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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB


[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the fiscal year ended  December 31, 2003

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from                     to

Commission file number 0-24053


                              CPC OF AMERICA, INC.
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)


     Nevada                                          11-3320709
---------------------------------------------   --------------------------------
     (STATE OR OTHER JURISDICTION OF                 (I.R.S. EMPLOYER
     INCORPORATION OR ORGANIZATION)                  IDENTIFICATION NO.)


     6336 17th Street Circle East
     Sarasota, Florida                               34243
---------------------------------------------   --------------------------------
     (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)        (ZIP CODE)

          ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE (941) 727-4370
                                                         --------------

SECURITIES TO BE REGISTERED UNDER SECTION 12(b) OF THE ACT:

     TITLE OF EACH CLASS                          NAME OF EACH EXCHANGE ON WHICH
     TO BE SO REGISTERED                          EACH CLASS IS TO BE REGISTERED

           None                                   N/A
-----------------------------------------   ------------------------------------


SECURITIES TO BE REGISTERED UNDER SECTION 12(g) OF THE ACT:

                         Common Stock, $.0005 par value

--------------------------------------------------------------------------------
                                (TITLE OF CLASS)

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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act of 1934 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-K contained in this form, and will not 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 ]
                   ---

The registrant's revenues for its most recent fiscal year were: $ -0-.

The aggregate market value of the voting and non-voting stock held by
non-affiliates of the registrant as of March 29, 2004 was approximately
$78,793,682.

The number of shares of the common stock outstanding as of March 29, 2004 was
6,618,352.

                   DOCUMENTS INCORPORATED BY REFERENCE: NONE.

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PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

         UNLESS OTHERWISE INDICATED, ALL REFERENCES TO OUR COMPANY INCLUDE OUR
WHOLLY-OWNED SUBSIDIARIES, CPCA 2000, INC., A NEVADA CORPORATION, HEARTMED,
INC., A NEVADA CORPORATION, AND MED CLOSE CORP., A NEVADA CORPORATION, AND OUR
MAJORITY-OWNED SUBSIDIARY, MED ENCLOSURE, LLC, A NEVADA LIMITED LIABILITY
COMPANY.

General
-------

         CPC of America, Inc. was formed under the laws of the State of Nevada
on April 11, 1996 to develop and acquire cardiology medical devices, therapeutic
devices and disposable products. To date, we have completed the development of
an external counterpulsation device for the treatment of coronary artery disease
known as the CPCA 2000. In March 2003, we received FDA clearance to market the
CPCA 2000 counterpulsation unit as a Class III medical device. In addition, we
have acquired a controlling interest in Med Enclosure, LLC, a development stage
company engaged in the business of developing a patented internal puncture
closing device and technique known as "MedClose." As of the date of this report,
we have not commenced revenue producing operations. Our operations to date have
consisted of the design and development of our counterpulsation units and
MedClose, and the raising of capital.

         In November 1999, we acquired a 73.3% interest in Med Enclosure, LLC, a
limited liability company organized under the laws of the State of Nevada.
Pursuant to the terms of an Operating Agreement dated November 5, 1999, we
received a 73.3% interest in Med Enclosure in exchange for our promissory note
in the original principal amount of $250,000. On April 25, 2000, we retired the
note in full by paying $255,208 to Med Enclosure. In September 2002, we
increased our percentage interest in Med Enclosure to 80.3% pursuant to a
purchase agreement with the minority owner of Med Enclosure by which we acquired
from the minority owner an additional 7% membership interest in Med Enclosure in
exchange for our issuance of 10,000 shares of our common stock. In October 2002,
we organized MedClose Corp., a wholly-owned Nevada corporation, for purposes of
conducting the development and commercialization of non-cardiac applications of
the MedClose technology.

         In November 2002, we commenced a private placement of shares of our
Series D preferred stock, at a price of $9.15 per share, pursuant to Rule 506
under the Securities Act of 1933 ("1933 Act"). Each share of Series D preferred
stock was convertible into our common stock at an initial conversion price of
$9.15 per share; however, as required pursuant to the terms of the subscription
agreement, on June 30, 2003 the conversion price was adjusted to $6.86 per
share, such amount representing the lower of (i) seventy-five percent (75%) of
the average last ask price of our common stock for the thirty (30) trading days
immediately preceding such date as reported on any stock exchange or (ii) $6.86
per share. The Series D preferred stock has no voting rights. In addition, the
holders of the shares of Series D preferred stock are entitled to an annual
dividend of 5%, payable in either cash or shares of our common stock. In the
private placement, we sold a total of 819,336 shares of Series D preferred stock
to 38 accredited investors for the gross proceeds of $7,496,925. We applied the
proceeds from the sale of the shares towards working capital and the research
and development of our cardiology products.

         Our executive offices are located at 6336 17th Street Circle East,
Sarasota, Florida 34243; telephone number (941) 727-4370.


Business of the Issuer
----------------------

GENERAL

         CPC of America is engaged in the business of developing and acquiring
cardiology therapeutic and disposable devices and products as well as the
manufacture and distribution of these devices and products for the diagnosis and
treatment of coronary artery disease. To date, we have developed the CPCA 2000
counterpulsation devices and acquired a controlling interest in the MedClose
internal puncture closing device and technique.

                                      -1-
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         Our first product, the CPCA 2000 counterpulsation unit, is a
non-invasive, atraumatic and non-toxic method of treating certain coronary
disease states. We have completed the development of the CPCA 2000 and, in March
2003, we received FDA clearance to market the CPCA 2000 counterpulsation unit as
a Class III medical device. MedClose is an internal puncture closure device and
technique that utilizes a human glue deployment to close puncture wounds
following surgery. MedClose is in the development stage and has not been
approved for sale by the FDA. As of the date of this report, we have not
commenced revenue producing operations.

CORONARY ARTERY DISEASE AND TREATMENT

         Coronary artery disease is the most common cause of death in industrial
nations. The coronary arteries serve the heart with oxygen and other nutrients.
The progressive narrowing of these coronary arteries by increasing layers of
fatty plaque can lead to heart attacks, brain failure and eventually death. The
direct cost of coronary disease is great in terms of treatment expense, loss of
earnings and productivity, while the indirect costs are incalculable in terms of
pain, suffering and limited lifestyles.

         A percentage of these patients undergo invasive surgical procedures
such as angioplasty, artery bypass surgery or cardiac catheterization, all of
which are designed to remedy coronary artery narrowing. Coronary angioplasty is
an invasive process whereby a small balloon attached to a catheter is inserted
into a clogged artery. The balloon is then inflated to compress plaque and to
open the narrowed artery. The estimated cost per successfully treated patient
using the angioplasty method approaches $16,000 and many patients fail multiple
attempts at angioplasty. Coronary artery bypass surgery involves supplementing
the original arteries on the surface of the heart with additional conduits, or
bypasses, which carry the blood around areas of blockage or narrowing. These
bypasses or detours are frequently created by using veins harvested from the
patient's leg or arteries harvested from the chest wall. This invasive procedure
requires more lengthy hospitalization than angioplasty, carries a higher risk of
complications, and can cost up to $50,000 per patient. Many bypass conduits
close in the years following surgery requiring a return to medications,
angioplasty, or repeat bypass attempts. Cardiac catheterization is an invasive
procedure that involves threading a catheter through an artery from a patient's
groin to the heart. While cardiac catheterization is invaluable in diagnosing
and treating coronary artery blockages, it carries a serious risk of
hemorrhaging following the procedure at the site where the artery is punctured.

COUNTERPULSATION TECHNOLOGY: "CPCA 2000"

         We are the developers and owners of a counterpulsation device under the
name CPCA 2000. Counterpulsation involves the rhythmic inflation and deflation
of sets of balloons or cuffs wrapped around the muscles of the calves, thighs
and buttocks. Inflation and deflation occurs in a sequential manner, progressing
from the calves to the lower and upper thighs and then to the buttocks. The
sequence of cuff inflation and deflation compresses the vascular beds and is
timed to the beating of the patient's own heart through synchronization with the
patient's electrocardiogram. Cuffs inflate sequentially and rapidly at the onset
of diastole to prevent blood from being trapped in vascular beds. Cuffs deflate
just before the heart squeezes, reducing the pressure against which the heart
must pump and allowing the heart to eject blood more efficiently and completely.
Counterpulsation is designed to increase the ease of work during the contraction
phase and to increase blood flow during the relaxation phase of the cardiac
cycle. Counterpulsation is significantly less invasive than angioplasty, artery
bypass surgery and cardiac catheterization and is designed to reduce the need
for these more invasive, complicated and costly procedures.

         Patients are typically treated with counterpulsation therapy during 35
one-hour outpatient visits or sessions, spanning four to seven weeks. During
their treatments, the patients remain outside the hospital and are free to
pursue work and other scheduled activities. Treatment success is observed by
relief of symptoms, possible reduction in medication, increased exercise
capacity on the treadmill, and elimination of areas of poor cardiac circulation.
A course of counterpulsation treatments, with a total expected cost of $7,500 or
less, compares favorably with the higher risk, expense, pain and lost
productivity time associated with the invasive angioplasty, coronary bypass or
cardiac catheterization procedures.

         A 1992 study by doctors at Stony Brook University in New York showed
that counterpulsation eliminated or reduced angina in over 80% of the patients
studied. In that study, doctors tested the clinical efficacy and tolerability of
counterpulsation in 18 patients with incapacitating chronic angina. In all


                                      -2-
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patients, treatment with counterpulsation was associated with a substantial
improvement in symptoms, with more than 80% of the patients in the study
reporting a complete absence of symptoms while performing their usual
activities. In addition, Thalium-201 stress testing (performed for the same
exercise duration before and after counterpulsation treatment) showed complete
resolution of ischemic defects in 12 patients (67%), a decrease in the area of
ischemia in two (11%), and no change in four (22%). Thus, 14 patients (78%) had
a reduction in myocardial ischemia as assessed by Thalium-201 imaging. In
addition, stress test results using a treadmill showed a significant increase in
exercise duration following counterpulsation treatment. We were not involved
with this study.

         Three years following the initial study, data from 17 of the original
18 patients was studied, including 13 of the 14 patients who had previously
shown a reduction in myocardial ischemia. One of these 13 patients suffered a
heart attack and another underwent a revascularization procedure during the
intervening period. The other 12 patients all remained free of limiting angina.

         In 1998, results of a study regarding the effectiveness of
counterpulsation were reported in a section of the official program of the
American Heart Association's 71st Scientific Sessions. The study involved a
randomized, sham-controlled, double-blinded clinical trial of 139 patients with
chronic angina. The study used standardized methodology to determine whether
counterpulsation treatment had an effect on quality-of-life functions up to 12
months after completion of treatment. Of the 125 patients who entered the study,
the group who received counterpulsation treatment demonstrated a 23% improvement
in their quality-of-life 12 months after the completion of their treatment. The
group that did not receive the counterpulsation treatment showed no improvement.

         We have completed the development of the CPCA 2000 and, in March 2003,
we received FDA clearance to market the CPCA 2000 counterpulsation unit as a
Class III medical device. As of the date of this report, we are analyzing the
potential for the sale of CPCA 2000, Inc., our subsidiary that owns and operates
our counterpulsation technologies and products. Pending the outcome of
divestiture analysis, we intend to postpone the deployment of resources towards
the manufacturing and marketing of the CPCA 2000.

INTERNAL PUNCTURE CLOSURE DEVICES: "MEDCLOSE"

         MedClose is a proprietary technique for use during catheterization
procedures that is designed to reduce the risk of hemorrhage and speed recovery
time for patients following these procedures. MedClose is based on a basic
principle of arterial clotting. When the outer surface of an artery, called the
adventitia, is injured it releases a sticky chemical that serves as an adhesive
for the body's clot-inducing substances, thus initiating the clotting process.
MedClose accelerates the release of this chemical through the use of a special
instrument that surgically debrides the adventitia. To further speed clotting,
this debridement is combined with one of the newly developed forms of "human
glue." These products, a mixture of natural thrombin and fibrinogen, are widely
available and relatively inexpensive. In addition, they can be manufactured to
become adhesive only when exposed to a specific catalyst such as a laser.

         The glue alone is not sufficient to close the artery, however.
Debridement is the key to the effectiveness of this technique, creating a
surface area that allows the glue to adhere and form a solid seal. MedClose
includes a patented instrument and technique to temporarily close the wound,
debride the surrounding adventitia and deliver a form of human glue to the
puncture site that can be activated by laser light. Our majority-owned
subsidiary, Med Enclosure, LLC, holds the three patents for both the instrument
and the technique used in connection with MedClose.

         We believe that a major advantage of MedClose is that it requires no
sutures and leaves no foreign matter in the artery thereby reducing the risk of
an embolism resulting from residual material left in the artery. In addition, we
believe that MedClose will significantly reduce the recovery time of patients
following catheterization procedures. Physicians traditionally have used sutures
to close puncture wounds following catheterization procedures. Using sutures
requires direct pressure to be applied to the wound for up to 45 minutes and for
the patient to remain still for up to 12 hours following the procedure to avoid
hemorrhaging. MedClose, by contrast, eliminates the need for direct pressure to


                                      -3-
<PAGE>

be applied to the wound and reduces the recovery time following the procedure to
approximately two hours. As a result, MedClose reduces the need for patients to
remain completely immobile following the catheterization procedure and limits
the recovery time and discomfort associated with the catheterization procedures.

         We have engaged Biomed Research, Inc., a medical device design and
testing firm located in Lutz, Florida, to conduct the development and testing of
the MedClose. As of the date of this report, Biomed has completed the
development of a product prototype and in March 2003 successfully concluded
animal testing. Since March 2003, we have continued to refine the product design
and conduct additional animal testing. We expect that the completion of design
and testing of the MedClose, including the submission of the final product for
FDA premarket clearance, will take approximately one year from the date of this
report.

         On November 22, 1999, we formed Med Enclosures, LLC, as a Nevada
limited liability company, with Gene Myers Enterprises, Inc. We initially
received a 73.3% interest in Med Enclosures for a $250,000 promissory note,
which was retired in April 2000. Gene Myers Enterprises, Inc. contributed two
patents it had developed. Med Enclosures acquired a third patent from Gene Myers
Enterprises, Inc. in 2000. In September 2002, we entered into a purchase
agreement with Gene Myers Enterprises, Inc. pursuant to which we acquired from
Gene Myers Enterprises, Inc. an additional 7% membership interest in Med
Enclosure in exchange for our issuance of 10,000 shares of our common stock.

         In October 2002, we organized Med Close Corp., a wholly-owned Nevada
corporation, for purposes of conducting the development and commercialization of
non-cardiac applications of the Med Close technology. Pursuant to a Technology
License Agreement dated October 29, 2002 between Med Enclosures and Med Close,
Med Enclosures granted Med Close exclusive worldwide rights to the Med
Enclosures technology and patents for all non-cardiac applications. Med Close
paid to Med Enclosures $100,000 upon execution of the license agreement and has
agreed to pay Med Enclosures a royalty in the amount of four percent (4%) on all
net sales of Med Close products that incorporate the licensed technology or
patents.

MARKETING AND DISTRIBUTION

         COUNTERPULSATION TECHNOLOGY "CPCA 2000"

         As of the date of this report, we are analyzing the potential for the
sale of CPCA 2000, Inc., our subsidiary that owns and operates our
counterpulsation technologies and products. Pending the outcome of divestiture
analysis, we intend to postpone the deployment of resources towards the
manufacturing and marketing of the CPCA 2000. However, our previously defined
marketing strategy called for us to sell the CPCA 2000 counterpulsation units to
physicians, clinics and hospitals, with us receiving revenues from the proceeds
of the sale as well as from service fees and licensing fees. We would intend to
market the CPCA 2000 both directly and through third party distributors. We
currently do not have any distributor agreements in place. We anticipate that
such a marketing strategy would require approximately additional 10 full-time
employees to conduct direct sales, marketing and distribution efforts.

         INTERNAL PUNCTURE CLOSURE DEVICE " MEDCLOSE"

         We initially intend to market MedClose to both hospitals and to
physicians through both national and international distribution agreements. None
of these agreements are currently in place. We also intend to establish a direct
sales support team to assist the distributors with their customers and to
establish national contracting agreements with major providers of services.

         We intend to offer our products to potential customers through a
marketing campaign consisting of public relations, direct mail and personal
selling efforts by our representatives. The public relations campaign will be
designed to raise awareness of MedClose and its puncture internal closure device
among both industry leaders and the general public. We intend to generate
publicity for MedClose through press conferences, television forums,
demonstrations and press releases to trade and professional publications.

         Although we initially intend to concentrate our marketing efforts on
the U.S. domestic market, once domestic operations have been established, we
intend to expand our marketing efforts in various international markets. We
intend to market our counterpulsation units and puncture closing devices to
international customers through affiliations and agreements with international
partners.

                                      -4-
<PAGE>

GOVERNMENT REGULATION AND SUPERVISION

         FDA APPROVAL PROCESS

         Clinical testing, manufacture and sale of the CPCA 2000 and MedClose
are subject to regulation by numerous governmental authorities, principally the
FDA, and corresponding state and foreign regulatory agencies. Pursuant to the
federal Food, Drug and Cosmetic Act, and the regulations promulgated thereunder,
the FDA regulates the clinical testing, manufacturing, labeling, distribution
and promotion of medical devices. Under the Medical Device Act of 1976, the FDA
places medical devices into one of three classes called Class I, II, or III, on
the basis of the controls deemed necessary by the FDA to reasonably ensure their
safety and effectiveness. Class I devices are subject only to general controls,
including labeling, premarket notification and adherence to good manufacturing
practices. Class II devices are subject to general controls and performance
standards established by the FDA, including postmarket surveillance, patient
registries and FDA guidelines. Class III devices must receive premarket approval
by the FDA to ensure their safety and effectiveness. Class III devices generally
include life-sustaining, life-supporting and implantable devices, or new devices
which have been found to be substantially equivalent to devices currently on the
market. Both the CPCA 2000 and MedClose are considered by the FDA to be Class
III devices.

         Before a Class III medical device can be introduced to the market, the
manufacturer generally must obtain FDA clearance through either a "510(k)
premarket notification" or through a premarket approval application. Although
Class III devices normally require FDA clearance through the premarket approval
process, we were able to obtain FDA premarket approval for our CPCA 2000 as a
Class III medical device in March 2003. We believe that we will be able to
receive FDA clearance pursuant to a 510(k) premarket notification for MedClose
as well. Because puncture closure devices are already on the market, newer
versions, similar to the MedClose, have been permitted to be marketed pursuant
to the 510(k) premarket notification procedure. However, there is no assurance
that we will be eligible to utilize the 510(k) premarket notification process in
the future or that the FDA will not in the future require us to submit a
premarket application, which would be a more costly, lengthy and uncertain
approval process.

         Generally, 510(k) premarket notification clearance will be granted if
the proposed device is "substantially equivalent" to a legally marketed Class I
or Class II medical device, or to a preamendment Class III medical device for
which the FDA has not called for premarket approval applications. The FDA has
recently been requiring a more rigorous demonstration of substantial equivalence
than in the past, for example, by more frequently requiring clinical data. It
generally can take from 12 to 36 months or longer from submission of the product
to obtain 510(k) premarket clearance. The FDA may determine that a proposed
device is not substantially equivalent to a legally marketed device or that
additional data is needed before a substantial equivalence determination can be
made. A determination that a device is not substantially equivalent to a device
already on the market, or a request for additional data, would delay the market
introduction of our products and could have a material adverse effect on our
business, financial condition and results of operations. For any of our devices
that are cleared through the 510(k) process, modifications or enhancements that
could significantly affect the safety or effectiveness of the device or that
constitute a major change to the intended use of the device will require a new
510(k) submission. There can be no assurance that we will obtain 510(k)
premarket clearance within the above time frames, if at all, for MedClose or any
other device for which we may file a 510(k).

         Further, once FDA approval is obtained, our products will be subject to
pervasive and continuing regulation by the FDA, including various record keeping
requirements and the requirement to report adverse experiences with the use of
the device. We are also subject to inspection on a routine basis for compliance
with the FDA's good manufacturing practices regulations. These regulations
impose certain procedural and documentation requirements upon us and the
companies with which we contract to manufacture our products. The FDA has
recently finalized changes to good manufacturing practice requirements that,
among other things, add requirements for design controls and maintenance of
service records. These changes are expected to increase the cost of compliance.

                                      -5-
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         THIRD-PARTY COVERAGE

         The commercial success of the CPCA 2000 is also dependent upon positive
coverage policies by the Health Care Financing Administration, which administers
the Medicare program, as well as by other third-party payors. In February 1999,
the HCFA extended Medicare coverage to external counterpulsation treatment for
patients with disabling angina who, in the opinion of a cardiologist or
cardiothoracic surgeon, are not readily amenable to surgical interventions. In
November 1999, the Health Care Financing Administration created a new code to
describe external counterpulsation technology. This new code, HCPCS code G0166,
is specific to Medicare beneficiaries and went into effect on January 1, 2000
for angina patients being treated by the counterpulsation. The allowable charge
under this HCPCS code for 35 one-hour treatments is $7,274. Certain patients may
require additional services, such as evaluation and management, which may be
billed separately. We expect third-party insurance companies to follow the lead
of Medicare and to adopt similar coverage policies for counterpulsation
treatment. Failure by these third-party payors to adopt coverage policies
similar to Medicare's, or the elimination of coverage entirely for
counterpulsation treatment, would seriously impact the demand for our
counterpulsation units.

         ANTI-KICKBACK STATUTES

         In addition, there are federal and state laws, which regulate the
financial relationships between manufacturers of medical devices and hospitals,
physicians and other potential purchasers of medical devices. The federal
Medicare and Medicaid anti-kickback statute prohibits financial relationships
designed to induce the purchase, or arranging for or recommending the purchase,
of items or services for which payment may be made under Medicare, Medicaid, or
other federally funded state health care programs. The anti-kickback statute
contains exceptions for, among other things, properly reported discounts and
compensation for bona fide employees. In addition, federal regulations establish
certain "safe harbors" from liability under the anti-kickback statute, including
further refinements of the exceptions for discounts and employee compensation.
Our future practices, in some cases, may not meet all of the criteria for a safe
harbor from anti-kickback law liability. Other provisions of state and federal
law provide civil and/or criminal penalties for presenting or causing to be
presented for payment claims that are fraudulent or for items or services that
were not provided as claimed. Because of the breadth of the statutory provisions
described above, it is possible that some of our business practices could be
subject to scrutiny and challenge under one or more such laws. Such a challenge
could have a material adverse effect on our business, financial condition and
results of operations.

COMPETITION

         COUNTERPULSATION TECHNOLOGY "CPCA 2000"

         At present, we are aware of four other companies that are currently
producing and marketing counterpulsation device similar to the CPCA 2000:
Vasomedical, Inc., Cardiomedics, Inc., Cardio-Vascular Electronics, Inc. and
NYCOR, Inc. We are also aware of three other companies that have received FDA
clearance to market counterpulsation devices: Solo Medical Devices, LLC, Living
Data Technology Corporation and Shanghai First People Hospital. Some of these
companies have already begun to market their counterpulsation units in the U.S.
and, accordingly, have already obtained some level of market acceptance. We
believe that these competitors have only a limited presence in the market and
that the market in general for counterpulsation devices is largely untapped.
There can be no assurance, however, that we will be able to compete initially or
on a continual basis with companies that are currently marketing
counterpulsation devices or those that presently seek to enter into the
counterpulsation device market.

         We estimate that counterpulsation therapy is presently used to treat
only a small percentage of all patients with coronary artery diseases.
Accordingly, we anticipate that the CPCA 2000 will indirectly compete with more
mainstream cardiology treatment techniques, such as angiography, coronary
angioplasty, coronary artery bypass surgery and medication. While
counterpulsation does not replace the need for these services in all cases, a
percentage of coronary artery disease patients can be successfully treated using
counterpulsation as an alternative to invasive procedures.

                                      -6-
<PAGE>

         INTERNAL PUNCTURE CLOSURE DEVICE  " MEDCLOSE"

         We have several competitors that manufacture and market in the puncture
closure devices, including Perclose, Inc., Kensey Nash, Datascope Corp. and
Vascular Solutions, Inc. We believe our devices have competitive advantages over
other products because our product is superior in delivery of arterial site
closures that are safe, variable and cost effective. However, all of our
competitors have greater marketing and financial resources than we do and,
accordingly, there can be no assurance that we will be able to compete
effectively, if at all.

PATENTS AND TRADEMARKS

         In September 2002, we received a patent from the U.S. Patent and
Trademark Office on our CPCA 2000 counterpulsation unit. At present, we have
submitted domestic and international applications to patent the CPCA 2000 and
our counterpulsation technology and have already received a trademark on the
name "CPCA 2000." In addition, our subsidiary, Med Enclosure, LLC, holds three
patents from the USPTO for the MedClose device and procedure and we have applied
for a trademark for the name MedClose. Our ability to compete successfully
depends, in part, on our ability to protect the proprietary technology contained
in our products. We will rely upon a combination of patent, trade secret and
trademark laws, together with non-disclosure agreements, to establish and
protect proprietary rights in our counterpulsation devices and other technology,
as well as our trade names and other similar property. We also intend to enter
into confidentiality agreements with our employees, manufacturers, distributors,
customers and suppliers, and will limit access to and distribution of our
proprietary information. If and when implemented, these measures will only
afford us limited protection, as there can be no assurance that any steps taken
by us to protect these proprietary rights will be adequate to prevent
misappropriation of our technology or the independent development by others of
similar technology. In addition, although we believe that there currently are no
infringement claims against us and no grounds for the assertion of such claims,
the cost of responding to any claim could be significant.

RESEARCH AND DEVELOPMENT

         Since inception through December 31, 2003, our research and development
expenses have amounted to approximately $8,996,390, including $2,454,817 spent
on research and development in 2003. At present, none of these research and
development expenses have been borne by customers, as we have not begun to
market or sell our products and services. We acquired the technology for
MedClose in the 73.3% acquisition of Med Enclosure, LLC in November 1999.

EMPLOYEES

         As of the date of this report, we employ one person consisting of our
one executive officer. We contract with various consultants to provide services
to us including engineering, software, testing, regulatory, product development,
medical and clinical affairs on a project by project basis.

ITEM 1A. CAUTIONARY STATEMENT REGARDING FUTURE RESULTS, FORWARD-LOOKING
INFORMATION AND CERTAIN IMPORTANT FACTORS

         We make written and oral statements from time to time regarding our
business and prospects, such as projections of future performance, statements of
management's plans and objectives, forecasts of market trends, and other matters
that are 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.
Statements containing the words or phrases "will likely result," "are expected
to," "will continue," "is anticipated," "estimates," "projects," "believes,"
"expects," "anticipates," "intends," "target," "goal," "plans," "objective,"
"should" or similar expressions identify forward-looking statements, which may
appear in documents, reports, filings with the Securities and Exchange
Commission, news releases, written or oral presentations made by officers or
other representatives made by us to analysts, stockholders, investors, news
organizations and others, and discussions with management and other
representatives of us. For such statements, we claim the protection of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.

                                      -7-
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         Our future results, including results related to forward-looking
statements, involve a number of risks and uncertainties. No assurance can be
given that the results reflected in any forward-looking statements will be
achieved. Any forward-looking statement made by or on behalf of us speaks only
as of the date on which such statement is made. Our forward-looking statements
are based upon assumptions that are sometimes based upon estimates, data,
communications and other information from suppliers, government agencies and
other sources that may be subject to revision. Except as required by law, we do
not undertake any obligation to update or keep current either (i) any
forward-looking statement to reflect events or circumstances arising after the
date of such statement, or (ii) the important factors that could cause our
future results to differ materially from historical results or trends, results
anticipated or planned by us, or which are reflected from time to time in any
forward-looking statement which may be made by or on behalf of us.

         In addition to other matters identified or described by us from time to
time in filings with the SEC, there are several important factors that could
cause our future results to differ materially from historical results or trends,
results anticipated or planned by us, or results that are reflected from time to
time in any forward-looking statement that may be made by or on behalf of us.
Some of these important factors, but not necessarily all important factors,
include the following:

         WE HAVE NOT COMMENCED REVENUE PRODUCING OPERATIONS. We were
incorporated in 1996 and to date have not generated any revenues from
operations. To date, our activities have included the market analysis and
development of our counterpulsation units, the acquisition of our controlling
interest in Med Enclosures, LLC and the raising of development and working
capital. As a result of the absence of any operating history or revenues, there
can be no assurance that we will achieve a significant level of operations and,
if so, that such operations can continue to be conducted on a profitable basis.

         WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY OR COMPETITIVE PRESSURES
FACED BY US MAY MATERIALLY ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITION,
AND RESULTS OF OPERATIONS. We expect to face significant competition in
connection with the marketing of both our counterpulsation units and the
MedClose puncture closing device. We are currently aware of four other companies
that are currently producing and marketing or intending to market a
counterpulsation device similar to ours, all of whom have far greater capital
and resources than us. Two of these companies have already begun to market
their counterpulsation units in the U.S. and, accordingly, have already obtained
some level of market acceptance. In addition, we have several competitors
that manufacture and market puncture closure devices, including Perclose, Inc.,
Kensey Nash, Datascope Corp. and Vascular Solutions, Inc. All of our competitors
have greater marketing and financial resources than us and, accordingly, there
can be no assurance that we will be able to compete effectively or that
competitive pressures faced by us will not materially adversely affect our
business, financial condition, and results of operations.

         WE MAY NOT BE ABLE TO PROTECT OUR PROPRIETARY RIGHTS AND WE MAY INCUR
SIGNIFICANT COSTS IN ATTEMPTING TO DO SO. Our success and ability to compete are
dependent to a significant degree on our proprietary technology. We rely on a
combination of patent, trade secret and trademark laws, as well as
confidentiality and licensing agreements to protect our proprietary rights.
However, it may be possible for a third party to copy or otherwise obtain and
use our proprietary information without authorization or to develop similar
technology independently. In addition, litigation may be necessary in the future
to enforce our intellectual property rights, to protect our trade secrets, to
determine the validity and scope of the proprietary rights of others, or to
defend against claims of infringement or invalidity. Such litigation, whether
successful or unsuccessful, could result in substantial costs and diversions of
resources, either of which could have a material adverse affect on our business,
financial condition and operating results.

ITEM 2.  DESCRIPTION OF PROPERTY

         Our executive offices are located in Sarasota, Florida and consist of
approximately 1,000 square feet. The lease has an initial term of one year,
subject to two one-year renewal options.

                                      -8-
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS.

         Neither the company nor our property are subject to any pending legal
proceedings, other than routine litigation incidental to our business

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

         There were no matters submitted to the security holders of the Company
during the fourth quarter of the fiscal year ended December 31, 2003.

                                      -9-
<PAGE>

PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS.

Market Information
------------------

         Our common stock is listed on the OTC Bulletin Board under the symbol
"CPCF." Set forth below are high and low closing prices for our common stock for
each quarter during the two fiscal years ended December 31, 2003. We consider
our common stock to be thinly traded and that any reported bid or sale prices
may not be a true market-based valuation of the common stock.


         QUARTER ENDED                                         HIGH     LOW
         -------------                                        ------   ------
         March 31, 2002                                       $ 6.80   $ 5.70
         June 30, 2002                                        $ 6.17   $ 3.70
         September 30, 2002                                   $ 5.43   $ 3.45
         December 31, 2002                                    $ 8.55   $ 5.00

         March 31, 2003                                       $ 8.00   $ 5.80
         June 30, 2003                                        $12.50   $ 7.90
         September 30, 2003                                   $23.95   $13.25
         December 31, 2003                                    $37.89   $21.10


Holders
-------

         As of March 26, 2004, there were 75 record holders of our common stock.

Dividends
---------

         We have not paid any cash dividends on our common stock since our
inception and do not contemplate paying dividends in the foreseeable future. It
is anticipated that earnings, if any, will be retained for the operation of our
business. Pursuant to our Certificate of Designations, holders of shares of our
Series C preferred stock and Series D preferred stock are entitled to dividends
at a rate of 5% per annum, payable at the option of the holders, in either cash
or shares of Common Stock. During 2003, we paid no cash dividends on the shares
of our preferred stock.

Securities Authorized for Issuance Under Equity Compensation Plans
------------------------------------------------------------------

         Item 11 of this report includes information about the securities
underlying outstanding options and securities remaining available for issuance
under our equity compensation plans as of December 31, 2003.

Sales of Unregistered Securities
--------------------------------

         During the fiscal year ended December 31, 2003, we sold unregistered
shares of our securities in the following transactions:

         During 2003, we issued 73,689 shares of our common stock upon the
conversion of 26,786 outstanding shares of Series C preferred stock and related
accrued dividends of $18,071. The common shares were issued pursuant to Rule 506
under the Act. There was no underwriter involved in this issuance.

         During 2003, we sold 708,709 shares of Series D Preferred Stock to 128
accredited investors for gross proceeds of $6,485,082. The shares were issued
pursuant to Rule 506 under the Act. There was no underwriter involved in this
issuance.

                                      -10-
<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

General
-------

         To date, our activities have included the market analysis and
development of our counterpulsation units, the acquisition of our controlling
interest in Med Enclosures, LLC and the raising of development and working
capital. We have developed and prepared for market our counterpulsation units,
including a stand-alone unit known as the CPCA 2000. In March 2003, we received
FDA clearance to market the CPCA 2000 counterpulsation unit as a Class III
medical device. We have also acquired a 80.3% interest in Med Enclosures, LLC, a
development stage company engaged in the business of developing a patented
internal puncture closure device and technique known as "MedClose".

         We have not commenced revenue producing operations. As of the date of
this report, we are analyzing the potential for the sale of CPCA 2000, Inc., our
subsidiary that owns and operates our counterpulsation technologies and
products. We expect to commence revenue producing operations subject to FDA
approval of MedClose or our decision to move forward with the manufacture and
sale of the CPCA 2000. We do not expect to purchase or sell plant or significant
equipment during 2004, nor do we expect a significant change in the number of
our employees during the year.

         We have financed our activities to date through the sale of our
securities. During 2003, we conducted the private placement sale of 708,709
shares of our Series D preferred stock, at a price of $9.15 per share, for the
total gross proceeds of $6,485,082. During 2003, we also received $623,250 of
gross proceeds from the sale of shares of our common stock in connection with
the exercise of outstanding options.

         As of December 31, 2003, we had working capital of $5,428,670. We
believe that our working capital on hand as of the date of this report will be
sufficient in order to fund our plan of operations over the next 12 months.

Off-Balance Sheet Arrangements
------------------------------

         We do not have any off-balance sheet financing arrangements.

                                      -11-
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS

                          INDEX TO FINANCIAL STATEMENTS

Report of Independent Certified Public Accountants...........................F-1
Consolidated Balance Sheet at December 31, 2003..............................F-2
Consolidated Statements of Operations for the years ended December
  31, 2003 and 2002 and cumulative from inception (April 11, 1996)
  to December 31, 2003.......................................................F-3
Consolidated Statements of Shareholders' Equity (Deficit)
  from inception (April 11, 1996) to December 31, 2003.......................F-4
Consolidated Statements of Cash Flows for the years ended December
  31, 2003 and 2002 and cumulative from inception (April 11, 1996)
  to December 31, 2003.......................................................F-7
Notes to Consolidated Financial Statements...................................F-8

                                      -12-
<PAGE>


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


The Board of Directors and Shareholders
CPC of America, Inc.

We have audited the accompanying consolidated balance sheet of CPC of America,
Inc. and subsidiaries (a development stage company) (the "Company") as of
December 31, 2003, and the related consolidated statements of operations,
shareholders' equity (deficit) and cash flows for each of the years in the two
year period ended December 31, 2003 and for the period from inception (April 11,
1996) to December 31, 2003. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes, on a test
basis, examination of evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of CPC of
America, Inc. and subsidiaries as of December 31, 2002, and the results of their
consolidated operations and cash flows for each of the years in the two year
period ended December 31, 2003 and for the period from inception (April 11,
1996) to December 31, 2002, in conformity with accounting principles generally
accepted in the United States of America.




                                     /s/ CACCIAMATTA ACCOUNTANCY CORPORATION

Irvine, California
March 16, 2004


                                      F-1
<PAGE>

                      CPC OF AMERICA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                           Consolidated Balance Sheet

                                                                   DECEMBER 31,
                                                                       2003
                                                                   -------------
                                     ASSETS
CURRENT ASSETS
   Cash and equivalents                                            $  3,519,274
   Short term investments                                             2,450,469
   Prepaid expenses                                                     177,816
                                                                   -------------

      TOTAL CURRENT ASSETS                                            6,147,559

EQUIPMENT, NET OF ACCUMULATED DEPRECIATION OF $17,612                     1,405

PATENTS, NET OF ACCUMULATED AMORTIZATION OF $83,327                     220,173

TRADEMARK, NET OF ACCUMULATED AMORTIZATION OF $2,907                      3,325
                                                                   -------------
                                                                   $  6,372,462
                                                                   =============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
   Accounts payable                                                $      7,707
   Accrued expenses                                                      10,534
   Settlement payable                                                   200,000
   Accrued dividends payable                                            500,648
                                                                   -------------
      TOTAL CURRENT LIABILITIES                                         718,889
                                                                   -------------

COMMITMENTS AND CONTINGENCIES                                                --

SHAREHOLDERS' EQUITY
   Preferred stock, 5,000,000 shares authorized, $.001 par value,
      Series C -  314,418 shares issued and outstanding                     314
      Series D -  819,336 shares issued and outstanding                     820
   Common stock, 20,000,000 shares authorized, $.0005 par value,
      6,476,180 shares issued and outstanding                             3,237
   Additional paid-in capital - preferred                            14,425,772
   Additional paid-in capital - common                                8,581,168
   Deficit accumulated during the development stage                 (17,357,738)
                                                                   -------------
      TOTAL SHAREHOLDERS' EQUITY                                      5,653,573
                                                                   -------------
                                                                   $  6,372,462
                                                                   =============

        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                      F-2
<PAGE>

<TABLE>
                           CPC OF AMERICA, INC. AND SUBSIDIARIES
                               (A DEVELOPMENT STAGE COMPANY)
                           Consolidated Statements of Operations

<CAPTION>
                                                                              CUMULATIVE
                                                                            FROM INCEPTION
                                               YEAR ENDED DECEMBER 31,     (APRIL 11, 1996)
                                            -----------------------------   TO DECEMBER 31,
                                                2003            2002             2003
                                            -------------   -------------   -------------

<S>                                         <C>             <C>             <C>
Costs and expenses:

  Research and development                  $  2,233,294    $  2,933,730    $  8,774,867

  General and administrative                     593,064         535,531       3,767,420
                                            -------------   -------------   -------------

OPERATING LOSS                                 2,826,358       3,469,261      12,542,287
                                            -------------   -------------   -------------

OTHER INCOME (EXPENSE):

  Interest expense                                    --              --          (8,954)

  Interest income                                 66,892           8,687         125,350
                                            -------------   -------------   -------------

                                                  66,892           8,687         116,396
                                            -------------   -------------   -------------

LOSS BEFORE MINORITY INTEREST                  2,759,466       3,460,574      12,425,891

MINORITY INTEREST                                     --              --           1,120
                                            -------------   -------------   -------------

NET LOSS                                    $  2,759,466    $  3,460,574    $ 12,424,771
                                            =============   =============   =============


BASIC AND DILUTED NET LOSS PER SHARE        $      (0.90)   $      (0.81)
                                            =============   =============

BASIC AND DILUTED WEIGHTED AVERAGE NUMBER
  OF COMMON SHARES OUTSTANDING                 5,904,416       5,768,032
                                            =============   =============


             The accompanying notes are an integral part of these consolidated
                                  financial statements.

                                           F-3
</TABLE>
<PAGE>

<TABLE>
                                          CPC OF AMERICA, INC. AND SUBSIDIARIES
                                              (A DEVELOPMENT STAGE COMPANY)
                                Consolidated Statements of Shareholders' Equity (Deficit)
                                  From inception (April 11, 1996) to December 31, 2003

<CAPTION>
                                                             PREFERRED STOCK                                      COMMON STOCK
                                     ------------------------------------------------------------------  ---------------------------
                                          SERIES A              SERIES B                 SERIES C                   SERIES D
                                     -------------------  -------------------  ------------------------   -------------------------
                                      NUMBER               NUMBER                NUMBER                    NUMBER
                                     OF SHARES    TOTAL   OF SHARES   TOTAL     OF SHARES      TOTAL      OF SHARES      TOTAL
                                     ---------  --------  ---------  --------  -----------   ----------   ----------  -------------

<S>                                        <C>  <C>             <C>  <C>          <C>        <C>            <C>       <C>
BALANCE, DECEMBER 31, 2002                 --   $    --         --   $    --      341,204    $     341      110,627   $        111
   Exercise of options                     --        --         --        --           --           --           --             --
   Conversion of  preferred
     stock and accrued
     dividends into common
     shares                                --        --         --        --      (26,786)         (27)          --             --
   Valuation of beneficial
     conversion feature on
     Series D Preferred                    --        --         --        --           --           --           --             --
   Issuance of preferred
     stock for cash                        --        --         --        --           --           --      708,709            709
   Preferred stock dividend                --        --         --        --           --           --           --             --
   Net loss for 2003                       --        --         --        --           --           --           --             --
                                     ---------  --------  ---------  --------  -----------   ----------   ----------  -------------
 BALANCE DECEMBER 31, 2003                 --   $    --         --   $    --      314,418    $     314      819,336   $        820
                                     =========  ========  =========  ========  ===========   ==========   ==========  =============

</TABLE>

(Continued)

<TABLE>
<CAPTION>
                                       COMMON STOCK                                                      DEFICIT
                                  ------------------------               ADDITIONAL     ADDITIONAL     ACCUMULATED        TOTAL
                                                              STOCK       PAID-IN        PAID-IN        DURING THE     SHAREHOLDERS'
                                     NUMBER                   OPTION      CAPITAL-       CAPITAL-       DEVELOPMENT       EQUITY
                                   OF SHARES      TOTAL       COSTS        COMMON        PREFERRED        STAGE          (DEFICIT)
                                  ------------  ----------  ----------  -------------  -------------   -------------   -------------

<S>                                 <C>         <C>         <C>         <C>            <C>             <C>             <C>
BALANCE, DECEMBER 31, 2002          5,626,582   $   2,812   $      --   $  6,966,327   $  6,024,678    $(12,046,289)   $    947,980
   Exercise of options                775,909         388          --      1,351,807             --              --       1,352,195
   Conversion of  preferred
     stock and accrued
     dividends into common
     shares                            73,689          37          --        263,034       (244,973)             --          18,071
   Valuation of beneficial
     conversion feature on
     Series D Preferred                    --          --          --             --      2,161,694      (2,161,694)             --
   Issuance of preferred
     stock for cash                        --          --          --             --      6,484,373              --       6,485,082
   Preferred stock dividend                --          --          --             --             --        (390,289)       (390,289)
   Net loss for 2003                       --          --          --             --             --      (2,759,466)     (2,759,466)
                                  ------------  ----------  ----------  -------------  -------------   -------------   -------------
 BALANCE DECEMBER 31, 2003          6,476,180   $   3,237   $      --   $  8,581,168   $ 14,425,772    $(17,357,738)   $  5,653,573
                                  ============  ==========  ==========  =============  =============   =============   =============


                                                     F-4
</TABLE>
<PAGE>

<TABLE>
                                          CPC OF AMERICA, INC. AND SUBSIDIARIES
                                              (A DEVELOPMENT STAGE COMPANY)
                                Consolidated Statements of Shareholders' Equity (Deficit)
                                  From inception (April 11, 1996) to December 31, 2003

<CAPTION>
                                                         PREFERRED STOCK                                        COMMON STOCK
                              ------------------------------------------------------------------------   ---------------------------
                                   SERIES A                 SERIES B                  SERIES C                    SERIES D
                              ---------------------   ----------------------   -----------------------   ---------------------------
                               NUMBER                  NUMBER                   NUMBER                     NUMBER
                              OF SHARES     TOTAL     OF SHARES     TOTAL      OF SHARES      TOTAL       OF SHARES        TOTAL
                              ---------   ---------   ---------   ----------   ----------   ----------   ------------   ------------

<S>                            <C>        <C>         <C>         <C>            <C>        <C>              <C>        <C>

BALANCE, DECEMBER 31, 1999      79,293    $     79          --    $      --           --    $      --             --    $        --
  Exercise of warrants              --          --          --           --           --           --             --             --
  Exercise of options               --          --          --           --           --           --             --             --
  Issuance of preferred
    stock for cash                  --          --      71,429           71           --           --             --             --
  Valuation of beneficial
    conversion feature on
    Series B Preferred              --          --          --           --           --           --             --             --
  Conversion of Series A
    Preferred into
    common shares              (70,469)        (70)         --           --           --           --             --             --
  Beneficial conversion
    feature on Series A
    Preferred shares                --          --          --           --           --           --             --             --
  Settlement of lawsuit             --          --          --           --           --           --             --             --
  Purchase of patent                --          --          --           --           --           --             --             --
  Stock option costs                --          --          --           --           --           --             --             --
  Amortization of stock
    option cost                     --          --          --           --           --           --             --             --
  Cancellation of common
    shares                          --          --          --           --           --           --             --             --
  Net loss for 2000                 --          --          --           --           --           --             --             --
                              ---------   ---------   ---------   ----------   ----------   ----------   ------------   ------------
BALANCE, DECEMBER 31, 2000       8,824           9      71,429           71           --           --             --             --
  Exercise of options               --          --          --           --           --           --             --             --
  Issuance of common stock
    for services                    --          --          --           --           --           --             --             --
  Issuance of preferred
    stock for cash                  --          --     113,715          114       95,123           95             --             --
  Valuation of beneficial
    conversion feature on
    Series B Preferred              --          --          --           --           --           --             --             --
  Valuation of beneficial
    conversion feature on
    Series C Preferred-             --          --          --           --           --           --             --             --
  Conversion of preferred
    stock and accrued
    dividends into common
    shares                      (8,824)         (9)   (113,715)        (114)          --           --             --             --
  Preferred stock dividend          --          --          --           --           --           --             --             --
  Issuance of common stock          --          --          --           --           --           --             --             --
    options for services            --          --          --           --           --           --             --             --
  Amortization of stock
    option costs                    --          --          --           --           --           --             --             --
  Net loss for 2001                 --          --          --           --           --           --             --             --
                              ---------   ---------   ---------   ----------   ----------   ----------   ------------   ------------

BALANCE, DECEMBER 31, 2001          --          --      71,429           71       95,123           95             --             --
  Exercise of options               --          --          --           --           --           --             --             --
  Conversion of preferred
    stock and accrued
    dividends into common
    shares                          --          --     (71,429)         (71)     (18,576)         (19)            --             --
  Valuation of beneficial
    conversion feature on
    Series C Preferred              --          --          --           --           --           --             --             --
  Cancellations of shares           --          --          --           --           --           --             --             --
  Issuance of preferred
    stock for cash                  --          --          --           --      264,657          265        110,627            111
  Amortization of stock
    option costs                    --          --          --           --           --           --             --             --
  Preferred stock dividend          --          --          --           --           --           --             --             --
  Purchase of Med Enclosure
    Stocks                          --          --          --           --           --           --             --             --
  Net loss for 2002                 --          --          --           --           --           --             --             --
                              ---------   ---------   ---------   ----------   ----------   ----------   ------------   ------------
BALANCE DECEMBER 31, 2002           --    $     --          --    $      --      341,204    $     341        110,627    $       111
</TABLE>


(Continued)

<TABLE>
<CAPTION>
                                     COMMON STOCK                                                         DEFICIT
                              ---------------------------                   ADDITIONAL    ADDITIONAL    ACCUMULATED       TOTAL
                                                               STOCK         PAID-IN       PAID-IN       DURING THE    SHAREHOLDERS'
                                 NUMBER                        OPTION        CAPITAL-      CAPITAL-      DEVELOPMENT      EQUITY
                               OF SHARES        TOTAL          COSTS          COMMON      PREFERRED        STAGE         (DEFICIT)
                              ------------   ------------   -------------  ------------  ------------  -------------   ------------

<S>                             <C>          <C>            <C>            <C>            <C>          <C>             <C>

BALANCE, DECEMBER 31, 1999      4,129,533    $     2,065    $        --    $ 1,822,900    $  898,407   $ (2,737,027)   $   (13,576)
  Exercise of warrants            365,500            183             --        639,442            --             --        639,625
  Exercise of options             223,832            113             --        258,528            --             --        258,641
  Issuance of preferred
    stock for cash                     --             --             --             --       624,929             --        625,000
  Valuation of beneficial
    conversion feature on
    Series B Preferred                 --             --             --             --       208,125       (208,125)            --
  Conversion of Series A
    Preferred into
    common shares                 127,447             64             --        598,936      (598,930)            --             --
  Beneficial conversion
    feature on Series A
    Preferred shares                   --             --             --        199,486      (199,486)            --             --
  Settlement of lawsuit            33,333             17             --        199,983            --             --        200,000
  Purchase of patent               47,042             24             --        235,184            --             --        235,208
  Stock option costs                   --             --       (280,000)       280,000            --             --             --
  Amortization of stock
    option cost                        --             --        105,000             --            --             --        105,000
  Cancellation of common
    shares                        (89,000)           (45)            --             --            --             --            (45)
  Net loss for 2000                    --             --             --             --            --     (1,749,444)    (1,749,444)
                              ------------   ------------   -------------  ------------  ------------  -------------   ------------
BALANCE, DECEMBER 31, 2000      4,837,687          2,421       (175,000)     4,234,459       933,045     (4,694,596)       300,409
  Exercise of options             360,394            179             --        413,484            --             --        413,663
  Issuance of common stock
    for services                  100,000             50             --        255,450            --             --        255,500
  Issuance of preferred
    stock for cash                     --             --             --             --     1,841,392             --      1,841,601
  Valuation of beneficial
    conversion feature on
    Series B Preferred                 --             --             --             --       331,636       (331,636)            --
  Valuation of beneficial
    conversion feature on
    Series C Preferred-                --             --             --             --       282,233       (282,233)            --
  Conversion of preferred
    stock and accrued
    dividends into common
    shares                        330,327            165             --      1,081,316    (1,069,887)            --         11,471
  Preferred stock dividend             --             --             --             --            --        (63,397)       (63,397)
  Issuance of common stock             --             --             --             --            --             --             --
    options for services               --             --             --         20,000            --             --         20,000
  Amortization of stock
    option costs                       --             --        140,000             --            --             --        140,000
  Net loss for 2001                    --             --             --             --            --     (1,968,471)    (1,968,471)
                              ------------   ------------   -------------  ------------  ------------  -------------   ------------

BALANCE, DECEMBER 31, 2001      5,628,408          2,815        (35,000)     6,004,709     2,318,419     (7,340,333)       950,776
  Exercise of options             282,480            140             --        317,650            --             --        317,790
  Conversion of preferred
    stock and accrued
    dividends into common
    shares                        241,627            120             --        790,205      (783,495)            --          6,740
  Valuation of beneficial
    conversion feature on
    Series C Preferred                 --             --             --             --      1,122,521    (1,122,521)            --
  Cancellations of shares        (535,933)          (268)            --       (199,732)            --            --       (200,000)
  Issuance of preferred
    stock for cash                     --             --             --             --      3,367,233            --      3,367,609
  Amortization of stock
    option costs                       --             --         35,000             --            --             --         35,000
  Preferred stock dividend             --             --             --             --            --       (122,861)      (122,861)
  Purchase of Med Enclosure
    Stocks                         10,000              5             --         53,495            --             --         53,500
  Net loss for 2002                    --             --             --             --            --     (3,460,574)    (3,460,574)
                              ------------   ------------   -------------  ------------  ------------  -------------   ------------
BALANCE DECEMBER 31, 2002       5,626,582    $     2,812    $        --    $ 6,966,327   $ 6,024,678   $(12,046,289)   $   947,980


                                                     F-5
</TABLE>
<PAGE>

<TABLE>
                                     CPC OF AMERICA, INC. AND SUBSIDIARIES
                                         (A DEVELOPMENT STAGE COMPANY)
                           Consolidated Statements of Shareholders' Equity (Deficit)
                             From inception (April 11, 1996) to December 31, 2003

<CAPTION>
                                               PREFERRED STOCK                         COMMON STOCK
                                 ----------------------------------------------  -------------------------
                                       SERIES A                  SERIES B
                                 -----------------------  ---------------------
                                   NUMBER                  NUMBER                 NUMBER
                                  OF SHARES      TOTAL    OF SHARES   TOTAL      OF SHARES       TOTAL
                                 ------------  ---------  --------  -----------  ----------   ------------

<S>                                   <C>      <C>        <C>       <C>          <C>          <C>
Initial capitalization                    --   $     --        --   $       --   2,400,000    $     1,200
  Issuance of common stock
    for a note                            --         --        --           --     300,000            150
  Issuance of common stock
    for cash                              --         --        --           --     100,000             50
  Issuance of common stock
    for services                          --         --        --           --     764,000            382
  Net loss for 1996                       --         --        --           --          --             --
                                 ------------  ---------  --------  -----------  ----------   ------------
BALANCE, DECEMBER 31, 1996                --         --        --           --   3,564,000          1,782
  Exercise of options                     --         --        --           --      26,666             13
  Issuance of common stock
    for cash and conversion
    of note payable ($77,000)             --         --        --           --     640,000            320
  Payment of note receivable
  Net loss for 1997                       --         --        --           --          --             --
                                 ------------  ---------  --------  -----------  ----------   ------------
BALANCE, DECEMBER 31, 1997                --         --        --           --   4,230,666          2,115
  Exercise of options                     --         --        --           --      57,000             29
  Issuance of common stock
    for cash                              --         --        --           --      40,000             20
  Issuance of preferred
    stock for cash                     8,824          9        --           --          --             --
  Valuation of beneficial
    conversion feature
    on Series A Preferred                 --         --        --           --          --             --
  Contribution of officer's
    salary                                --         --        --           --          --             --
  Net loss for 1998                       --         --        --           --          --             --
                                 ------------  ---------  --------  -----------  ----------   ------------
BALANCE, DECEMBER 31, 1998             8,824          9        --           --   4,327,666          2,164
  Exercise of warrants                    --         --        --           --     209,490            105
  Exercise of options                     --         --        --           --     146,903             73
  Issuance of preferred stock
    for cash                          70,469         70        --           --          --             --
  Preferred stock dividend                --         --        --           --       5,474              3
  Valuation of beneficial
    conversion feature on
    Series A Preferred                    --         --        --           --          --             --
  Repurchase of common shares             --         --        --           --    (560,000)          (280)
  Net loss for 1999                       --         --        --           --          --             --
                                 ------------  ---------  --------  -----------  ----------   ------------
BALANCE, DECEMBER 31, 1999            79,293   $     79   $    --   $       --   4,129,533    $     2,065

(Continued)
</TABLE>

<TABLE>
<CAPTION>
                                                                         DEFICIT
                                           ADDITIONAL    ADDITIONAL    ACCUMULATED       TOTAL
                                  STOCK     PAID-IN       PAID-IN      DURING THE    SHAREHOLDERS'
                                  OPTION    CAPITAL-      CAPITAL-     DEVELOPMENT      EQUITY
                                  COSTS      COMMON      PREFERRED       STAGE         (DEFICIT)
                                 -------  ------------  ------------  ------------   ------------

<S>                              <C>      <C>           <C>           <C>            <C>

Initial capitalization           $   --   $        --   $        --   $        --    $     1,200
  Issuance of common stock
    for a note                       --            --            --            --            150
  Issuance of common stock
    for cash                         --         4,950            --            --          5,000
  Issuance of common stock
    for services                     --        37,818            --            --         38,200
  Net loss for 1996                  --            --            --       (59,079)       (59,079)
                                 -------  ------------  ------------  ------------   ------------
BALANCE, DECEMBER 31, 1996           --        42,768            --       (59,079)       (14,529)
  Exercise of options                --        29,987            --            --         30,000
  Issuance of common stock
    for cash and conversion
    of note payable ($77,000)        --       927,680            --            --        928,000
  Payment of note receivable
  Net loss for 1997                  --            --            --      (457,829)      (457,829)
                                 -------  ------------  ------------  ------------   ------------
BALANCE, DECEMBER 31, 1997           --     1,000,435            --      (516,908)       485,642
  Exercise of options                --       114,971            --            --        115,000
  Issuance of common stock
    for cash                         --        57,980            --            --         58,000
  Issuance of preferred
    stock for cash                   --            --        74,991            --         75,000
  Valuation of beneficial
    conversion feature
    on Series A Preferred            --            --        25,000       (25,000)            --
  Contribution of officer's
    salary                           --        80,000            --            --         80,000
  Net loss for 1998                  --            --            --      (640,580)      (640,580)
                                 -------  ------------  ------------  ------------   ------------
BALANCE, DECEMBER 31, 1998           --     1,253,386        99,991    (1,182,488)       173,062
  Exercise of warrants               --       366,503            --            --        366,608
  Exercise of options                --       177,289            --            --        177,362
  Issuance of preferred stock
    for cash                         --            --       598,930            --        599,000
  Preferred stock dividend           --        25,722            --       (25,725)            --
  Valuation of beneficial
    conversion feature on
    Series A Preferred               --            --       199,486      (199,486)            --
  Repurchase of common shares        --            --            --            --           (280)
  Net loss for 1999                  --            --            --    (1,329,328)    (1,329,328)
                                 -------  ------------  ------------  ------------   ------------
BALANCE, DECEMBER 31, 1999       $   --   $ 1,822,900   $   898,407   $(2,737,027)   $   (13,576)


                                                     F-6
</TABLE>
<PAGE>

<TABLE>
                           Consolidated Statements of Cash Flows
                           CPC OF AMERICA, INC. AND SUBSIDIARIES
                               (A DEVELOPMENT STAGE COMPANY)

<CAPTION>
                                                                                               CUMULATIVE
                                                                                             FROM INCEPTION
                                                                 YEAR ENDED DECEMBER 31,    (APRIL 11, 1996)
                                                              -----------------------------  TO DECEMBER 31,
                                                                  2003             2002             2003
                                                              -------------   -------------   -------------
<S>                                                           <C>             <C>             <C>
Cash flows from operating activities:
  Net loss                                                    $ (2,759,466)   $ (3,460,574)   $(12,424,771)
  Adjustments to reconcile net loss to net cash
    used by operating activities:
    Depreciation and amortization                                   21,274          31,728         117,481
    Amortization of stock option costs                                  --          35,000         280,000
    Contribution of officer's salary                                    --              --          80,000
    Issuance of common stock and options for services                   --              --         313,700
    Other                                                               --              --          38,879
    Decrease (increase) in other assets                            (70,329)        (37,102)       (124,045)
    Increase (decrease) in accounts and other payable              (13,546)        204,717         208,899
    (Decrease) increase in accrued expenses                         (5,474)        (19,265)        198,261
                                                              -------------   -------------   -------------
    Net cash used by operating activities                       (2,827,541)     (3,245,496)    (11,311,596)
                                                              -------------   -------------   -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of short-term investments                            (2,450,469)             --      (2,450,469)
  Purchase of patent                                                    --              --         (14,795)
  Capital expenditures                                              (1,500)             --        (148,016)
                                                              -------------   -------------   -------------
    Net cash used by investing activities                       (2,451,969)             --      (2,613,280)
                                                              -------------   -------------   -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from shareholder notes                                       --              --          73,150
  Payments on note payable to shareholder                               --              --          (3,000)
  Exercise of options and warrants                               1,352,195         317,790       3,670,884
  Issuance of preferred stock                                    6,485,082       3,367,609      12,993,292
  Issuance of common stock                                              --              --         915,200
  Dividends                                                             --              --          (5,051)
  Cancellation of common stock                                          --        (200,000)       (200,325)
                                                              -------------   -------------   -------------
    Net cash provided by financing activities                    7,837,277       3,485,399      17,444,150
                                                              -------------   -------------   -------------

Net increase (decrease) in cash                                  2,557,767         239,903       3,519,274
CASH, BEGINNING OF PERIOD                                          961,507         721,604              --
                                                              -------------   -------------   -------------
CASH, END OF PERIOD                                           $  3,519,274    $    961,507    $  3,519,274
                                                              =============   =============   =============

NON-CASH INVESTING AND FINANCING ACTIVITIES:
  Issuance of common stock for note receivable                $         --    $         --    $        150
  Debt to equity conversion                                   $         --    $         --    $     77,000
  Acquisition of minority interest                            $         --    $         --    $     33,250
  Sale of Tercero - elimination of goodwill                   $         --    $         --    $    (40,000)
  Preferred dividends accrued                                 $    372,925    $     80,848    $    500,648
  Preferred dividends paid through issuance of common stock   $     18,071    $      6,625    $     61,892
  Acquisition of Med Enclosures for note payable              $         --    $         --    $    250,000
  Acquisition of patent paid by issuance of common stock      $         --    $     53,500    $    288,708
  Settlement of lawsuit by issuance of common stock           $         --    $         --    $    200,000
  Valuation of beneficial conversion features                 $  2,161,694    $  1,122,521    $  4,330,695


             The accompanying notes are an integral part of these consolidated
                                   financial statements.

                                           F-7
</TABLE>
<PAGE>

                      CPC OF AMERICA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2003


1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------------------------------

     Organization
     ------------

     CPC of America, Inc., a Nevada corporation ("CPC" or the "Company"), was
     formed on April 11, 1996 to manufacture and distribute external
     counterpulsation medical devices. The Company is classified as a
     development stage company because its principal activities involve
     obtaining capital and rights to certain technology, and conducting research
     and development activities.

     On July 25, 1997, the Company acquired 80% of DSDS Group, Inc. ("DSDS").
     The sole owner of DSDS, John P. Colonna, served as a technical and
     engineering consultant to the Company. DSDS had no operating history and
     its only assets consisted of two patents relating to a self-destructing
     single-use syringe. The patents had approximately 16 years remaining before
     expiration, and were deemed to have a fair value of $76,250. The Company
     purchased its interest in DSDS for a total price of $61,000, of which
     $25,000 was paid in cash at the closing, and $36,000 was to be paid by the
     Company in 18 equal monthly installments. The transaction was accounted for
     as a purchase of DSDS by the Company and, accordingly, the accompanying
     financial statements include the amounts and operations of the Company from
     its inception and of DSDS from July 25, 1997. In September 1998, the
     Company purchased the remaining 20% interest of DSDS for $18,000 cash. On
     December 1, 1998, the Company sold DSDS for its book value of $60,000 to a
     consulting firm that has been providing research and development activities
     to the Company since early 1998. In consideration for the acquisition of
     DSDS, this R & D consulting firm provided $60,000 worth of consulting
     services to the Company through May 1999.

     In June 1998 CPC formed CPCA 2000, Inc., a Nevada corporation ("CPCA") to
     serve as the Company's wholly owned operating subsidiary. The Company
     transferred all of its assets and liabilities to CPCA.

     On February 1, 1999, the Company filed a lawsuit against Partner Provider
     Health, Inc. (PPH) alleging breach of contract, misrepresentation and fraud
     relating to its joint venture with HeartMed LLC. Under terms of a November
     1999 settlement, CPC dropped its lawsuit and received the remaining
     interest in HeartMed LLC making it a wholly owned subsidiary of CPC.
     HeartMed LLC has had no operations.

     On November 22, 1999, CPC formed Med Enclosures, LLC, a Nevada limited
     liability company, (MED) with Gene Myers Enterprises, Inc., (GME) a
     minority shareholder of CPC. CPC received a 73.3% interest in MED for a
     $250,000 promissory note, which was retired in April 2000. GME contributed
     two patents it developed that are recorded at GME's carrying value of zero.
     MED acquired its third patent from GME with the proceeds from the $250,000
     promissory note. During 2002, the Company purchased an additional 7% of MED
     through the issuance of 10,000 shares of common stock valued at $53,500.

     During 2002, the Company formed Med Close Corp ("MCC"); operations have not
     commenced.

                                      F-8
<PAGE>

                      CPC OF AMERICA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2003


1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
----------------------------------------------------------------------------

     Principles of consolidation
     ---------------------------

     The accompanying consolidated financial statements include the accounts of
     the Company and its subsidiaries, DSDS from July 1997 through November
     1998, CPCA from June 1998, MED and HeartMed LLC from November 1999, and Med
     Close from 2002. All significant intercompany transactions and balances
     have been eliminated in consolidation.

     Cash and equivalents, short-term investments and other cash flow statement
     --------------------------------------------------------------------------
     supplemental information
     ------------------------

     The Company considers all liquid investments with a maturity of three
     months or less from the date of purchase that are readily convertible into
     cash to be cash equivalents. Short term investments are bank certificates
     of deposit with original terms in excess of three months. Balances in bank
     accounts may, from time to time, exceed federally insured limits. The
     Company believes that its loss exposure is limited.

     No income taxes have been paid since inception. Payments of $8,954 for
     interest have been made since inception; none in 2002 or 2003.

     Patents and trademarks
     ----------------------

     Patents and trademarks are stated at cost and amortized using the
     straight-line method over their economic useful life, which is estimated at
     ten and fifteen years, respectively. Amortization expense was $20,649 in
     2003 and $27,003 in 2002.

     Equipment
     ---------

     Depreciation expense is provided over the estimated useful life of 5 years
     using accelerated methods. Depreciation expense was $625 in 2003 and $4,725
     in 2002.

     Use of estimates
     ----------------

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect certain reported amounts and disclosures.
     Accordingly, actual results could differ from those estimates.

     Income taxes
     ------------

     The Company reports certain expenses differently for financial and tax
     reporting purposes and, accordingly, provides for the related deferred
     taxes. Income taxes are accounted for under the liability method in
     accordance with SFAS 109.

     Research and development costs
     ------------------------------

     Costs and expenses that can be clearly identified as research and
     development are charged to expense as incurred in accordance with FASB
     Statement No. 2, "Accounting for Research and Development Costs".

                                      F-9
<PAGE>

                      CPC OF AMERICA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2003


1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
----------------------------------------------------------------------------

     Intangibles and long-lived assets
     ---------------------------------

     Long-lived assets are reviewed annually for impairment whenever events or
     changes in circumstances indicate that carrying amount of an asset may not
     be recoverable. Impairment is necessary when the undiscounted cash flows
     estimated to be generated by the asset are less than the carrying amount of
     the asset.

                                                         2003             2002
                                                       ---------       ---------
Patents
       Gross carrying amount                           $303,500        $303,500
                                                       =========       =========
       Accumulated amortization                        $ 83,327        $ 63,093
                                                       =========       =========
       Amortization expense                            $ 20,234        $ 26,588
                                                       =========       =========

Trademark
       Gross carrying amount                           $  6,232        $  6,232
                                                       =========       =========
       Accumulated amortization                        $  2,907        $  2,492
                                                       =========       =========
       Amortization expense                            $    415        $    415
                                                       =========       =========


     Amortization of intangibles is expected to be approximately $27,000 in each
     of the next five years.

     Stock-based compensation
     ------------------------

     The Company has elected to adopt the disclosure provisions only of SFAS 123
     and continues to measure compensation cost related to stock and stock
     options issued to employees using the intrinsic method of accounting
     prescribed by Accounting Principles Board Opinion No. 25 ("APB25"),
     "Accounting for Stock Issued to Employees," and related interpretations.
     Stock based compensation issued to persons other than employees is
     reflected in the financial statements at fair value.

     Had compensation cost been determined based on the fair value of the
     options at the grant dates consistent with the method of SFAS 123, the
     Company's net loss and loss per share would have been:

                                                        2003            2002
                                                     ------------   ------------
        Net loss
               As reported                           $(2,759,466)   $(3,460,574)
               Stock compensation, fair value        $   267,487    $   378,936
               Pro forma                             $(3,026,953)   $(3,838,970)
        Basic and fully diluted loss per share
               As reported                           $     (0.90)   $     (0.81)
               Pro forma                             $     (1.05)   $     (0.88)


     The fair value of these options was estimated at the date of grant using
     the Black-Scholes option-pricing model with the following weighted average
     assumptions for 1998 and 1996, respectively: risk-free interest rate of 6%
     and 9%; volatility of 50% and 200%; and a weighted fair value of $1.26 and
     $.001.

                                      F-10
<PAGE>

                      CPC OF AMERICA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2003


1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
----------------------------------------------------------------------------

     Basic and diluted net loss per share
     ------------------------------------

     Net loss per share is calculated in accordance with Statement of Financial
     Accounting Standards 128, Earnings Per Share ("SFAS 128"). Basic net loss
     per share is based upon the weighted average number of common shares
     outstanding. Diluted net loss per share is based on the assumption that all
     dilutive convertible shares and stock options were converted or exercised.
     Dilution is computed by applying the treasury stock method. Under this
     method, options and warrants are assumed to be exercised at the beginning
     of the period (or at the time of issuance, if later), and as if funds
     obtained thereby were used to purchase common stock at the average market
     price during the period. For 2003 and 2002 all common stock equivalents
     were anti-dilutive.

     Recent accounting pronouncements
     --------------------------------

     During the year ended December 31, 2003, the Financial Accounting Standards
     Board ("FASB") issued various accounting standards and interpretations,
     including FASB Statement No. 150, "Accounting for Certain Financial
     Instruments with Characteristics of both Liabilities and Equity" ("SFAS
     150"), Interpretation No.46 ("FIN 46), "Consolidation of Variable Interest
     Entities, an interpretation of ARB 51" and Interpretation No.46-R
     "Consolidation of Variable Interest Entities" ("FIN 46-R"). Adoption of
     these standards and interpretations has not had a material effect on the
     Company's financial condition, results of operations or liquidity.

2.   SHAREHOLDERS' EQUITY (DEFICIT)
-----------------------------------

     Series A Preferred stock
     ------------------------

     In November 1998, the Company offered in a private placement memorandum
     Series A preferred stock at $8.50 per share. As of November 15, 1999, the
     Company sold 79,293 shares for proceeds of $674,000. The Series A Preferred
     stock has no voting rights and has a 5% annual dividend which may be
     payable in cash or common stock. Each Series A share was convertible into
     one common share until December 31, 1999, when the conversion price was
     adjusted to the lower of $6.38 or 75% of the average last sale price of the
     common stock for the 30 trading days immediately preceding such date as
     reported on any stock exchange, according to the terms of the original
     agreement. At December 31, 1999 the conversion price was calculated at
     $4.70 per share. On December 31, 1999, a dividend of $25,725 was paid by
     issuing 5,474 shares of the Company's common stock. In January 2000, 70,469
     Series A shares were converted into 127,447 common shares. In June 2001,
     the remaining 8,824 Series A shares and related accrued dividends of $1,563
     were converted into 16,290 common shares. Additional accrued dividends of
     $3,750 were paid in cash.

                                      F-11
<PAGE>

                      CPC OF AMERICA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2003


2.   SHAREHOLDERS' EQUITY (DEFICIT) (CONTINUED)
-----------------------------------------------

     Series B Preferred stock
     ------------------------

     In April 2000, the Company offered in a private placement memorandum Series
     B preferred stock at $8.75 per share. As of December 31, 2001, the Company
     sold 185,144 shares for proceeds of $1,620,010. The Company recorded the
     beneficial conversion feature totaling $208,125 in 2000 and $331,636 in
     2001 at the date of issuance. The Series B Preferred stock has no voting
     rights and has a 5% annual dividend which may be payable in cash or common
     stock. Each Series B share was convertible into one common share until June
     30, 2001, when the conversion price was adjusted to the lower of $6.56 or
     75% of the average last sale price of the common stock for the 30 trading
     days immediately preceding such date as reported on any stock exchange,
     according to the terms of the original agreement. The conversion price was
     calculated at $3.20 per share. During the fourth quarter of 2001, 113,715
     Series B shares and related accrued dividends of $9,908 were converted into
     314,037 common shares. In March 2002, the remaining 71,429 Series B shares
     were converted into 195,313 common shares. Additional accrued dividends of
     $53,125 were paid in cash.

     Series C Preferred stock
     ------------------------

     In October 2001, the Company offered in a private placement memorandum
     Series C preferred stock at $8.90 per share. As of December 31, 2002, the
     Company sold 359,780 shares for proceeds of $3,202,042. The Company
     recorded the beneficial conversion feature totaling $1,067,337 at the date
     of issuance. The Series C Preferred stock has no voting rights and has a 5%
     annual dividend which may be payable in cash or common stock. Each Series C
     share is convertible into one common share until June 30, 2002, when the
     conversion price will be adjusted to the lower of $6.68 or 75% of the
     average last sale price of the common stock for the 30 trading days
     immediately preceding such date as reported on any stock exchange,
     according to the terms of the original agreement. The conversion price was
     calculated at $3.57 per share. During the fourth quarter of 2002, 18,576
     Series C shares and related accrued dividends of $6,625 were converted into
     46,314 common shares. During 2003, 26,786 Series C shares and related
     accrued dividends of $18,071 were converted into 73,689 common shares.
     Accrued dividends of $242,192 on the 314,418 outstanding shares remain
     unpaid at December 31, 2003.

     Series D Preferred stock
     ------------------------

     In November 2002, the Company offered in a private placement memorandum
     Series D preferred stock at $9.15 per share. As of December 31, 2003, the
     Company sold 819,336 shares for proceeds of $7,496,924. The Company
     recorded a beneficial conversion feature totaling $2,499,111 at the date of
     issuance. The Series D Preferred stock has no voting rights and has a 5%
     annual dividend which may be payable in cash or common stock. Each Series D
     share is convertible into one common share until June 30, 2003, when the
     conversion price will be adjusted to the lower of $6.86 or 75% of the
     average last sale price of the common stock for the 30 trading days

                                      F-12
<PAGE>

                      CPC OF AMERICA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2003


     2.  SHAREHOLDERS' EQUITY (DEFICIT) (CONTINUED
     ---------------------------------------------

     Series D Preferred stock (continued)
     ------------------------------------

     immediately preceding such date, according to the terms of the original
     agreement. Accrued dividends of $258,457 on the 819,336 outstanding shares
     remain unpaid at December 31, 2003.

     Common stock
     ------------

     During 2003, 26,786 Series C shares and related accrued dividends of
     $18,071 were converted into 73,689 common shares. During 2002, 18,576
     Series C shares and related accrued dividends of $6,625 were converted into
     46,314 common shares.

     In March 2002, 71,429 Series B shares were converted into 195,313 common
     shares.

     In October 2002, the Company purchased an additional 7% interest in MED for
     10,000 common shares valued at $53,500.

     In March 2002, 33,333 common shares were canceled as part of a lawsuit
     settlement. In August and November 2002, 502,600 common shares were
     canceled as part of the settlement with former consultants of the Company.

     In June 1998, the Company effected a two-for-one stock split, decreasing
     the par value to $.0005 per share. All share information reported in these
     financial statements has been adjusted to reflect the two-for-one stock
     split.

     In March 1997, the Company offered in a private placement memorandum 35
     units at $29,000 per unit. Each unit consists of 20,000 shares of common
     stock and warrants to purchase 40,000 shares of common stock exercisable at
     $1.75 per share from February 10,1999 until December 31, 2000. As of
     December 31, 1998, the Company had sold 34 units, including 3 units in
     conversion of a note payable. An investor converted a note with a balance
     of $70,000 and related accrued interest of $7,000 into 3 units, and the
     Company received $10,000 cash for the balance. No value was allocated to
     the warrants because the exercise price was above market price at the time
     of issuance. During 1999, warrants to purchase 209,490 common shares were
     exercised. During 2000, warrants to purchase 365,500 common shares were
     exercised and the remaining balance of 785,010 at December 31, 2000 were
     not converted and therefore expired.

     In December 1996, the Company issued 4,000 shares of common stock to its
     attorney for payment of $200 in legal fees. In October 1996, the Company
     issued 760,000 shares of common stock to related parties in payment of
     $38,000 in consulting fees rendered in 1996.

     In May 1996, the Company sold to its founders 2,400,000 shares of common
     stock for $.0005 cash per share and 300,000 shares for a $150 note
     receivable. In September 1996, the Company sold 100,000 shares of common
     stock for $.05 cash per share to one of its founders.

                                      F-13
<PAGE>

                      CPC OF AMERICA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2003


2.    SHAREHOLDERS' EQUITY (DEFICIT) (CONTINUED)
------------------------------------------------

     Stock options
     -------------

     Options to purchase the Company's common stock have been granted at prices
     at or above the fair value of the Company's common stock at the time of
     grant. The following information applies to all options outstanding at
     December 31, 2003:

                            Average      Weighted                    Weighted
     Exercise   Options    remaining      average       Number       average
       Price  Outstanding life (years) exercise price exercisable exercise price
     -------- ----------- ------------ -------------- ----------- --------------
     $ 1.125     971,663       2       $       1.125     971,663  $       1.125
     $  2.50   3,900,492       4       $        2.50   3,900,492  $        2.50
     $  5.50      69,127       1       $        5.50      69,127  $        5.50



     A summary of option activity follows.

                                       Number of    Exercise Price
                                        Options        Per Share      Expiration
                                   --------------   ---------------   ----------
Inception (April 11, 1996)                    --           --             --
Granted                                4,420,000     $1.125 - 1.25    997 - 2006
                                   --------------   ---------------
Outstanding at December 31, 1996       4,420,000     $1.125 - 1.25    997 - 2006

Exercised                              (26,666)         $1.125
Expired                                (200,000)         $1.18
                                   --------------   ---------------
Outstanding at December 31, 1997       4,193,334     $1.125 - 1.25       2006

Granted                                4,152,000     $1.25 - 9.00        2008
Exercised                              (57,000)      $1.125 - 2.50
Canceled                              (1,173,334)       $1.125
                                   --------------   ---------------
Outstanding at December 31, 1998       7,115,000     $1.125 - 9.00   2003 - 2008

Granted                                 25,000           $5.50           2004
Exercised                              (146,903)     $1.125 - 2.50
Canceled                               (490,000)        $1.125
                                   --------------   ---------------
Outstanding at December 31, 1999       6,503,097     $1.125 - 9.00   2003 - 2008

Granted                                 175,000      $5.00 - $5.75
Exercised                              (223,832)     $1.125 - 2.50
                                   --------------   ---------------
Outstanding at December 31, 2000       6,454,265     $1.125 - 9.00   2003 - 2008

Granted                                 15,800           $2.50           2004
Exercised                              (360,394)     $1.125 - 2.50
                                   --------------   ---------------
Outstanding at December 31, 2001       6,109,671     $1.125 - 9.00   2003 - 2008

Exercised                              (282,480)        $1.125
Canceled                               (100,000)         $5.50
                                   --------------   ---------------
Outstanding at December 31, 2002       5,727,191     $1.125 - 9.00   2003 - 2008

Exercised                              (775,909)     $1.125 - 9.00
Canceled                               (10,000)          $8.00
                                   --------------   ---------------
Outstanding at December 31, 2003       4,941,282     $1.125 - 5.50   2004 - 2008
                                   ==============   ===============

                                      F-14
<PAGE>

                      CPC OF AMERICA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2003


2.   SHAREHOLDERS' EQUITY (DEFICIT) (CONTINUED)
-----------------------------------------------

     Stock options (continued)
     -------------------------

     The following information applies to employee options outstanding at
     December 31, 2003:

<TABLE>
<CAPTION>
                                     Average         Weighted                          Weighted
       Exercise       Options       remaining         average          Number           average
        Price       Outstanding    life (years)   exercise price     exercisable    exercise price
      ----------   --------------  -------------  ----------------  --------------  ----------------

      <C>              <C>              <C>       <C>                   <C>         <C>
      $   1.125           69,886        2         $         1.125          69,886   $         1.125
      $    2.50        1,909,190        4         $          2.50       1,909,190   $         2.50
</TABLE>


     In April 2001, 15,800 options were granted to a consultant at an exercise
     price of $2.50 for services performed. The fair value of these options was
     calculated using the Black-Scholes option-pricing model and was determined
     to be $20,000.

     During 2000, 175,000 options were granted to two consultants at exercise
     prices of $5.00 and $5.75. The fair value of these options was calculated
     using the Black-Scholes option-pricing model and was determined to be
     $280,000. The services provided by these consultants are to be performed
     over two years. The cost of $280,000 is being amortized over two years.
     During 2002 and 2001, $35,000 and $140,000 were charged to expense and
     recorded in the statement of operations, respectively. In 2002, 100,000 of
     these options were cancelled due to non-performance. The fair value of the
     options issued to non-employees during 1999 and 1998 was determined to be
     minimal.


3.    BASIC AND DILUTED NET LOSS PER SHARE
------------------------------------------

<TABLE>
<CAPTION>
                                                                 2003            2002
                                                              ------------   ------------
<S>                                                           <C>            <C>
BASIC AND DILUTED LOSS PER SHARE:

  Numerator
      Net loss                                                $(2,759,466)   $(3,460,574)
      Preferred dividend                                         (390,289)      (116,121)
      Beneficial conversion feature preferred stock            (2,161,694)    (1,122,521)
                                                              ------------   ------------

                                                              $(5,311,449)   $(4,699,216)
                                                              ============   ============
  Denominator
      Basic and diluted weighted average number of
      common shares outstanding during the period               5,904,416      5,768,032
                                                              ============   ============

  Basic and diluted loss per share                            $     (0.90)   $     (0.81)
                                                              ============   ============

  Incremental common shares (not included in denominator
  of diluted earnings per share calculation due to their
  antidilutive nature) attributable to exercise/conversion
  of:
         Outstanding options                                    4,941,282      5,727,191
         Preferred stock                                        1,876,751        961,248
                                                              ------------   ------------

                                                                6,818,033      6,688,439
                                                              ============   ============
</TABLE>

                                      F-15
<PAGE>

                      CPC OF AMERICA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2003


4.   INCOME TAXES
-----------------

     The Company recognizes deferred tax assets and liabilities for temporary
     differences between the financial reporting and tax bases of its assets and
     liabilities. At December 31, 2003, the Company has an estimated net
     operating loss carryforward for federal tax purposes of $9,667,000, which,
     if unused to offset future taxable income, will begin to expire in 2012 and
     continue through 2022. The Company had deferred tax assets of $3,384,000
     and $2,606,000 at December 31, 2003 and 2002, respectively, relating to its
     net operating loss. A 100% valuation allowance, which increased by $778,000
     in 2003, has been recognized to offset the related deferred tax asset due
     to the uncertainty of realizing the benefit.

5.   COMMITMENTS AND CONTINGENCIES
----------------------------------

     Consulting agreement
     --------------------

     In January 1997, the Company entered into a consulting agreement with its
     strategic consultant, a majority shareholder, for five years at $5,000 per
     month. This agreement was revised in November 1997 to $8,000 per month, in
     April 1998 to $10,000 per month and for an additional five years, and in
     April 1999 to provide for increases in compensation based on increases in
     the consumer price index in the preceding year. Base monthly compensation
     was $18,333 in 2001 and $19,250 in 2002. For 2003, base monthly
     compensation was $31,797 plus a bonus of $175,000.

     In addition, options to purchase 2,000,000 shares of common stock at $2.50
     per share were granted under the April 1998 revision agreement. The options
     vest and become exercisable in ten equal installments of 200,000 shares
     each year starting on the grant date and are exercisable for ten years.

     The Company has entered into various agreements with its strategic
     consultant for the research and development of additional applications of
     the Company's proprietary intellectual properties. The Company made
     payments to the strategic consultant amounting to $672,164 in 2003 and
     $692,734 in 2002 under these agreements.

     Employment agreement
     --------------------

     In April 1998, the Company entered into a ten-year employment agreement
     with its CEO. The agreement provides for a base salary of $10,000 per month
     beginning May 1998. In December 1998, the CEO elected to contribute his
     accrued salary of $80,000 to the Company. The agreement was revised in
     April 1999 to provide for increases in compensation based on increases in
     the consumer price index in the preceding year. Base monthly compensation
     was $18,333 in 2001 and $19,250 in 2002. For 2003, base monthly
     compensation was $31,797 plus a bonus of $175,000.

     In addition, options to purchase 2,000,000 shares of common stock at $2.50
     per share were granted under the April 1998 agreement. The options vest and
     become exercisable in ten equal installments of 200,000 shares each year
     starting on the grant date and are exercisable for ten years.

                                      F-16
<PAGE>

                      CPC OF AMERICA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2003


5.   COMMITMENTS AND CONTINGENCIES (CONTINUED)
----------------------------------------------

     Royalty agreements
     ------------------

     In July 2000, the Company entered into royalty agreements with its CEO and
     its strategic consultant granting each of them royalties equal to .0075% on
     net sales of certain MED products, as defined. In July 2001, these
     agreements were amended to increase the royalties to 1.5% of net sales of
     certain MED products, as defined. To date, MED has not had any sales.

     In October 2002, the Company entered into royalty agreements with its CEO
     and its strategic consultant granting each of them royalties equal to 2.5%
     on net sales of certain MCC products, as defined. To date, MCC has not had
     any sales.

     Litigation
     ----------

     In settlement of its lawsuit with Carepoint Networks, Inc., in February
     2000 the Company paid $50,000 cash and issued 33,333 common shares valued
     at the then current market price of $6.00 per share. The total amount of
     $250,000 is included in the 1999 consolidated statement of operations under
     general and administrative expenses. Since management was unable to
     register the 33,333 shares by the deadline outlined in the settlement
     agreement, the Company subsequently paid Carepoint Networks, Inc. $200,000
     in cash.

     The Company was named in a lawsuit brought by Nancy Lee, a former
     consultant to the Company. Ms. Lee alleged that the Company prohibited her
     from selling the balance of her shares of stock she acquired as one of the
     Company's founders. She sought a judicial declaration from the court that
     she is the rightful owner of the shares. The Company filed an answer and a
     counterclaim seeking return of the shares on the grounds that Ms. Lee
     failed to provide adequate consideration for the securities. In July 2002,
     this matter was settled, with the Company paying Ms. Lee $170,000 in
     settlement of her claims and Ms. Lee returning 78,000 shares of common
     stock to the Company.

     The Company was named in a lawsuit brought by Richard E. Rubin, M.D., a
     former officer and director of the Company. Rubin alleged that the Company
     breached an employment contract with him and prohibited him from selling
     his shares of stock or exercising his stock options. He sought damages in
     excess of $5,000,000. The Company filed an answer denying any and all
     liability to Rubin. The Company interposed counterclaims against Rubin
     seeking recovery of the shares and options, or in the alternative, monetary
     damages. In December 2002, this matter was settled, with the Company paying
     Rubin $400,000 with a final payment of $200,000 due in 24 months in
     settlement of his claims and Rubin returning 424,600 shares of common stock
     to the Company.

     Office Lease
     ------------

     The Company leases its office space under a one-year lease at $1,100 per
     month. The lease expires November 30, 2004. Actual rent expense was $12,500
     in 2003 and $12,100 in 2002.

                                      F-17
<PAGE>


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

         None.

ITEM 8A. CONTROLS AND PROCEDURES

         Our disclosure controls and procedures are designed to ensure that
information required to be disclosed in reports that we file or submit under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the Securities and
Exchange Commission and that such information is accumulated and communicated to
our management, as appropriate, to allow timely decisions regarding required
disclosure. Our Chief Executive Officer and Chief Financial Officer has reviewed
the effectiveness of our disclosure controls and procedures and has concluded
that the disclosure controls and procedures are effective as of the end of the
period covered by this report. There were no significant changes in our internal
controls or in other factors that could significantly affect these controls
subsequent to the last day they were evaluated.

         It should be noted that any system of controls, however well designed
and operated, can provide only reasonable, and not absolute, assurance that the
objectives of the system are met. In addition, the design of any control system
is based in part upon certain assumptions about the likelihood of future events.
Because of these and other inherent limitations of control systems, there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. As a small organization with one full time
employee, the effectiveness of our controls heavily depends on the direct
involvement of our Chief Executive Officer and Chief Financial Officer.


PART III

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

Set forth below are our directors and officers.


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

Rod A. Shipman         53     President, Secretary, Treasurer and Director
Rafe Cohen             56     Director
William C. Lievense    56     Director


         Mr. Shipman has been our President and Chief Executive Officer since
January 1997, became Secretary in July 1997 and treasurer in September 2000 and
has been a director of our company since its inception in May 1996. Mr. Shipman
has over 20 years of experience in the medical industry. From August 1994 to
September 1999, Mr. Shipman was President and Chief Executive Officer of R.A.
Shipman & Associates, L.L.C., a health care consulting firm. From January 1993
to July 1994 he served as Senior Vice President and Chief Operating Officer of
MRI Medical Diagnostics, a Colorado corporation that provided imaging and
nuclear medical services and operated a senior retirement facility. Mr. Shipman
also served as a director of that company from May 1993 to June 1994. From
January 1991 to September 1992, Mr. Shipman served as the President and Chief
Operating Officer of Southern California Imaging Services, a private mobile
diagnostic imaging and service company. From 1978 to 1990 he served in various
positions including Business Manager, Controller, Account Executive and District
General Manager with Philips Medical Systems, CGR Medical Systems, ADAC
Laboratories and Picker, all medical imaging companies. Mr. Shipman received a
Bachelor of Science degree in Business Administration from Pepperdine University
in Malibu, California and a Masters degree in Public and Health Care
Administration from the University of San Francisco in San Francisco,
California. He currently serves as a director on several small privately held
companies in real estate and environmental companies.

                                      -13-
<PAGE>

         Mr. Cohen has served as our director since July 1998. Mr. Cohen served
as treasurer from July 1998 to September 2000. Mr. Cohen is a certified public
accountant and has owned and managed his own accounting practice since 1974. Mr.
Cohen also currently serves as President of Galaxy Theaters. Mr. Cohen received
a Masters Degree in Business Taxation from the University of Southern California
in 1976 and a Masters Degree in Finance from the University of California, Los
Angeles in 1972.

         Mr. Lievense has served as our director since October 1996. He has
approximately 26 years of experience in the medical industry. Mr. Lievense was
the President and Chief Executive Officer of Columbia/Doctors Hospital of
Sarasota, Florida, and its predecessor, Galen Health Care Corporation from 1993
to his recent retirement in January 2000. Mr. Lievense has worked for Humana,
Inc., a nationwide owner and operator of hospitals and healthcare facilities,
for 20 years, serving as its Vice President and Assistant Regional Manager from
1988 to 1993. He also worked for American Inhalation Representatives, Inc., a
respiratory services company in Birmingham, Alabama. Mr. Lievense received a
Bachelor of Arts degree in Sociology from Alma College in Alma, Michigan and
received a Masters degree in Business Administration from the University of
Louisville, Kentucky.

         All directors serve for a one-year term and until their successors are
duly elected and qualified. All officers serve at the discretion of the Board of
Directors.

KEY CONSULTANTS TO THE COMPANY

         The CTM Group, Inc., has a consulting contract to provide strategic
planning services to our company. Mr. Paul Shabty is the key consultant from the
CTM Group, Inc. who provides these consulting services. Mr. Shabty is a former
founder of our company and served as our President, Treasurer and Chairman of
the Board from April 1996 to January 1997. Mr. Shabty was a member of the Board
of Trustees of Columbia/Doctors Hospital of Sarasota, Florida. He is a former
director of TD Technologies, Inc., a private engineering and software company,
and Advanced Technologies Management Corporation, a medical software and
management company. Mr. Shabty has been involved in the medical and
manufacturing industries since 1970. He was the Founder, Chairman of the Board
and Chief Executive Officer of Medical Clinic Unlimited, Inc., which specialized
in both the provision of outpatient dialysis services and the manufacturing of
medical devices, equipment and supplies. From October 1993 to September 1994,
Mr. Shabty served as Executive Vice President of U.S. Diagnostic Labs, Inc., a
physician practice management provider specializing in diagnostic imaging
centers. Mr. Shabty received a Bachelor of Arts degree in Accounting from the
University of Tel Aviv. We made payments to CTM Group amounting to $672,164 in
2003 and $692,734 in 2002.

AUDIT COMMITTEE FINANCIAL EXPERT

         We do not have an audit committee nor do we have a financial expert.

CODE OF ETHICS

         We have adopted a code of ethics that applies to the principal
executive officer and principal financial and accounting officer. We will
provide to any person without charge, upon request, a copy of our code of
ethics. Requests may be directed to our principal executive offices at 6336 17th
Street Circle East, Sarasota, Florida 34243.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our officers, directors and persons who beneficially own more than 10%
of a registered class of our equity securities to file reports of securities
ownership and changes in such ownership with the Securities and Exchange
Commission (the "SEC"). Officers, directors and greater than 10% beneficial
owners are also required by rules promulgated by the SEC to furnish us with
copies of all Section 16(a) forms they file.

         Based solely upon a review of the copies of such forms furnished to us,
or written representations that no Form 5 filings were required, we believe that
during the fiscal year ended December 31, 2003, all Section 16(a) filing
requirements applicable to our officers, directors and greater than 10%
beneficial owners were complied with.

                                      -14-
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION.

         CASH COMPENSATION OF EXECUTIVE OFFICERS. The following table sets forth
the cash compensation paid by the Company to its Chief Executive Officer for
services rendered during the fiscal years ended December 31, 2003, 2002 and
2001.


<TABLE>
<CAPTION>
                                      ANNUAL COMPENSATION                LONG-TERM COMPENSATION
                            ----------------------------------------  ------------------------------
    NAME AND POSITION        YEAR    SALARY   BONUS   OTHER ANNUAL    RESTRICTED    COMMON SHARES      ALL OTHER
                                                      COMPENSATION       STOCK       UNDERLYING      COMPENSATION
                                                                      AWARDS ($)   OPTIONS GRANTED
                                                                                     (# SHARES)
--------------------------- ----------------------------------------  ------------------------------ --------------
<S>                          <C>   <C>       <C>          <C>            <C>            <C>            <C>
Rod A. Shipman, President    2003  $381,557  $175,000     9,000          -0-            -0-                -0-
and Chief Executive          2002  $409,095
Officer                      2001  $278,685    -0-         -0-           -0-            -0-            $54,500(1)
</TABLE>


                     OPTION/SAR GRANTS IN 2003 FISCAL YEAR
                               INDIVIDUAL GRANTS
-------------------------------------------------------------------------------
    NAME      NUMBER OF     % OF TOTAL OPTIONS/   EXERCISE OR   EXPIRATION DATE
              SECURITIES     SARS GRANTED TO      BASE PRICE
              UNDERLYING       EMPLOYEES IN        ($/SH)
             OPTIONS/SARS      FISCAL YEAR
             GRANTED (#)
----------  --------------  -------------------  -------------  ---------------
                                      None



<TABLE>
               AGGREGATED OPTION/SAR EXERCISES IN 2002 FISCAL YEAR
                          AND FY-END OPTION/SAR VALUES

<CAPTION>
             NAME                  SHARES ACQUIRED      VALUE REALIZED          NUMBER OF             VALUE OF
                                   ON EXERCISE (#)            ($)               SECURITIES           UNEXERCISED
                                                                                UNDERLYING          IN-THE-MONEY
                                                                               UNEXERCISED         OPTIONS/SARS AT
                                                                             OPTIONS/SARS AT         FY-END ($)
                                                                                FY-END (#)

                                                                               EXERCISABLE/         EXERCISABLE/
                                                                              UNEXERCISABLE         UNEXERCISABLE
-------------------------------   ------------------   ------------------    -----------------    ------------------
<S>                                         <C>            <C>               <C>                   <C>
Rod A. Shipman, President and               258,652        $311,174          1,379,076/600,000     $49,646,736/
Chief Executive Officer                                                                            $21,600,000(2)
</TABLE>


(1)  Represents bonus of 25,000 shares of common stock valued at $2.18 per
     share, the closing price of the Common Stock on the date of grant.
(2)  Based on a closing price of $36.00 per share for our common stock as quoted
     on the OTC Bulletin Board on December 30, 2003.


         COMPENSATION OF DIRECTORS. At the present time, directors receive no
compensation for serving as directors of the company, however, we may in the
future begin to compensate our non-officer directors. All directors receive
reimbursement for out-of-pocket expenses in attending board of directors
meetings. From time to time, we may engage certain members of our board of
directors to perform services on our behalf and will compensate such persons for
the services which they perform.

                                      -15-
<PAGE>

         EMPLOYMENT AGREEMENTS. On April 23, 1998, we entered into an Employment
Agreement with Rod A. Shipman to serve as our President and Chief Executive
Officer. Pursuant to the terms of that employment agreement, Mr. Shipman
received an annual salary of $120,000. Effective April 1, 1999, Mr. Shipman and
we amended the terms of his employment agreement to increase annual compensation
to $220,000 and to permit Mr. Shipman to use his accrued salary to pay the
exercise price on his outstanding options. Effective January 1, 2003, Mr.
Shipman and us further amended the agreement to increase annual compensation to
$354,312. Pursuant to his employment agreement with us, Mr. Shipman received
options to purchase 2,000,000 shares of our common stock at an exercise price of
$2.50 per share, of which options to purchase 200,000 were immediately
exercisable and options to purchase 200,000 shares vest and first become
exercisable on April 23 on each of the next nine anniversaries of the date of
grant. The options expire on April 22, 2008. The Employment Agreement is for a
term of ten years, subject to automatic renewals for additional five year
periods unless either party elects not to renew the agreement .

         In July 2000, our board of directors approved, and caused our 80.3%
subsidiary, Med Enclosure LLC, to award, a bonus to Mr. Shipman in the form of a
royalty on the net sale of products of Med Enclosure LLC derived from two of its
three patents. Mr. Shipman will receive a royalty in the amount of
three-quarters of one percent (.75%) on all net sales of products subject to the
royalty agreement. In July 2001, our board of directors approved an amendment to
the royalty agreement increasing the royalty payable to Mr. Shipman to one and
one-half percent (1.5%) on all net sales. In October 2002, our board of
directors approved, and caused our wholly-owned subsidiary, Med Close Corp., to
award a bonus to Mr. Shipman in the form of a royalty in the amount of two and
one-half percent (2.5%) on all net sales of products of Med Close Corp.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The following table sets forth certain information regarding the
beneficial ownership of the shares of our common stock as of March 29, 2004 by
(i) each person who is known by us to be the beneficial owner of more than five
percent (5%) of the issued and outstanding shares of our common stock, (ii) each
of our directors and executive officers and (iii) all directors and executive
officers as a group.

            NAME AND ADDRESS                NUMBER OF SHARES  PERCENTAGE OWNED
                                            ----------------  ------------------

Rod A. Shipman(1) (2)                            1,646,748         21.04%
Rafe Cohen(1)                                       62,000          1.00%
William C. Lievense(1)                             100,000          1.54%
CTM Group, Inc.(3)(4)                            2,830,406         33.61%
Leslie J. Kessler(5)(6)                            867,000         12.68%
All officers and directors as a group (three     1,808,748         23.11%
persons)

_______________

(1)  Address is 6336 17th Street Circle East, Sarasota, Florida 34243.

(2)  Includes options granted to Mr. Shipman to purchase 1,350,000 shares of
     Common Stock. Does not include options to purchase 600,000 shares of Common
     Stock, which are subject to vesting.

(3)  Address is 1350 East Flamingo, #800, Las Vegas, Nevada 89119.

(4)  Includes options granted to the CTM Group to purchase 1,945,185 shares of
     Common Stock. Does not include options to purchase 600,000 shares of Common
     Stock, which are subject to vesting.

(5)  Address is 11 Hedgerow Lane, Jericho, New York 11753.

(6)  Includes an option granted to Ms. Kessler to purchase 357,000 shares of
     Common Stock.

                                      -16-
<PAGE>

Equity Compensation Plans
-------------------------

         The following table sets forth certain information as of December 31,
2003 concerning our equity compensation plans:

<TABLE>
<CAPTION>
                                   Number of Common
                               Shares to Be Issued Upon          Weighted- Average             Number of Common
                                Exercise of Outstanding          Exercise Price of             Shares Remaining
      Plan Category                     Options                 Outstanding Options         Available for Issuance
--------------------------     --------------------------     -------------------------     ------------------------

<S>                                    <C>                             <C>                         <C>
Equity  compensation plan              1,040,790                       $1.42                       3,175,534
approved by shareholders

Equity  compensation plan              3,900,492                       $2.50                          N/A
not approved by
shareholders (1)
</TABLE>


(1) Represents shares of common stock issuable to Rod Shipman and CTM Group,
Inc. pursuant to an employment agreement and consulting agreement, respectively,
entered into with us.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         In October 2002, our board of directors approved, and caused our
wholly-owned subsidiary, Med Close Corp., to award a bonus to Mr. Shipman and
CTM Group, Inc. each in the form of a royalty in the amount of two and one-half
percent (2.5%) on all net sales of products of Med Close Corp. CTM Group
beneficially owns approximately 33.6% of our outstanding common shares.

         During 2002 and 2003, we entered into various agreements with CTM Group
for research and development of additional various applications of our
proprietary intellectual property. We made payments to CTM Group amounting to
$672,164 in 2003 and $692,734 in 2002.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

(a)      INDEX TO EXHIBITS

      3.1       Articles of Incorporation of the Company (1)

      3.2       Bylaws of the Company (1)

      4.1       Specimen of Common Stock Certificate (1)

      4.2       Certificate of Designations of the Company's Series A Preferred
                Stock (4)

      4.3       Certificate of Designations of the Company's Series B Preferred
                Stock (6)

      4.4       Certificate of Designations of the Company's Series C Preferred
                Stock (6)

      4.5       Certificate of Designations of the Company's Series D Preferred
                Stock

      10.1      Consulting Agreement between the Company and CTM Group, Inc (1)

      10.2      Stock Purchase Agreement between the Company and DSDS Group,
                Inc. dated July 25, 1997 (1)

                                      -17-
<PAGE>

      10.3      Employment Agreement dated April 23, 1998 between the Company
                and Rod A. Shipman (2)

      10.4      Operating Agreement dated August 21, 1998 between the Company
                and Partner Provider Health, Inc. (2)

      10.5      Consulting Agreement dated April 23, 1998 between the Company
                and CTM Consulting Group, Inc. (2)

      10.6      Agreement dated November 17, 1998 between the Company and
                Automated Specialties Enterprises, Inc. (3)

      10.7      Agreement dated November 17, 1998 (3)

      10.8      Amendment to Employment Agreement dated April 1, 1999 between
                the Company and Rod A. Shipman (4)

      10.9      Amendment to Consulting Agreement dated April 1, 1999 between
                the Company and CTM Group, Inc. (4)

      10.10     Letter Agreement between the Company and Leslie J. Kessler dated
                May 18, 1999 (5)

      10.11     Operating Agreement for Med Enclosures LLC (6)

      10.12     Royalty Agreement dated July 28, 2000 between Med Enclosures LLC
                and Rod A. Shipman (6)

      10.13     Royalty Agreement dated July 28, 2000 between Med Enclosures LLC
                and CTM Group, Inc. (6)

      10.14     Amendment No. 1 dated July 13, 2001 to Royalty Agreement between
                Med Enclosure LLC and Rod A. Shipman (7)

      10.15     Amendment No. 1 dated July 13, 2001 to Royalty Agreement between
                Med Enclosure LLC and CTM Group, Inc. (7)

      10.16     Product Development Services Agreement between Biomed Research,
                Inc. and Med Enclosure LLC (8)

      10.17     Membership Interest Purchase Agreement dated September 30, 2002
                between Gene Myers Enterprises, Inc. and the Company (9)

      10.18     Amendment No. 2 to Royalty Agreement dated October 29, 2002
                between Med Enclosure, LLC and CTM Group, Inc. (9)

      10.19     Amendment No. 2 to Royalty Agreement dated October 29, 2002
                between Med Enclosure, LLC and Rod A. Shipman (9)

      10.20     Royalty Agreement dated October 29, 2002 between MED Close Corp.
                and CTM Group, Inc. (9)

      10.21     Royalty Agreement dated October 29, 2002 between MED Close Corp.
                and Rod A. Shipman (9)

      10.22     Agreement dated October 29, 2002 between Med Close Corp. and Med
                Enclosure LLC (9)

      10.23     Amendment No. 2 dated January 1, 2003 to Employment Agreement
                dated April 23, 1998 between the Company and Rod A. Shipman (10)

      10.24     Amendment No. 2 dated January 1, 2003 to Consulting Agreement
                dated April 23, 1998 between the Company and CTM Group, Inc.(10)

      21.1      List of Subsidiaries

                                      -18-
<PAGE>

      23.1      Consent of Independent Certified Public Accountants

      31.1      Certification of Chief Executive Officer pursuant to Section 302
                of the Sarbanes-Oxley Act of 2002

      31.2      Certification of Chief Financial Officer pursuant to Section 302
                of the Sarbanes-Oxley Act of 2002

      32        Certification of Chief Executive Officer and Chief Financial
                Officer pursuant to 18 U.S.C.ss.1350, as adopted pursuant to
                Section 906 of the Sarbanes-Oxley Act of 2002

_______________

(1)  Previously filed as part of the Company's registration statement on Form
     10-SB (SEC File No. 0-24053) filed with the Securities and Exchange
     Commission on April 20, 1998.

(2)  Previously filed as part of the Company's registration statement on Form
     10-SB/A (SEC File No. 0-24053) filed with the Securities and Exchange
     Commission on August 14, 1998.

(3)  Previously filed as part of the Company's annual report on Form 10-KSB (SEC
     File No. 0-24053) for the year ended December 31, 1998 filed with the
     Securities and Exchange Commission on March 31, 1999.

(4)  Previously filed as part of the Company's quarterly report on Form 10-QSB
     for the quarter ended March 31, 1999 filed with the Securities and Exchange
     Commission on May 17, 1999.

(5)  Previously filed as part of the Company's quarterly report on Form 10-QSB
     for the quarter ended June 30, 1999 filed with the Securities and Exchange
     Commission on August 9, 1999.

(6)  Previously filed as part of the Company's annual report on Form 10-KSB (SEC
     File No. 0-24053) for the year ended December 31, 2000 filed with the
     Securities and Exchange Commission on April 17, 2001.

(7)  Previously filed as part of the Company's quarterly report on Form 10-QSB
     for the quarter ended September 30, 2001 filed with the Securities and
     Exchange Commission on November 11, 2001.

(8)  Previously filed as part of the Company's annual report on Form 10-KSB for
     the year ended December 31, 2001 filed with the Securities and Exchange
     Commission on April 1, 2002.

(9)  Previously filed as part of the Company's quarterly report on Form 10-QSB
     for the quarter ended September 30, 2002 filed with the Securities and
     Exchange Commission on November 19, 2002.

(10) Previously filed a part of the Company's annual report on Form 10-KSB for
     the year ended December 31, 2002.

(b)  REPORTS ON FORM 8-K.

         None.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

         Our board of directors has selected Cacciamatta Accountancy Corporation
as our independent accountants to audit our consolidated financial statements
for the fiscal year 2004. Cacciamatta Accountancy Corporation previously audited
our consolidated financial statements for the two fiscal years ended December
31, 2003 and 2002.

AUDIT AND NON-AUDIT FEES

         Aggregate fees for professional services rendered to us by Cacciamatta
Accountancy Corporation for the years ended December 31, 2003 and 2002 were as
follows:

              Services Provided                         2003            2002
              ------------------------------------  -------------  -------------
              Audit Fees..........................     $54,000         $54,000
              Audit Related Fees..................       $-0-            $-0-
              Tax Fees............................       $-0-            $-0-
              All Other Fees......................       $-0-            $-0-
                      Total.......................       $-0-            $-0-

                                      -19-
<PAGE>

         AUDIT FEES. The aggregate fees billed for the years ended December 31,
2003 and 2002 were for the audits of our financial statements and reviews of our
interim financial statements included in our annual and quarterly reports.

         AUDIT RELATED FEES. There were no fees billed for the years ended
December 31, 2003 and 2002 for the audit or review of our financial statement
that are not reported under Audit Fees.

         TAX FEES. There were no fees billed for the years ended December 31,
2003 and 2002 for professional services for tax compliance, tax advice and tax
planning.

         ALL OTHER FEES. There were no billed for the years ended December 31,
2003 and 2002 for services other than the services described above.

PRE-APPROVAL POLICIES AND PROCEDURES

         We have implemented pre-approval policies and procedures related to the
provision of audit and non-audit services. Under these procedures, our board of
directors pre-approves all services to be provided by Cacciamatta Accountancy
Corporation and the estimated fees related to these services.

                                      -20-
<PAGE>


                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                        CPC OF AMERICA, INC.

Date:  March 30, 2004                   By: /s/ Rod A. Shipman
                                            -----------------------------------
                                            Rod A. Shipman, President and Chief
                                            Executive Officer

         In accordance with the Exchange Act, this report has been signed by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.


Signature                  Title                                  Date
---------                  -----                                  ----

   /s/ Rod A. Shipman      President, Chief Financial Officer,    March 30, 2004
------------------------   Secretary, Treasurer and Principal
ROD A. SHIPMAN             Accounting Officer and Director

   /s/ Rafe Cohen          Director                               March 30, 2004
------------------------
RAFE COHEN

                           Director
------------------------
WILLIAM LIEVENSE


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