consolidated by a company if that company is subject to a majority of
         the risk of loss from the variable interest entity's activities or
         entitled to receive a majority of the entity's residual returns or
         both. The Company would have to consolidate any of its variable
         interest entities that meet the above criteria as of July 1, 2003. The
         interpretation also requires disclosures about variable interest
         entities that the company is not required to consolidate but in which
         it has a significant variable interest. The Company does not have any
         unconsolidated interests in any entities as of December 31, 2003.

<PAGE>

         In May 2003, the FASB issued Statement No. 150 ("Accounting for Certain
         Financial Instruments with Characteristics of both Liabilities and
         Equity"). This Statement establishes standards for how an issuer
         classifies and measures certain financial instruments with
         characteristics of both liabilities and equity. The Statement requires
         that an issuer classify a financial instrument that is within its scope
         as a liability (or an asset in some circumstances). Many of those
         instruments were previously classified as equity. The Company is
         currently classifying financial instruments within the scope of this
         Statement in accordance with this Statement. This Statement is
         effective for financial instruments entered into or modified after May
         31, 2003, and otherwise is effective at the beginning of the first
         interim period beginning after June 15, 2003. Management does not
         believe that this Statement will have a material impact on the
         Company's financial statements.

Note 2 - Going Concern

         These financial statements have been prepared assuming that the Company
         will continue as a going concern. The Company has operating and
         liquidity concerns, has incurred an accumulated deficit of
         approximately $5,122,000 through the period ended December 31, 2003,
         and current liabilities exceeded current assets by approximately
         $1,741,000 at December 31, 2003. The Company continues to pursue
         additional capital investment. However, there can be no assurance that
         the Company will be able to successfully acquire the necessary capital
         to continue their on-going development efforts and bring products to
         the commercial market. These factors, among others, create an
         uncertainty about the Company's ability to continue as a going concern.


         Having established a strong interest and demand for its first product,
         the Nature's Cradle Sound and Motion System, management believes
         Parentech has two hurdles to profitability; quantities of orders and
         production costs. Up until now, production has been limited to machined
         parts vs. molded, making the cost of each unit substantially greater
         than the price they are sold for. In order to overcome this, a
         distributor/partner had to be identified who would place an order large
         enough to justify the investment in molds or manufacturing partner had
         to be identified who was willing to invest in the cost of molds to
         bring production costs down to a level of profitability.

         Since 2002, the Company experienced several false starts with potential
         distributors and manufacturers, so management made the decision in June
         of 2003 to cease all operating expenses with the exception of filing
         requirements until a financially capable partner had entered into a
         binding commitment. In February of 2004, the Company began discussions
         with UPMG, (United Premier Medical Group) of Hong Kong who operate VIP
         Obstetric clinics within existing Chinese hospitals. Under its
         subsidiary, PME, these clinics have been using the Nature's Cradle on a
         limited basis since the beginning of 2003. UPMG saw the Nature's Cradle
         as one more means to differentiate themselves from the majority of
         obstetrics in China and was interested in entering into a partnership
         under which they would distribute the product throughout China.

         In May of 2004, Parentech signed an MOU with UPMG to set up Parentech
         China; a Hong Kong based joint venture that would distribute the
         Nature's Cradle in China. The Company anticipates signing a completed
         agreement by the end of August, 2004. UPMG introduced Parentech to
         InnoTech, a Hong Kong based company that manufactures electronic
         control systems for hospitals. InnoTech will manufacture the Nature's
         Cradle for worldwide sales. UPMG anticipates delivery of over 4,000
         babies in their next fiscal year beginning September 2004. This is a
         large enough number to justify the investment in production molds by
         InnoTech, bringing the cost of making a Nature's Cradle unit below its
         selling price. Although final details remain to be worked out,
         management believes this relationship will enable the Company to become
         profitable by the end of 2004.


Note 3 - Loss per Share

         The Company computed basic and diluted loss per share amounts for
         December 31, 2003 and 2002 pursuant to the SFAS No. 128, "Earnings per
         Share." The assumed effects of the exercise of outstanding stock
         options, warrants, and conversion of notes were anti-dilutive and
         accordingly, dilutive per share amounts have not been presented in the
         accompanying statements of operations.
<PAGE>

Note 4 - Acquisition of Intangible Assets and Goodwill

         Patent Rights:

         In July 2000, the Company acquired the rights to four patents and four
         patent pending applications in the United States, Canada, Europe and
         Japan, for a certain Nature's Cradle technology from Infant Advantage,
         Inc. ("Infant Advantage") through an assignment for the benefit of
         creditors. The cost of the patent rights totaled $1,162,173 that
         consisted of cash and the assumption of certain liabilities. The
         Company is amortizing the patents over what management believes is its
         estimated useful life of 97 months that is through their expiration
         dates from 2008 through 2010. Accumulated amortization is $503,202 and
         $359,430 at December 31, 2003 and 2002, respectively. Amortization
         expense totaled $143,772 in both 2003 and 2002.

         Estimated amortization expense for the following years for December 31:

         2004                       $147,000
         2005                       $147,000
         2006                       $147,000
         2007                       $147,000

         Goodwill:

         In November 2002, the Company merged with Premier Classic Acquisition
         Corporation (see Note 15). The consideration paid by the former
         Parentech shareholders for the Premier Acquisition Corporation common
         stock that they received in the Merger was their Parentech common
         stock. In addition, as a result of the Merger, Parentech assumed
         approximately $300,000 of liabilities and 252,000 shares of preferred
         stock. Since ownership and operational control of Premier is considered
         to have passed to the shareholders and management of Parentech as a
         result of the Merger, Parentech is treated as the entity that acquired
         the assets of Premier for accounting purposes. The liabilities assumed
         were forgiven for approximately $204,000 and reflected as a gain on
         extinguishment of debt in the statement of operations for the year
         ended December 31, 2003.

         In accordance with SFAS No. 141, the business combination was accounted
         for using the purchase method of accounting. The Company determined
         that the total consideration paid for the acquisition was $304,504. No
         identifiable assets were obtained as a result of the merger, and, as
         such, the entire purchase price was recorded as goodwill.

         As of December 31, 2002, the Company determined that the goodwill had
         no fair value. As a result an impairment loss for the entire
         consideration of $304,504 was recorded in 2002.

Note 5 - Royalty Agreement


         In connection with the acquisition of the patent rights, the Company
         assumed a royalty liability due to a third party assignee totaling
         $1,714,250. Upon acquisition, the note was discounted approximately
         $634,000 that is being amortized over a 55 month period, which is
         approximately $137,000 per annum. The payoff of this liability is based
         upon 3% of the gross sales generated from the Nature's Cradle products.
         Management believes that sales from this product will be sufficient to
         payoff this debt within five years. THERE IS NO SET REPAYMENT SCHEDULE
         AND WE ARE NOT OBLIGATED TO REPAY THIS ROYALTY LIABILITY THERE IS NO
         SET REPAYMENT SCHEDULE AND WE ARE NOT OBLIGATED TO REPAY THIS ROYALTY
         LIABILITY IN THE ABSENCE OF SALES OF NATURE'S CRADLE PRODUCTS.


<PAGE>

Note 6 - Supplemental Disclosures

<TABLE>
<CAPTION>
                                                                                                           February 10, 2000
                                                        For the Year Ended       For the year Ended     (Inception) to December
                                                        December 31, 2003         December 31, 2002             31, 2003
                                                     ------------------------- ------------------------ -------------------------
<S>                                                               <C>                     <C>                        <C>
      Interest Paid                                               $         -             $      1,430               $     1,430
      Income taxes paid                                                   800                      800                     3,200

      Non-cash transactions:
      Issuance of Series A for notes payable                                -                        -                   860,000
      Issuance of common stock for notes payable                            -                        -                         3
      Assumption of discounted royalties payments
      which totaled $1,714,250                                              -                        -                 1,080,268
      Reclassification of accounts payable to
      notes payable                                                    88,038                        -                    88,038
      Reclassification of accrued payroll to notes
      payable                                                         204,503                        -                   204,503
      Conversion of stock subscription to common
      stock                                                           169,052                        -                   169,052
      Conversion of preferred stock to common stock                       504                        -                       504
      Adjustment to subscription receivable and
      common stock subscribed                                           9,309                                              9,309
      Reclassification of par value of common
      stock  from additional paid in capital                           42,360                        -                    42,360
      Issuance of common stock subscription                                 -                   25,000                    25,000
      Issuance of common stock for services                            25,600                   22,812                   217,464
</TABLE>


Note 7 - Property and Equipment

         Property and equipment are valued at cost, less accumulated
depreciation as follows:

                                               At December 31,
                                                    2003
                                              ------------------
Equipment                                                $4,191
Less: Accumulated depreciation                           $3,604
                                              ------------------
Property and equipment, net                                $587
                                              ------------------

Note 8 - Income Taxes

         The Company provides for income taxes in accordance with SFAS No. 109
         using an asset and liability based approach. Deferred income tax assets
         and liabilities are recorded to reflect the tax consequences on future
         years of temporary differences of revenue and expense items for
         financial statement and income tax purposes.

<PAGE>

         Since its formation the Company has incurred net operating losses. As
         of December 31, 2003 the Company had a net operating loss carryforward
         available to offset future taxable income for federal and state income
         tax purposes.

         SFAS No. 109 requires the Company to recognize income tax benefits for
         loss carryforwards that have not previously been recorded. The tax
         benefits recognized must be reduced by a valuation allowance if it is
         more likely than not that loss carryforwards will expire before the
         Company is able to realize their benefit, or that future deductibility
         is uncertain. For financial statement purposes, the deferred tax asset
         for loss carryforwards has been fully offset by a valuation allowance
         since it is uncertain whether any future benefit will be realized.

         Deferred income taxes reflect the net tax effects of temporary
         differences between the carrying amounts of assets and liabilities for
         financial reporting purposes and the amounts used for income tax
         purposes. Significant components of the Company's deferred tax assets
         at December 31, 2003 are approximately as follows:

                                                                     2003
                                                        -----------------------

   Net operating loss carryforward                               $  2,000,000
   Valuation allowance for deferred tax assets.                    (2,000,000)
                                                        -----------------------

                  Net deferred tax assets                        $          -
                                                        =======================


         Income tax expense is $800 for the years ended December 31, 2003 and
         2002. Such amounts consist of minimum state taxes payable.

Note 9 - Commitments and Material Agreements

         The Company entered into a lease for an office in San Ramon,
         California. The lease ended at December 31, 2001, and the space was
         rented on a month-to-month basis. Rent expense for this facility is
         approximately $1,800 per month. The Company terminated the lease as of
         August 31, 2003.

         The Company entered into a month-to-month lease, on June 1, 2001 for
         office space in Solana Beach, California). Rent expense for this
         facility is $3,000 per month. The lease was cancelled effective
         December 31, 2002 and terms are currently being renegotiated. The
         Company accrued $12,000 for the year ended December 31, 2003.

         Total rent expense was $32,609 and $54,709 for the fiscal years ended
         December 31, 2003 and 2002, respectively.

         In March 2003, the Company entered into an exclusive three-year
         agreement with Parentech Korea, Inc. (PTK), an unrelated party, to
         distribute Nature's Cradle products in Korea. The agreement provides
         for revenues from both leasing and selling Nature's Cradle units.
         Leased units are rented for $70 per four-month period. Units for sale
         are priced between $299 and $339. As of March 29, 2004, no units were
         shipped under this agreement.

Note 10 - Notes Payable

         At December 31, 2003, the Company had a promissory note due on demand
         with a shareholder. The total principal amount due under this note was
         $513,100. On February 27, 2003, this shareholder filed a UCC financing
         statement to secure amounts due to him under this note, and extended
         the maturity date until March 31, 2003. The terms of this note are
         currently being renegotiated. As of December 31, 2003, the total amount
         of accrued interest due to this shareholder under this note was
         $64,271.

<PAGE>

         On December 14, 2001, the Company entered into a promissory note for
         $37,500 with an unrelated party in connection with the merger with
         Premier Classic Acquisition Corporation. Interest on the note accrued
         at 8% per annum. The principal and unpaid accrued interest was due and
         payable upon the successful completion of the contemplative merger with
         Premier by September 1, 2002. Because the merger was not completed by
         September 1, 2002 the note and related interest were cancelled and
         income from the extinguishment of debt was recognized amounting to
         $39,754 for the year ended December 31, 2002.


         The Company borrowed $75,000 to loan to Premier Classic Art, as part of
         the terms when it entered into the original MOU to merge in 2001. In
         February of 2002, Premier agreed to issue unregistered stock to the
         holders of those notes as risk enhancement, based on its likely
         inability to repay the $75,000 should the merger not be compensated.
         The note holders then agreed to forgive their notes, should the merger
         not occur by September 1, 2002, which was the result.

         During December 2001, the Company signed a Memorandum of Understanding
         to merge with Parentech, Inc. ("Parentech") of Solana Beach,
         California. Parentech paid the Company a transaction fee of $75,000
         upon execution of this memorandum. The payment was made in the form of
         a six month, 8% loan which will terminate upon completion of the
         merger. If the merger is not completed, under certain circumstances,
         the Company shall owe Parentech a breakup fee of $75,000, which amount
         will be paid in addition to repayment of the loan. On March 1, 2002,
         the Company agreed to issue 683,108 shares of common stock and 186,000
         shares of preferred stock of Premier to certain parties who provided
         the transaction fee funding in consideration of Parentech waiving its
         rights under certain circumstances to a return of the transaction fee.


         As of December 31, 2003, the Company has a promissory note with its
         President due on demand, total principal amount due under the
         promissory note was $260,576. The accrued interest on the obligation as
         of December 31, 2003 was $39,549. The promissory note consists of
         balances due for cash proceeds provided to the Company, for operating
         expenses incurred on the Company's behalf and accrued wages and
         benefits.

         On March 20, 2003 the Company offered promissory notes to existing
         investors for up to $650,000. The notes accrue interest at 5% per annum
         and are convertible into common stock at $0.25 per share anytime during
         the five years subsequent to the issuance of the note. In addition, for
         every $1,000 in note value, warrants are granted to purchase eight
         thousand shares at $.25 per share. Four warrants can be exchanged for
         one share of common stock. The warrants and the exchange right expire
         five years from the offering date. During 2003 approximately $182,000
         in such promissory notes were issued. None of the notes have been
         converted, nor have any of the related warrants have been exercised.

Note 11 - Preferred Stock and Subscription Agreements

         On March 20, 2001, the Company issued 3,440,000 shares of Series A
         Preferred Stock for $860,000. Each share of Series A Preferred Stock is
         convertible at the option of the holder at any time into one share of
         common stock of the Company. Dividends are payable to shareholders when
         declared by the Board of Directors, are non-cumulative, and are paid in
         preference to any dividends declared with respect to common stock of
         the Company. All shares of Series A Preferred Stock were automatically
         converted to common stock upon the completion of the merger with
         Premier Classic Acquisition Corporation on November 6, 2002 (See Note
         15).

         Beginning on May 1, 2001, the Company sold 4,125,433 shares of Series B
         Preferred Stock at $.33 per share. Each share of Series B Preferred
         Stock is convertible at the option of the holder thereof at any time
         into one share of common stock of the Company. Dividends are payable to
         Series B Preferred shareholders when declared by the board of
         directors, are non-cumulative, and are paid on an equal basis with
         Series A Preferred shareholders and in preference to any dividends
         declared to common shareholders. All shares of Series B Preferred Stock
         were automatically converted into common stock upon the completion of
         the merger with Premier Classic Acquisition Corporation on November 6,
         2002.

<PAGE>

         In August 2001, the Company acknowledged an obligation to reimburse
         $169,052 in promotional expenses incurred by a shareholder prior to the
         formation of the Company. Effective June 5, 2003, the Company converted
         the stock subscription into 939,000 of common stock based on the market
         price of $0.18 as of that date.

         In November 2002, upon the merger with Premier Classic Acquisition
         Corp., the Company assumed 252,000 shares of 8% cumulative convertible
         preferred stock. Holders of the Preferred Shares are entitled to
         receive cumulative cash dividends at the annual rate of $0.20 per share
         payable quarterly when and if declared by the Board of Directors. The
         Company has not declared a dividend since issuance. The Preferred
         Shares are convertible, in whole or in part, at the option of the
         holders thereof, into .2222 shares of common stock. The Preferred
         Shares rank senior to the common stock. The Preferred Shares have a
         liquidation preference of $2.50 per share plus all declared and
         undeclared dividends. Effective January 1, 2003, 252,000 shares of
         preferred stock was converted into 56,700 shares of common stock based
         on the agreement.

Note 12 - Common Stock

         On March 12, 2002, the Company issued 671,737 shares of common stock to
         Pacific Asia Ventures, LLC ("Pacific Asia"), of which both Dr. Richard
         Propper and Mr. Daniel Beharry are members, as compensation for
         consulting services. The value of the services received was estimated
         to be $22,167 based on management's estimate of the fair value of the
         shares issued. The shares issued are subject to a right of repurchase
         for $100 should Pacific Asia not meet certain milestones. This
         transaction was exempt from registration under the Securities Act of
         1933, as amended, pursuant to Section 4(2). No underwriters were
         involved in this transaction, and no commissions were paid to any party
         in connection with it.

         On March 12, 2002, the Company issued 19,558 shares of common stock to
         an unrelated party as compensation for legal services. The value of the
         services received was estimated to be $645 based on management's
         estimate of the fair value of the shares issued. This transaction was
         exempt from registration under the Securities Act of 1933, as amended,
         pursuant to Section 4(2). No underwriters were involved in this
         transaction, and no commissions were paid to any party in connection
         with it.


         On May 28, 2003, the Company issued 640,000 shares of common stock to
         an unrelated third party as compensation for marketing and consulting
         services relating to the Spain market. The value of the services
         received was estimated to be $25,600 based on management's estimate of
         the fair market value of the shares issued, based on a share price of
         $.25/share. This transaction was exempt from registration under the
         Securities Act of 1933, as amended, pursuant to Section 4(2). No
         underwriters were involved in this transaction, and no commissions were
         paid to any party in connection with it.


<PAGE>

Note 13 - Stock Compensation Plans

         Effective August 5, 2001, the Company adopted the Parentech, Inc. 2001
         Stock Option Plan, which authorizes the granting of stock options to
         employees, outside directors, consultants, and vendors. Under the Plan,
         awards are made in the form of incentive stock options (ISOs) or
         nonstatutory stock options (NSOs). Only employees of the Company are
         eligible for the grant of ISOs.

         The total options that can be awarded under the 2001 Stock Option Plan
         are 2,000,000. The exercise price of each ISO granted under the plan
         must equal 100% of the market price of the Company's stock on the date
         of grant. The exercise price of each NSO grant under the plan cannot be
         less than 85% of the market price of the Company's stock on the date of
         grant. An option's maximum term is 10 years.

         Under the terms of the merger with Premier Classic Acquisition
         Corporation, each Parentech option was converted into 1.5 options for
         Premier Classic Acquisition Corporation stock. As a result, the total
         options that can be awarded were increased to 3,000,000. As of December
         31, 2003, the Company had issued and outstanding 1,162,500 options.
         None of the issued and outstanding options have been exercised.

         A summary of the options in Parentech, Inc. issued to employees and
         consultants at December 31, 2003 is presented below:

<TABLE>
<CAPTION>
                                                                                                Weighted Average
                                                                     Number of Options           Exercise Price
                                                                   -----------------------    ----------------------
<S>                                                                             <C>           <C>
         Stock Options

         Balance at January 1, 2003                                             3,000,000     $         0.03
         Granted                                                                        -     $            -
         Exercised                                                                      -     $            -
         Forfeited                                                              1,837,500     $         0.03
                                                                   -----------------------    ----------------------
         Balance at December 31, 2003                                           1,162,500     $         0.03
                                                                   =======================    ======================

         Options exercisable at December 31, 2003                                 814,324     $         0.03
                                                                   -----------------------    ----------------------
         Weighted average fair value of options granted during
           the period                                                                         $         0.00
                                                                                              ======================
</TABLE>

         The following table summarizes information about employee stock options
         and consultant warrants outstanding at December 31, 2003:

<TABLE>
<CAPTION>
                               Options Outstanding                                              Options Exercisable
----------------------------------------------------------------------------------    -----------------------------------------
                                                    Weighted
                                                    Average            Weighted
        Range of                                   Remaining           Average               Number                Weighted
        Exercise        Number Outstanding        Contractual          Exercise          Exercisable at            Average
         Price         at December 31, 2003           Life              Price           December 31, 2003       Exercise Price
      -------------    --------------------      ---------------     -------------    ---------------------     ---------------
<S>                               <C>              <C>               <C>                                <C>      <C>
   $          0.03                1,162,500        7.62 years        $       0.03                   814,324     $          0.03
                       --------------------                          ------------     ---------------------     ---------------

                       ====================                          ============     =====================     ===============
                                  1,162,500                          $       0.03                   814,324     $          0.03
                       ====================                          ============     =====================     ===============
</TABLE>

Note 14 - Contingencies

         On July 6, 2001, the Company notified a former consultant of a breach
         of contract under both a consulting agreement and a licensing agreement
         signed by the Company on April 17, 2000. The letter requested repayment
         of $130,000, paid in consideration for the licensing agreement and
         stated that any obligation of the Company to pay additional
         consideration under either the consulting agreement or the license
         agreement were void. While resolution of this matter is pending,
         management does not believe that the outcome will have a material
         adverse effect on the Company's financial condition.

<PAGE>

Note 15 - Merger

         On November 6, 2002, Parentech merged with and into Premier Classic
         Acquisition Corporation, a Delaware corporation ("Premier Acquisition
         Corporation") a wholly-owned subsidiary of Premier Classic Art, Inc.
         ("Premier"). Parentech is the surviving corporation in the Merger and,
         as a result of the Merger, became a wholly-owned subsidiary of Premier.

         As provided for in the Agreement and Plan of Merger and Reorganization
         (the "Merger Agreement") entered into between the Premier Acquisition
         Corporation, Premier and Parentech, the Merger resulted in the
         shareholders of Parentech receiving 1.5 shares of Premier common stock
         in exchange for each share of Parentech common or preferred stock they
         held. A total of 31,748,856 shares of Premier common stock were issued
         to Parentech shareholders in consummation of the Merger. Immediately
         following the Merger, Premier had a total of 41,761,593 shares of
         common stock issued and outstanding excluding shares issuable upon
         exercise of stock options and conversion of shares of Series A
         Preferred Stock.

         In addition, the resignations of Charles F. Trapp and Louis A. Pistilli
         from the Board of Directors of Premier and from their positions as
         President and Chief Executive Officer and as Secretary of Premier,
         respectively, took effect upon the close of the Merger. By action taken
         by Premier's Board of Directors, upon the close of the Merger, Gerald
         Beemiller, Daniel P. Beharry, Scott D. Landow, Richard Rosenblum,
         Richard D. Propper and Charles R. Smith were appointed directors, and
         Scott D. Landow was appointed President and Treasurer of Premier and
         Daniel P. Beharry was appointed Secretary of Premier. Pursuant to the
         Merger Agreement, all of the officers and directors of Parentech prior
         to the Merger continued in those roles with Parentech subsequent to the
         Merger.

         As a result of the Merger, former shareholders of Parentech hold
         31,748,856 shares of Premier common stock out of 41,761,593 issued and
         outstanding shares, or 76% of the issued and outstanding common stock
         of Premier. While the former Parentech shareholders now own more than a
         majority of the issued and outstanding shares of Premier, no individual
         shareholder holds enough shares to assert control over Premier, and
         neither Premier nor Parentech is not aware of any group of shareholders
         that is acting together in order to assert control over Premier.

         Pursuant to the Merger Agreement, all outstanding but unexercised
         options to purchase shares of Parentech common stock, whether vested or
         unvested, were assumed by Premier at the time of the Merger and are now
         options to purchase shares of Premier common stock.

         On January 16, 2003, Parentech, a 100% owned subsidiary of Premier,
         merged into Premier, and pursuant to such merger, Premier's name was
         changed to "Parentech, Inc."

Note 16 - Subsequent Events


         On February 4, 2004, the Company signed a memorandum of understanding
         with a potential merger candidate.