<PAGE>

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

                                   FORM 10-KSB

  (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:  None

         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 ]

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

                                     PART I

<S>           <C>                                                                                                     <C>
Item 1.       Description of the Business........................................................................         2
Item 2.       Description of the
Property.........................................................................................................         6
Item 3.       Legal Proceedings..................................................................................         6
Item 4.       Submission of Matters to Vote of Security Holders..................................................         6

                                     PART II

Item 5.       Market for Common Equity and Related Shareholder Matters...........................................         7
Item 6.       Management's Discussion and Analysis...............................................................         7
Item 7.       Financial Statements...............................................................................        16
Item 8.       Changes in and Disagreements with Accountants on Accounting and
                  Financial Disclosure...........................................................................        16

                                    PART III

Item 9.       Directors, Executive Officers, Promoters and Control Persons.......................................        17
Item 10.      Executive Compensation.............................................................................        18
Item 11.      Security Ownership of Certain Beneficial Owners and Management.....................................        20
Item 12.      Certain Relationships and Related Transactions.....................................................        21

                                     PART IV

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

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


<PAGE>



                                     PART I

THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 PROVIDES A "SAFE HARBOR"
FOR FORWARD LOOKING STATEMENTS. This Form 10-KSB contains statements that are
not historical facts. These statements are called "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. These statements involve important known
and unknown risks, uncertainties and other factors and can be identified by
phrases using "estimate," "anticipate," "believe," "project," "expect,"
"intend," "predict," "potential," "future," "may," "should" and similar
expressions or words. Our future results, performance or achievements may differ
materially from the results, performance or achievements discussed in the
forward-looking statements. There are numerous factors that could cause actual
results to differ materially from the results discussed in forward-looking
statements, including:

o      Changes in existing product liability, tort or warranty laws or the
       introduction of new laws, regulations or policies that could affect our
       business practices: these laws, regulations or policies could impact our
       industry as a whole, or could impact only those portions in which we are
       currently active.

o      Changes in economic conditions, including changes in interest rates,
       currency fluctuations, financial market performance and our industry:
       these types of changes can impact the economy in general, resulting in a
       downward trend that impacts not only our business, but all companies with
       which we compete; or, the changes can impact only those parts of the
       economy upon which we rely in a unique fashion, including, hospitals.

o      Changes in relationships with major suppliers: an adverse change in our
       relationships with suppliers would have a negative impact on our earnings
       and financial position.

o      Armed conflicts and other military actions: the considerable political
       and economic uncertainties resulting from these events, could adversely
       affect our order intake and sales.

o      Factors that we have discussed in previous public reports and other
       documents filed with the Securities and Exchange Commission.

This list provides examples of factors that could affect the results described
by forward-looking statements contained in this Form 10-KSB. However, this list
is not intended to be exhaustive; many other factors could impact our business
and it is impossible to predict with any accuracy which factors could result in
which negative impacts. Although we believe that the forward-looking statements
contained in this Form 10-KSB are reasonable, we cannot provide you with any
guarantee that the anticipated results will be achieved. All forward-looking
statements in this Form 10-KSB are expressly qualified in their entirety by the
cautionary statements contained in this section and you are cautioned not to
place undue reliance on the forward-looking statements contained in this Form
10-KSB. In addition to the risks listed above, other risks may arise in the
future, and we disclaim any obligation to update information contained in any
forward-looking statement.
<PAGE>

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.

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

Premier evaluated 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 entered into a Memorandum of Understanding for
that purpose. Upon execution of this memorandum, Parentech paid the Company a
transaction fee of $75,000. 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.

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.

Prior to the merger, 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.



                                       2
<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. 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.

Percentage Ownership. The former Shareholders of Parentech now own 76% of the
issued and outstanding common stock of Premier. However, no single shareholder
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.

As of November 6, 2002, the effective date of the Merger, virtually all of the
operations of Premier were 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 CradleTM 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.


                                       3
<PAGE>

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.

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, the Company has received a purchase order from another
network in Korea. Parentech is in the process of establishing both manufacturing
and distribution capability in Mainland China, however there is no such
relationship 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 the 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.

                                       4
<PAGE>

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 stimuli. In 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.

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, which put the
Company's agreement on hold.

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 2008 and 2010. 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.

                                       5
<PAGE>

Parentech uses the trademark Nature's Cradle Sound and Motion Sleep SystemTM 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.

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. Employees of the
Company are not represented by labor unions. The Company considers its
relationship with its employees to be good.



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


                                       6
<PAGE>

PART II


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

MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER 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.


         PERIOD                    HIGH BID             LOW BID
         ------                    --------             -------

      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

Holders

As of December 31, 2003, the Company had approximately 700 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.



                                       7
<PAGE>

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. 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.

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 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 predecessor 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, which the Company believes is 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 still in process.

                                       8
<PAGE>


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.


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,
2003, we increased our accumulated deficit to approximately $ 5.2 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 2003, we had borrowed $1.0 million and had additional payables and accrued
expenses of approximately $725,000.



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

                                       9
<PAGE>



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.

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.

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. 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.

                                       10
<PAGE>


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.

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. 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

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.

                                       11
<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. 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.


                                       12
<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.


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 $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
$89,792 in fiscal 2003 compared with $363,240 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.

Gain on Extinguishment of Debt

During the year ended December 31, 2003, the Company recognized a gain on
extinguishment of debt amounting to $204,308, compared to $39,754 for the same
period in 2004.


                                       13
<PAGE>


Impairment Losses

During the year ended December 31, 2002, the Company incurred an impairment loss
on its goodwill amounting to $304,504, with no corresponding charge in the same
period in 2003. As of December 31, 2002, the Company determined that the
goodwill had no fair value.

General and Administrative Expenses

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

Interest Expense

Interest expense for fiscal 2003 was $68,590 as compared to $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 $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
$363,240 in fiscal 2002 compared with $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
$769,348 for fiscal 2002 compared with $504,795 for fiscal 2001. The increased
costs in 2002 resulted primarily from costs incurred as the result of the
Merger.

Impairment Losses

During the year ended December 31, 2002, the Company incurred an impairment loss
on its goodwill amounting to $304,504 as discussed above, with no corresponding
charge in the same period in 2001.

Interest Expense

Interest expense for fiscal 2002 was $32,868 as compared to $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.

                                       14
<PAGE>


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.

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.

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.


                                       15
<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' deficit

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.


                                       16
<PAGE>



                                    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.

<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, 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, Mr.
Landow had founded and operated Beyond Conception, Inc., a Texas-based specialty
retail chain of 16 high-end newborn and infant stores.

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 shareholders 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.


                                       17
<PAGE>


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.


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
 Name and Principle                 Year Ended                       Stock
     Position                       December 31,     Salary ($)      Award(s) ($)
-------------------                 ------------    ------------     ------------

<S>                                 <C>              <C>             <C>
Scott D. Landow, President          2003             $87,500(1)      $        0
                                    2002             120,000(1)               0
</TABLE>

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


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.

                                       18
<PAGE>


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.

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.

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.



                                       19
<PAGE>



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 January 14, 2002 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
shareholder 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.

<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            1,716,660               3.96%

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

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

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

Penny Lane Partners
777 South Highway 101, Suite 215
Solana Beach, CA  92075                     Direct            2,789,265               6.43%
Total Employees and Directors as a group                      1,906,504                4.4%
</TABLE>

(1) Applicable percentage of beneficial ownership is based on shares
outstanding as of March 15, 2004. 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 March 15, 2004 are deemed outstanding, but are not deemed
outstanding for computing the percentage of any other person.



                                       20
<PAGE>





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                     1,162,500                       $0.033                          1,837,500
holders

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




ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         At December 31, 2003, the Company had a promissory note due on demand
         with a Richard Propper, MD. 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.


         As of December 31, 2003, the Company has a promissory note with its
         Scott Landow 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.

         The Company 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 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.






                                       21
<PAGE>



                              FINANCIAL STATEMENTS

                                 Parentech, Inc.

                          (A Development Stage Company)


Table of Contents


<TABLE>
-----------------------------------------------------------------------------------------
<S>                                                                           <C>
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
-----------------------------------------------------------------------------------------
</TABLE>

<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. 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 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
                                                                                             December 31,
                                                            2003            2002                 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 B
                                                                  Series A Convertible       Series A 8% Cumulative     Convertible
                                                                    Preferred Shares          Convertible Preferred     Preferred
                                                                -------------------------   -------------------------   -----------
                                                                  Shares        Amount        Shares        Amount        Shares
                                                                -----------   -----------   -----------   -----------   -----------
<S>                                                            <C>           <C>           <C>           <C>           <C>
Balance at February 10, 2000 inception of development stage            --            --            --            --            --

Issuance of common stock                                               --            --            --            --            --


Issuance of other shares of common stock                               --            --            --            --            --

Preferred stock subscription                                           --            --            --            --            --
Net loss
                                                                -----------   -----------   -----------   -----------   -----------
Balance December 31, 2000                                              --            --            --            --            --

Conversion of notes payable to Series A preferred stock           3,440,000          --            --            --            --


Issuance of Series B preferred stock for cash                          --            --            --            --       3,991,797


Conversion of notes payable to common stock                            --            --            --            --            --


Issuance of common stock for cash                                      --            --            --            --            --



Issuance of common stock in connection with the merger                 --            --            --            --            --

Net Loss                                                               --            --            --            --            --
                                                                -----------   -----------   -----------   -----------   -----------
Balance December 31, 2001                                         3,440,000          --            --            --       3,991,797
Receipt of subscription payments
Adjustment of subscription payments
Issuance of Series B Preferred Stock                                                                          133,636          --
Issuance of common stock for cash
Issuance of common stock for services
Conversion of preferred shares upon merger                       (3,440,000)                                             (4,125,433)
Common stock issued as a result of merger
Series A cumulative preferred stock assumed upon merger                                         252,000           504           504
Net Loss
                                                                -----------   -----------   -----------   -----------   -----------
Balance December 31, 2002                                              --            --         252,000           504          --
Conversion of preferred stock to common stock                                                  (252,000)         (504)
Conversion of stock subscription to common stock
Adjustment  stock subscription receivable
Reclassification of par value from additional paid in capital
Issuances of common stock for services                                                                           --
Net Loss
                                                                -----------   -----------   -----------   -----------   -----------
Balance December 31, 2003                                              --            --            --     $      --            --
                                                                ===========   ===========   ===========   ===========   ===========

<CAPTION>

                                                                  Series B                                                 Stock
                                                                 Convertible                                 Stock      Subscription
                                                                 Preferred          Common Stock          Subscription  Receivable
                                                                 -----------  -------------------------   ------------  -----------
                                                                   Amount        Shares       Amount
<S>                                                            <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          --            --


Issuance of Series B preferred stock for cash                          --            --               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                                              --      12,862,964   $        20   $   194,052   $   (72,510)
Receipt of subscription payments                                                                                             63,201
Adjustment of subscription payments                                                                           (25,000)
Issuance of Series B Preferred Stock
Issuance of common stock for cash
Issuance of common stock for services                               691,295             1                                    22,811
Conversion of preferred shares upon merger                        7,565,433          --
Common stock issued as a result of merger                        20,641,901            21                                       (21)
Series A cumulative preferred stock assumed upon merger
Net Loss
                                                                -----------   -----------   -----------   -----------   -----------
Balance December 31, 2002                                              --      41,761,593            42       169,052        (9,309)
Conversion of preferred stock to common stock                                      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 31, 2003                                              --      43,397,293   $    43,397   $      --     $      --
                                                                ===========   ===========   ===========   ===========   ===========

<CAPTION>

                                                                 Additional
                                                                   Paid In        Deficit Accumulated
                                                                   Capital         During 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                          --
Issuance of Series B Preferred Stock                                                                 --
Issuance of common stock for cash                                       823                           823
Issuance of common stock for services                                                              22,812
Conversion of preferred shares upon merger                                                           --
Common stock issued as a result of merger                                                            --
Series A cumulative preferred stock assumed upon merger
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 31, 2003                                       $ 2,368,417    $(5,122,007)   $(2,710,193)
                                                                ===========    ===========    ===========
</TABLE>


See accompanying report of independent certified public accountants and notes to
the 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>

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.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.


                                      F-7
<PAGE>

         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. 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.


                                      F-8
<PAGE>

         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.

         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.


                                      F-9
<PAGE>

         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. 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.


                                      F-10
<PAGE>

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.

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.

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.


                                      F-11
<PAGE>

         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.

Note 6 - Supplemental Disclosures

<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>
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>


                                      F-12
<PAGE>

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.

         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.


                                      F-13
<PAGE>

         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.

         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.

         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.


                                      F-14
<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. 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.


                                      F-15
<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                             Weighted
Range of                   Number                Remaining        Average           Number             Average
Exercise               Outstanding at           Contractual      Exercise       Exercisable at        Exercise
  Price              December 31, 2003              Life           Price       December 31, 2003        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.


                                      F-16
<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. The terms of such merger are
         currently being negotiated.


                                      F-17
<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:

(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

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

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

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

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


(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.


                                       22
<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-.


                                       23
<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
                                                and Chief Accounting Officer

                                             Date: March 30, 2004


                                       24