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

                                  FORM 10-KSB/A

                                 AMENDMENT NO. 1


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

                   For the Fiscal Year ended December 31, 2002

                                       OR

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

           For the transition period from ___________ to ____________

                         COMMISSION FILE NUMBER 0-27157

                    P.D.C. INNOVATIVE INDUSTRIES, INC. (Exact
                 name of Registrant as specified in its charter)

              NEVADA                                            65-0789306
              ------                                            ----------
(State or other jurisdiction                                   (IRS Employer
 of incorporation or organization)                           Identification No.)

4411 NW 105 TERRACE, CORAL SPRINGS, FLORIDA                         33065
-------------------------------------------                         -----
(Address of principal executive offices)                          (Zip Code)

       Registrant's telephone number, including area code: (954) 341-0092

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

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

                          COMMON STOCK, $.001 PAR VALUE
                          -----------------------------
                                (Title of class)

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

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

         The Registrant had no revenue for the fiscal year ended December 31,
2002.

         The aggregate market value of the Registrant's voting stock held by
non-affiliates of the Registrant as of May 16, 2003 was approximately $879,576
based on the closing bid price of the Registrant's common stock on such date as
reported on the Over-the-Counter Bulletin Board.

         As of May 16, 2003, the Registrant had 114,671,071 shares of common
stock, par value $.001 per share outstanding.

Documents Incorporated By Reference:  None


<PAGE>

                                EXPLANATORY NOTE

This Annual Report on Form 10-KSB/A is being filed as Amendment No. 1 to the
Registrant's Annual Report on Form 10-KSB filed with the Securities and Exchange
Commission on May 21, 2003 for the purpose of amending the consolidated
financial statements to more accurately reflect the effect of a judgment in the
amount of $228,000 against the Company in connection with a landlord tenant
dispute, amending Notes 4 and 12 to the Consolidated Financial Statements to
reflect such increased accounts payable, amending the Independent Auditors'
Report to reflect such increased accounts payable, and adding Note 16 to the
Consolidated Financial Statements to discuss such increased accounts payable and
to amend the Consolidated Financial Statements to reflect the issuable share
quantity, which was inadvertently overstated by 200,000, amending Notes 14 and
16 to the Consolidated Financial Statements to reflect such amended issuable
share quantity; and to correct certain typographical errors concerning valuation
per share, set forth in Part II, Item 5 under the heading "Recent Sales of
Unregistered Securities" for the period 1/1/02 through 12/31/02.



                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

General
-------

         References in this report to "we" and "our" are to P.D.C. Innovative
Industries, Inc. (and its wholly-owned subsidiary, MAS Acquisition XIV Corp.,
which collectively may also be referred to herein as the "Company").

         P.D.C. Innovative Industries, Inc., a Florida corporation ("P.D.C.
Florida"), was originally incorporated in the State of Florida in December 1997.

         On January 22, 1998, P.D.C. Florida merged with Kenneth C. Garcia,
Inc., a Nevada corporation ("Garcia") and existing public company which
subsequently changed its name to P.D.C. Innovative Industries, Inc. ("P.D.C.").
Pursuant to the merger, 2,450,000 restricted shares of Garcia were issued to the
sole shareholder of P.D.C. Florida, Mrs. Sandra Sowers and the Garcia
shareholders retained 1,000,000 shares. Such merger was approved by all of the
members of the Board of Directors of Garcia and shareholder approval was not
required of the Garcia shareholders. Such transaction was effected by unrelated
parties in an arms length transaction on terms deemed reasonable by such parties
and no fairness opinion was rendered.

         In January 1999, P.D.C. effected a 1:40 reverse stock split, which was
approved by the holder of a majority of the issued and outstanding voting shares
of such entity.

         On March 2, 2000, P.D.C. became the successor to MAS Acquisition XIV
Corp., an Indiana corporation and a reporting company under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and continued to maintain
P.D.C.'s December 31 fiscal year end. P.D.C. acquired approximately 96.8% of the
outstanding shares of the common stock of such


                                        2

<PAGE>



entity from its controlling shareholder, MRC Legal Services Corporation, and
issued an aggregate of 3,956,000 shares of P.D.C. common stock in connection
with such exchange transaction. A reverse stock split was then effected whereby
P.D.C. became the sole shareholder of MAS Acquisition XIV Corp. Such transaction
was approved by the Board of Directors of each of MAS Acquisition XIV Corp. and
P.D.C. and did not require the approval of the shareholders of either entity.

         On July 6, 2000, P.D.C. entered into a plan of merger with Sterile-Pro,
Inc., a Florida corporation ("Sterile-Pro"), with P.D.C. being the survivor.
Sterile-Pro's principal asset was the right to develop and market a device known
as the Hypo-Pro 2000 ("Hypo-Pro") (formerly known as "Sterile Pro 2000") which
rights it acquired from Mr. David Sowers, who was the then Chief Executive
Officer of P.D.C. and whose estate currently owns the patent rights to such
product.

         The Hypo-Pro is a device designed to dispose of contaminated hypodermic
syringes at the site of use, i.e., hospital, doctor's office, lab, etc. The
device is designed to reduce, in an enclosed environment, the entire instrument
to small, decontaminated particles, which can be disposed of as conventional
trash. See "Our Products below"

         Prior to the merger, Mr. David Sowers, his wife, Sandra, and their son
Vernon Leroy, owned 27,010,000 shares of Sterile-Pro common stock and an
aggregate of 14,500,000 shares of P.D.C.'s common stock. Immediately after the
merger, which was approved by all of the shareholders of Sterile-Pro and 50.75%
of the issued and outstanding shares of P.D.C., they owned an aggregate of
45,000,000 shares of P.D.C.'s common stock, or approximately 61% of the total
number of shares then issued and outstanding. Pursuant to such merger, P.D.C.
assumed certain convertible debenture issuance obligations of Sterile-Pro in the
aggregate principle amount of $1,000,000. No fairness opinion was issued in
connection with such merger transaction, which was not effected pursuant to arms
length negotiations but which terms were nevertheless considered reasonable.

Licensing Agreement
-------------------

         As stated above, Sterile-Pro had acquired certain rights from Mr. David
Sowers to enable Sterile-Pro to begin to develop and sell the Hypo-Pro. Mr.
Sowers also then held the ownership rights to various other products (which
rights are now held by his estate), and on June 8, 2000, he and P.D.C. entered
into a separate exclusive licensing agreement pursuant to which P.D.C. was
granted rights to develop, manufacture, and distribute certain products, which
consist of the:

         - Hypo-Pro
         - Tri-Level Family
         - Perfect Seal
         - Flush Mizer
         - Mulching Blade

The term of such license agreement is for the life of the patent and any renewal
thereof, subject to termination under certain conditions, including
non-compliance with its terms.

                                        3

<PAGE>


         In consideration for his grant to P.D.C. of this license, P.D.C. issued
12,000,000 shares of its common stock, which, at the time, were subject to
certain anti-dilution rights, to Mr. Sowers' designee, Mrs. Sowers. Such license
agreement also provides for certain royalties to be paid pursuant to a
delineated schedule, based upon product sales.

         Such license agreement was subsequently modified per the terms of an
October 1, 2001 executed written consent of the Company's then Board of
Directors, comprised of Mrs. Sandra Sowers (also the personal representative and
beneficiary of the estate of David Sowers at such time) and Mr. Harold H.
Harris, to provide that the Company be in receipt of $10,000,000 in revenue
before any royalties are paid.

         Pursuant to the terms of a subsequent exclusive patent sub-license and
royalty agreement entered into by and between P.D.C. and two other parties,
discussed below, and a recently executed termination agreement between all of
such parties, also discussed below, the terms of such licensing agreement, as
modified, have been substantially further revised to terminate the anti-dilution
and royalty provisions described above.

Recent Developments
-------------------

         As a result of our ongoing severe liquidity constraints, we determined
in the latter part of 2002 not to manufacture any of our products ourselves.

         Accordingly, on November 21, 2002 , P.D.C. entered into an exclusive
patent sub-license and royalty agreement with Medical Marketing Innovations,
Inc. ("MMI"), a recently incorporated Florida corporation formed for purposes of
marketing various medical products, for purposes of MMI manufacturing, selling
and marketing the Hypo-Pro on a worldwide basis.

         The agreement provided, in summary, for MMI, at its sole cost and
expense, to cause the manufacture, sales and marketing of the Hypo-Pro following
such time as when the Hypo-Pro may receive U.S. Food and Drug Administration
("FDA") approval. Prior to submitting the Hypo-Pro to the FDA, P.D.C. was
required pursuant to the agreement at its expense to undertake further
laboratory testing of the Hypo-Pro as well as to fund the FDA application
process. The agreement further provided for P.D.C. to receive certain royalty
payments on product sales which might occur following such time as when FDA
approval might be obtained.

         The directors and officers of MMI at the time the agreement was entered
into were Messrs. Ronald Epstein, John Carlson, and Michael Hiler (PDC's then
and current Chief Executive Officer). Mr. Hiler abstained from voting on the
agreement in his capacity as a member of MMI's Board of Directors. The
shareholders of MMI at the time the agreement was entered into were Messrs.
Epstein, Carlson, Hiler and P.D.C., each of whom paid nominal consideration for
their MMI shares

                                        4

<PAGE>


         In connection with approving the exclusive patent sub-license and
royalty agreement on behalf of P.D.C., Mrs. Sandra Sowers, P.D.C.'s President
and a PDC director, relinquished her prior right to personally receive any
royalties from Hypo-Pro sales under the terms of the prior licensing agreement,
as modified, discussed above by and between the estate of David Sowers of which
Mrs. Sowers is the personal representative and sole beneficiary, and P.D.C., and
relinquished all anti-dilution rights under the prior license agreement, as
modified.

         In connection with entering into the agreement, P.D.C. retained and
paid an initial retainer fee for the services of an outside professional
services firm to provide P.D.C. with a fairness opinion to the effect that the
agreement and its terms and related matters are fair to P.D.C. and its
shareholders. Such firm preliminarily and informally concluded that the
above-described transaction and terms were fair to P.D.C. and its shareholders.
A fairness opinion has not been issued, however, as we have not had sufficient
funds to pay the balance owed for such fairness opinion.

         On December 16, 2002, Global Medical Marketing, Inc., formerly e-Game
Network, Inc. ("Global") (OTC: GMDM) effected a share exchange on a one for one
basis with the shareholders of MMI, pursuant to which MMI became a wholly-owned
subsidiary of Global, the MMI shareholders collectively became the majority
shareholders of Global, and Messrs. Epstein, Carlson and Hiler, MMI's Chief
Executive Officer, President, and Vice President, respectively, as well as
directors, also assumed such respective positions with Global. Mr. Hiler
subsequently resigned both his director and officer positions with Global as of
March 25, 2003.

          Global was then and is currently a nominally capitalized company whose
business plan provides, among other things, for the marketing and sale of
various medical equipment, services and devices to the healthcare industry.

         As a result of our continuing severe liquidity constraints and lack of
adequate funding, we have not been able to undertake additional laboratory
testing or commence the FDA approval process for the Hypo-Pro. Such steps, as
well as obtaining FDA approval for such product, were required prior to MMI
having any manufacturing, selling and marketing obligations under such
agreement.

         Accordingly, the parties to such exclusive patent sub-license and
royalty agreement entered into a termination agreement dated May 5, 2003
pursuant to which the parties agreed to terminate such exclusive patent
sub-license and royalty agreement, P.D.C. agreed to relinquish to Global its
ownership interest in all of its shares of Global common stock in consideration
for Global causing MMI to enter into the termination agreement and to relinquish
its exclusive rights to the Hypo-Pro, and P.D.C. and the estate of David Sowers
returned to their respective prior rights and obligations under the license
agreement, as modified, discussed above, except that Mrs. Sowers agreed to
relinquish all anti-dilution and royalty rights thereunder.

         We continue to experience severe liquidity constraints and do not have
sufficient funds to initiate and complete additional laboratory testing required
prior to the submission of the Hypo-Pro to the FDA, or to fund the initiation of
such FDA approval process. No assurances are given that we will secure such
needed funds or that the Hypo-Pro will ever receive FDA approval. Should we


                                        5

<PAGE>


be unable to secure such necessary funds and obtain FDA approval for such
product, P.D.C. and its results of operations will be adversely effected as the
Hypo-Pro presently constitutes our only potentially viable product.

         Subsequent to June 30, 2002, we reduced our staff by four (4) persons
which separations constitute approximately 57% of our workforce, substantially
reduced salary and administrative expenses, and have sought but not been
successful in obtaining any material funding from outside sources. Our present
monthly expenditure rate has been reduced to approximately $10,840 from
approximately $12,722 per month at December 31, 2002 as a result of the recent
termination of our most recent leased facility, further discussed below. We do
not currently have sufficient working capital on hand to support our monthly
burn rate and no assurances are given that we will be able to satisfy our
current and short term cash requirements. We have no current agreements, or
arrangements or understandings for any material outside funding needed for
continued sustained operations, additional laboratory testing, and product
refinement.

         At December 31, 2002, and presently, we have a working capital
deficiency of in excess of $1,000,000. As of December 31, 2002, our President,
Mrs. Sowers, has made loans to the Company for working capital purposes
aggregating approximately $214,780, which loans are unsecured, payable on demand
and without interest. Subsequent to December 31, 2002 and through the date
hereof, such loans now aggregate approximately $232,620. No assurances are given
that management will continue to effect loans to the Company, nor is any member
of management obligated to do so.

         We are currently unable to pay federal and state payroll taxes of
approximately $16,000 which are past due and owing.

         During 2002, we were indebted to one of our vendors for services
performed in the amount of $51,102. The balance is personally guaranteed by our
President. The balance has been demanded in full by the vendor, however, no
payments have been made as of December 31, 2002 or subsequent thereto through
the date hereof. The entire amount has been included in accounts payable at
December 31, 2002.

         Due to our severe liquidity constraints, in approximately mid-April
2003, we relocated our corporate office to our President's residence, 4411 NW
105 Terrace, Coral Springs, Florida 33065. Such facility is provided on a rent
free basis. Prior thereto, our corporate and manufacturing facility had been
located at 3838 NW 126th Avenue, Corporate Park, Coral Springs, Florida 33065.
Such facility, which occupied approximately 2,000 square feet, was subject to a
base rent, excluding sales tax and other charges, of $1,700 per month, with an
annual cost of living adjustment over the term of the lease. The lease agreement
for such facility, which is dated October 14, 2002, was to expire in November
2004. The landlord of such facility informally agreed to retain previously
pre-paid first and last month's rent as well as a security deposit equal to a
month's rent, and to allow the Company to vacate such premises without any
further liability to the Company. In view of our current liquidity constraints
and the fact that we do not currently plan to manufacture any products, we
believe that our current facility is adequate for our current and reasonably
foreseeable future needs.

                                       6

<PAGE>


         A judgment was previously entered against the Company in the amount of
approximately $228,000 for the alleged balance due under the terms of the lease
agreement relating to our former leased facility located at 3701 NW 126th
Avenue, Bay 5, Coral Springs, Florida 33065. The landlord of such facility is
currently in possession of our construction levels, certain machinery, furniture
and office equipment. We understand that such facility has recently been relet
by such landlord at a lease rate comparable to that which we previously paid,
and also understand, based upon our counsel's informal discussions with the
management of such landlord, that such company would be willing to release such
levels, machinery, furniture and equipment if paid approximately $20,000. We do
not currently have funds to pay such amount. As such, property and equipment is
inaccessible, we recorded an impairment loss of $1,017,549 at December 31, 2002.
We do not believe, however, that such company's possession of such items is
material to the Company or its present or future operations as we do not intend
to manufacture any products ourselves and we have in our possession the
schematic and design drawings for the Hypo-Pro.

         While management believes in the event it receives FDA approval of the
Hypo Pro that such approval may present additional and more established funding
sources, no assurances can be given that management is correct in its belief or
that the Company will sustain operations through such time.

         The U.S. Patent and Trademark Office has recently advised that it has
rejected virtually all of the claims that were proffered in support of the
Hypo-Pro potentially receiving patent protection. Counsel for the licensor of
the Hypo-Pro has recently responded to such examiner requesting that the claims,
as amended, be reconsidered. No assurances are given as to when a follow-on
response from the U.S. Patent and Trademark Office may be received by such
counsel, or if the U.S. Patent and Trademark Office will concur with any or all
of such counsel's claims. In the event such agency does not so concur,
meaningful patent protection may not be afforded to such product, which could in
turn further adversely affect our ability to raise capital, negatively impact
competitive advantages, if any, of such product, and may materially adversely
impact prospective sales and marketing of such product.

         In view of our liquidity constraints, we have and plan to continue to
issue shares of our common stock to certain employees and service providers for
services rendered and to be rendered.

         In the event we are unable to obtain equity and/or debt financing or
are unable to obtain such financing on terms and conditions acceptable to us, we
may need to shortly further curtail our already extremely limited operations or
cease our operations.

Our Products
------------

Hypo-Pro
--------

         The Hypo-Pro, our health field related product, is a patent-pending
device designed to dispose of contaminated hypodermic syringes after patient
use. The device reduces, in an enclosed environment, the entire instrument to
small, decontaminated particles which can be disposed of as conventional trash.
This approach significantly reduces physical hazards to health care personnel
after injections or draws, reduces bacterial growth within and around collection
boxes


                                        7

<PAGE>


and aerolization of infectious agents, limits risks of injury or infection to
waste-handling personnel, cuts costs of disposal, including collection,
handling, paperwork and specialized transport as well as limits potential
cross-contamination with the hospital, office and environment due to handling
and moving of contaminated waste.

         The U.S. Patent and Trademark Office recently issued an office action
in which it cited claim rejections on virtually all of our claims based upon
prior patents found by the patent examiner. Counsel for the licensor of the
Hypo-Pro has recently responded to such examiner requesting that the claims, as
amended, be reconsidered. No assurances are given as to when a follow-on
response from the U.S. Patent and Trademark Office may be received by such
counsel, or if the U.S. Patent and Trademark Office will concur with any or all
of such counsel's claims. In the event such agency does not so concur,
meaningful patent protection may not be afforded to such product, which could in
turn further adversely affect our ability to raise capital, negatively impact
competive advantages, if any, of such product, and may materially adversely
impact prospective sales and marketing of such product.

         At the end of May 2002, Underwriters Laboratories, Inc. classified the
Hypo-Pro as having met certain safety requirements, and is therefore free from
reasonably foreseeable risk of fire, electric shock and related hazards.

         As the result of the need to reconfigure and retest certain components
of the device in response to prior meetings and discussions with FDA and the
Occupational Safety Hazard Agency ("OSHA") regulatory agency personnel, and
financing constraints experienced post-September 11, 2001, which have continued
and remain severe, our time schedule to seek and obtain FDA approval and to
bring this product to market has continued to be severely delayed. Due to
continuing severe liquidity constraints, we have been unable to proceed with
further laboratory testing, which is currently anticipated to cost between
approximately $100,000-$150,000, and take up to approximately 4 to 6 months to
complete once commenced, and which is required prior to submission of such
device for FDA approval. Such FDA application process is currently anticipated
to take up to approximately 120 days. In view of our need for required capital
to undertake such further laboratory testing and for purposes of seeking to
obtain FDA approval, as to which no assurances can be given, we cannot provide
assurances when, if at all, such product may be available for marketing.

         In the event we secure the funding needed to undergo additional
laboratory testing of the Hypo-Pro and then commence and obtain FDA approval, of
which no assurances are given, it is anticipated that the Hypo-Pro may be
manufactured and marketed by one or more third parties to hospitals and larger
health clinics where higher volume usage justifies a dedicated machine at each
usage point. In the event we are able to secure additional funding beyond our
immediate funding requirements, we also plan to have at least two additional
designs that would be available for smaller medical offices as well as a larger
batch mode version. We currently have five prototypes of such device in our
possession and previously tested such device in the first quarter of 2002 in a
local hospital and a local fertility clinic in response to a suggestion by FDA
personnel in an August 2001 meeting with P.D.C. that they would be interested in
seeing the results of such device being tested in medical facilities for
approximately two weeks. The comments that were received from the


                                        8

<PAGE>


hospital were generally favorable, but also stated their desire that the
disposal process be faster. The comments that were received from the fertility
clinic were generally constructive, noting that an odor was detected during the
disposal process and also reflecting that such process be faster.

         Although aware of safety protocols when dealing with contagious
infectious illnesses, medical personnel are still subjected to thousands of
penetrations with intrusive instruments each year with serious consequences,
including possible life-threatening conditions, and the substantial cost of
ongoing treatment and testing for their employment facility. Despite stringent
regulations by OSHA, Joint Commission on Accreditation of Healthcare
Organizations ("JCAHO"), and others, problems persists mainly because used
contaminants are not destroyed, sterilized or decontaminated, but merely covered
and stored, leaving the physical and biological hazards undiminished during
storage, collection and transport to a licensed incinerator, usually off site.
The Hypo-Pro is planned to prevent injury from contaminated needles and destroy
biological hazards at the site of use.

         At such time as when product sales may commence, we plan to obtain
product liability insurance in such amount as we deem reasonable; however, no
assurances are given that we will be able to obtain or afford such insurance.
See "Insurance" below.

Food and Drug Administration Application and Approval Process
-------------------------------------------------------------

         The United States Food and Drug Administration (the "FDA") has
regulatory authority over the testing, manufacturing, and sale of the Hypo-Pro
in the United States. Pursuant to the Federal Food, Drug and Cosmetic Act (FD&C
Act"), the FDA classifies medical devices intended for human use into three
classes: Class I, Class II, and Class III.

         In general, Class I devices are products for which the FDA can
determine that the safety and effectiveness can be reasonably assured by general
controls under the FD&C Act relating to such matters as adulteration,
misbranding, registration, notification, records and reports, and "Quality
Systems Regulations ("QSRs") (formerly the Good Manufacturing Practices (GMP)
regulations).

         Class II devices are products for which the FDA determines that these
general controls are insufficient to provide reasonable assurance of safety and
effectiveness, and that require special controls such as the promulgation of
performance standards, post-market surveillance, patient registries, or such
other actions as the FDA deems necessary.

         Class III devices are devices for which the FDA has insufficient
information to conclude that either general controls or special controls would
be sufficient to assure safety and effectiveness, and which are life-supporting,
life-sustaining, of substantial importance in preventing impairment of human
health (e.g., a diagnostic device to detect a life-threatening illness), or
present a potential unreasonable risk of illness or injury due to, for example,
noxious or toxic fumes emissions.


                                        9

<PAGE>


         A medical device is ultimately classified by the FDA as either a Class
1, Class II or Class III device. Class I devices are subject to general controls
which are applicable to all devices. Such controls include regulations regarding
FDA inspection of facilities, QSR's, labeling, maintenance of records, and
filings with the FDA. Class II devices must meet general performance standards
established by the FDA before they can be marketed and must adhere to such
standards once on the market. Class III devices require individual pre-market
approval by the FDA before they can be marketed, which can involve extensive
tests to prove safety and efficacy of the device.

         The FD&C Act further provides that, unless exempted by regulation,
medical devices may not be commercially distributed in the United States unless
they have been approved or cleared by the FDA. There are two review procedures
by which medical devices can receive such approval or clearance. Some devices
may qualify for clearance under a Section 5-10(k) procedure, which we believe
based upon informal discussions previously had with FDA personnel, is applicable
to the Hypo-Pro. The other review procedure, which we do not believe applies to
the Hypo-Pro, is an application to the FDA for pre-marketing approval ("PMA")
before marketing can begin. PMA applications must demonstrate, among other
matters, that the medical device is safe and effective. A PMA application is
typically a complex submission, usually including the results of clinical
studies, and preparing an application is a detailed and time-consuming process.

         Each manufacturer of medical devices is required to register with the
FDA and also to file a "5-10(k) Notification" (the "Notification") before
initially marketing a new device intended for human use. The manufacturer may
not market such new device until 90 days following the filing of such
Notification unless the FDA permits an early marketing date. The FDA, prior to
the expiration of the 90-day period, may notify the manufacturer that it objects
to the marketing of the proposed device and thereby may delay or preclude the
manufacturer's ability to market that device. The FDA may also require further
data from, or testing by, the manufacturer.

         Any products manufactured or distributed by or for P.D.C. pursuant to
FDA approval are, or will be, subject to continuing regulation by the FDA. The
FD&C Act also requires that our products be manufactured in a establishment
registered with the FDA which, prior to marketing approval being given by the
FDA for such products, will be subject to FDA inspection in accordance with QSR.
Labeling, advertising and promotional activities are subject to scrutiny by the
FDA and, in certain instances, by the Federal Trade Commission. P.D.C. and the
manufacturers of our products or product components may be inspected on a
routine basis by both the FDA and the individual states for compliance with
current QSR regulations and other requirements.

         The export of medical devices is also subject to regulation in certain
instances. In addition, the marketing and use of the Company's products may be
regulated by various state agencies.

         The Mandatory Device Reporting ("MDR") regulation obligates us to
provide information to the FDA on injuries alleged to have been associated with
the use of a product or certain product failures that could cause injury. If due
to FDA inspections, MDR reports or other information, the FDA believes that we
are not in compliance with applicable law, the FDA can institute


                                       10

<PAGE>


proceedings to detain or seize products, enjoin future violations, or assess
civil and/or criminal penalties against us, our officers or employees. Any such
action could disrupt our operations for an undetermined time and have a material
adverse effect upon our business.

         In addition to the foregoing, should P.D.C. seek to itself manufacture
the Hypo-Pro, which it does not presently intend to do, P.D.C. will be subject
to numerous federal, state and local laws relating to such matters as safe
working conditions, manufacturing practices, environmental protection and fire
hazard control. In such event, there can be no assurance that we will not be
required to incur significant costs to comply with such laws and regulations and
that such compliance will not have a material adverse effect upon our ability to
conduct business.

         We have had discussions and a meeting in August 2001 with FDA personnel
explaining our Hypo-Pro product and requesting that the FDA assist us in
classifying the Hypo-Pro device and outlining the preparatory documentation that
will need to be submitted prior to product submission. We have filed Forms
2891(Initial Registration of Device Establishment) and 2892 (Device Listing),
registering both P.D.C. and the Hypo-Pro in the FDA system. Additional informal
comments received from the FDA after August 2001 indicated that the device,
while then currently considered a Class III product, may be reclassified as a
Class II product depending upon the results of testing by an independent
laboratory concerning noxious and/or toxic fumes emissions. In the event of and
following the Company's receipt of such independent laboratory test results, the
Company plans to submit a Section 5-10(k) application to the FDA in Rockville,
Maryland for approval. Such application process is currently anticipated to take
up to approximately 120 days. We do not at this time, however, have sufficient
funds to engage in additional laboratory testing required prior to submission of
the Hypo-Pro for FDA approval, or to commence the FDA submission process.

         In January 2001, P.D.C. entered into a Medical Device Prototype
Manufacturing Agreement with Biopass Medical Systems ("Biopass") located in
Parkland, Florida to provide the final design, five prototypes, manual and
operating instruction for the Hypo-Pro. Biopass, through its President Jay
Brussels, has a history of completing prototype medical device mechanisms for
the FDA. The initial prototypes have been completed and delivered to the Company
together with user manual documentation.

         The Company has completed its contractual payment obligations to
Biopass for work performed to date and may engage Biopass on an hourly basis as
may be needed post-additional laboratory testing, if ever undertaken, for
updating user manuals and for purposes of assistance concerning other possible
regulatory submissions.

         In March 2001, we entered into a twelve month consulting agreement with
Devices & Diagnostic Consulting Group, Inc., a medical devices consulting firm
located in Rockville, Maryland. Pursuant to their engagement, such firm:

         - Provided guidance for, and assisted with, preparation of regulatory
         documents for submission to the FDA and foreign health agencies.


                                       11

<PAGE>


         -   Assisted in the design, conduct, analysis, and reporting of
             results from medical device clinical studies.

         -   Communicated with the FDA and foreign regulatory agencies and
             governments.

         -   Assisted in securing international product registrations.

         -   Assisted in the development and maintenance of a domestic and
             internationally compliant quality system.

         -   Provided appropriate referral of individuals deemed beneficial
             to meet the above objectives.

         -   Was available for consultation with our employees.

         Such firm continues to be available to provide these services on an as
needed hourly basis and we may utilize such firm for one or more of the purposes
above if funding permits.

OSHA Regulations
----------------

         In January 1992, OSHA issued comprehensive federal regulations aimed at
establishing new protective standards to minimize occupational exposure to
various blood borne pathogens such as Hepatitis and the HIV virus associated
with AIDS. OSHA determined, after a study of the need for such regulations, that
employees face a significant health risk as a result of occupational exposure to
blood and other potentially infectious materials and concluded that this
exposure can be minimized or eliminated using a combination of work practice
controls, personal protective clothing and equipment, training, and medical
surveillance.

         OSHA continues to stress the need for zero tolerance of hospital
infectious disease controls, including the handling of contaminated syringes and
other small contaminants, that remain in the hospital and clinic environment
after use on a patient. OSHA estimates that 5.6 million workers in the
healthcare industry and related occupations are at risk of occupational exposure
to bloodborne pathogens. According to the NIOSH Alert in March 1999, it is
estimated that 600,000 to 800,000 needle stick injuries and other percutaneous
injuries occur annually among healthcare workers. Studies show that nurses
sustain the majority of these injuries and that as many as one- third of
injuries relating to sharps (the term generally applied to various devices that
collect contaminated syringes and other contaminants) usage have been reported
to be related to the disposal process. The Center for Disease Control estimates
that 62% to 88% of sharps' injuries can potentially be prevented by the use of
safer medical devices. Needle stick injuries and other sharp-related injuries
that result in occupational bloodborne pathogen exposure continue to be an
important public health concern.

         In response to this situation, Congress passed the Needlestick Safety
and Prevention Act, which became law on November 6, 2000. To meet the
requirements of this Act, OSHA has


                                       12

<PAGE>


revised its Bloodborne Pathogens Standard (29 CFR 1910.1030), effective April
18, 2001. Such standard applies to all employers with reasonably anticipated
occupational exposure to blood or other potentially infectious materials. Some
of the new and clarified provisions in the Standard apply only to healthcare
activities, but some of the provisions apply to non-healthcare as well as
healthcare activities. The main provisions include:

         -        an expanded definition of "engineering controls" in the
                  standard, to include devices with engineered sharps-injury
                  protection, meaning devices with built-in safety features or
                  mechanisms. The previous standard only listed sharps disposal
                  containers and self-sheathing needles as examples of devices
                  that removed the bloodborne pathogens hazard from the
                  workplace.

         -        A requirement that healthcare facilities create written
                  exposure-control plans that reflect changes in technology that
                  reduce exposure to bloodborne pathogens. Facilities must
                  document the consideration and use (at least annually) of
                  devices designed to minimize exposure.

         -        A requirement that each facility maintain a sharps-injury log
                  with detailed information on percutaneous injuries. This
                  includes the department where the injury occurred, the type
                  and brand of device involved, and an explanation of how it
                  happened.

         -        The participation of non-managerial healthcare workers in the
                  identification, evaluation, and selection of safety-engineered
                  sharps devices and other safety controls. Facilities must
                  document this involvement in the exposure-control plan.

         While federal OSHA standards do not apply to public sector employees,
there are approximately 24 states with their own OSHA-approved occupational
safety and health plans which must now adopt a comparable standard or amend
their existing standard if it is not at least as effective as the federal
standard in the public sector.

         Generally, in order for equipment to be viewed by OSHA as
decontamination equipment, such equipment must be puncture resistant, leak
proof, closable and may have to be identified as biohazardous depending upon
whether noxious or toxic fumes are emitted.

         The term "decontamination" is defined by OSHA in its regulations to
mean the removal of hazardous substances from employees and their equipment to
the extent necessary to preclude the occurrence of foreseeable adverse health
effects.

         Management believes that these regulations may have a materially
favorable impact upon any future sales of our Hypo-Pro product.

         In September 2001, P.D.C. personnel met with OSHA representatives in
Atlanta, Georgia at which time the Hypo-Pro was demonstrated. Such meeting had
been arranged for the purpose


                                       13

<PAGE>


of the FDA having OSHA as a reviewing agency determine compliance of P.D.C.'s
Hypo-Pro with OSHA's Bloodborne Pathogen Standard and other safety regulations
related to sharps containers. The OSHA representatives at such meeting made a
number of recommendations relating to safety factors dealing, generally, with
visibility, labeling and handling factors which the Company has since addressed
by making appropriate modifications as suggested by OSHA, the FDA and UL. P.D.C.
was further advised at such meeting that if laboratory testing confirmed the
process contaminant as decontaminated and the bloodborne hazard removed then,
per OSHA's definition of "decontaminant," the processed product would no longer
be a hazardous material. It was confirmed at such meeting by such OSHA personnel
that P.D.C.'s Hypo-Pro meets OSHA's regulations on bloodborne pathogens (29 CFR
1910.1030) and that P.D.C. may represent such finding in its 5-10(k) application
to the FDA. A second meeting with OSHA personnel was held at OSHA's main
Washington D.C. office on February 27, 2002 and limited follow-on discussions
ensued.

Marketing
---------

         Management believes that in the event the Hypo-Pro becomes marketable,
the primary markets for P.D.C.'s Hypo-Pro will be in the public and private
healthcare sectors, divided essentially into three broad categories (i)
hospitals; (ii) "alternative site" facilities (including surgical centers,
nursing homes, and elderly care facilities and clinics); and (iii) small medical
offices.

         Primary customers are anticipated to be the single end-user, purchasing
associations or consortiums of various kinds - a dominant feature in the
hospital sector - and various federal, state and local government bodies (the
majority of whose purchases are open to competitive bidding).

         In the event the Hypo-Pro becomes marketable, the primary channels of
distribution are anticipated to include medical supply distributors, dealers who
specialize in the medical and hospital markets, and firms purchasing P.D.C.'s
products for resale under "private label" arrangements for other suppliers and
retailers.

         On February 24, 2001, we entered into a one year exclusive marketing
agreement with Mr. Ronald Epstein, acting individually and under certain
circumstances in association with Clearlake Financial Corporation ("Clearlake"),
a medical equipment finance and leasing company located in Hialeah, Florida
which is involved in the sale of medical equipment to hospitals and other
medical facilities. Such agreement provided by its terms for the issuance of
500,000 shares of P.D.C. common stock to Mr. Epstein. Mr. Epstein is also the
Chief Executive Officer and a director of Global.

         On February 7, 2002, P.D.C. entered into an interim agreement with Mr.
Ronald Epstein & Associates pursuant to which Mr. Ronald Epstein & Associates
was retained to consult, market and sell the Hypo-Pro on a worldwide basis.
Pursuant to such interim agreement, effective until March 31, 2002, Mr. Epstein
was issued 1,200,000 shares of P.D.C. common stock.


                                       14

<PAGE>


         On February 7, 2002, P.D.C. entered into an interim agreement with Mr.
John G. Carlson pursuant to which Mr. Carlson was retained to consult, market
and sell the Hypo-Pro on a worldwide basis. Pursuant to such interim agreement,
effective until March 31, 2002, Mr. Carlson was issued 1,000,000 shares of
P.D.C. common stock at a purchase price of $.01 per share. Mr. Carlson is the
President and a director of Global.

         In view of our continuing severe liquidity constraints, we will be
required to seek to obtain one or more third parties to manufacture, market and
sell the Hypo-Pro in the event such product ever obtains FDA approval. No
assurances are given that we will ever obtain FDA approval for such product,
that we will be successful in entering into any such arrangements with one or
more third parties, or if entered into, that any such third parties will be
successful in fulfilling their respective manufacturing, marketing and selling
obligations.

Competition
-----------

         The medical waste disposal sector is highly competitive and is
presently dominated by Baxter International, Inc., Johnson & Johnson,
Kimberly-Clark, Steri-Cycle, Waste Management, BMI and other large suppliers
who, generally, manufacture and sell smaller and larger medical waste disposal
system products which store, and in some instances, treat certain contaminated
medical instruments until removed for further treatment but do not themselves
decontaminate such instruments. There are generally substantial disposal costs
associated in connection with contaminated products.

         We plan to develop a niche market within such industry through our
planned ability to decontaminate commonly used syringes through the use of a
medical product device which is both portable and relatively simple to maintain.
We believe such factors distinguish our product from the generally larger, not
portable, and substantially more expensive products offered by such competitors.
No assurances are given, however, that such factors will cause our product to
successfully compete if and when FDA approval may ever be obtained.

         We further believe that the patent pending status of the Hypo-Pro
together with the application and review time necessary for FDA approval of a
similar type device may provide the Company certain competitive advantages over
prospective competitors, possibly for some period of time in the event of and
after the Hypo-Pro may receive FDA approval. However, in view of recent claim
rejections by the U.S. Patent and Trademark Office of virtually all of our
claims and the uncertainty of our success in obtaining any meaningful patent
protection, no assurances can be given, however, that P.D.C. is correct in its
belief.

Intellectual Property Protection
--------------------------------

         P.D.C. has filed a patent application for the Hypo-Pro with the U.S.
Patent and Trademark Office, which application is currently pending. The U.S.
Patent and Trademark Office has recently advised that it has rejected virtually
all of the claims that were proffered in support of the Hypo-Pro potentially
receiving patent protection. Counsel for the licensor of the Hypo-Pro has
recently responded to such examiner requesting that the claims, as amended, be
reconsidered. No assurances are given as to when a follow-on response from the
U.S. Patent and Trademark Office may be received by such counsel, or if the U.S.


                                       15

<PAGE>


Patent and Trademark Office will concur with any or all of such counsel's
claims. In the event such agency does not so concur, meaningful patent
protection may not be afforded to such product, which could in turn further
adversely affect our ability to raise capital, negatively impact competitive
advantages, if any, of such product, and may materially adversely impact
prospective sales and marketing of such product.

Supplies and Suppliers
----------------------

         The Hypo-Pro is primarily comprised of high-grade machined aircraft
aluminum, a power PC board and an electric motor, heater, blower, cooling fan
and viewing lamp. All of such materials and components are readily available
from numerous suppliers at competitive pricing.

Manufacturing
-------------

         We have previously manufactured certain components planned to be used
for additional Hypo-Pro prototypes. However, in the event of and following the
time when we may receive FDA approval for such product, it is expected that we
will seek to subcontract out the manufacture of the Hypo-Pro to one or more
third party manufacturers. We believe, based upon prior informal discussions
with a number of health care device industry manufacturing participants, that
there are a number of domestic and foreign manufacturers with whom we may
subcontract the manufacturing of such product at competitive rates who also
satisfy applicable quality assurance standards.

Other Products
--------------

         We have also previously developed, manufactured and inventoried various
types of construction levels. Due to our severe liquidity constraints, we
previously determined in the latter half of 2002 not to engage in any further
manufacturing of these or any other products. We have had discussions in the
past with a prominent national distributor of construction and home improvement
products as well as other distributors to sell and distribute such products, but
have been unsuccessful to date in securing a distributor to sell such products.
We have intermittently attempted to effect sales through in-house personnel of
such products to distributors and retail hardware stores and chains but have not
been successful in such efforts due to lack of sufficient funds for marketing,
and a general lack of interest for such products. We plan to continue limited
efforts to sell such products if and when we may ever recover their possession,
and if still viable for commercial sale. Such products are currently in the
possession of a former landlord due to our inability to pay such landlord rent
on a facility we formerly occupied.

Inventory
---------

         There are currently in excess of 5,000 levels in our inventory
available for sale. We believe the sale of these levels in inventory if
effectuated, would result in approximately $50,000 cash to P.D.C. if sold at
current wholesale prices. No assurances are given, however, that such levels
will be sold at this aggregate price, if at all. Currently, we do not have
access to our inventory due to our nonpayment of rent under our prior lease
obligation.


                                       16

<PAGE>


Employees
---------

         As of December 31, 2002 we employed a total of three full-time
employees, including our Chief Executive Officer, Mr. Michael Hiler, and our
President, Mrs. Sandra Sowers. We currently employ a total of three full-time
employees, including our Chief Executive Officer and President. In view of our
continuing severe liquidity constraints, we do not currently anticipate the need
to hire any additional personnel except possibly one or two design engineers for
additional refinements to the Hypo-Pro if and when sales and revenues from such
product may commence and if working capital permits. We believe that our
relations with our employees are good. None of our employees are represented by
a labor union.

Insurance
---------

         Due to the decrease in the number of insurance carriers willing to
provide product liability insurance, especially in the healthcare industry,
product liability insurance availability has been significantly reduced and
premiums have increased dramatically over recent years. At present, we do not
maintain product liability insurance. Although we still intend to obtain such
insurance coverage after such time as we may receive FDA approval for the
Hypo-Pro, there can be no assurance that we will be able to obtain insurance for
a reasonable, affordable premium. The inability to obtain such insurance could
have a materially adverse effect upon our business, financial condition and
future prospects.

ITEM 2.  DESCRIPTION OF PROPERTY

         Due to our severe liquidity constraints, in approximately mid-April
2003, we relocated our corporate office to our President's residence, 4411 NW
105 Terrace, Coral Springs, Florida 33065. Such facility is provided on a rent
free basis. Prior thereto, our corporate and manufacturing facility had been
located at 3838 NW 126th Avenue, Corporate Park, Coral Springs, Florida 33065.
Such facility, which occupied approximately 2,000 square feet, was subject to a
base rent, excluding sales tax and other charges, of $1,700 per month, with an
annual cost of living adjustment over the term of the lease. The lease agreement
for such facility, which is dated October 14, 2002, was to expire in November
2004. The landlord of such facility informally agreed to retain previously
pre-paid first and last month's rent as well as a security deposit equal to a
month's rent, and to allow the Company to vacate such premises without any
further liability to the Company. In view of our current liquidity constraints
and the fact that we do not currently plan to manufacture any products
ourselves, we believe that our current facility is adequate for our current and
reasonably foreseeable future needs.

ITEM 3.  LEGAL PROCEEDINGS

         L.A.W. Properties Coral Springs L.C. v. P.D.C. Innovative Industries,
Inc., Circuit Court of the 17th Judicial Circuit in and for Broward County, Case
No. 02-016659(09). A judgment was



                                       17

<PAGE>


previously entered against the Company in the amount of approximately $228,000
for the alleged balance due under the terms of the lease agreement relating to
its former leased facility located at 3701 NW 126th Avenue, Bay 5, Coral
Springs, Florida 33065, including related litigation costs. The landlord of such
facility is currently in possession of our construction levels, certain
machinery, furniture and office equipment. We understand that such facility has
recently been relet by such landlord at a lease rate comparable to that which we
previously paid, and also understand, based upon our counsel's informal
discussions with the management of such landlord, that such company would be
willing to release such levels, machinery, furniture and equipment if paid
approximately $20,000. We do not currently have funds to pay such amount. We do
not believe, however, that such company's possession of such items is material
to the Company or its present or future operations as we do not currently plan
to manufacture any products ourselves and we have in our possession the
schematic and design drawings for the Hypo-Pro.

         During 2002, we were indebted to one of our vendors for services
performed in the amount of $51,102. The balance is personally guaranteed by our
President. The balance has been demanded in full by the vendor, however, no
payments have been made as of December 31, 2002 or subsequent thereto through
the date hereof. The entire amount has been included in accounts payable at
December 31, 2002.

         See also PART II - ITEM 5. and Recent Sales of Unregistered Securities
thereunder.

         The Company has from time to time been involved in litigation relating
to claims arising out of its operations in the ordinary course of business. The
Company is not currently subject to any other claims, actions or proceedings.

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

         Not Applicable.

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

         P.D.C.'s common stock is traded on the OTCBB under the symbol PDCI
("PDCIE" as of April 24, 2003 due to the Company not being current in its
filings under the Exchange Act; it is anticipated the "E" will no longer appear
following the filing of this Form 10-KSB with the U.S. Securities and Exchange
Commission). The following table sets forth, for each of the quarterly periods
then ended, the high/low bid prices for our common stock, as reported by
NASDAQ.com. These per share quotations reflect inter-dealer prices in the
over-the-counter market without markups, markdowns, or commissions and may not
necessarily represent actual transactions.

QUARTER ENDING                                               HIGH/LOW BID

FISCAL YEAR 2002
March 31, 2002                                                $.260/.095
June 30, 2002                                                 $.210/.090
September 30, 2002                                            $.105/.031
December 31, 2002                                             $.090/.021


                                       18

<PAGE>

FISCAL YEAR 2001
March 31, 2001                                                $.085/.021
June 30, 2001                                                 $.10/.045
September 30, 2001                                            $.175/.048
December 31, 2001                                             $.51/.14

         The number of beneficial holders of record of the common stock of
P.D.C. as of the close of business on May 16, 2003 was approximately 204;
however, many of the shares are held in street name and consequently do not
reflect beneficial owners.

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

         For the period January 1, 2000 through December 31, 2002, P.D.C. sold
the following securities pursuant to Section 4(2) under the Securities Act of
1933, as amended (the "Securities Act"), except as otherwise noted, based upon
the limited number of offerees, their relationship to the Company, the number of
shares offered in each offering, the size of the respective offerings, and the
manner of each offering:

         1/1/00 through 12/31/00:

         In January 2000, prior to P.D.C. becoming a reporting company under the
Exchange Act, we issued 15,000 shares of restricted common stock to David Nakhon
for business consulting services rendered.

         In January 2000, prior to P.D.C. becoming a reporting company under the
Exchange Act, we issued 100,000 shares of restricted common stock to Adam
Barnett for business consulting services rendered.

         In March 2000, we issued an aggregate of 3,956,000 shares of restricted
common stock valued at approximately $.195 per share, in connection with the
share exchange with MRC Legal Services Corporation whereby we acquired a
controlling interest in MAS Acquisition XIV Corp.

         In April 2000, we issued 500,000 shares of restricted common stock to
Vernon Leroy Sowers as bonus compensation for his services to P.D.C., valued at
$.13 per share.

         On June 15, 2000, P.D.C. issued 12,000,000 shares of restricted common
stock, subject to certain anti-dilution rights (subsequently relinquished
pursuant to and in connection with the Company's termination agreement with MMI,
Global and Sandra Sowers as the personal representative of the estate of David
Sowers), to Mrs. Sandra Sowers as Mr. David Sowers designee in consideration for
the patent licensing agreement, valued at $.12 per share. Such license agreement
was subsequently modified per the terms of an October 1, 2001 executed written
consent of the Company's then Board of Directors, comprised of Sandra Sowers
(also the personal representative and beneficiary of the estate of David Sowers
at such time) and Mr. Harold H. Harris, to provide that the Company be in
receipt of $10,000,000 in revenue before any royalties are paid. Pursuant to the
above-referenced termination agreement, Mrs. Sowers relinquished all
anti-dilution and royalty payment rights.

                                       19

<PAGE>


         On July 6, 2000, P.D.C. entered into a plan of merger with Sterile-Pro,
with P.D.C. being the survivor. In connection with the merger, we issued an
aggregate of 30,500,000 shares of restricted common stock to David and Sandra
Sowers and Vernon Leroy Sowers valued at $.05 per share in exchange for 100% of
the outstanding Sterile- Pro shares.

         Prior to the merger between Sterile-Pro and P.D.C., Sterile-Pro was
committed to issue an 8% Series A Senior Subordinated Convertible Redeemable
Debenture for a total aggregate amount of $1,000,000.00, due July 5, 2002.
Pursuant to the plan of merger, the rights and obligations of Sterile-Pro with
respect to the Sterile-Pro and the Sterile-Pro Debenture became obligations of
P.D.C. The debenture was discounted 10% of its face value and was convertible
into P.D.C. common stock at a conversion price equal to 75% of the lowest
closing bid price of the common stock for any of the three consecutive trading
days immediately preceding the date of receipt of the conversion notice.

         In July 2000, Rock Solid Group L.L.C., Venice Holdings L.L.C. and
Creative Holdings, L.L.C. funded $733,488 pursuant to the Debenture, which
included attorney fees and costs of approximately $24,448. Creative Holdings
converted an aggregate of $255,500 of the debenture for a total of 6,393,117
shares of P.D.C. common stock. In addition, they noticed an additional $80,000
for conversion, which was not honored by P.D.C. Litigation was commenced by such
entities in connection with this matter, which was subsequently settled. The
Debenture and the shares underlying the Debenture were issued, pursuant to an
opinion of counsel, in reliance on Rule 504 of Regulation D under the Securities
Act. The issuance of these securities was exempt from the registration
requirements of the Securities Act pursuant to Section 3(b) thereunder.

          1/1/01 through 12/31/01

          In February 2001, we issued 5,714,285 shares of common stock to IDT
Group, Inc. ("IDT") at $.035 per share for net proceeds of $199,000.

          In April 2001, we entered into a funding agreement with IDT for an
aggregate installment payment purchase price of $1,000,000. To date, IDT has
funded $200,000 of the $1,000,000, and has received 3,278,689 shares of
restricted common stock at a purchase price of $.061 per share. In addition, we
were required to escrow an additional 4,918,032 shares of restricted common
stock as security for a 30% return on IDT's investment based upon the $.061 per
share price. We also agreed to register the resale of the shares purchased by
IDT. A registration statement on Form SB-2 was filed with the SEC in connection
with this transaction. If the registration statement was not declared effective
within 90 days from May 2, 2001, such funding agreement provided for P.D.C. to
pay, as liquidated damages, 2% of the principal amount of the shares. After 120
calendar days, such funding agreement provided for P.D. C. to pay 3% of the
principal amount of the shares for each 30-day period, or portion thereof, that
the registration statement was not declared effective. To date, the registration
statement has not been declared effective. P.D.C. has previously advised IDT
that it does not intend to further proceed with such registration statement. A
proposal was previously made by


                                       20

<PAGE>


P.D.C. through its counsel in January 2002 to IDT to resolve their respective
differences concerning this matter, which proposal was rejected by IDT. There
has been no further communication with IDT since the time P.D.C.'s proposal was
rejected.

         In May 2001, we issued 500,000 shares of restricted common stock,
valued at $.05 per share, to Ronald Epstein pursuant to the terms of his initial
February 24, 2001 sales and marketing contract with P.D.C.

         In May 2001, we issued 100,000 shares of restricted common stock,
valued at $.05 per share, to Mr. Paul Cohen for prior business consulting
services.

         In August 2001, we issued 500,000 shares of restricted common stock,
valued at $.06 per share, to Barbara Blazer as designee for Mark Blazer for
services rendered by Mr. Blazer relating to his management of our plant
facility.

         In August 2001, we issued 60,000 shares of restricted common stock to
Fernando Bugallo, in addition to paying him $5,000, and 40,000 shares of
restricted common stock to his counsel, Jeffrey Gerow, Esq., in connection with
the settlement of litigation; such share issuances were valued at $.06 per
share.

          In August 2001, we issued 1,000,000 shares of restricted common stock,
valued at $.06 per share, to Southern Research Corporation, a corporation owned
by Mr. Harold Harris, our then Interim Chief Executive Officer and a director
for consulting services rendered.

         In August 2001, we issued 5,000,000 shares of restricted common stock
to an existing accredited shareholder, Frank Bertrand, for gross proceeds of
$250,000 or $.05 per share.

         In August 2001, we issued 1,000,000 shares of restricted common stock,
valued at $.06 per share, to Linda Mathesie, the wife and designee of Michael
Hiler, our then and current Chief Operating Officer, for services rendered.

         In September 2001, October 2001, and November 2001, we issued 100,000,
153,750 and 65,000 shares of restricted common stock, valued at $.13, $.46 and
$.33 per share, respectively, to Richard D. Seay, Esq. for prior legal services
rendered.

         In October 2001, we issued 100,000 shares of restricted common stock to
the Spechler Family Partnership for $46,000 ($.46 per share).

         In November 2001, we issued 15,000 shares of restricted common stock to
David Feingold, Esq. for legal services rendered, valued at $.35 per share.

         In December 2001, we issued an aggregate of 2,957,144 shares of
restricted common stock to several individual accredited investors for an
aggregate of $207,000.


                                       21

<PAGE>


         1/1/02 through 12/31/02


         In January 2002, we issued 2,000,000 shares of restricted common stock,
valued at approximately $.22 per share, to the estate of David Sowers in
recognition of his prior contributions and services.

         In March 2002, we issued 1,000,000 shares of restricted common stock to
John Carlson for sales and marketing services rendered and to be rendered at a
price to be paid of $.195 per share.

         In March 2002, we issued 1,200,000 shares of restricted common stock,
valued at $.195 per share, to Ronald Epstein for sales and marketing services
rendered and to be rendered.


         In April 2002, we issued a promissory note in the aggregate principal
amount of $50,000 to an existing accredited shareholder to reflect a loan made
by such person to the Company in such principal amount. Such promissory note is
payable as to principal and interest 18 months from the date of issuance at an
interest rate of 18% per annum.

         In October 2002, we issued 1,666,667 shares of our restricted common
stock to an existing stockholder, valued at $.015 per share, for an aggregate of
$25,000.

         In October 2002, we issued 133,333 shares of our restricted common
stock to an existing stockholder, valued at $.015 per share, for an aggregate of
$2,000.

         On December 31, 2002, we agreed to issue 5,000,000 shares of our
restricted common stock to Desarrollo Corporativo Logonet De Costa Rica Sociedad
Anonima for prior business and consulting services rendered, valued at $.043 per
share.

Dividends
---------

         In January 2001, P.D.C. declared and paid a 5% dividend on its common
stock to its shareholders of record on January 12, 2001. Our officers and
directors declined the dividend.

         We have never paid any cash dividends on our common stock and do not
anticipate paying any cash dividends on our common stock in the future. We
intend to retain future earnings, if any, to fund the development and growth of
our business.

Factors That May Effect Future Operating Results
------------------------------------------------

         Uncertainty of Continued Operations and of Ability to Meet Capital
         ------------------------------------------------------------------
         Needs
         -----

         Our ability to continue operations and to meet our capital needs
depends on our ability to first obtain funding to engage in additional
laboratory testing of our Hypo-Product and to then seek to obtain FDA approval
for such product. We currently estimate that we will require approximately
$100,000-$150,000 for additional laboratory testing, and approximately
$100,000-


                                       22

<PAGE>


$200,000 to fund our daily operations for approximately twelve months, which
includes making necessary changes, improvements and/or refinements to the
Hypo-Pro, depending upon the results of any additional laboratory testing, and
seeking to obtain FDA approval, of which no assurances are given. While during
the last fiscal year, we have sought and continue to seek funds for these
purposes, we have not been successful in such efforts to date to secure any
substantial funding, and no assurances are given that we will ever secure such
funds. Our limited operations during such period and presently have been and
continue to be funded primarily by informal loans made by our President, which
aggregated approximately $214,780 at December 31, 2002 and aggregate
approximately $232,620 currently, do not bear interest, are unsecured, and are
due on demand. Such person is under no obligation to effect or to continue to
effect such funding and no assurances are given that such person will do so. In
such event, we may need to shortly further curtail our already extremely limited
operations or cease operations, unless we are successful in raising the capital
required for the purposes described above. We do not currently have sufficient
working capital on hand to fund our current monthly burn rate of approximately
$10,840. At December 31, 2002 and currently, we have liabilities in excess of
$1,000,0000, including approximately $16,000 currently owed for past due federal
and state payroll tax obligations. We are also considering pursuing discussions
with one or more third parties who may have an interest in effecting a merger
and/or other transaction with P.D.C. We have not yet formulated any specific
criteria for any such third party or transaction, other than that any such third
party have ongoing business operations. We have not had any discussions as of
yet with any third parties and no assurances are given that such discussions
will be held, or that such discussions, if held, will lead to any definitive
agreement or transaction being effected.

         Limited Operating History; Continuing Operating Losses
         ------------------------------------------------------

         We have a limited history of operations. Since our inception, we have
engaged principally in the development of our products, including the Hypo-Pro,
which has not yet been approved for sale in the United States. Consequently, we
have little experience in manufacturing, marketing and selling our products. We
do not have any sources of operating revenue and have incurred net operating
losses since inception through December 31, 2002 of $7,885,381. Such losses have
resulted principally from costs associated with research and development and
from general and administrative costs associated with our operations. Until such
time as when we may secure sufficient funding to engage in additional laboratory
testing, and to seek and obtain FDA approval of the Hypo-Pro, both of which no
assurances are given, and sales and marketing efforts may then commence, we
expect operating losses to continue.

         Need for Additional Capital
         ---------------------------

         We need additional capital to fund our operations, and are seeking to
obtain additional capital through equity and/or debt financing from existing
shareholders and others. If additional funds are raised by issuing equity
securities, further dilution to existing stockholders will result, and future
investors may be granted rights superior to those of existing stockholders.
There can be no assurance that additional financing will be available when
needed, or if available, will be available on acceptable terms. Insufficient
funds will require us to further delay our limited


                                       23

<PAGE>


operational plans and objectives, which are to engage in the additional
laboratory testing required to then seek FDA approval, obtaining FDA approval,
and having a product then available for commercial manufacture and sale.

         Going Concern Considerations
         ----------------------------

         Our financial statements referred to in ITEM 7. of this Report and
appearing in ITEM 13. have been prepared on a going concern basis that
contemplates the realization of assets and the settlement of liabilities and
commitments in the normal course of business. Management recognizes that we must
generate capital and revenue to enable us to achieve profitable operations. We
are planning on obtaining additional equity and/or debt financing to meet
current and short term needs from one or more existing shareholders and possibly
other sources, although we have no firm commitments for such funds. The
realization of assets and satisfaction of liabilities in the normal course of
business is dependent upon us obtaining revenues and equity capital and
ultimately achieving profitable operations. However, no assurances can be given
that we will be successful in these activities. Should any of these events not
occur, our financial statements will be materially affected.

         Uncertainty of Revenues and of Future Profitability; Reliance Upon One
         ----------------------------------------------------------------------
         or More Third Parties to Manufacture, Market and Sell the Hypo-Pro
         ------------------------------------------------------------------

         To the extent we secure required funding, of which no assurances are
given, it is currently estimated that laboratory testing will take approximately
four to six months and that the FDA application process will take approximately
120 days from the date of submission. Assuming FDA approval, of which no
assurances are given, we will then be reliant upon one or more third parties to
manufacture or cause to be manufactured the Hypo-Pro and to commence sales and
marketing efforts of such product. We have no agreements, arrangements or
understandings with any third parties to engage in any of such activities and no
assurances are given that we will enter into any arrangements with one or more
third parties for such purposes. In view of our prior agreement with MMI to
manufacture, market and sell the Hypo-Pro, which agreement was only recently
terminated, we have not had any recent discussions with any third parties for
such purposes, and do not currently know if we will be able to attract one or
more qualified parties for such purposes. If third party manufacturers cannot be
retained on commercially reasonable terms, the Hypo-Pro may not be able to be
successfully commercialized as planned. Dependence upon third parties for the
manufacture of Hypo-Pro components may adversely affect our profit margins and
the ability to develop and deliver the Hypo-Pro on a timely and competitive
basis. Our inability for whatever reason(s) to enter into arrangements with one
or more third parties to successfully manufacture, market and sell such product
will materially and adversely affect the Company as such contemplated sales
presently constitute our only source of anticipated meaningful revenue.
Accordingly, the time required to achieve revenues from product sales and
profitability, if at all, is uncertain.


                                       24

<PAGE>


         Additional Factors Concerning Dependence on Third Parties
         ---------------------------------------------------------

         Third party manufacturers whom we may engage will be required to adhere
to all rules and regulations enforced by the FDA through its facilities
inspection program, including passing a facilities plant inspection, before the
FDA will grant P.D.C. pre-market approval. There can be no assurance that such
third-party manufacturers on whom we will depend for manufacture of the Hypo-Pro
will be in compliance with such rules and regulations, the failure of which
would have a material adverse effect on our business.

         The qualification of additional or replacement suppliers for certain
components of the Hypo-Pro device can be a lengthy process. If delays or
difficulties with third-party suppliers are encountered in producing, packaging,
or distributing components of the Hypo-Pro, as we have from time to time
experienced concerning the production of certain components, market introduction
and subsequent sales could be adversely effected. In such event, there can be no
assurance that alternative supply arrangements at commercially acceptable terms
will be entered into.

         Dependence on Market Acceptance
         -------------------------------

         There can be no assurance that physicians or the medical community in
general will accept and utilize the Hypo-Pro, if and when FDA approval may be
obtained for such product and marketing and sales may commence, or any other
health care related products, if any, which may be developed by P.D.C. The
extent that, and rate at which the Hypo-Pro may achieve market acceptance and
penetration, if ever marketed and sold, will depend on many variables including,
but not limited to, the establishment and demonstration in the medical community
of the clinical safety, efficacy and cost-effectiveness of the Hypo-Pro, the
perceived advantage, if at all, of the Hypo-Pro over then existing technology,
and manufacturing, quality control, marketing and sales efforts undertaken.
There can be no assurance that the medical community will broadly accept the
Hypo-Pro product. Failure of P.D.C.'s first health field related product to gain
broad market acceptance, if and when marketed, would in all likelihood have a
material adverse effect on P.D.C.'s business, financial condition, and results
of operations.

         Economic Uncertainty
         --------------------

         The U.S. economy continues to reflect uncertainty, exacerbated by the
events of September 11 and recent subsequent events related to such attack. We
are currently unable to predict with any certainty the impact, if any, of such
economic uncertainty on prospective demand for our Hypo-Pro product, our
financial condition or results of operations. We have found, post September 11,
that traditional as well as other sources of financing are substantially more
difficult to access. If we continue to find this to be the case, and cannot
otherwise access required capital, our business and operations will be severely
negatively impacted even if demand for our product may be present.

         Uncertainty of Patent Approval or of Ability to Protect Any Patents and
         -----------------------------------------------------------------------
         Proprietary Technology and Information
         --------------------------------------


                                       25

<PAGE>


         The U.S. Patent and Trademark Office has recently advised that it has
rejected virtually all of the claims that were proffered in support of the
Hypo-Pro potentially receiving patent protection. Counsel for the licensor of
the Hypo-Pro has recently responded to such examiner requesting that the claims,
as amended, be reconsidered. No assurances are given as to when a follow-on
response from the U.S. Patent and Trademark Office may be received by such
counsel, or if the U.S. Patent and Trademark Office will concur with any or all
of such counsel's claims. In the event such agency does not so concur,
meaningful patent protection may not be afforded to such product, which could in
turn further adversely affect our ability to raise capital, negatively impact
competitive advantages, if any, of such product, and may materially adversely
impact prospective sales and marketing of such product.

         Our ability to compete effectively in the medical products industry
will depend in part in the successful protection of our proprietary technology,
both in the United States and abroad. The license agreement, as modified, to
which we and the estate of David Sowers are parties, does not provide for either
party to prosecute and maintain the U. S. patents and patent applications for
the Hypo-Pro. While the estate of David Sowers has undertaken such
responsibility in the past, no assurances are given that it will continue to do
so in the future.

         The patent positions of medical products companies frequently involve
complex legal and factual questions. To the extent such licensor does not
continue to prosecute and/or later maintain any patents relating to the
Hypo-Pro, we could incur substantial costs in defending any patent infringement
claims or suits or in asserting any patent rights, including those granted by
third parties, the expenditure of which we might not be able to afford. In such
event, our sales and revenues for such product may be materially and adversely
effected, as well as our business and operations in general. Even if we can
afford such expenditures, no assurances are given that P.D.C. will be successful
in any such proceedings.

         There can be no assurances that we will be able to protect our rights
to non-patented trade secrets and know-how effectively. Moreover, there can be
no assurance that others will not independently develop substantially equivalent
proprietary information and techniques or otherwise gain access to P.D.C.'s
trade secrets and know-how.

         Potential Impact of Cost Containment Policies and Volume Buying Through
         -----------------------------------------------------------------------
         Purchasing Consortiums in the Healthcare Industry
         -------------------------------------------------

         Sectors of the healthcare market have accounted for most of the
interest in the Hypo-Pro, with hospitals accounting for a majority of such
previously expressed interest. The healthcare industry has been typified in
recent years by strict cost containment measures imposed by federal and state
governments, private insurers and other "third party" payers of medical costs.

         In response to these pressures, virtually all segments of the
healthcare market have become extremely cost sensitive, and, in many cases,
hospitals and other healthcare providers have become affiliated with purchasing
consortiums charged with obtaining large quantities of needed products at the
lowest possible cost. These factors, in combination, have had an adverse impact
upon smaller suppliers and manufacturers, who either are unable to supply the
large quantities sought


                                       26

<PAGE>


by these purchasing consortiums or who are unable to respond to the need for
lower product pricing. We believe that if demand for large quantity orders
materialize, that such demand may be successfully met due to the potential
availability of various domestic and/or offshore manufacturers. Further, we
believe that the increased demand by hospitals for safety-oriented products due
to applicable federal regulations may also serve to offset these factors.
However, there can be no assurance that we will be able to overcome the impact
of these conditions in the healthcare marketplace.

         Competition
         -----------

         The hospital supply and medical products sectors of the healthcare
industry in which we plan to introduce the Hypo-Pro are intensely competitive.
Many of our competitors in the medical products industry have far greater
financial, manufacturing, marketing and sales resources, and more established
market recognition in both the domestic and international markets than P.D.C.
Our inability to secure any meaningful patent protection for the Hypo-Pro may
also negatively impact our ability to compete. As such, no assurances are given
that we will successfully compete.

         Potential Impact of Rising Cost of Raw Materials and Labor
         ----------------------------------------------------------

         The cost of raw materials from which the Hypo-Pro product is
manufactured is subject to change. The price of such materials has generally
been increasing. Significant increases in the cost of such materials could
dramatically increase the pricing of our products and adversely affect future
revenues and profitability of such products. Mass production of current and new
lines of products, if any, if undertaken in response to product demand, of which
no assurances are given, may require outsourcing to foreign manufacturers under
the assumption that foreign labor may be less expensive. However, such
outsourcing may lead to the risk of rising cost of the products in case of
unforeseen surges of costs of labor in foreign markets as well as possible
delays in manufacturing and shipping due to labor and/or other unrest, work
stoppages and possibly other factors. The inability of the Company for whatever
reason to meet market demand for its product should such demand develop could
have a material adverse effect on the Company and its operations.

         Potential Adverse Impact of Environmental Concerns Upon the Future
         ------------------------------------------------------------------
         Marketability of One of Our Products
         ------------------------------------

         At present, some of the components which are used in the Hypo-Pro use
materials that are comprised of non-biodegradable plastic fibers.

         In recent years, concern has grown over the effects of such materials
on the environment due to the growing U.S. solid waste disposal "crisis," the
declining landfill capacity in major metropolitan areas able to handle such
materials, and the publicized hazards of "medical wastes." Although the degree
to which such materials are responsible for the waste disposal related problems
in the U.S. is the subject of some debate, should it become the consensus that
the cost and problems of disposal of such materials outweighs their benefits,
such a development could have a materially adverse impact upon our operating
results.


                                       27

<PAGE>



         Potential Impact of FDA and Governmental Regulation on New Product
         ------------------------------------------------------------------
         Development for the Health Care Industry
         ----------------------------------------

         The Hypo-Pro is regulated as a medical device by the FDA pursuant to
the FD&C Act and is and may also be subject to regulation by other federal and
state governmental agencies.

         The FDA has comprehensive authority to regulate the development,
production, distribution and promotion of medical devices. Furthermore, certain
states impose additional requirements on the distribution of medical devices.
The cost of complying with present and future regulations may be significant. In
addition, the regulatory approval process and attendant costs may delay or
prevent the marketing of products, if any, developed by P.D.C. in the future.
The Mandatory Device Reporting ("MDR") regulation obligates us to provide
information to the FDA on injuries alleged to have been associated with the use
of a product or certain product failures that could cause injury. If the FDA
believes that we are not in compliance with the law, it can institute
proceedings to detain or seize products, enjoin future violations, or assess
civil and/or criminal penalties against P.D.C. and/or our officers and
employees. Any such action by the FDA could result in a material disruption of
our operations, including any subcontracted manufacturing, marketing and sales
efforts, for an undetermined time.

         Possible Need for Additional Management and Other Personnel
         -----------------------------------------------------------

         In view of our current plans to rely upon one or more third parties to
manufacture, market and sell the Hypo-Pro after such time as when we may obtain
FDA approval of such product, we do not currently believe that we will need to
seek and obtain additional management personnel with relationships to major
health care organizations, or otherwise. However, in the event we determine to
market the Hypo-Pro on our own or jointly with a third party, we will be
required to seek and obtain additional management, sales and possibly other
personnel with relationships to various health care organizations. Depending
upon the compensation requirements of such person(s) and our cash position at
such time, which may be insufficient to meet the compensation requirements of
such person(s), no assurances are given that we will succeed in hiring such
additional personnel, which could have a material adverse effect upon the
Company and its operations.

         Control by Management
         ---------------------

         Management of P.D.C. currently own approximately 38.6% of the
outstanding common stock of P.D.C. Since P.D.C.'s shares doe not have cumulative
voting rights, such persons are currently in a position to control the policies
and affairs of the Company.

           Lack of Cash Dividends
           ----------------------

         P.D.C. has not paid any cash dividends on its common stock and does not
intend to pay cash dividends in the foreseeable future.


                                       28

<PAGE>


         Penny Stock Regulations and Restrictions
         ----------------------------------------

         The Securities and Exchange Commission (the "Commission" or the "SEC")
has adopted regulations, which generally define penny stocks to be an equity
security that has a market price less than $5.00 per share or an exercise price
of less than $5.00 per share, subject to certain exemptions. At present, the
market price of P.D.C.'s common stock is substantially less than $5.00 per share
and therefore may be designated as a "penny stock" pursuant to the rules under
the Exchange Act. Such a designation requires any broker or dealer selling such
securities to disclose certain information concerning the transaction, obtain a
written agreement from the purchaser, and determine that the purchaser is
reasonably suitable to purchase such securities. These rules may restrict the
ability of broker/dealers to sell our common stock and may affect the ability of
investors to sell their shares. The issuance of large amounts of common stock
upon conversion, or otherwise, and the subsequent sale of such shares may
further depress the price of the common stock. In addition, since each new
issuance of common stock dilutes existing shareholders, the issuance of
substantial additional shares may further depress the price of our common stock
and may cause a change of control of P.D.C.

         Possible Volatility of Stock Price
         ----------------------------------

         The price of our common stock has fluctuated substantially since it
began trading on the OTCBB and is likely to continue to do so. Factors such as
our continued severe liquidity constraints, the timing of our submission, if
ever, of the Hypo-Pro to the FDA for approval, the results of any such
submission, our success or lack of success in our efforts to secure needed
equity and/or debt funding, developments in patent or other proprietary rights
of P.D.C. or its competitors, including litigation, fluctuations in P.D.C.'s
operating results, the potential sale and sale of issued and outstanding P.D.C.
restricted stock as it becomes eligible for sale under Rule 144, and economic
and market conditions, could have a significant impact on the future price of
our common stock. In addition, should we not be able to continue to afford the
expense of reporting under the Exchange Act, our common stock will shortly
thereafter be delisted from the OTCBB. In such event, our common stock may only
be traded, if at all, in the OTC "Pink Sheets" which frequently provides less
liquidity and greater volatility for securities traded on such market, larger
spreads between bid and ask prices, and is typically less followed by market
participants.

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

         The following discussion should be read together with the information
contained in the Financial Statements and related Notes included elsewhere in
this filing.

         We make statements in this Report on Form 10-KSB under the caption
"Management's Discussion and Analysis and Plan of Operation" as well as in our
press releases and verbal statements that may be made by our officers, directors
or employees acting on behalf of our Company, that are not historical fact and
constitute "forward-looking statements." Such forward-looking statements involve
known and unknown risks, uncertainties and other


                                       29

<PAGE>


factors that could cause our actual results to be materially different from the
historical results or from any results expressed or implied by such
forward-looking statements. Factors that might cause such a difference include,
without limitation, the information set forth below and under the heading above
entitled "Factors That May Effect Future Operating Results." In addition to
statements which explicitly describe such risks and uncertainties, terms such as
"believes", "belief", "expects", "plans", or "anticipates" should be considered
uncertain and forward-looking. All cautionary statements made in this Report
should be read as being applicable to all related forward-looking statements
wherever they may appear.

Results of Operations
---------------------

Twelve Months Ended December 31, 2002 and 2001
----------------------------------------------

         We have not had any revenues from operations in each of the last two
fiscal years. For the reasons discussed below, we incurred a loss from
operations of $(3,697,129) for the fiscal year ended December 31, 2002 as
compared to a loss from operations of $(1,276,511) for the fiscal year ended
December 31, 2001.

         Compensation and related benefits during the year ended December 31,
2002 increased $383,641 to a total of $729,150 from $345,509 for the prior year
primarily due to a stock issuance to the estate of our founder in recognition of
his prior contribution of services.

         Professional fees, consulting and commissions during the year ended
December 31, 2002 were $434,672, representing a decrease of $9,337 from the
$444,009 incurred during the year ended December 31, 2001. The decrease is a
result of reduced expenditures for such matters.

         Advertising, marketing and promotional costs for the year ended
December 31, 2002 amounted to $418,580 compared to $0 for the year ended
December 31, 2001. Such increase related primarily to stock issuances for
product marketing and consulting services.

         General and administrative expenses, including bad debt expense, in the
aggregate during the twelve months ended December 31, 2002 were $111,998
representing a decrease of $39,774 from $151,772 for the year ended December 31,
2000. The decrease in these costs is attributable primarily to our decreased
level of operations during such last fiscal year.

         During 2002, we recorded an impairment loss of $1,017,549 related to
property and equipment that we owned that was inaccessible, an impairment loss
of $472,118 related to patents, and an impairment loss of investment of $100
related to our investment in MMI. We did not recognize any impairment losses on
our property and equipment or patents or any investments during the year ended
December 31, 2001.

         During 2002, we recorded a loss on writedown of inventory of $263,133
compared to a recorded loss on writedown of inventory of $46,643 during 2001.
Such increased loss on writedown is attributable to the financial difficulties
we have been experiencing. Specifically, we


                                       30

<PAGE>


have been locked out of our leased facility and therefore, have no access to and
are unable to sell our inventory.

         Materials, research and development, and tooling costs for the year
ended December 31, 2002 were $73,329 or a decrease of $17,001 from the $90,330
incurred during December 31, 2001. Such reduction in costs is attributable to a
reduced level of activity.

         Rent expense increased $5,100 during the year ended December 31, 2002
to $72,516 from $67,416 during the year ended December 31, 2001 due to our
rental obligation on two facilities for a short time in the latter part of 2002.

         Depreciation and amortization expenses decreased $26,848 to $103,984
during the year ended December 31, 2002 from the $130,832 incurred during the
year ended December 31, 2001. This decrease is a result of our no longer
utilizing certain assets and writing off such assets as impairment losses. We
have been locked out of our leased facility and therefore, have no access to and
are unable to sell our inventory.

         Interest expense decreased to $6,000 for the year ended December 31,
2002 from $38,291 for the prior year as a result of the Company no longer having
any interest expense on previously outstanding debentures and only having an
interest expense on a currently outstanding promissory note in the amount of
$50,000 from a stockholder. In connection with the settlement of a lawsuit
relating to these debentures, there is no additional interest expense related to
the agreed upon settlement amount of $559,443 for which we are still obligated.

Balance Sheet Data
------------------

         We have financed our operations since inception by the issuance of
equity and debt securities with aggregate net proceeds of approximately
$4,537,000 and through loan transactions with our President in the aggregate net
amount of $214,780 through December 31, 2002.

         Our combined cash and cash equivalents totaled $0.00 at December 31,
2002. We are not certain when, if ever, we may generate a positive internal cash
flow due to continued expenditures, working capital needs, and ongoing losses,
including the expected costs associated with seeking to obtain FDA approval.

         At December 31, 2002, in order to reflect the financial difficulties we
have been experiencing, we fully impaired the remaining net book value related
to our fixed assets. Accordingly, we recorded an impairment loss of $1,017,549
related to property and equipment that we owned which was inaccessible.

Plan of Operations
------------------

         During approximately the next twelve months, assuming receipt of
required capital of approximately $250,000-$350,000, of which no assurances
are given, we plan to engage in


                                       31

<PAGE>


additional laboratory testing and to seek to obtain FDA approval for the
Hypo-Pro. In the event we obtain FDA approval, of which no assurances are given,
we currently plan to seek one or more strategic partners to assist in and fund
the manufacture, marketing and sale of the Hypo-Pro. No assurances are given
that we will be successful in such efforts. To a substantially lesser extent, we
also plan to pursue additional sales and marketing efforts for our construction
level products if we obtain access to them from our prior landlord.

         We are also considering pursuing discussions with one or more third
parties who may have an interest in effecting a merger and/or other transaction
with P.D.C. We have not yet formulated any specific criteria for any such third
party or transaction, other than that any such third party have ongoing business
operations. We have not had any discussions as of yet with any third parties and
no assurances are given that such discussions will be held, or that such
discussions, if held, will lead to any definitive agreement or transaction being
effected.

         We are currently a development stage company and our continued
existence is materially dependent upon our ability to resolve our liquidity
problems, principally by obtaining additional equity and/or debt financing and
by commencing product sales of our primary product, the Hypo-Pro. We have yet
to generate an internal cash flow, and until sales of such product line may
commence, if ever, we are totally dependent upon equity and/or debt financing
and loans from shareholders and /or others. We continue to have informal
discussions from time to time with prospective funding sources, including
existing shareholders and others; however, we do not currently have any firm or
informal commitments or understandings for financing.

         Our present monthly expenditure rate has been reduced to approximately
$10,840 from approximately $12,722 per month at December 31, 2002 as a result of
the recent informal termination of our most recent leased facility, further
discussed below. We do not currently have sufficient working capital on hand to
support our monthly burn rate and no assurances are given that we will be able
to satisfy our current and short term cash requirements. We have no current
agreements, or arrangements or understandings for any material outside funding
needed for continued sustained operations, additional laboratory testing, and
product refinement.

         At December 31, 2002, and presently, we have a working capital
deficiency of in excess of $1,000,000. As of December 31, 2002, our President,
Mrs. Sowers, has made loans to the Company for working capital purposes
aggregating approximately $214,780, which loans are unsecured, payable on demand
and without interest. Subsequent to December 31, 2002 and through the date
hereof, such loans now aggregate approximately $232,620. No assurances are given
that management will continue to effect loans to the Company, nor is any member
of management obligated to do so.

         We are currently unable to pay federal and state payroll taxes of
approximately $16,000 which are past due and owing.

         During 2002, we were indebted to one of our vendors for services
performed in the amount of $51,102. The balance is personally guaranteed by our
President. The balance has been demanded in full by the vendor, however, no
payment have been made as of December 31, 2002


                                       32

<PAGE>


or subsequent thereto through the date hereof. The entire amount has been
included in accounts payable at December 31, 2002.

         Due to our severe liquidity constraints, in approximately mid-April
2003, we relocated our corporate office to our President's residence. In view of
our current liquidity constraints and the fact that we do not currently plan to
manufacture any products, we believe that our current facility is adequate for
our current and reasonably foreseeable future needs.

         While management believes in the event it receives FDA approval of the
Hypo Pro that such approval may present additional and more established funding
sources, no assurances can be given that management is correct in its belief or
that the Company will sustain operations through such time.

         The U.S. Patent and Trademark Office has recently advised that it has
rejected virtually of the claims that were proffered in support of the Hypo-Pro
potentially receiving patent protection. Counsel for the licensor of the
Hypo-Pro has recently responded to such examiner requesting that the claims, as
amended, be reconsidered. No assurances are given as to when a follow-on
response from the U.S. Patent and Trademark Office may be received by such
counsel, or if the U.S. Patent and Trademark Office will concur with any or all
of such counsel's claims. In the event such agency does not so concur,
meaningful patent protection may not be afforded to such product, which could in
turn further adversely affect our ability to raise capital, negatively impact
competitive advantages, if any, of such product, and may materially adversely
impact prospective sales and marketing of such product.

         In view of our liquidity constraints, we have and plan to continue to
issue shares of our common stock to certain employees and service providers in
payment for services rendered and to be rendered.

         In the event we are unable to obtain equity and/or debt financing or
are unable to obtain such financing on terms and conditions acceptable to us, we
may need to shortly further curtail our already extremely limited operations or
cease our operations.

         We do not currently have any planned purchases or sales of plant and/or
significant equipment within the next twelve month period. We expect that our
research and development activities, if any, during such time period will focus
primarily on additional versions of the Hypo-Pro. We do not currently expect
any significant changes in the number of our employees during such period.

         We are not certain when, if ever, we may generate a positive internal
cash flow due to continued expenditures, working capital needs, and ongoing
losses, including the expected costs associated with seeking to obtain FDA
approval. The continued weakened U.S. economy and the compounded effect from the
September 11th terrorist attack and recent subsequent events related to such
attack make it difficult to assess our sales prospects with any certainty.

Critical Accounting Policies
---------------------------

         Stock Based Compensation

         From time to time, we have issued and plan to continue to issue shares
of our common stock to certain employees and service providers for services
rendered and to be rendered. The fair market value of such shares is based on
the quoted trading price of our common stock at the grant date.

         Deferred Tax Assets

         Deferred tax assets are to be reduced by a valuation allowance if,
based on the weight of available evidence, it is more likely than not that some
portion or all of the deferred tax assets will be realized. The valuation
allowance should be sufficient to reduce the deferred tax asset to the amount
that is more likely than not to be realized.


                                       33


<PAGE>


ITEM 7.  FINANCIAL STATEMENTS

         The Company's consolidated financial statements and the note thereto
appear in ITEM 13. of this Report.

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

         The information required by this Item 8. as to the Company's fiscal
year ended December 31, 2002 has been previously reported in a Form 8-K filed
with the Commission on April 16, 2003 and in a Form 8-K /A filed with the
Commission on May 13, 2003.

         The information required by this Item 8. as to the Company's fiscal
year ended December 31, 2001 has been previously reported in a Form 8-K filed
with the Commission on June 23, 2000, in a Form 8-K filed with the Commission on
February 27, 2001, and in a Form 10-KSB for the fiscal year ended December 31,
2000 filed with the Commission on April 16, 2001.


                                    PART III

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

         The following table sets forth certain information concerning each of
the Company's directors and executive officers:

         The following table sets forth the names and ages of the directors and
officers of P.D.C. and the principal offices and positions with P.D.C. held by
each such person as of December 31, 2002 and currently, except as otherwise
noted:

    Name                    Age            Position

Harold Harris*              70             Interim Chief Executive Officer,
                                           Director

Sandra Sowers               64             President, Secretary, Treasurer, and
                                           Director

Michael Hiler**             43             Chief Executive Officer

Fern Marlene Kennedy        66             Director

         * Mr. Harris passed away on April 3, 2002.

         **Mr. Hiler served as Chief Operating Officer from June 2001 through
           early April 2002, and served as Acting Chief Executive Officer from
           early April 2002 through April 19, 2002 at which time he was
           appointed Chief Executive Officer.

                                       34

<PAGE>


         Our directors hold office until the next annual meeting of shareholders
and the election and qualification of their successors. Currently, there are no
family relationships between the directors, executive officers, significant
employees or any other person who may be selected as a director or executive
officer of the Company. None of the Company's directors or executive officers is
a director of any company that files reports with the Commission. Officers serve
at the discretion of the Board. There are no agreements with respect to the
election of directors. P.D.C. has not compensated its directors for service on
the Board of Directors or any committee thereof and P.D.C. has no plans to
establish such a compensation plan. Directors are not reimbursed for expenses
incurred for attendance at meetings of the Board of Directors and any committee
of the Board of Directors.

         Mr. Harold Harris served as a Director of P.D.C. since January 1999, as
Interim Chief Executive Officer since June 2001, and as a consultant to P.D.C.
from approximately January 1999 through April 3, 2002. On April 3, 2002, Mr.
Harris passed away. In 1997 and 1998, Mr. Harris served as an independent
financial consultant and analyst for various business clients.

         Sandra Sowers is the widow of David Sowers and the mother of Vernon
Leroy Sowers. On March 6, 2001, David Sowers, founder of P.D.C. Florida and
P.D.C.'s then Chief Executive Officer and a Director, passed away. In June,
2001, Vernon Leroy Sowers, Mr. David Sowers' son and his successor as Chief
Executive Officer, passed away. There are no other family relationships between
officers and directors.

         Mrs. Sandra Sowers has served as President, Secretary, Treasurer, and
Director of P.D.C. Florida and continued in such positions with P.D.C. For
approximately the one year period prior to 1997, Mrs. Sowers was not employed.

         Mr. Michael Hiler was appointed as Chief Executive Officer on April 19,
2002. Mr. Hiler served as Acting Chief Executive Officer following the passing
of Mr. Harris on April 3, 2002 until his appointment as Chief Executive Officer.
Prior thereto, Mr. Hiler served as the Chief Operating Officer of P.D.C. since
June 2001. Prior to June 2001 and from late 1997, Mr. Hiler served as a
consultant to P.D.C. Mr. Hiler served as President of MPH Financial Group, Inc.,
an investment banking firm located in Coral Springs, Florida from 1996 to late
1997.

         Mrs. Fern Marlene Kennedy was appointed to fill a vacancy on the Board
of Directors on April 19, 2002. Prior thereto, from 2000 to the time of such
appointment, Mrs. Kennedy was not employed. From 1991 to 1999, Mrs. Kennedy was
employed in the medical records department of Fawcett Memorial Hospital located
in Port Charlotte, Florida.

         No director, officer, affiliate or promoter of P.D.C. has within the
past five years been subject to any bankruptcy petition filed by or against any
business or which such person was a general partner or executive officer either
at the time of the bankruptcy or within two years prior to that time, been
convicted in or been the subject of any pending criminal proceedings, or has


                                       35

<PAGE>


been the subject of any order, judgment, or decree involving the violation of
any federal or state securities or commodities laws.

Beneficial Ownership Reporting Compliance
-----------------------------------------

         Section 16(a) of the Exchange Act requires that P.D.C.'s officers,
directors, and persons who beneficially own more than ten percent of a
registered class of P.D.C.'s equity securities, file reports of ownership and
changes in ownership with the Commission and to furnish P.D.C. with copies.

         P.D.C. believes that all filing requirements applicable to its
officers, directors and persons who beneficially own more than ten percent of
its common stock have been complied with during the fiscal year ended December
31, 2002 except as follows: Mr. Hiler, P.D.C.'s Chief Executive Officer, filed
his Form 4 late on three occasions relating to sales transactions by his wife
resulting in four sales transactions not being reported on a timely basis;
Sandra Sowers, President, filed her Form 4 late on ten occasions and a Form 5
late on one occasion resulting in sixty transactions not being reported on a
timely basis; Fern Marlene Kennedy, Director filed her Form 3 late on one
occasion resulting in one transaction not being reported on a timely basis.

ITEM 10. EXECUTIVE COMPENSATION.

         The following table sets forth, for the fiscal years ended December 31,
2002, 2001 and 2000 certain information regarding the compensation earned by the
Company's Chief Executive Officer and each of the Company's most highly
compensated executive officers whose individual aggregate salary and bonus for
each of such fiscal years exceeded $100,000.

         No executive officer or director of MAS XIVAcquisition Corp., P.D.C.'s
Exchange Act predecessor, received any compensation for serving in such
capacities. See, however, PART II - Item 5. and Recent Sales of Unregistered
Securities thereunder and ITEM 11. below.

                               Annual Compensation
                               -------------------

                                                                     Other
Name and                                                             Compen-
Principal Position           Year          Salary       Bonus        sation
------------------           ----          ------       -----        ------

Michael Hiler - CEO,          2002       $ 54,320       $ -0-          (2)
COO (1)                       2001       $ 43,464       $ -0-        $70,350(3)

Sandra Sowers - President,    2002       $ 55,600       $ -0-        $ 4,821(4)
Secretary, Treasurer          2001       $109,200       $ -0-        $11,571(4)
                              2000       $127,400       $ -0-        $   -0-(4)

David Sowers - CEO (5)        2001       $    -0-       $ -0-        $ 3,500(6)
                              2000       $    -0-       $ -0-        $10,225(6)

Vernon Sowers - CEO (7)       2001       $ 21,874(8)    $ -0-        $ 4,300(9)
Exec.  VP                     2000       $ 45,936       $62,500(10)  $ 8,082(9)

Harold Harris -Interim (11)   2002       $ 12,000(12)   $ -0-        $   -0-
CEO                           2001       $ 32,950(12)   $ -0-        $60,000(13)


                                       36

<PAGE>


(1) Mr. Hiler became Acting Chief Executive Officer in early April 2002 and
Chief Executive Officer on April 19, 2002. From June 2001 through April 2002,
Mr. Hiler was Chief Operating Officer.

(2) Does not include health insurance premiums of approximately $522 paid in
2002.

(3) Includes $10,350 as 1099 income, and $60,000, constituting approximate fair
market value of 1,000,000 shares of restricted common stock issued to Mr.
Hiler's wife as his designee; does not include health insurance premiums of
approximately $1,761 paid in 2001.

(4) Includes approximate lease payments and insurance for automobile; does not
include health insurance premiums of approximately $1,044 paid in 2002, and
$5,069 paid in each of 2001 and 2000, respectively.

(5) Mr. David Sowers passed away in March 2001.

(6) Includes approximate annual lease payment and insurance for automobile.

(7) Mr. Vernon Sowers served as Chief Executive Officer from March 2001 through
June 2001 and passed away in June 2001.

(8) Includes all salary compensation paid to Mr. Vernon Sowers in all capacities
during such fiscal year.

(9) Includes approximate annual lease payment and insurance for automobile; does
not include health insurance premiums of approximately $741 and $1,482 paid in
2001 and 2000, respectively.

(10) Constitutes approximate fair market value of 500,000 shares of restricted
common stock issued as a bonus.

(11) Mr. Harris served as Interim Chief Executive Officer from June 2001 through
April 2002 and passed away at that time.


                                       37

<PAGE>


(12) Consulting fees paid to an entity controlled by Mr. Harris; includes all
salary compensation paid to Mr. Harris and/or such entity during such fiscal
year.

(13) Constitutes approximate fair market value of 1,000,000 shares of restricted
common stock issued to Mr. Harris' consulting entity.

         There are no currently no written employment agreements with any of
P.D.C.'s executive officers. Mrs. Sowers is currently paid at an annual salary
rate of approximately $44,000 payable weekly in her capacity as President,
Secretary and Treasurer, and Mr. Hiler is currently paid at an annual salary
rate of approximately $52,000 payable weekly in his capacity as Chief Executive
Officer. Due to our severe liquidity constraints, there have been occasions when
both Mrs. Sowers and Mr. Hiler have not received their weekly compensation. Mr.
Hiler has not accrued any compensation; Mrs. Sowers accrued $21,000 during 2002.
Such compensation for Mrs. Sowers and Mr. Hiler has generally been paid to such
persons as a result of stock sales by Mrs. Sowers, the proceeds of which are
then loaned to the Company by Mrs. Sowers for working capital and general
corporate purposes. Such loans do not bear interest, are unsecured, and are
payable on demand.

         At such time as when P.D.C. may receive FDA approval for the Hypo-Pro,
each of Mr. Hiler and Mr. Harris' estate are to receive a minimum of 1,000,000
shares of restricted common stock.

         There were no stock options or stock appreciation rights granted to any
executive officers or directors in the last three fiscal years or any stock
option exercises by any of such persons during such time period.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

         The following table sets forth the beneficial ownership of P.D.C.
common stock as of May 16, 2003 as to (a) each person known to us who
beneficially owns more than 5% of the outstanding shares of our common stock;
(b) each current director and executive officer; and (c)) all of our executive
officers and directors as a group.


                                       38

<PAGE>

                                                              Percentage of
Name and Address of              Number of Shares           Outstanding Shares
Beneficial Owner (1)             Beneficially Owned (2)     of Common Stock (3)
--------------------             ----------------------     -------------------

Sandra Sowers (4)                   44,183,708                    38.5%
c/o Company
4411 NW 105 Terrace
Coral Springs, FL 33065


Michael Hiler (5)                           --                      --
c/o Company
4411 NW 105 Terrace
Coral Springs, FL 33065

Fern Kennedy (6)                       121,263 (7)                   *
c/o Company
4411 NW 105 Terrace
Coral Springs, FL 33065

All officers and directors
as a group (3) persons              44,304,971 (7)                38.6%

* Less than 1%

(1) Each of the persons listed has sole voting, investment, and dispositive
power, except as otherwise noted.

(2) Beneficial ownership has been determined in accordance with Rule
13d-3(d)(1)(i) under the Exchange Act; such rule, generally, includes as
beneficial owners of securities, among others, any person who directly or
indirectly through any contract, arrangement, understanding, relationship, or
otherwise has or shares voting power and/or investment power with respect to
such securities, and any person who has the right to acquire beneficial
ownership of such security within sixty days through a means including but not
limited to the exercise of any option, warrant, right or conversion of a
security.

(3) All percentages are based on 114,671,071 shares issued and outstanding as of
May 16, 2003.

(4) Mrs. Sowers is P.D.C.'s President, Secretary, Treasurer and Director.

(5) Mr. Hiler is P.D.C.'s Chief Executive Officer.

(6) Mrs. Kennedy is a Director.

(7) Includes 11,538 shares registered in the name of Fern Kennedy and Charles T.
Kennedy.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         In January 2001, a resolution of the Board of Directors of P.D.C.
authorized the issuance to David Sowers of an aggregate of 6,000,000 shares of
restricted common stock over the next three years in recognition of his
contributions and services. A subsequent board resolution directed that the
shares be issued instead to Sandra Sowers, the personal representative and sole
beneficiary of Mr. Sowers' estate: 2,000,000 shares were issued in the beginning
of 2002, valued at $.21 per share; and 2,000,000 shares were issued in the
beginning of 2003, valued at $.022 per share.


                                       39

<PAGE>


         In January 2001, we declared and paid a 5% stock dividend on our common
stock to shareholders of record on January 12, 2001. Our officers and directors
declined the dividend.

         Mr. Harold Harris, former Interim Chief Executive Officer and a former
director of P.D.C., prior to him passing away on April 3, 2002, also served as a
consultant to P.D.C., pursuant to an arrangement whereby Mr. Harris through his
company, Southern Research Corporation ("SRC"), consulted on an as needed basis
at the rate of $200 per day. For the fiscal year ended December 31, 2001, P.D.C.
paid SRC $32,950. In addition, P.D.C. issued SRC 1,000,000 shares of restricted
common stock for services rendered, which shares were valued at $.06 per share,
or an aggregate of $60,000.

         In August 2001, P.D.C. issued 1,000,000 shares of restricted common
stock to Linda Mathesie, the wife and designee of Mr. Michael Hiler, our then
Chief Operating Officer and currently, our Chief Executive Officer, for services
rendered; such shares were valued at $.06 per share, or an aggregate of $60,000.

         From time to time, our President, Mrs. Sandra Sowers, has made loans to
P.D.C. for working capital purposes. These loans have not been evidenced by a
note or other security agreement, are unsecured, do not bear interest, and are
payable on demand. At December 31, 2002, such loans aggregated approximately
$214,780. Mrs. Sowers may continue in her discretion to effect loans from time
to time for such purpose, though she is under no obligation to do so. Through
the date hereof, Mrs. Sowers has made additional loans of approximately $17,840
for an aggregate of approximately $232,620.

         Mrs. Sowers is currently paid at an annual salary rate of approximately
$44,000 payable weekly in her capacity as President, Secretary and Treasurer and
Mr. Hiler is currently paid at an annual salary rate of approximately $52,000
payable weekly in his capacity as Chief Executive Officer. Due to our severe
liquidity constraints, there have been occasions when both Mrs. Sowers and Mr.
Hiler have not received their weekly compensation. Mr Hiler has not accrued such
compensation; Mrs. Sowers accrued $21,000 during 2002. Such compensation for
Mrs. Sowers and Mr. Hiler has generally been paid to such persons as a result of
stock sales by Mrs. Sowers, the proceeds of which are then loaned to the Company
by Mrs. Sowers for working capital and general corporate purposes. Such loans
are unsecured, do not bear interest and are payable on demand.

         At such time as when P.D.C. may receive FDA approval of the Hypo-Pro,
each of Mr. Hiler and the estate of Harold Harris are to receive a minimum of
1,000,000 shares of restricted common stock.

         During 2002, we were indebted to one of our vendors for services
performed in the amount of $51,102. The balance is personally guaranteed by our
President. The balance has been demanded in full by the vendor, however, no
payments have been made as of December 31, 2002


                                       40

<PAGE>


or subsequent thereto through the date hereof. The entire amount has been
included in accounts payable at December 31, 2002.

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

         The following documents are filed as part of this report:

         Consolidated Financial Statements:

                   - Table of Contents
                   - Independent Auditors' Report
                   - Report of Independent Certified Acountants
                   - Consolidated Balance Sheet at December 31, 2002
                   - Consolidated Statements of Operations for the
                     Years Ended December 31, 2002 and 2001 and for the period
                     September 7, 1994 (date of incorporation) through
                     December 31, 2002
                   - Consolidated Statements of Changes in Stockholders'
                     Deficiency for the Year Ended December 31, 2002 and
                     for the period September 7, 1994 (date of incorporation)
                     through December 31, 2002
                   - Consolidated Statements of Cash Flows for the
                     Years Ended December 31, 2002 and 2001 and for the period
                     September 7, 1994 (date of incorporation) through December
                     31, 2002
                   - Notes to Consolidated Financial Statements

         (a)  Exhibits

       Exhibit                    Description
       -------                    -----------

         2        Plan of Merger between P.D.C. and Sterile-Pro (incorporated by
                  reference to exhibit to P.D.C's Form 8-K filed with the
                  Commission on July 26, 2000).

         2.1      Stock Exchange Agreement between P.D.C. and certain MAS
                  Acquisition XIV Corp. shareholders dated as of March 2, 2000
                  (incorporated by reference to exhibit to P.D.C.'s Form 8-K
                  filed with the Commission on March 6, 2000).

         2.2      Consulting Agreement dated March 2, 2000 by and between P.D.C.
                  and certain individuals (incorporated by reference to exhibit
                  to P.D.C.'s Form 8-K filed with the Commission on March 6,
                  2000).

         2.3      Stock Purchase Agreement dated April 2001 with IDT Fund, Ltd.
                  (incorporated by reference to Exhibit 2.3 to P.D.C.'s Form
                  10-KSB filed with the Commission on April 16, 2002).

         3.1      Articles of Incorporation (incorporated by reference to
                  exhibit to P.D.C.'s Form 8-K filed with the Commission on
                  March 6, 2000).


                                       41

<PAGE>


         3.2      Certificate of Amendment to Articles of Incorporation
                  (incorporated by reference to exhibit to P.D.C.'s Form 8-K
                  filed with the Commission on March 6, 2000).

         3.3      Articles of Merger by and between Kenneth C. Garcia, Inc., a
                  Nevada corporation and P.D.C. Florida (incorporated by
                  reference to exhibit to P.D.C.'s Form 8-K filed with the
                  Commission on March 6, 2000).

         3.4      Bylaws (incorporated by reference to exhibit to P.D.C.'s Form
                  8-K filed with the Commission on March 6, 2000).

         3.5      Certificate of Amendment of Articles of Incorporation
                  (incorporated by reference to Exhibit 3.5 to P.D.C.'s Form
                  10-KSB filed with the Commission on April 16, 2002).

         3.6      Certificate of Amendment of Articles of Incorporation
                  (incorporated by reference to Exhibit 3.6 to P.D.C.'s Form
                  10-KSB filed with the Commission on April 16, 2002).

         3.7      Certificate of Amendment of Articles of Incorporation
                  (incorporated by reference to Exhibit 3.7 to P.D.C.'s Form
                  10-KSB filed with the Commission on April 16, 2002).

         4.1      Form of P.D.C. common stock certificate (incorporated by
                  reference to Exhibit 4.1 to P.D.C.'s Form 10-KSB filed with
                  the Commission on April 16, 2002).

         4.2      Promissory Note (incorporated by reference to Exhibit 4.2 to
                  P.D.C.'s Form 10-QSB filed with the Commission on August 19,
                  2000).

         10.1     Exclusive Patents License (incorporated by reference to
                  Exhibit10.1 to P.D.C.'s Form 10-QSB filed with the Commission
                  on September 30, 2000).

         10.2     Lease Agreement dated July 2000 by and between P.D.C. and
                  L.A.W. Properties Coral Springs, LC (incorporated by reference
                  to Exhibit 10.2 to P.D.C.'s Form 10-KSB filed with the
                  Commission on April 16, 2002).

         10.3     Lease Agreement dated October 14, 2002 by and between P.D.C.
                  and Coral Center (incorporated by reference to Exhibit 10.3 to
                  P.D.C.'s Form 10- QSB filed with the Commission on November
                  19, 2002.


                                       42

<PAGE>


         10.4     Exclusive Patent Sub-License and Royalty Agreement dated
                  November 21, 2002 by and between P.D.C., Medical Marketing
                  Innovations, Inc., and Sandra Sowers, Personal Representative
                  for the Estate of David Sowers (incorporated by reference to
                  Exhibit 10.4 to P.D.C.'s Form 8-K filed with the Commission on
                  November 25, 2002.

         10.5     Termination Agreement dated May 5, 2003 by and between P.D.C.,
                  Medical Marketing Innovations, Inc., Global Medical Marketing,
                  Inc., and Sandra Sowers, Personal Representative for the
                  Estate of David Sowers - Filed herewith.

         16       June 21, 2000 correspondence from Franklin and Nicholls CPAs
                  re: change in certifying accountant (incorporated by reference
                  to Exhibit 16 to P.D.C.'s Form 8-K filed with the Commission
                  on June 23, 2000).

         16.1     February 7, 2001 correspondence from Tubbs & Bartnick, P.A.
                  re: change in certifying accountant (incorporated by reference
                  to Exhibit 16.1 to P.D.C.'s Form 8-K filed with the Commission
                  on February 27, 2001).

         16.2     April 15, 2003 correspondence from Margolies, Fink and
                  Wichrowski ("MFW") re: change in certifying accountant
                  (incorporated by reference to Exhibit 16.1 to P.D.C.'s Form
                  8-K filed with the Commission on April 16, 2003).

         16.3     May 13, 2003 correspondence from MFW re: change in certifying
                  accountant (incorporated by reference to Exhibit 16.1 to
                  P.D.C.'s Form 8-K/A filed with the Commission on May 13,
                  2003).

         21.0     Mas Acquisition XIV Corp., an Indiana corporation

         (b) Reports on Form 8-K in the fourth quarter of fiscal year 2002: A
Form 8-K was filed with the Commission on November 25, 2002 concerning the
execution of an exclusive patent sub-license and royalty agreement dated
November 21, 2002 by and between P.D.C., Medical Marketing Innovations, Inc.,
and Sandra Sowers, Personal Representative for the Estate of David Sowers.

ITEM 14. CONTROLS AND PROCEDURES.

         Within the 90 day period prior to the filing of this Report, an
evaluation was carried out under the supervision and with the participation of
the Company's management, including the Company's Chief Executive and Principal
Financial and Accounting Officer, of the effectiveness of our disclosure
controls and procedures. Based on that evaluation, the Company's Chief Executive
and Principal Financial and Accounting Officer concluded that the Company's
disclosure controls and procedures are effective to ensure that information
required to be disclosed by the Company in reports that it files or submits
under the Exchange Act, is recorded, processed, summarized and reported within
the time periods specified in Commission rules and forms. Subsequent to the date
of such evaluation, there were no significant changes in the Company's internal
controls or in other factors that could significantly affect the disclosure
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.

         It should be noted that the design of any system of controls is based
in part upon certain assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions, regardless of how remote.


                                       43

<PAGE>



                                   SIGNATURES

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



                                          P.D.C. Innovative Industries, Inc.

Dated: June 3, 2003                       By: /s/ Michael Hiler
                                             -------------------------------
                                              Michael Hiler
                                              Chief Executive Officer

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the Registrant and in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>


Signatures                          Date                        Title
----------                          ----                        -----
<S>                               <C>                    <C>

/s/ Michael Hiler
------------------------          June 3, 2003           Chief Executive Officer
Michael Hiler


/s/ Sandra Sowers
------------------------          June 3, 2003           President, Secretary Treasurer,
Sandra Sowers                                            Principal Financial and Accounting
                                                         Officer, and  Director

/s/ Fern Marlene Kennedy
------------------------          June 3, 2003           Director
Fern Marlene Kennedy
</TABLE>




                                       44

<PAGE>


                                  CERTIFICATION
                                  -------------

         I, Michael Hiler, certify that:


1.       I have reviewed this annual report on Form 10-KSB/A of P.D.C.
         Innovative Industries, Inc.


2.       Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this annual report.

3.       Based on my knowledge, the financial statements, and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report.

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13-a-14 and 15d-14) for the registrant
         and have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

         c)       presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent functions):

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         annual report whether or not there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.



       Signature                       Title                           Date


/s/ Michael Hiler
-----------------------        Chief Executive Officer             June 3, 2003
Michael Hiler                 (Principal Executive Officer)


                                       45

<PAGE>


                                  CERTIFICATION
                                  -------------


         I, Sandra Sowers, certify that:


1.       I have reviewed this annual report on Form 10-KSB/A of P.D.C.
         Innovative Industries, Inc.


2.       Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this annual report.

3.       Based on my knowledge, the financial statements, and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report.

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13-a-14 and 15d-14) for the registrant
         and have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

         c)       presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent functions):

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         annual report whether or not there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.


       Signature                       Title                           Date


/s/ Sandra Sowers
-----------------------     President, Principal Financial and     June 3, 2003
Sandra Sowers               Accounting Officer


                                       46

<PAGE>
                 P.D.C. Innovative Industries, Inc. and Subsidiary
                          (a Development Stage Company)



                                TABLE OF CONTENTS




                                                                     Page
                                                                     ----

Independent Auditors' Reports                                        F-2

Report of Independent Certified Accountants                          F-3

CONSOLIDATED FINANCIAL STATEMENTS:

    Consolidated Balance Sheet                                       F-4

    Consolidated Statements of Operations                            F-5

    Consolidated Statements of Changes in
      Stockholders' Deficiency                                    F-6 - F-7

    Consolidated Statements of Cash Flows                            F-8

    Notes to Consolidated Financial Statements                   F-9  - F-19

                                      F-1
<PAGE>



                          Independent Auditors' Report


The Board of Directors and Stockholders
P.D.C. Innovative Industries, Inc.
(a Development Stage Company)

We have audited the accompanying consolidated balance sheet of P.D.C. Innovative
Industries, Inc. and Subsidiary (a Development Stage Company) as of December 31,
2002, and the related consolidated statements of operations, stockholders'
deficiency, and cash flows for the year ended December 31, 2002 and for the
period from September 7, 1994 (inception) through December 31, 2002. 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 audit. The consolidated financial statements
as of December 31, 2001 were audited by other auditors whose report dated
February 28, 2002 on those consolidated statements included an explanatory
paragraph describing conditions that raised substantial doubt about the
Company's ability to continue as a going concern. The consolidated financial
statements for the period September 7, 1994 (inception) through December 31,
2001 include total revenues and net loss of $0 and $4,143,755, respectively. Our
opinion on the consolidated statements of operations, changes in stockholders'
deficiency, and cash flows for the period September 7, 1994 (inception) through
December 31, 2002, insofar as it relates to amounts for periods through December
31, 2001, is based solely on the report of other auditors.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free from material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides 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 P.D.C.
Innovative Industries, Inc. and Subsidiary (a Development Stage Company), as of
December 31, 2002 and the results of its consolidated operations and its
consolidated cash flows for the year ended December 31, 2002 and for the period
September 7, 1994 (inception) to December 31, 2002 in conformity with accounting
principles generally accepted in the United States of America.

As more fully described in Note 16, subsequent to the issuance of the Company's
2002 consolidated financial statements and our report thereon dated May 9, 2003,
we became aware that those consolidated financial statements did not reflect
certain accounts payable and the issuable common shares quantity outstanding was
overstated by 200,000 shares. In our related report, we expressed an
unqualified opinion with an explanatory paragraph describing conditions that
raised doubt about the Company's ability to continue as a going concern. Our
opinion on the revised consolidated financial statements, as expressed herein,
remains unqualified with an explanatory paragraph describing conditions that
raised doubt about the Company's ability to continue as a going concern.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2(a) to
the consolidated financial statements, the Company has a net loss of $3,952,772
and net cash used in operations of $366,987 in 2002, a working capital
deficiency of $1,251,776, deficit accumulated during the development stage of
$8,096,527, and a stockholders' deficiency of $1,251,776 at December 31, 2002
and is currently in development stage. These matters raise substantial doubt
about its ability to continue as a going concern. Management's Plan in regards
to this matter is also described in Note 2(a). The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.


Salberg & Company, P.A.
Boca Raton, Florida
May 9, 2003 (except for Note 16 as to which the date is May 27, 2003)


                                      F-2



<PAGE>


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


The Board of Directors and Stockholders
P.D.C. Innovative Industries, Inc.


We have audited the accompanying consolidated statements of operations,
stockholders' equity and cash flows of P.D.C. Innovative Industries, Inc. (a
Development Stage Company) for the year ended December 31, 2001 and for the
period September 7, 1994 (date of inception) to December 31, 2001. 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 audit.

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

In our opinion, the consolidated financial statements referred to above, present
fairly, in all material respects, the results of operations and cash flows of
P.D.C. Innovative Industries, Inc. (a Development Stage Company) for the year
ended December 31, 2001 and for the period September 7, 1994 (date of inception)
to December 31, 2001 in conformity with accounting principles generally accepted
in the United States of America.

The Company is in the development stage as of December 31, 2001 and to date has
had no significant operations. Recovery of the Company's assets is dependent on
future events, the outcome of which is indeterminable. In addition, successful
completion of the Company's development program and its transition, ultimately,
to attaining profitable operations is dependent upon obtaining adequate
financing to fulfill its development activities and achieving a level of sales
adequate to support the Company's cost structure.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. The Company has suffered recurring
losses and has yet to generate an internal cash flow that raises substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are described in Note 2(a). The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.


/s/ Margolies, Fink and Wichrowski
---------------------------------
Margolies, Fink and Wichrowski
Certified Public Accountants

Pompano Beach, Florida
February 28, 2002

                                      F-3
<PAGE>

                P.D.C. INNOVATIVE INDUSTRIES, INC. AND SUBSIDIARY
                         (a Development Stage Company)

                           Consolidated Balance Sheet

                               December 31, 2002
<TABLE>
<CAPTION>


                               ASSETS
                                                                    Restated (Note 16)
                                                                    -----------------
<S>                                                                    <C>
TOTAL ASSETS                                                           $        --
                                                                       ===========



                            LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
    Accounts payable                                                   $   389,303
    Accrued expense                                                         38,250
    Settlement payable                                                     559,443
    Note payable-stockholder                                                50,000
    Loans payable-officer                                                  214,780
                                                                       -----------
TOTAL CURRENT LIABILITIES                                                1,251,776
                                                                       -----------

STOCKHOLDERS' DEFICIENCY
    Common stock, $0.001 par value; 125,000,000 shares
           authorized, 105,371,071 shares issued
          and outstanding                                                  105,371
    Common stock issuable (6,800,000 shares at par value)                    6,800
    Additional paid in capital                                           6,732,580
    Deficit accumulated during the development stage                    (8,096,527)
                                                                       -----------

TOTAL STOCKHOLDERS' DEFICIENCY                                          (1,251,776)
                                                                       -----------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                         $        --
                                                                       ===========
</TABLE>


           See accompanying notes to consolidated financial statements


                                      F-4
<PAGE>

                P.D.C. INNOVATIVE INDUSTRIES, INC. AND SUBSIDIARY
                          (a Development Stage Company)

                      Consolidated Statements of Operations
<TABLE>
<CAPTION>

                                                      Year Ended December 31,    From September 7, 1994
                                                 --------------------------------  (inception) to
                                                       2002             2001       December 31, 2002
                                                   -------------    -------------  ------------------
                                                 Restated (Note 16)                Restated (Note 16)
                                                 -----------------                 ------------------
<S>                                                      <C>              <C>            <C>
Revenues                                           $          --    $          --    $          --
                                                   -------------    -------------    -------------

OPERATING EXPENSES

Compensation and related benefits                        729,150          345,509        1,782,339
Professional fees, consulting and commissions            434,672          444,009          910,025
Advertising, marketing and promotional costs             418,580               --          902,696
Bad debt expense                                           5,958               --            5,958
General and administrative                               144,538          151,772          949,824
Loss on impairment of property and equipment           1,017,549               --        1,017,549
Loss on impairment of patent                             472,118               --          472,118
Loss on impairment of investment                             100               --              100
Loss on writedown of inventory                           263,133           46,643          628,408
Materials, research and development, and tooling          73,329           90,330          212,099
Rent expense                                              55,662           67,416          252,339
Depreciation and amortization                            103,983          130,832          443,339
                                                   -------------    -------------    -------------

TOTAL OPERATING EXPENSES                               3,718,772        1,276,511        7,576,794
                                                   -------------    -------------    -------------

Loss from Operations                                  (3,718,772)      (1,276,511)      (7,576,794)
                                                   -------------    -------------    -------------

OTHER INCOME (EXPENSES)

Interest income                                               --              452              452
Interest expense                                          (6,000)         (38,291)        (292,185)
Settlement expense                                      (228,000)              --         (228,000)
                                                   -------------    -------------    -------------

TOTAL OTHER EXPENSE, NET                                (234,000)         (37,839)        (519,733)
                                                   -------------    -------------    -------------

NET LOSS                                           $  (3,952,772)   $  (1,314,350)   $  (8,096,527)
                                                   =============    =============    =============

Net loss per common share:
Basic
     Net loss per common share                     $       (0.04)   $       (0.02)   $       (0.29)
                                                   =============    =============    =============

Weighted average number of common shares
     outstanding, respectively                       102,860,057       84,965,139       27,511,388
                                                   =============    =============    =============

Diluted
     Net loss per common share                     $       (0.04)   $       (0.02)   $       (0.29)
                                                   =============    =============    =============

Weighted average number of common shares
     outstanding, respectively                       102,860,057       84,965,139       27,511,388
                                                   =============    =============    =============
</TABLE>

           See accompanying notes to consolidated financial statements


                                      F-5
<PAGE>

                P.D.C. INNOVATIVE INDUSTRIES, INC. AND SUBSIDIARY
                         (a Development Stage Company)

          Consolidated Statement of Changes in Stockholders' Deficiency
<TABLE>
<CAPTION>
                                                                                                           DEFICIT
                                                                                                         ACCUMULATED
                                             COMMON STOCK          COMMON STOCK ISSUABLE     ADDITION    DURING THE
                                        ------------------------   ----------------------     PAID-IN    DEVELOPMENT
                                           SHARES      AMOUNT       SHARES       AMOUNT       CAPITAL       STAGE         TOTAL
                                        -----------  -----------  -----------  -----------  -----------   -----------   -----------
<S>                                     <C>          <C>            <C>        <C>          <C>           <C>           <C>
Balance, September 7, 1994
     (Date of inception)                         --  $        --           --  $        --  $        --   $        --   $        --

Issuance of common stock at                   1,000            1           --           --       24,754            --        24,755
                                        -----------  -----------  -----------  -----------  -----------   -----------   -----------
     incorporation

Balance, December 31, 1996                    1,000            1           --           --       24,754            --        24,755

Net loss                                         --           --           --           --           --       (41,344)      (41,344)
                                        -----------  -----------  -----------  -----------  -----------   -----------   -----------

Balance, December 31, 1997                    1,000            1           --           --       24,754       (41,344)      (16,589)

Issuance of common stock,
     restated for reverse stock split       425,702          426           --           --    1,841,294            --     1,841,720

Net loss                                         --           --           --           --           --      (573,376)     (573,376)
                                        -----------  -----------  -----------  -----------  -----------   -----------   -----------

Balance, December 31, 1998                  426,702          427           --           --    1,866,048      (614,720)    1,251,755

Issuance of common stock for
     services                             3,592,605        3,592           --           --      522,545            --       526,137

Conversion of convertible
     debentures                             383,993          384           --           --       49,616            --        50,000

Net loss                                         --           --           --           --           --      (424,987)     (424,987)
                                        -----------  -----------  -----------  -----------  -----------   -----------   -----------

Balance, December 31, 1999                4,403,300        4,403           --           --    2,438,209    (1,039,707)    1,402,905

Common stock issued in mergers           36,956,000       36,956           --           --           --            --        36,956

Issuance of common stock for
     services                             2,715,000        2,715           --           --      175,150            --       177,865

Common stock issued in exchange
     for licensing agreement             12,000,000       12,000           --           --      538,000            --       550,000
</TABLE>


           See accompanying notes to consolidated financial statements


                                      F-6
<PAGE>

                P.D.C. INNOVATIVE INDUSTRIES, INC. AND SUBSIDIARY
                          (a Development Stage Company)

          Consolidated Statement of Changes in Stockholders' Deficiency
<TABLE>
<CAPTION>
                                                                                                           DEFICIT
                                                                                                         ACCUMULATED
                                             COMMON STOCK          COMMON STOCK ISSUABLE     ADDITION    DURING THE
                                        ------------------------   ----------------------     PAID-IN    DEVELOPMENT
                                           SHARES      AMOUNT       SHARES       AMOUNT       CAPITAL       STAGE         TOTAL
                                        -----------  -----------  -----------  -----------  -----------   -----------   -----------
<S>                                     <C>          <C>            <C>        <C>          <C>           <C>           <C>


Conversion of convertible debentures     13,488,938       13,489           --           --      866,779            --       880,268

Common stock sold                           250,000          250           --           --       10,000            --        10,250


Net loss                                         --           --           --           --           --    (1,789,698)   (1,789,698)
                                        -----------  -----------  -----------  -----------  -----------   -----------   -----------

Balance, December 31, 2000               69,813,238       69,813           --           --    4,028,138    (2,829,405)    1,268,546

Stock dividend                            1,215,933        1,216           --           --       (1,216)           --            --

Contribution to capital of convertible
     debentures' interest                        --           --           --           --      263,303            --       263,303

Issuance of common stock for
     services                             3,833,750        3,834           --           --      357,591            --       361,425

Common stock sold                        21,868,150       21,868           --           --      784,132            --       806,000

Net loss                                         --           --           --           --           --    (1,314,350)   (1,314,350)
                                        -----------  -----------  -----------  -----------  -----------   -----------   -----------

Balance, December 31, 2001               96,731,071       96,731           --           --    5,431,948    (4,143,755)    1,384,924

Issuance of stock for compensation        2,000,000        2,000           --           --      430,780            --       432,780

Issuance of stock for legal               1,700,000        1,700           --           --      133,100            --       134,800

Issuance of stock for marketing           2,200,000        2,200           --           --      426,800            --       429,000

Issuance of stock for consulting          1,330,000        1,330    5,000,000        5,000      224,010            --       230,340

Issuance of stock for cash                       --           --    1,800,000        1,800       25,200            --        27,000

Issuance of stock for wages               1,410,000        1,410           --           --       60,742            --        62,152

Net loss, as previously reported                 --           --           --           --           --    (3,741,626)   (3,741,626)

Effect of restatement (Note 16)                  --           --           --           --           --      (211,146)     (211,146)
                                        -----------  -----------  -----------  -----------  -----------   -----------   -----------

BALANCE, DECEMBER 31, 2002              105,371,071  $   105,371    6,800,000  $     6,800  $ 6,732,580   $(8,096,527)  $(1,251,776)
                                        ===========  ===========  ===========  ===========  ===========   ===========   ===========
</TABLE>

           See accompanying notes to consolidated financial statements


                                      F-7
<PAGE>


                P.D.C. INNOVATIVE INDUSTRIES, INC. AND SUBSIDIARY
                         (a Development Stage Company)

                      Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>
                                                                                                         From September 7, 1994
                                                                                    December 31,           (Inception) to
                                                                                2002            2001       December 31, 2002
                                                                            -----------      -----------  ---------------------
                                                                         Restated (Note 16)                Restated (Note 16)
                                                                          -----------------                 -----------------
<S>                                                                         <C>              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                    $(3,952,772)     $(1,314,350)     $(8,096,527)
Adjustments to reconcile net loss to net cash provided by
      operating activities:
Stock issued for compensation, legal, marketing, consulting
     and wages                                                                1,289,072          361,425        2,402,001
Depreciation and amortization                                                   103,983          130,832          443,339
Bad debt expense                                                                  5,958               --            5,958
Settlement expense                                                              228,000               --          228,000
Loss on impairment of property and equipment                                  1,017,549               --        1,017,549
Loss on impairment of patent                                                    472,118               --          472,118
Loss on impairment of investment                                                    100               --              100
Loss on writedown of inventory                                                  263,133           46,643          309,776
Changes in operating assets and liabilities:
(Increase) decrease in:
     Other receivables                                                            6,004          (11,962)          (5,958)
     Inventory                                                                    1,167               --         (309,776)
     Other assets                                                                    --               --          (15,575)
Increase (decrease) in:
     Accounts payable and accrued expenses                                      198,701           17,940          199,553
                                                                            -----------      -----------      -----------
NET CASH USED IN OPERATING ACTIVITIES                                          (366,987)        (769,472)      (3,349,442)
                                                                            -----------      -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures                                                                 --          (37,011)      (1,380,560)
Acquisition of equipment                                                        (21,690)              --          (21,690)
Investment in Medial Marketing, Inc.                                               (100)              --             (100)
                                                                            -----------      -----------      -----------
NET CASH USED IN INVESTING ACTIVITIES                                           (21,790)         (37,011)      (1,402,350)
                                                                            -----------      -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (repayments of) loan payable, officer                             201,627          (32,734)         214,780
Proceeds from note payable                                                       50,000               --           50,000
Proceeds from stock issuance                                                     27,000          806,000        3,235,612
Proceeds from convertible debenture                                                  --               --        1,251,400
                                                                            -----------      -----------      -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                       278,627          773,266        4,751,792
                                                                            -----------      -----------      -----------

Net Decrease in Cash                                                        $  (110,150)     $   (33,217)     $        --

Cash at Beginning of Period                                                     110,150          143,367               --
                                                                            -----------      -----------      -----------

CASH AT END OF YEAR                                                         $        --      $   110,150      $        --
                                                                            ===========      ===========      ===========

Supplemental disclosure of non-cash investing and financing activities:
-----------------------------------------------------------------------

     Issuance of common stock in exchange for patent
         licensing agreement                                                $        --      $        --      $   550,000
                                                                            ===========      ===========      ===========
</TABLE>

           See accompanying notes to consolidated financial statements


                                      F-8
<PAGE>

                P.D.C. INNOVATIVE INDUSTRIES, INC. AND SUBSIDIARY
                          (a Development Stage Company)

                   Notes to Consolidated Financial Statements


(1)      BACKGROUND

P.D.C. Innovative Industries, Inc. and Subsidiary ("the Company") was organized
in the state of Nevada on September 7, 1994. On January 22, 1998, a merger was
effected between Kenneth C. Garcia, Inc. and the Company. On March 2, 2000, the
Company exchanged shares with MAS Acquisition XIV Corp. ("MAS"), a reporting
company under the Securities and Exchange Act of 1934. As a result, the Company
became the parent company to MAS, its wholly-owned subsidiary. As of December
31, 2002, MAS had no assets, or activities. On July 6, 2000, Sterile-Pro, Inc.
was merged into the Company (See Note 3).

The Company is currently in the development stage. Activities during the
development stage primarily include Research and Development and raising
capital. There is no assurance that once the development of the Hypo-Pro 2000
(formerly known as the Sterile Pro 2000) device is completed it will gain
Federal Drug Administration marketing clearance, and the sales of the TriLevel
Family, a series of innovative levels for construction workers, will occur, or,
that the Company will achieve a profitable level of operations.

(2)      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (a) Going Concern

         As reflected in the accompanying consolidated financial statements, the
         Company has a net loss of $3,952,772 and net cash used in operations of
         $366,987 in 2002 and a working capital deficiency of $1,251,776,
         deficit accumulated during the development stage of $8,096,527 and a
         stockholders' deficiency of $1,251,776 at December 31, 2002. The
         ability of the Company to continue as a going concern is dependent on
         the Company's ability to further implement its business plan, raise
         capital, and generate revenues. The consolidated financial statements
         do not include any adjustments that might be necessary if the Company
         is unable to continue as a going concern.

         The Company is currently a development stage company and its continued
         existence is dependent upon the Company's ability to resolve its
         liquidity problems, principally by obtaining additional debt financing
         and/or equity capital. The Company has yet to generate an internal cash
         flow, and until the sales of its product begins, the Company is very
         dependent upon the debt and equity funding.

         As a result of these factors, there exists substantial doubt about the
         Company's ability to continue as a going concern. However, management
         of the Company is continually negotiating with various outside entities
         for additional funding necessary to complete FDA marketing clearance.
         To date, management has been able to raise the necessary capital to
         reach this stage of product development and has been able to fund any
         capital requirements. However, there is no assurance that once the
         development of the Hypo- Pro 2000 device is completed and finally gains
         Federal Drug Administration marketing clearance, that the Company will
         achieve a profitable level of operations.

                                      F-9
<PAGE>
                P.D.C. INNOVATIVE INDUSTRIES, INC. AND SUBSIDIARY
                          (a Development Stage Company)

                   Notes to Consolidated Financial Statements

         (b) Basis of Presentation

         The consolidated financial statements of the Company are presented as
         if the Company will continue as a going concern. No adjustments have
         been made to the values of the consolidated assets or liabilities of
         the Company as of December 31, 2002. (See Note 2(a)).

         (c) Principles of Consolidation

         The accompanying consolidated financial statements include the accounts
         of the Company and its inactive Subsidiary. All significant
         intercompany balances and transactions have been eliminated in
         consolidation.

         (d) Use of estimates

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

         (e) Cash and cash equivalents

         Holdings of highly liquid investments with original maturities of three
         months or less and investment in money market funds are considered to
         be cash equivalents by the Company.

         (f) Inventory

         Inventory, consisting principally of raw materials, work-in-process and
         finished goods, are carried at the lower of cost or market. Cost is
         determined using the first-in, first-out (FIFO) method. As of December
         31, 2002, all inventories on hand were written down to their net
         realizable value of $0. Accordingly, the Company charged $263,133 to
         operations (See Note 4).

         (g) Property and equipment

         Property and equipment are stated at cost, less accumulated
         depreciation and amortization. Depreciation and amortization are
         computed using straight-line methods over the estimated useful lives of
         the related assets. As of December 31, 2002, all fixed assets on hand
         were deemed to be fully impaired as defined by SFAS No. 144.
         Accordingly, the Company charged $1,017,549 to operations. (See Notes 4
         and 5)

         (h) Net loss per share

         Basic net income (loss) per common share (Basic EPS) excludes dilution
         and is computed by dividing net income (loss) by the weighted average
         number of common shares outstanding during the year. Diluted net income
         (loss) per share (Diluted EPS) reflects the potential dilution that
         could occur if stock options or other contracts to issue common stock,
         such as convertible notes, were exercised or converted into common
         stock. At December 31, 2002, there were no common stock equivalents
         outstanding, which may dilute future earnings per share.

                                      F-10
<PAGE>
                P.D.C. INNOVATIVE INDUSTRIES, INC. AND SUBSIDIARY
                          (a Development Stage Company)

                   Notes to Consolidated Financial Statements

         (i) Patent license

         The patent license was being amortized over the seventeen year life of
         the patent. During 2002, the Company, in accordance with SFAS No. 142,
         the Company fully impaired its patent license. Accordingly, the Company
         charged $472,118 to operations. (See Note 6)

         (j) Stock-based compensation

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

         The Company accounts for stock options or warrants issued to
         non-employees for goods or services in accordance with the fair value
         method of SFAS No. 123. Under this method, the Company records an
         expense equal to the fair value of the options or warrants issued. The
         fair value is computed using an options pricing model.

         (k) Long-lived assets

         The Company reviews long-lived consolidated assets and certain
         identifiable assets related to those assets for impairment whenever
         circumstances and situations change such that there is an indication
         that the carrying amounts may not be recoverable. If the undiscounted
         cash flows of the long-lived assets are less than the carrying amount,
         their carrying amounts are reduced to fair value, and an impairment
         loss is recognized. During 2002, the Company recorded an impairment
         loss of $1,017,549 related to equipment owned by the Company that was
         inaccessible. (See Notes 4 and 5)

         The Company did not recognize any impairment losses on its property and
         equipment or patents during the year ended December 31, 2001.

         (l) Income taxes

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

                                      F-11
<PAGE>
                P.D.C. INNOVATIVE INDUSTRIES, INC. AND SUBSIDIARY
                          (a Development Stage Company)

                   Notes to Consolidated Financial Statements

         (m) Fair Value of Financial Instruments

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

         The carrying amounts of the Company's short-term consolidated financial
         instruments, including accounts payable, accrued expenses, loan payable
         - officer, and note payable - stockholder approximate fair value due to
         the relatively short period to maturity for these instruments.

         (n) Reclassifications

         Certain amounts in the prior period consolidated financial statements
         have been reclassified to conform to the 2002 presentation.

         (o) New Accounting Pronouncements

         Statement No. 144 "Accounting for the Impairment or Disposal of
         Long-Lived Assets" supercedes Statement No. 121 "Accounting for the
         Impairment of Long-Lived Assets and for Long-Lived Assets to be
         Disposed of" ("SFAS 121"). Though it retains the basic requirements of
         SFAS 121 regarding when and how to measure an impairment loss, SFAS 144
         provides additional implementation guidance. SFAS 144 excludes goodwill
         and intangibles not being amortized among other exclusions. SFAS 144
         also supercedes the provisions of APB 30, "Reporting the Results of
         Operations," pertaining to discontinued operations. Separate reporting
         of a discontinued operation is still required, but SFAS 144 expands the
         presentation to include a component of an entity, rather than strictly
         a business segment as defined in SFAS 131, "Disclosures about Segments
         of an Enterprise and Related Information." SFAS 144 also eliminates the
         current exemption to consolidation when control over a subsidiary is
         likely to be temporary. This statement is effective for all fiscal
         years beginning after December 15, 2001. The adoption of SFAS 144 on
         January 1, 2002 resulted in recording an impairment loss to operations,
         which materially effected the Company's consolidated financial
         position, results of operations and liquidity. (See Notes 5 and 6)

         Statement No. 145, "Rescission of FASB Statements No. 4, 44, and 64,
         Amendment of FASB Statement No. 13, and Technical Corrections,"
         updates, clarifies, and simplifies existing accounting pronouncements.
         Statement No. 145 rescinds Statement 4, which required all gains and
         losses from extinguishment of debt to be aggregated and, if material,
         classified as an extraordinary item, net of related income tax effect.
         As a result, the criteria in Opinion 30 will now be used to classify
         those gains and losses. Statement 64 amended Statement 4, and is no
         longer necessary because Statement 4 has been rescinded. Statement 44
         was issued to establish accounting requirements for the effects of
         transition to the provisions of the motor Carrier Act of 1980. Because
         the transaction has been completed, Statement 44 is no longer
         necessary. Statement 145 amends Statement 13 to require that certain
         lease modifications that have economic effects similar to
         sale-leaseback transactions be accounted for in the same manner as
         sale-leaseback transactions. This amendment is consistent with FASB's
         goal requiring similar accounting treatment for transaction that has
         similar economic effects. This statement is effective for fiscal years
         beginning after May 15, 2002. The adoption of SFAS No. 145 is not
         expected to have a material impact on the Company's consolidated
         financial position, results of operations or liquidity.

                                      F-12
<PAGE>
                P.D.C. INNOVATIVE INDUSTRIES, INC. AND SUBSIDIARY
                          (a Development Stage Company)

                   Notes to Consolidated Financial Statements

         Statement No. 148, "Accounting for Stock-Based Compensation--Transition
         and Disclosure", amends FASB Statement No. 123, "Accounting for
         Stock-Based Compensation." In response to a growing number of companies
         announcing plans to record expenses for the fair value of stock
         options, Statement 148 provides alternative methods of transition for a
         voluntary change to the fair value based method of accounting for
         stock-based employee compensation. In addition, Statement 148 amends
         the disclosure requirements of Statement 123 to require more prominent
         and more frequent disclosures in financial statements about the effects
         of stock-based compensation. The Statement also improves the timeliness
         of those disclosures by requiring that this information be included in
         interim as well as annual financial statements. In the past, companies
         were required to make pro forma disclosures only in annual financial
         statements. The transition guidance and annual disclosure provisions of
         Statement 148 are effective for fiscal years ending after December 15,
         2002, with earlier application permitted in certain circumstances. The
         interim disclosure provisions are effective for financial reports
         containing financial statements for interim periods beginning after
         December 15, 2002. The Company adopted the disclosure provisions of
         Statement 148 for the year ended December 31, 2002, but will continue
         to use the method under APB 25 in accounting for stock options. The
         adoption of the disclosure provisions of Statement 148 did not have a
         material impact on the Company's financial position, results of
         operations or liquidity.

(3)      MERGER

On July 6, 2000, the Company merged with Sterile-Pro, Inc., with the Company
being the survivor. The merger was accomplished through the issuance of
33,000,000 shares of the Company's common stock. Sterile-Pro was a Florida
corporation whose principal asset was the rights to develop and market a device
know as the Hypo-Pro 2000, pursuant to the licensing agreement signed on June 8,
2000. (See Notes 14 and 15)

(4)      INVENTORY

During 2002, the Company experienced severe financial difficulties; unable to
generate positive operating cash flow and having general liquidity problems, the
Company could not make its regularly scheduled operating lease payments (see
Notes 12 and 16). As a result, the Company's landlord locked down the Company's
leased warehouse space and all fixed assets and inventory contained within See
Note 4). As of the date of this report, the Company has still been unable to
meet its current obligations and all related assets are deemed to be fully
impaired (see Notes 5 and 6). Accordingly, the Company has written down its
inventory to its net realizable value of $0 and charged $263,133 to operations.
During 2001, the Company had charged $46,643 to operations to reflect that
periods write down of inventory to its net realizable value.

(5)      PROPERTY AND EQUIPMENT

During 2002, in order to reflect the financial difficulties the Company was
experiencing, the Company fully impaired the remaining net book value related to
its fixed assets, accordingly, the Company recorded an impairment loss of
$1,017,549 related to property and equipment owned by the Company that was
inaccessible (See Note 4).

Depreciation expense for the years ended December 31, 2002 and 2001 was $64,086
and $95,963, respectively.


                                      F-13
<PAGE>
                P.D.C. INNOVATIVE INDUSTRIES, INC. AND SUBSIDIARY
                          (a Development Stage Company)

                   Notes to Consolidated Financial Statements

(6)      OTHER ASSETS

During June 2000, the Company finalized an exclusive Patent License Agreement
with its then, chief executive officer. The officer was the owner of various
patents and patents pending, which items will be eventually sold by the Company.
Pursuant to the terms of the agreement, the Company was granted the exclusive
right to modify, customize, maintain, incorporate, manufacture, sell, and
otherwise utilize and practice the Patent, all improvements thereto and all
technology related to the process, throughout the world. The license shall apply
to any extension or re-issue of the Patent. The term of license is for the life
of the Patent and any renewal thereof, subject to termination, under certain
conditions. As consideration for the License, the Company issued to the officer
12,000,000 shares of common stock (See Note 14). The License agreement has been
recorded at the historical cost basis of the chief executive officer, who owned
the patents.

During 2002, the Company was unable to progressively move forward with its
patent license agreement. As such, the Company deemed the patent to be fully
impaired. Accordingly, the Company charged the net book value of $472,118 to
operations.

During 2002, the Company acquired an investment in Global Medical Marketing,
Inc. ("Global") for $100. In exchange, the Company received 10,000,000 shares of
Global's common stock and gave Global's subsidiary, Medical Marketing
Innovations, Inc. exclusive rights under a patent sub-license and royalty
agreement. Based on the termination of this agreement in May 2003, the Company
deemed the investment to be fully impaired. Accordingly, the Company charged
$100 to operations in 2002. (See Note 15)

License amortization expense for the years ended December 31, 2002 and 2001 was
$39,898 and $34,869, respectively.

(7)      ACCRUED EXPENSES

Accrued expenses consist of the following as of December 31, 2002:

                                                                         2002
                                                                     ----------
                Accrued interest payable                             $    6,000
                Accrued wages payable-officer (See Note 10)              21,000
                Payroll taxes payable                                    11,250
                                                                     ----------
                Balance                                              $   38,250
                                                                     ==========

(8)      NOTES PAYABLE - STOCKHOLDER

On April 25, 2002, a stockholder of the Company loaned the Company $50,000 for
working capital. The loan bears interest at 18%, is unsecured and due October
25, 2003. Under the terms of the note, and at the option of the Company, all
principal and related accrued interest may be repaid in cash or a sufficient
number of shares of common stock. As of December 31, 2002, the Company has
accrued $6,000 in related accrued interest and has charged $6,000 to operations
for interest expense.

(9)      LOANS PAYABLE - OFFICER

During 2002, the Company continues to receive operating capital from its
President. The proceeds were obtained from direct sales of registered publicly
traded stock of the Company. During 2002, the Company received $201,627 in
additional proceeds. During 2001, the Company had received proceeds of $13,153
of similar type loans. At December 31, 2002, the Company owes $214,780 to its
President. The loans are non-interest bearing, unsecured and due on demand. (See
Note 10)

                                      F-14
<PAGE>
                P.D.C. INNOVATIVE INDUSTRIES, INC. AND SUBSIDIARY
                          (a Development Stage Company)

                   Notes to Consolidated Financial Statements

(10)     RELATED PARTY TRANSACTIONS

During 2002, the Company accrued wages payable to its President totaling
$21,000. (See Note 7)

During 2002, the Company received proceeds of $201,627 in operating capital from
its President (see Note 9). This funding from the President represents a
concentration of the Companies total debt financing received during 2002.

During 2002, the Company was indebted to one of its vendors for services
performed in the amount of $51,102. This balance is personally guaranteed by the
Company's President. The balance has been demanded in full by the vendor;
however, no payments have been made as of December 31, 2002 or as of the date of
the accompanying report. The entire $51,102 has been included in accounts
payable at December 31, 2002.

(11)     CONVERTIBLE DEBENTURES AND SETTLEMENT PAYABLE

Prior to the merger with the Company, Sterile-Pro, Inc. entered into a
Subscription Agreement with the Purchasers of the 8% Series Senior Subordinated
Convertible Redeemable Debenture (the "Debentures") on July12, 2000. The
Purchaser agreed to purchase $1,000,000 of the Company's Debentures at 90% of
the face amount. The Debentures were offered subject to the rules promulgated by
Rule 504, Regulation D of the Securities and Exchange Commission, and the rules
of the state of Colorado Securities Division. The Debentures were to mature on
July 12, 2002. The Debentures had become an obligation of the Company as a
result of the merger.

The holder of the Debenture was entitled, at its option, at any time to convert
all or any amount over $10,000 of the principal face amount of this Debenture
then outstanding into freely trading stock of the Company without restrictive
legend. The conversion price was to be equal to 75% of the lowest closing bid
price of the common stock as reported for any of the three consecutive trading
days immediately preceding the date of receipt by the Company of each notice of
conversion. As a result, the Company recorded a premium discount at issuance on
the convertible debentures in the aggregate amount of $231,010. This amount is
included in the cost of the common shares during the amortization period, which
began when the shares were initially converted during the year ended December
31, 2000. Accordingly, $103,382 was included to the cost of the shares converted
as additional paid-in capital. No fractional shares will be issued on
conversion, but the number of share issuable shall be rounded to the nearest
whole share.

During the year ended December 31, 2000, the Company issued a total of
13,488,938 shares of its common stock in conversion of $880,268 of convertible
debentures. Approximately $492,400, or 7,095,821 shares, were converted from the
convertible debentures issued during the prior fiscal year. As of December 31,
2000, accrued interest on the remaining $639,943 of Debentures amounted to
$16,884.

During July 2001, a lawsuit was filed by the holders of the debentures alleging
breach of financial obligation by the Company. Prior to the Company filing an
answer and/or counterclaim to the suit, the plaintiffs agreed to drop the
lawsuit, and the Company did not have to pay any monies to the plaintiffs as
settlement on the suit. On November 21, 2001, the suit was dismissed with
prejudice, and each of the parties were responsible for their own legal fees and
costs. As a result of this settlement, the Company is required to donate to the
charity of their choice the remaining amount due on such debentures of $559,443
at December 31, 2002. The Company shall endeavor to utilize its best efforts to
fulfill its obligation and satisfy this debt. The balance of this obligation has
been classified as a short term liability in the December 31, 2002 balance
sheet.

                                      F-15
<PAGE>
                P.D.C. INNOVATIVE INDUSTRIES, INC. AND SUBSIDIARY
                          (a Development Stage Company)

                   Notes to Consolidated Financial Statements

(12)     LEASES AND LEGAL MATTERS

The Company leases its office and warehouse space under an operating lease
expiring in August 2005. In October 2002, the Company was locked out of its
warehouse for failure to pay rent. The Company has not been released from its
obligation (See Notes 4 and 16). In October 2002, a judgment of approximately
$228,000 was entered against the Company. The entire balance was accrued at
December 31, 2002 and is reflected in operations as a charge to settlement
expense.

Rent expense for the years ending December 31, 2002 and 2001 and for the period
from September 7, 1994 (inception) to December 31, 2002 were $55,662, $67,416
and $252,339, respectively.

(13)     INCOME TAXES

There was no income tax expense for the periods ended December 31, 2002 and 2001
due to the Company's net losses.

The Company's tax expense differs from the "expected" tax expense for the
periods ended December 31, 2002 and 2001, (computed by applying the Federal
Corporate tax rate of 34% to loss before taxes), as follows:
<TABLE>
<CAPTION>

                                                                              2002               2001
                                                                         ------------         ----------
<S>                                                                      <C>                 <C>
              Computed "expected" tax expense (benefit)                  $ (1,343,942)       $  (446,879)
              Non deducted stock based expenses                               438,284            268,436
              Change in valuation allowance                                   905,658            178,443
                                                                         ------------         ----------
                                                                         $         --         $       --
                                                                         ============         ==========
</TABLE>

The tax effects of temporary differences that gave rise to significant portions
of deferred tax assets and liabilities at December 31, 2002 are as follows:
<TABLE>
<CAPTION>

                                                                             2002
                                                                        ------------
<S>                                                                     <C>
             Deferred tax assets:
             Bad debt expense                                           $      2,026
             Write-down of inventory to net realizable value                  89,465
             Net operating loss carryforward                               2,110,247
                                                                        ------------
             Total gross deferred tax assets                               2,201,738
             Less valuation allowance                                     (2,201,738)
                                                                        ------------
             Net deferred tax assets                                    $         --
                                                                        ============
</TABLE>

At December 31, 2002, the Company has a net operating loss carryforward of
approximately $6,207,000 available to offset future taxable income in years
beginning 2017 through 2022.

The valuation allowance at December 31, 2001 was $1,296,079. The net change in
valuation allowance during the year ended December 31, 2002 was an increase of
$905,658.

                                      F-16
<PAGE>
                P.D.C. INNOVATIVE INDUSTRIES, INC. AND SUBSIDIARY
                          (a Development Stage Company)

                   Notes to Consolidated Financial Statements

(14)     COMMON STOCK

On January 1, 1999, at a special meeting of shareholders of the Company, a forty
to one reverse stock split was approved reducing the number of issued and
outstanding shares of common stock from 13,568,098 shares to 426,702 shares.

During the years ended December 31, 1997 and 1998, a total of 426,702 shares of
common stock were issued for cash and other consideration, after giving effect
to the reverse stock split.

The Company issued 2,000,000 shares of common stock to Sterile-Pro, Inc. on
April 5, 1999 as consideration for the Company to complete the development of
the Hypo-Pro 2000 device. In addition, during the year ended December 31, 1999,
a total of 300,000 shares of stock were issued to a company for services
rendered, a total of 1,292,605 shares were issued to unrelated third parties,
and 383,993 shares were issued upon the conversion of $50,000 of convertible
debentures.

During the year ended December 31, 2000, the Company issued a total of
65,409,938 shares ($1,508,207) of its common stock. The conversion of the
Company's convertible debentures, accounted for the issuance of 13,488,938
shares ($880,268). The remaining 47,350,000 shares were issued as follows:

         1.       Services rendered by independent consultants in exchange for
                  2,715,000 shares. Consulting and promotion expenses of
                  $177,865 was charged as the fair market value of the stock on
                  the date of issuance approximated $.07 per share.

         2.       The Company sold 250,000 shares on September 29, 2000 in a
                  Regulation D offering at $.041 per share, and received cash
                  proceeds of $10,250.

         3.       On June 8, 2000, the Company issued to its chief executive
                  officer 12,000,000 shares ($1,440,000) as consideration for an
                  exclusive Patent License Agreement (see Note 6). The market
                  value of the stock on this date was $.12 per share. The excess
                  of the fair market value of the common stock over the
                  historical cost basis of the patent license was recorded as a
                  distribution to the shareholder; recorded as a reduction to
                  additional paid-in capital of $890,000.

         4.       On July 6, 2000, the Company merged with Sterile-Pro, Inc.,
                  with the Company being the survivor. The merger was
                  accomplished through the issuance of 33,000,000 shares of the
                  Company's common stock.

         5.       The remaining 3,956,000 shares were issued during March 2000
                  as a result of the Company merging with MAS XIV Acquisition
                  Corp., a reporting entity.

During the year ended December 31, 2001, the Company issued a total of
26,917,833 shares ($1,167,425) of its common stock, as follows:

         1.       The Company approved and issued a 5% stock dividend (1,215,933
                  shares) to its shareholders. The officers and directors
                  declined the stock dividend.

         2.       Services rendered by independent consultants in exchange for
                  3,833,750 shares. Consulting and legal expenses of $361,425
                  was charged as the fair market value of the stock on the dates
                  of issuance approximated $.05 to $.46 per share.

                                      F-17
<PAGE>
                P.D.C. INNOVATIVE INDUSTRIES, INC. AND SUBSIDIARY
                          (a Development Stage Company)

                   Notes to Consolidated Financial Statements

         3.       The Company sold a total of 21,868,150 shares of its common
                  stock during the year at prices that ranged from $.024 to $.07
                  per share, and received cash proceeds totaling $806,000.

During the year ended December 31, 2002, the Company issued a total of
15,440,000 shares of its common stock. Of the total stock issued in 2002,
6,800,000 shares remain issuable as of December 31, 2002. The stock issuances
for 2002 are as follows:

         1.       The Company issued 2,000,000 shares of its common stock for
                  compensation to its President for services rendered totaling
                  $432,780 or approximately $.22 per share. Fair value is based
                  on the quoted trading price of the common stock at the grant
                  date.

         2.       The Company issued 1,700,000 shares of its common stock for
                  legal fees for services rendered totaling $134,800 or a per
                  share price ranging from $.028 - $.10 per share. Fair value is
                  based on the quoted trading price of the common stock at the
                  grant date.

         3.       The Company issued 2,200,000 shares of its common stock for
                  marketing fees for services rendered totaling $429,000 or
                  $.195 per share. Fair value is based on the quoted trading
                  price of the common stock at the grant date.

         4.       The Company granted 6,330,000 shares of its common stock for
                  consulting fees totaling $230,340 or a per share price ranging
                  from $.028 - $.10 per share. Fair value is based on the quoted
                  trading price of the common stock at the grant date. Of the
                  total shares granted, 5,000,000 remain issuable at December
                  31, 2002.

         5.       The Company issued 1,410,000 shares of its common stock as
                  compensation to employees totaling $62,152 or a per share
                  price ranging from $.028 - $.10 per share. Fair value is based
                  on the quoted trading price of the common stock at the grant
                  date.

         6.       In October 2002, the Company sold 1,800,000 shares of its
                  common stock for cash to unrelated third parties totaling
                  $27,000, or a per share price of $.015. The 1,800,000 shares
                  remain issuable at December 31, 2002.

On January 24, 2002, the Company's Board of Directors adopted a resolution to
increase the number of authorized shares of common stock to 125,000,000 shares.

(15)     SUBSEQUENT EVENTS

         On January 17, 2003, the Company issued 1,100,000 shares of its common
         stock for services. Of the total shares issued, 400,000 shares were
         issued as compensation to employees and 700,000 shares were issued for
         legal fees. The fair value of the common stock issued is based on the
         quoted trading price of the common stock at the date of issuance, which
         aggregated $33,000 or $.03 per share.

         On February 21, 2003, the Company issued 2,000,000 shares of common
         stock as compensation to its President for services rendered. The fair
         value of the common stock issued is based on the quoted trading price
         of the common stock at the date of issuance which aggregated $44,000 or
         $.022 per share.

                                      F-18
<PAGE>
                P.D.C. INNOVATIVE INDUSTRIES, INC. AND SUBSIDIARY
                          (a Development Stage Company)

                   Notes to Consolidated Financial Statements

         On March 14, 2003, the Company issued 1,200,000 shares of its common
         stock for services. Of the total shares issued, 300,000 shares were
         issued as compensation to employees, 300,000 shares were issued for
         consulting fees, and 600,000 shares were issued for legal fees. The
         fair value of the common stock issued is based on the quoted trading
         price of the common stock at the date of issuance, which aggregated
         $18,000 or $.015 per share.

         In May 2003, the Company entered into a termination agreement with
         Medical Marketing Innovations, Inc. ("MMI") and its parent, Global. The
         Company had previously entered into an exclusive patent sublicense and
         royalty agreement dated November 21, 2002. Under the terms of the
         termination, MMI shall be afforded the opportunity on a non-exclusive
         basis to sell and market the Hypo-pro 2000. As consideration for Global
         agreeing to cause MMI to terminate the agreement and relinquish its
         exclusive rights, the Company will transfer 10,000,000 shares of Global
         common stock previously received for the Company's $100 investment back
         to Global. The Company has written off this investment at December 31,
         2002 as an impairment loss.
         (See Note 6)

(16)     RESTATEMENT

         Subsequent to the issuance of the Company's fiscal 2002 consolidated
         financial statements, management determined to amend those consolidated
         financial statements to more accurately reflect the effect of a
         judgment in the amount of $228,000 in connection with a landlord tenant
         dispute (See Note 12). The Company increased the accrual by $211,146 to
         reflect the full judgment of $228,000. The full amount of the judgment
         had not been previously included in the consolidated financial
         statements since management believed the Company was not liable due to
         the landlord's alleged relet of the premises. However, management
         subsequently determined that the full judgment is considered a
         contingency and the Company would be liable if the subsequent lessee
         defaulted on its lease. In addition, the issuable share quantity was
         overstated by 200,000 requiring a reclassification of the $200 par
         value between common stock issuable and additional paid-in capital. The
         inclusion of these items in the revised consolidated financial
         statements has the effect of increasing current liabilities by $211,146
         and increasing net loss by $211,146. Net loss per share, basic and
         diluted did not change.




                                      F-19